Green Logistics: A Vital Consideration for Businesses
October, 6 2022
In Thailand, logistics costs account for approximately 14% of GDP, divided into 7% for transportation, 6% for inventory management, and 1% for administrative costs. Effective logistics management is a crucial factor in business operations, enhancing competitiveness and aligning with Corporate Social Responsibility (CSR), a growing global trend.
Green Logistics is an innovative approach to mitigating these environmental issues while optimizing logistics operations. It enhances business efficiency, reduces production costs, increases value creation, conserves energy, and promotes environmental sustainability.
For example, implementing eco-driving training for transport drivers, which includes safe and environmentally friendly driving techniques, has proven to:
- Reduce fuel consumption by 16%
- Lower accident rates by 27%
- Cut overall costs by 10-20%
- Negotiate lower insurance premiums due to improved driver safety records
Key Elements of Sustainable Logistics Management
Sustainable logistics management improves efficiency across all supply chain activities, from procurement, production, storage, and transportation to distribution and customer service. Achieving sustainable logistics requires balancing four key aspects:
- Economic Impact – Organizational growth, operational efficiency, employment, competitiveness, and business diversification.
- Environmental Impact – Addressing climate change, air and water quality, noise pollution, land use, biodiversity, waste management, and energy efficiency.
- Social Impact – Ensuring safety, health, fair access to information, and transparency.
- Value Creation – Enhancing service potential, research, consumer demand, and market trends.
Thus, Green Logistics prioritizes environmental considerations alongside logistics efficiency. In simple terms:
"Logistics is about reducing non-value-added activities, but Green Logistics is about reducing waste and CO₂ emissions from logistics activities."