Introduction - DHL’s Green Logistics Strategies Compared to Royal Mail plc in the UK
The term sustainability is defined as capability to support and maintain the process over the period of time. The sustainability is categorized into three parts such as environmental, economic and social. Most of organizations and governments are committed to develop the sustainable goals in order to conserving the resources and reduce the environmental footprints. Most of organizations are likely to apply the sustainability policies in order to increase the efficiency of the business and enhance the performance. Application of sustainable policies and initiatives are beneficial for the organizations because it helps in reduce costs, increase profits, enhance public image, greater employee satisfaction and improve social responsibility which ultimately positively impacts the overall operation. Apart from this, the report will be based on the sustainability policies, initiatives and solutions of DHL. It is one of leading American-founded German logistic business. That offers wide range of services such as package delivery, courier and express main services. DHL was incorporated in 1969 by Larry Hillblom, Adrian Dalsey and Robert Lynn. In this organization, more than 6, 00,000 peoples are working over 220 territories and countries to provide the services of courier to the peoples (DHL, 2024). In addition, the report will highlight the application of sustainable initiatives, policies and solutions as well as its commitment towards the greater sustainable of its supply chain.
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Applications of Sustainability Policies, Solutions or Initiatives
Sustainability refers to an activity to maintain and protect the environment and society by reducing their carbon footstep on the environment. Sustainability is taken in three parts economic, environmental and social. Sustainability is essential conserving natural resources and making a sustainable future by reducing pollution and protect environment from harmful impacts. Sustainable supply chain is considered as one of the strategic business decision that comprises of sustainable production, packaging, sourcing, and responsible delivery of manufactured goods. Supply chain sustainability is significant for every business because it helps in reduce environmental impact, improve company partnership, constant improvement in supply chain and promote the conductive work culture (Villena and Gioia, 2020). On the other hand, implementation of sustainable policies is disadvantageous for chosen business because sustainable packaging it is very expensive. The cost of green packaging is more than usual packaging because of its material and resources. There are insufficient education among the individual regarding green technology and green packaging. But still DHL is implement wide range of sustainable policies in the area of its supply chain to supports its operation within the UK.
In addition, DHL is focusing on accepting the green packaging in order to enhance the resilience of supply chain. The key service of this company is to deliver parcel so packaging is considered as significant part. The plastic and bubble wrap packaging is wasteful and indissoluble and harm the environment. It means packaging through using material such as bamboo, mushroom packaging and cardboard which recycled. The sustainable packaging improves reputation of business and reduces wastage. Another sustainable policy of DHL is using consolidated shipping. For deliver courier at different places, the company use consolidated shipping. The business use consolidated shipping, it save time money and shipping cost of the company (Matsuda, Hirata and Kawasaki, 2022). It aids a business in reducing carbon footprint, fuel consumption. The process uses the vehicle to its full capacity and utilizes it efficiently. The sustainable policies of DHL help in advance its supply chain operation with green, clean and safe solution which helps them in achieve their environmental targets (DHL, 2024).
Along with this, the selected organization is also invested in green transportation to enhance the supply chain activities which directly impacts the efficiency of the supply chain. Investing in the green transportation is beneficial for the business because it helps in decrease congestion, emits less pollution, provide safer transportation and reduce the environmental footprint. DHL supply chain also announces green transport policy in order to set the international sustainability standards for its transport fleet which helps in reduce carbon emission (DHL, 2023). This organization is use electronic vehicles (EV’s) for delivering the courier to its customers because it not releases any greenhouse gas. The use of EV`s increases in logistics due to its technology advances. When the electrical vehicles are charged with the use of solar and wind the renewable resources the advantage of EV`s increases. It saved cost of business and reduces greenhouse gas emission. Sustainable aviation fuel (SAF) is another policy of DHL in order to enhance its supply chain activities to support the UK’s operations. This fuel procures from used cooking oil, corn and wastage. Implementation of this policy is beneficial for the chosen business because it helps in reduce greenhouse gas emissions, enhanced air quality and lower particulate emissions. In 2022, DHL make $ 17 billion in forward purchase agreements of SAF (DHL, 2024).
