3 Trends Elevating the Importance of Green Warehousing

What is green warehousing?

Warehousing products costs energy and resources. Climate control, lighting, and the operation of other facilities elements are all part of the equation adding up to total resource usage. Green warehousing refers to making updates that reduce the amount of energy used, tap in to sustainable energy sources and materials, and reduce the amounts of non-recyclable waste created during  warehouse operations. Progress towards a greener warehouse can be measured in a tangible way by seeking building certifications that will evaluate performance across metrics that are often tied to Environmental, Social, and Governance (ESG) criteria.

For many businesses looking to both save on the bottom line as well as reduce ecological footprints, it makes sense to consider the concept of green warehousing an indispensable part of their overall warehousing sustainability strategy.

What are the components of green logistics?

An eco-friendly warehouse is one component; however, it can be beneficial to take a step back and examine where this fits in to the overall business supply chain. Production, storage, retrieval and processing, packaging, palletizing, shipping, delivery, down to the last mile; all contribute to the development of green logistics for businesses. While all these stages of the product journey are important, a high-level summary of the logistics supply chain can be broken down into the five broad steps below.

Raw materials sourcing

Sourcing materials sustainably can be accomplished through due diligence in procurement. Businesses must establish their own supplier standards and then seek to strengthen relationships with those that meet and uphold their criteria with transparency.

Product manufacturing

Manufacturing can be made more sustainable with the introduction of optimized processes for material and energy efficiency. Today, the introduction of advanced automation is allowing more manufacturing and logistics processes to be optimized, reducing the ecological impact of manufacturing by eliminating waste.

Product warehousing

The focus of this article, the concept of green warehousing focuses on resource conservation within the warehouse, from lighting and temperature control to inventory management, and the efficient movement of goods and people across the floor.

Product distribution

The green logistics of distribution will involve improved packaging processes and materials, as well as the logistics of shipping the packaged goods themselves either managed with a fleet or in partnership with third-party logistics providers (3PLs). Optimizing for space within shipping containers and on pallets can ensure that fuel is conserved within the shipping process. Some of the particularly challenging aspects of distribution include managing cold chain delivery as well as last mile distribution.

Product Returns/Reverse logistics

Reverse logistics will differ depending on business type. For example, e-commerce businesses may favor packaging that can easily be repacked in the event that a customer would like to make a return by mail, whereas an industrial manufacturer might need to put specific recovery processes in place to recover specialized packaging that they can reintegrate into their operations. Overall, reverse logistics becomes more sustainable when travel of goods is minimized and as many resources allocated to the original delivery can be reclaimed or reused.

3 trends elevating the importance of green warehousing

1. Increases in e-commerce activity around the world

In 2021, global e-commerce is predicted to grow by 16.8% to a total value of $4.921 trillion USD. Along with e-commerce growth comes a need for increased logistics infrastructure to support demand. As businesses work to optimize their logistics operations and support growing online purchase volumes, scaling up with an environmentally sound infrastructure becomes increasingly important.

2. Consumer demands for accountability

The same consumers who are driving major growth within e-commerce are also attuned to trends in how their consumption impacts the environment. Preferences for sustainability have been shown to impact how consumers perceive brands, including their likelihood to buy more in the future. While consumers are less directly exposed to the environmental impacts of the warehouse than touchpoints such as packaging, the overall energy consumption of businesses does have an impact on ESG performance and the narratives behind overall energy use and carbon footprint reduction that are core to their public image.

3. Opportunity for cost optimizations through efficiency

Green warehousing strategies are not only good for the environment—they can also make a positive impact on the bottom line for companies that optimize their efficiency and reduce their energy use. With breakthroughs in the efficiency of renewable energy, more energy can be produced with less emissions created. Investigating where green energy procurement can work for the warehouse is a solid step towards reducing carbon footprints.

Improvements in automation throughout the warehouse environment can also help to support greener practices through heightened efficiency. Today, even complex tasks such as picking and placing can be partially or fully automated thanks to breakthroughs in tech including computer vision and machine learning. As part of the adoption of Industry 4.0, these technologies can have a positive impact on the environmental efficiency of warehouse operations provided they are implemented correctly.