Warehouse and logistics companies are trying to shore up their sustainability efforts as they struggle to change their inventory strategies from just in time to just in case during the COVID-19 pandemic. Here are five trends in sustainable warehousing to look for when the dust settles.
As warehouse labor gets progressively tougher to find and the pandemic continues, warehouses are shifting to technology and automation to do some of the work. Wearable devices, such as those provided by Kinetic, can increase efficiency as they monitor workers’ movements to reduce injuries and provide useful feedback. Kinetic’s website states that its devices can reduce lost workdays by 88%. Now those devices also have a contact tracing feature to prevent the spread of COVID-19.
Automation in warehouses gives companies the ability to expand into areas where labor is harder to find. Because forklifts are one of the most dangerous pieces of equipment in a warehouse, using autonomous forklifts can reduce accidents and increase efficiency. Warehouse automation as a whole can result in reduced accidents, increased efficiency and improved sustainability.
Just outside of the warehouse, Outrider is automating distribution yards. Outrider uses electric vehicles to transport cargo effectively and with fewer emissions. Dock appointment scheduling has also helped alleviate traffic, reduce idle times and increase efficiency outside of warehouses.
Optimal facility functions
According to the Leadership in Energy and Environmental Design (LEED) website, “LEED-certified buildings use 25% less energy, have 34% lower CO2 emissions and consume 11% less water.” LEED has also diverted over 80 million tons of waste from landfills. By retrofitting old or building new green warehouses, companies can achieve different levels of sustainability certifications from LEED.
The logistics company Prologis has helped clients switch to LED lighting in warehouses through its Essentials program, saving money and reducing emissions. Efficient HVAC systems and well-insulated buildings can reduce energy consumption. Energy management systems with timers and sensors monitor activity and reduce the use of electricity, water and gas.
Thomas LaSalvia of Moody’s Analytics REIS and FreightWaves podcast host John Kingston discussed how online retailers are seeking to take over mall space where brick-and-mortar shops are closing down in a recent Drilling Deep episode. Though COVID-19 is putting more stress on in-store shopping, they say brick-and-mortar stores in malls may be the last to close because of their strategic locations close to consumers.
If mall spaces open up, converting them to warehouse distribution and fulfillment centers could be a sustainable transition given the proximity to large numbers of consumers. The closer warehouses are to major ports, roads, airports and their customers, the less transportation is needed between each step in the distribution process. According to a DHL study, a strategically located warehouse allowed the company to switch from air to road transportation resulting in 50% lower CO2 emissions in that region, “due to optimized and consolidated replenishment flows and shorter last mile deliveries.”
Reduce, reuse and recycle
CHEP said it replaces “disposable packaging with high-quality, reusable pallets and containers to eliminate waste and make your business more efficient.”
To reduce waste, many companies are switching to eco-friendly packaging. Warehouses can drastically decrease the waste they produce by reusing pallets and containers and recycling all appropriate materials such as cardboard and metals.
IKEA is taking the “reduce, reuse, recycle” motto to the environmental extreme with a goal to be 100% circular by 2030. Malin Nordin, head of circular development for the Inter IKEA Group, said, “We are committed to designing all of our products to be 100% circular from the beginning, using only renewable or recycled materials, and to developing circular capabilities in our supply chain.”
According to the Prologis website, about “15% of a warehouse’s total operating budget goes toward energy costs.” Many companies prefer solar-powered warehouses and distribution centers because they save them money and get companies closer to their environmental, social and governance (ESG) goals. The initial investment in solar panels leads Prologis customers to reach the “break-even point” an average of eight years after installation.
RLS Logistics derives 100% of its power from solar at three of its four New Jersey locations including the Newfield Logistics Center, the Vineland North Facility and the Delanco Logistics Center. The Delanco site also uses a transcritical CO2 refrigeration system instead of environmentally harmful ammonia or HFC-based refrigerants.
Renewable energy sources including wind and solar are trending in a more affordable direction thanks to economies of scale and the increasing demand for clean energy. Companies can experience immense savings in electricity bills and greenhouse gas emissions when they invest in renewable energy to power warehouses.