Apart from this, DHL is also working with environment friendly logistic partner to improve the supply chain activities. Work jointly with an environment friendly logistic partner aids in using strategies such as sustainable transportation, green technology and packaging material that recycle. DHL express, identify this requirements and introduced an initiative Go Green Plus. Furthermore, DHL is committed to achieve net zero emission by 2050 thorough several initiatives or solutions. Implementation of all these solution is beneficial for the business because it helps in enhance the supply chain activities that support its UK operations. Go Green Plus is one of the best solutions that is implementing by the chosen business in order to increase the efficiency and resilience of supply chain. Go Green solutions helps DHL to decrease its emission and increase the efficiency in the global logistics operations. In current environment, climate change is one of the biggest advantages that are face by the organization and it directly impacts its supply chain. This solution helps the chosen business to reduce the emissions. Go Green plus as an addition of its accessible variety of logistics solution and it is benefits to the climate neutral shipping with the local evasion of emissions (DHL, 2024).
Another solution of DHL is sustainable marine fuel that is implementing by selected business activities in the areas of its supply chain. The use of sustainable marine fuel is significant level for chosen company to reduce the environmental footprint of ocean freight. This solution helps in delivering the courier to the customers by protecting the environment and also helps in improve resilience of supply chain (DHL, 2021).
DHL’s Commitment to and Progress Towards Better Sustainability
Sustainability in supply chain helps company in accomplishing their environment target by doing operation with clean and green solutions. This organization makes various commitments to and progress towards the greater sustainability of its logistics, supply chain and freight transport activities. The sustainable commitments of the chosen business are clean operation for the climate protection, great company to work for all and become highly trusted company (DHL, 2023). In 2022, the chosen was business was already invested €284 m in sustainable fuels and technologies to improve the overall operation and logistics activities (DHL, 2023).
Designing climate neutral logistics: The chosen organization committed to design its logistics operation climate neutrally. By 2050, DHL want to reduce all greenhouse gases emissions related to logistics operations to net zero including suppliers and subcontractors. But currently, the company in its operation releasing large amount of carbon dioxide that is a serious threat to company`s reputation. However, due to this company face several challenges like expensive in providing courier services mainly for deliveries in internationally. It charges extra fees for service like insurance, custom clearance and delivery to rural area (Dobers, et al. 2023). The DHL committed to attain zero emission by 2050 by doing innovation in their respected field. It committed to use new technology and innovation for warehousing and delivery by using electric fleets and cargo bikes. For superior storage and transportation management, the company use 3D mapping technology and aerial drones for delivery purpose. If organization is fulfilling its commitment by 2050 then it will be beneficial for it because there are various advantages connected with the environmental protection and accomplishing carbon neutral operations. As critically said by Lu, et al. (2020), the organization which focusing towards the environment protection that helps then in attracting the customers, stakeholders, employees and general society which directly impacts on its reputation as well as supply chain or logistic activities.
GHG emissions: Another commitment of DHL will to reduce the 29 million tonnes GHG emissions by 2030. At the present time, this organization is put all the efforts in order to minimize the GHD emission in order to enhance its logistics operations, supply chain and freight transport activities. In 2020, DHL emitted 33 million tonnes reduce emission which positively impacts on its overall effectiveness and supply chain (DeWeerdt, Dargusch and Hill, 2022). Fulfill this commitment will be beneficial for the business because it helps in improve the efficiency of the supply chain, logistics and freight transport activities. As contended by Villena and Gioia (2020), this commitment will impact positively on the business operations and performance because it helps in reduce the environmental impact, cut costs, enhance operational efficiency, reputation and foster the involvement of stakeholders. By reducing GHG emission the organization is able to improve the corporate performance, improve reputation and brand value by representing their commitment to the sustainability.
Figure 1: Reduction in GHG emission
From the above figure it has been determined that, in 2020, this organization reduce 33.64 million tonnes GHG and its target will reduce the 29 million by 2030.
Use of sustainable energies: Another commitment of the DHL is to reduce the sustainable energies. In 2022, this organization makes the commitment and it fulfilled in order to progress towards the sustainability of its logistics, supply chain and freight transport activities. DHL offers agile and reliable renewable energy supply chains. By using renewable energies the chosen organization is enhancing visibility of stock, goods availability and orders deliver consultancy. As per the view of Lu, et al. (2020), using renewable energy is beneficial for the organizations because it helps in lower the energy bills, less service disruptions, reduce air pollutions, greater employee satisfaction, improve brand reputation and improve public image. Using the sustainable energies are valuable for the organizations because it significantly reduce the carbon footprints which helps in improve the process of supply chain and increase its efficiency as well as resilience.
