Today's customers expect access to a wide range of products that may be manufactured in all parts of the world, making product transportation a critical part of the retail equation. A significant cost for the industry, transportation also involves fuel consumption that emits carbon dioxide and particulates. Retailers are reshaping logistics to take advantage of lower cost solutions with less environmental impact.
In retail, small, frequent deliveries by road and air are increasingly common as retailers strive to keep inventories low, and meet consumer demand for local produce, high-obsolescence electronic goods, and other short shelf-life goods. Retailers are working in two key ways to reshape logistics and transportation: reducing transport and improving transportation efficiency.
Intermodal Rail and Road. The Container Store saved an initial $300,000 and reduced its greenhouse gas emissions by forty percent when it began servicing one third of its stores via intermodal transport—moving goods long distances by rail and delivering them to the final destination by truck. The Container Store uses intermodal transport for both inbound and outbound freight. To meet its requirement of transporting deliveries to stores within very short time frames, The Container Store partnered with Burlington Northern Santa Fe Railway and J.B. Hunt Transport Services. J.B. Hunt assigned priority status to all cargo destined for the store, and notified the drayage drivers, to ensure the strict time requirements are met.
Intermodal Ocean and Road. Michael Kors reduced transit time for its products by thirty percent, reduced freight costs by twenty dollars per item, and reduced transport-related GHG emissions by shifting a portion of its transport from air to ocean freight. Given that its volumes were significantly less than the size of a container, Michael Kors used a service that matched its shipments into full containers. Typically "less than container load" (LCL) shipping adds transit time, because goods are re-sorted on arrival and transported as "less than truckload" (LTL) freight to their final destination. In partnership with a logistics firm, Michael Kors had a single provider for its LCL and LTL freight that improved transit times.
Leadership Steps for Logistics & Transport in Retail. To enable retailers to benchmark their sustainable logistics and transportation practices, RILA and the CRC's Retail Sustainability Management Leadership Model includes a dimension on sustainability goals:
Some relevant resources, case studies, and collaborative opportunities are listed below.
Retailer deployment examples
Collaborative opportunities & other resources
Visit www.rila.org/sustainability for more tools and resources.