"Green" for sustainable logistics development

Green logistics will become mandatory. Photo: TL

Transport optimization cuts emissions by 30%-40%

At the Order Fulfillment Forum of the year, 2023 - Towards Green e-commerce, in Hanoi, Ms. Le Hoang Oanh, Director of the Department of E-commerce and Digital (Ministry of Industry and Trade) said that the Vietnam logistics report shows that logistics costs at retail businesses account for a large proportion of the cost, ranging from 10%-20%. In logistics costs, transportation costs have the highest ratio, ranging from 60% to 80%. Therefore, optimizing transportation costs not only helps businesses cut costs but also significantly contributes to reducing emissions from transportation activities.

According to research by Google, Temasek, and Bain & Company, the optimization of shipping activities in e-commerce such as: reducing the travel distance of delivery vehicles, and using recycled, friendly materials for packing… will contribute to reducing 30%-40% of emissions in this sector.

In Vietnam, a number of e-commerce and postal businesses such as Lazada, Grab, and Vietnam Post have implemented many innovative solutions to reduce negative impacts on the environment. These include reducing the number of cartons, switching to 100% recycled packaging or reducing plastic waste; encouraging customers to wait for slow delivery, instead of promoting instant delivery…

Tran Thanh Hai, Deputy Director of the Import-Export Department, at the Ministry of Industry and Trade, said that Vietnam is currently an export-oriented economy. Vietnam's merchandise exports have grown continuously since 2010 and now Vietnam is the world's leading exporter of a number of items such as rice, coffee, textiles, footwear, phones, and components. ... Export activities affect the growth of the logistics industry, causing the demand for international transportation services, domestic transportation and distribution services to increase.

Notably, Vietnam belongs to the group of countries with strong economic growth expectations but the market efficiency is not high, which is a potential feature for the development of logistics services in the optimal direction of costs," said a representative of the Import-Export Department.

Roads emit 21.95 times more than aviation

Assessing the status of logistics development with environmental issues, Mr. Hai said that the structure of transport services is unbalanced and unsustainable; the proportion of road transport is still higher than that of railways, inland waterways, sea, and air. GHG emissions by road transport are 21.95 times higher than air transport, 19.94 times higher than sea transport, and up to 245.49 times higher than rail transport.

According to the World Bank (WB), on average, every year transport activities in Vietnam emit more than 50 million tons of CO2, of which road transport accounts for 85% of emissions. This emission is forecasted to increase by 6-7% per year on average, and at the same time, Vietnam's greenhouse gas emissions are being assessed much higher than developed and developing countries in the world. The CO2 emissions forecast of the transportation industry is forecast to reach 60 million tons of CO2 by 2024 and 90 million tons of CO2 by 2030.

Mr. Hai said that the development of green logistics is facing a number of challenges. First of all, the problem of logistics awareness is not clear; there is not enough motivation to convert. Green logistics seems to be not only a trend but also a requirement in the future. Customers are not willing to spend more on more sustainable logistics services... Financial burdens, especially small and medium enterprises, are well aware of the need for green logistics but due to its small financial scale, it is not possible to invest appropriately for this issue and needs support from the state. The diversity of environmental regulations between countries and within each country is also a challenge for businesses.

Regarding Vietnam's green action plan for 2030, according to Mr. Tran Thanh Hai, it will be necessary to perfect relevant standards, regulations, and norms to reduce emissions from transportation activities and develop green logistics, promoting the transition to transportation and warehouses using clean energy, environmentally friendly energy; completing and synchronously implementing solutions for fuel quality management, emission standard system; complete transportation infrastructure in the direction of increasing connectivity and multimodal transport, cross-border transport. In addition, businesses need to optimize transportation and warehousing activities, reducing useless traffic.

Along with that, the parties need to promote digital transformation in logistics activities: digital government in transportation, building a logistics database, synchronously developing a non-stop electronic toll collection system, installing an electronic toll collection system, and intelligent traffic management system...