De-carbonization: Another commitment of DHL is to make the huge investment in de-carbonization in order to growth towards the greater sustainability of its supply chain, freight transport and logistics activities. The chosen organization will want to spend up to €7 billion on the measures of de-carbonization by 2030 (DHL, 2022). Expenditure towards the de-carbonization will be beneficial for the organization because it helps in reduce the GHG gas. As critically said by Joung, et al. (2020), this commitment positively impacts the business operation because it helps in facilitating social license which enhance business reputation with socially responsible investors and consumers. De-carbonization also helps the chosen organization to improve brand value by tapping into new markets, create business opportunities and spark the innovation which ultimately impacts on the supply chain.
Use of sustainable fuels: The major objective of DHL is to increase the portion of sustainable fuels in ocean, fuels and road transport. The management of chosen business is successfully occupied towards the combining ratio of more than 30% by 2030 for sustainable fuels. In 2022, this organization added €66 million expenditure for sustainable fuels, use 343 million kWh for air transport and use 242 million kWh for road transport (DHL, 2022).
Comparison of DHL Performance With Its Main Competitor in the UK’s Market
Figure 2: Revenue of the leading industrial transportation companies in the UK
In current times, every logistic organization want to meet the requirements of the government for commitment to use sustainable fuels, reduce GHG emissions, energy fuels etc. within a time frame. In this respect, it is crucial for the business to implement sustainable policies, initiatives and commitments that permits control of the environmental standards during all activities of supply chain, logistics and freight transport. Royal Mail plc is one of the main competitors of DHL in the UK. This organization is also develop the sustainability policies, initiatives and make the commitments like DHL to build the better position within the highly competitive market. In its sustainable program, Royal Mail plc is committed to achieve new zero by 2040 (Royal Mail Plc, 2023). To key objective behind this commitment will be decarbonize its value chain and operations in order to minimize the climate risks, deliver positive results and retain the customers for long period of time.
Royal Mail is one of leading courier and British postal service Company in the UK and it is the biggest competitor of the DHL. It follows all the same sustainable policies and initiatives in context of supply chain to perform well in the competitive market. Royal Mail Plc also committed to reduce the waste and driving the behaviors to the approach of circular economy. The ambition of this organization is reduce the 25% reduction in the water and waste generated by 2030 (Royal Mail Plc, 2023).
Another commitment of DHL’s competitor is to clear the air and managing its environmental impact effectively which helps in improve the efficiency of the supply chain and logistic activities to support the UK’s operations.
Figure 3: Net zero deliveries of Royal Mail Plc
From the above figure it has evaluated that, in order to reduce the net zero emissions, Royal Mail Plc delivers 4900 electric delivery vans, 154 electric delivery collection units, 11700 trained in electric vehicle driving and 21% zero emissions delivery routes. To become a sustainable business and improve the supply chain operations, this organization was also focusing towards the environmental management and collaboration with partners. Moreover, in contrast to Royal Mail Plc, DHL had a downward trend in the income or turnover.
Conclusion
From the above report it has been concluded that, for every business supply chain sustainability is significant because it helps in reduce environmental impact, improve company partnership, constant improvement in supply chain and promote the conductive work culture. In related to supply chain activities DHL is implement wide range of sustainability policies, initiatives and make the commitment in order to support the UK’s operations. DHL is focusing on accepting the green packaging, using consolidated shipping and working with environment friendly logistic partner in order to enhance the resilience of supply chain. This organization fulfilled various commitment and make for the future in regards to sustainability to increase the efficiency and resilience of the supply chain. The commitment of DHL will design its logistics operation climate neutrally by 2050, reduce the 29 million tonnes GHG emissions by 2030, make the huge investment in de-carbonization, use sustainable fuels and energies which positively impacts the supply chain, logistics and freight transport activities. Royal Mail is one of leading courier and British postal service Company in the UK and it is the biggest competitor of the DHL. It follows all the same sustainable policies and initiatives in context of supply chain to perform well in the competitive market.
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