Society’s perception of environmentally and socially responsible shipping practices is far from the truth. When Amazon unveiled the promise of free two-day shipping for Prime members, customers were thrilled.
The processes were already in place to enable fast delivery, so what could be the harm in more people benefiting from even shorter delivery windows?
Amazon recognized how this service would impact on sales, and began offering free same-day shipping on millions of products starting in May 2019. It all looks like an Amazon Prime Member benefit.
That is the problem in its entirety.
Although the company offered fast shipping, the transparency was missing. Faster, “free” shipping is never without any cost. It incurs a cost somewhere, and while customers enjoy the benefits, someone pays the price down the line, even if it’s Mother Nature.
The lack of transparency means consumers do not realize what shorter delivery windows cost the environment. That said, today’s consumers have access to more information than ever before, and they value transparency and accountability within their favorite retailers and service providers.
Transparency holds value, and consumers trust brands that demonstrate transparency and environmentally responsible behaviors.
In fact, according to CNN, consumers are willing to pay up to 5% more to wait on a product when it follows a “Green” route. In addition, consumers placed blind trust in companies’ commitment to sustainability. So, what goes wrong?
Nowadays, shippers and logistics service providers use route optimization software. Regardless of transport mode, route optimization does enable more efficient load planning and delivery.
Unfortunately, the globalization of e-commerce means the fastest mode is usually air, and air transport may cost up to eight times more than ground transport, especially when shipped the same day or even two-day.
However, the software can only go so far in optimizing transportation networks and delivering product as soon as possible. The reality is that when shippers have more time to plan, they can use more efficient processes and consolidate shipments further.
The cost of air freight will always be higher than sending an item by ground, and sending an item by ground may not always be possible for international trade.
However, the opportunity to implement sustainable practices in the supply chain network remains, despite the challenges of sending freight efficiently and not relying solely on air transport. And, consumers are open to eco-conscious service, even if it means their packages may take a little bit longer to arrive.
Companies and organizations have had profound success in the past with leveraging guilt and morality to impact the behavior of people. The “Don’t Mess With Texas” campaign played on a person’s guilt to protect the environment and beautify Texas highways, and it worked.
Companies have taken the approach to leverage guilt to reduce their costs in the past, such as placing the phrase, “Please Recycle” on aluminum cans, cardboard packages, plastic products, and other items. Other places, including Norway, have taken a stronger approach.
Norwegian plastic bottles are “on loan,” says the Huffington Post. Retailers place a “deposit” value on each bottle, and when consumers return them, they get the value back in the form of credit. Since retailers and consumers that do not return bottles pay a tax, simply recycling plastic bottles amounts to a lower tax burden.
Additional evidence supports the consolidation and improved efficiency within supply chains to reduce the carbon footprint of a company. A 2012 study found that grocery delivery could cut emissions costs by up to 90%, and it all revolves around the consolidation of freight.
Increasing the consumer consciousness of how their delivery expectations impact the environment will result in more customers willing to think twice before choosing the fastest delivery option.
In addition, companies are playing with fire by automatically giving consumers the quickest option at checkout., And while many companies are not likely to change the narrative anytime soon, emphasizing the energy and environmental savings associated with a longer shipping timeline will encourage more consumers to wait.
When you think about it, the only items that may be needed right now are foods, medications and personal hygiene products, and with more people working from home in today’s world, waiting an extra day or two will not make much difference. To ensure consumers know what to expect, companies must revisit transparency and ensure consumers have the information needed to really trust them.
Shippers do not need to take extensive steps with improving the perception of green shipping; changing box color to signal a consumer’s “Green” shipping choice plays on the level of conscious support and protective caring for the environment. When consumers believe they are helping the environment, their impatience disappears.
Technological advancement plays into the greenness of shipping too, and companies that have implemented solutions to increase transparency throughout the supply chain, such as Bumble Bee Foods, found significant success in both business-to-business (B2B) and business-to-consumer (B2C) transactions.
After implementing a blockchain solution and placing QR codes on packaging, both consumers and retailers could immediately trace a product back to its origins, including the very hatchery or fishery where the shelf-stable products were sourced.
Now, blockchain does give people more information and encourage accountability. However, it cannot do much for route optimization today, says John Monarch, Co-founder, and CEO of ShipChain.
Today’s companies already have route optimization processes in place, and the only way to increase efficient processes rests within fundamental changes to shipping expectations.
When consumers see all the processes that go into moving an item from origin to destination, they are more likely to think about the costs of shipping, packaging, and delivery.
Shippers only need to tip their hats to consumers, and consumers will respond with a willingness to wait a few extra days. No one really wants to be perceived as environmentally unfriendly, especially in a world dominated by social media.
As more companies look for ways to increase transparency, they will adopt blockchain solutions, and the use of such solutions will result in more informed consumers that want to help.
In a way, transparency is the key to reconditioning consumers to accept standard shipping options in a world where Amazon has both the economy of scale and power to offer all of its customers two-day free shipping.
Amazon is the largest e-commerce enterprise on the planet, and other retailers simply cannot keep up. Instead of trying to beat Amazon by wasting energy and harming the environment, apply the principles in environmental, social, and governance (ESG) risk management.
Decreasing blind trust with improved transparency will always go back to improved profitability and efficiency within a business.
It’s the ultimate win-win.