The Greening of Fulfillment

Shipping and fulfillment companies create efficiencies to conserve natural resources while improving the bottom line.


Nearly every consumer products marketer makes use of the term “green,” focusing on the relative nontoxicity, biodegradability, and sustainability of their products as yet another reason to buy. But where environmentally friendly strategies may have the biggest impact for DR marketers is in shipping and fulfillment. Since it takes considerable resources to get a product into customers’ hands, the back end offers many opportunities to conserve. “We are right in the middle of the supply chain, and being green is a critical component of the discussion,” says Steve Leffin, director of Global Sustainability for UPS.


Shipping and fulfillment companies are pursuing green strategies in several areas, looking to protect the environment and cut costs at the same time. “We feel better about doing things to reduce our energy usage,” says Ayal Latz, president of Greensboro, Ga.-based a2b Fulfillment. “But the No. 2 reason to go green is the cost savings. We can see a reduction in costs, and we are saving customers money on the shipping side. When you can save clients money, you know you’re a winner.”


Containers of Costs

First among many shipping and fulfillment providers’ strategies is to limit the materials used in packaging and their environmental impact. Companies reuse and recycle corrugated cardboard, and employ biodegradable boxes and cushioning materials whenever possible. Though perhaps less obvious, right-sizing the boxes used to ship products is also important.


In packaging, “You can think of being green in two ways,” says Patrick Moulton, director of New Business Development for Los Angeles-based Moulton Logistics Management. “The first is to use environmentally friendly packaging, which costs more, but is better for the environment. The second way is to be more efficient. For example, making sure you are using the least amount of packaging possible and not shipping a box that has a lot of filler in it just because it happened to be the easiest box available. That may be easier for the warehouse, but ultimately you will pay significantly more for shipping costs, [and] carriers end up shipping a significant amount of air, which means they are using much more fuel to get fewer packages delivered.”


Another green strategy is to economize on the energy it takes to run warehousing and distribution facilities. Moulton replaced its warehouse lighting with more efficient bulbs to save energy, and has begun installing solar panels on its distribution centers to generate its own energy. Likewise, a2b has upgraded its warehouse lighting with skylights, energy-efficient bulbs, and timers, cutting its electric bills an estimated 30 percent.


Road to Efficiency

Recycling boxes and slashing utility costs are essential, but where the rubber meets the road in shipping and fulfillment is getting shipments large and small to where they’re going—be it a retail loading dock or a front porch. UPS builds efficiency strategies in from the ground up, using information to make all of its processes more efficient.


For instance, the company installs wireless telematics units in its more than 100,000 trucks worldwide, supplying a “black box” that tracks miles per gallon, idling times, route efficiency, and maintenance needs. This information is married to the details on the signing boards drivers carry, parsing data to the package level; any anomalies can be addressed with drivers and handlers. “We have [the] ability to see characteristics that would have impeded efficiency,” says UPS’ Leffin. “Once the operator knows, they improve very quickly.”


One of UPS’ findings is that left turns are an inefficient maneuver for a delivery vehicle, since they often require longer wait times. Computer-aided “robust routing” gives drivers the “best opportunity to have sequential stops on an optimal route with least amount of left turns,” Leffin says. “It makes for not only very effective service, but very safe and very efficient service.”


Similarly, Moulton recently launched its Smart Shipping service to deliver packages by the most efficient route based on the speed of delivery requested. “It’s like a cross between a GPS application that monitors traffic in real time and a discount travel application that shops the different routes and carriers available,” Moulton says. “This ends up having packages being routed for delivery at a much more efficient rate than the current software options available.