For long, ‘Green’ has been a handy catchphrase for businesses and policy wonks, signalling their commitment towards preserving environment, by prefixing it with almost everything. But who is not eco-friendly nowadays, and logistics sector is no exception to this; after all, it is one of the major contributors to environmental despoliation. Around a quarter of global CO2 emissions are due to fossil fuel combustion in transport sector alone, according to International Energy Association.
While Europe and the developed world have taken concrete actions to reduce Green House Gas (GHG) emissions from logistics and transportation sector, the developing nations have barely moved beyond paying lip service. As witnessed in the developed world, increase in emission is in lockstep with economic growth; for instance, the CAGR in Indian CO2 emissions from transport sector due to fossil fuel combustion has been around 4.5 % compared to 1.16 % in OECD countries and 1.04 % in North America in the previous decade. No wonder, environment and growth are often couched in mutually antagonistic terms, especially in India, which is in a great hurry to catch up on growth.
However, any discussion on green logistics remains confined to transportation—though it is a major sub-sector of logistics—whereas logistics includes facilities like warehousing, transport terminals, packaging, distribution, material handling and even disposal. If we avoid the fallacy of equating logistics with transportation, then only we can understand the negative externalities of logistics activities. In a curious paradox, the logistics service providers, from their business perspective, try to keep the logistics—i.e., transportation—cost as low as possible, while the true cost to environment, society and economy increases as the GDP grows.
In fact, even as logistics moves goods within supply chains, the environmental impact is much beyond the oft-maligned GHG emissions from freight and passenger transport: warehouses pose a threat to safety of the neighbourhood, more so, if stocked with hazardous goods; terminals at ports, airports and stations add to noise pollution as vehicles and cranes move; discarded packaging sullies the landscape; improper waste disposal contaminates land and water.
For resuscitating and implementing green logistics in India, we need to address the issue at three levels: public policy, business and individual—these three tiers interact with and influence one another. But no cut-and-dried or easy solutions are in sight. In any case, government intervention for right pricing, incentivising, laying down regulations and enforcing them is imperative.
Over the years, the share of rail transport has decreased drastically by more than two-thirds from 89 % in 1951, while the share of road transport has increased seven-fold from 10 % within the same period. Restoring rail as a primary mode of transport, in particular for freight, would be essential, as rail emissions (per tonne km) are at least five times lesser than road emissions. Although Indian roads, despite being in bad shape, will still retain a major share of transportation as they alone can provide door-to-door delivery, until we move on to intermodal transport with roads providing only the last-mile delivery.
Building bypass roads for managing congestion, adding capacity at specific chokepoints and speeding up traffic are obvious solutions, as despite increase in travelling distances CO2 emissions are lesser due to optimal speed. Yet, we have not been able to do this in New Delhi; almost 80,000 trucks pass through the capital every night for want of bypass roads.
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Replacement of fossil fuel based technology with bio-fuel based one or even with alternatives like CNG, hybrid, battery-operated vehicles and equipment is improbable in the short to mid-term. Nor any in-house innovations in India are likely. Commercially viable and efficient alternatives are not available and high capital investment costs deter the fragmented, small-scale Indian logistics sector from importing these eco-friendly technologies.
On the other hand, players in the Indian logistics industry are yet to appreciate that green logistics is compatible with their bottom-line. Fuel efficiency, payload management, routing and driving techniques matter a lot in saving costs. For small trucking companies masquerading as logistics operators, performance metrics for monitoring these aspects are alien practices. Going green and being greener than your competitors is still not an advantage in Indian logistics industry due to consumer apathy.
Reverse logistics industry that takes care of recovery—retrieval of parts, recycling of products and disposal of packaging waste—is almost non-existent in India. With the rise of e-commerce, there is a concomitant rise in packaging waste. Though many e-retailers no longer provide paper receipts to enhance their green-image, they still do not provide consumers with the option of disposing of packaging material, even at a nominal cost. Mandatory legislation regarding these aspects like in the E.U. would prod both consumers and businesses in the right direction and push towards a ‘circular economy’, while contributing to the Swachh Bahrat Abhiyan as well.
With logistics driving growth, it need not be dichotomous with ecological concerns; for instance, Germany reduced its CO2 emissions even as its road freight grew, before the economic crisis of 2008-09. Though Indian conditions are different, green logistics has met a premature death due to neglect. Catchphrases may not be important but black logistics has high societal and economic costs and cannot sustain supply chains for too long.
Prashant K Singh is a logistics and supply chain management professional with the Indian Air Force. The views are personal.Twitter @ZenPK