6.3

For the retail industry

Roadmap milestones

The following milestones indicate good practice measures which will help the industry to reach net zero:

Short-term priorities

For the industry to meet the overall net zero targets, rapid action is needed to start the process of decarbonisation of logistics. The prioritisation and relevance of specific actions will vary considerably between retailers, based on operating models, ability to influence, and the work already completed. The list here is intended as a general guide for retailers on their low carbon logistics programmes. 

There are already many detailed reports providing recommendations on decarbonising logistics. For road logistics, a useful introduction is the UK Government’s 2019 Foresight report ‘Decarbonising road freight’ which identified the important decarbonisation interventions for the sector. A subset of those interventions can be directly controlled or influenced by individual retailers (extracted from report summary): 

• Telematics-informed driver-training will continue to play an important role in reducing carbon emissions from road freight.
• ICT-based solutions such as dynamic vehicle routing and congestion predication will reduce the negative impact of congestion.
• The relaxation of time constraints may go against current trends in service-based competition, but have been shown to offer significant efficiency improvements.
• Changes to weights and dimensions regulations would permit the use of higher capacity vehicles and increase logistics efficiency.
• Despite the widespread adoption of over-cab fairings, aerodynamic improvements continue to offer significant opportunities to improve fuel efficiency

The following seven recommendations in the Roadmap are intended as an ‘on-ramp’ for retailers considering greenhouse gas mitigation in logistics. Owing to the complexity and degree of technical specialism on this topic, readers are encouraged to follow the hyperlinks to access detailed resources to support programme design and implementation.

1.   Optimising fuel efficiency of existing HGV operations

A.   The complexity and sophistication of modern HGV logistics management necessitate multi-faceted approaches to greenhouse gas reductions. The Smart Freight Centre publishes relevant, useful reports including approaches for ‘Smart Truck Fleet Management,’ consisting of five pillars as shown below.

Figure 6.3a: Fleet emissions reduction guide, from Smart Freight Centre

B.   Road freight operators can benefit from fleet efficiency in numerous ways, many of which contribute to profitability. Examples of behavioural and technological measures that cut both emissions and costs include:

Driver-influenced measures

•   Fuel efficiency training for drivers
•   Regular fuel efficiency debriefings for drivers
•   Telematics for tracking real-time driving performance

Operational improvements

•   Optimised vehicle routing
•   Reduced empty running
•   Slower running speeds
•   Rigorous vehicle inspection and maintenance schedules

Added fuel-saving technology

•   Anti-idling devices
•   Low rolling-resistance tyres
•   Automated tyre pressure monitoring and adjustment
•   Energy-efficient refrigeration systems

 
Improved aerodynamic profiles

•   Side skirts
•   Cab roof fairings
•   Body and trailer side panels

C.   Review detailed recommendations and associated MACCs (marginal abatement cost curves) from recent 2019 Foresight report on decarbonising road freight. These report the financial cost/savings of interventions for three vehicle classes (Small Rigid, Large Rigid and Articulated).

D.   For direct, practical support, make use of Energy Saving Trust’s Fleet Review programme, with a range of services including ‘Heavy Goods Vehicle Review’ (to identify savings opportunity) and subsidised ecodriving training. Support is free for eligible business.

E.   Review research, publications, and outputs from the Centre for Sustainable Road Freight. Consider participating in workshops or seminars for hands-on guidance from leading logistics experts.

2.   Use KPIs that accurately track greenhouse gas performance 

Reliable tracking and analysis of emissions from logistics retail supply chains needs to underpin efforts to plot routes to decarbonisation. Where possible, data on fuel consumption should be tracked and gathered in order to understand real-life performance, as opposed to ‘modelled’ data for typical loads and transport routes.

3.   Make greenhouse gas performance a parameter in logistics procurement

For many retailers, most or all logistics is contracted to specialist freight operators. For retailers establishing long-term partnerships with delivery companies, procurement presents a key opportunity to incorporate criteria on greenhouse gases, such as transparent reporting, average fleet performance, commitments to EV switch and so on.

A.   Utilise the Smart Freight Centre’s Sustainable Freight Procurement guidelines and questionnaire. These two tools are designed to help both customers and logistics service providers achieve decarbonisation, but they offer retailers an opportunity to make better informed decisions around obtaining low carbon transport. The Smart Freight Centre is continuing work on this project and is still soliciting member feedback, including through company-level testing. More details can be found here.

B.   To tackle emissions, urgent action is needed by retailers to engage with logistics providers to understand their current greenhouse gas emissions profile. For this, the Global Logistics Emissions Council (GLEC) has developed the GLEC Framework: a globally recognised methodology for harmonized calculation and reporting of the logistics greenhouse gas footprint across multi-modal supply chains. It can be implemented by shippers, carriers and logistics service providers free of charge.

C.   A major part of the modern retail economy is online, involving neighbourhood or home delivery by courier firms. The GLEC Framework includes specific guidance for the mail and parcel sector that delivery companies can apply to understand and track greenhouse gas performance.

4.   Ensure good practice measures have been implemented by freight operators

A.   There is a strong body of evidence showing the relative benefits and paybacks of interventions to improve HGV fuel efficiency. However, the degree of penetration of good practice by freight operators is variable, as shown below from a 2015 Department for Transport survey about adoption of different fuel efficiency measures.

Figure 6.3b: Fuel efficiency measure adoption rates, from Department for Transport, Freight Carbon Review (2017)

B.   Similarly, the 2019 Foresight report important summaries that “The uptake of some aerodynamic interventions has been significant (possibly, because reductions in aerodynamic resistance improve fuel consumption and reduce costs). However, there has been no equivalent increase in the adoption of measures to reduce rolling resistance (by switching to low resistance tyres) and light-weighting (by using novel materials) as these face some cost barriers.” The report includes detailed marginal abate

5.   Lower carbon liquid fuels 

Lower carbon liquid fuels, including biodiesel from food waste, compressed natural gas (CNG), and biomethane, offer carbon benefits and flexibility in the transition to electrification or ultra-low carbon fuels (Refer to The Low Carbon Vehicle Partnership’s Renewable Fuels Guide for the emissions outlook of different lower carbon liquid fuels). Depending on fuel source and vehicle characteristics, these fuels can also yield opportunities for cost saving. One distinct cost advantage is lower fuel duties – CNG is assessed at less than half of the per litre tax of diesel, with a rate of approximately 19p/litre fixed until 2032.^[61]

6.   Start to incorporate EVs for small and mid-size delivery vehicles

A.   For LCV fleets, particularly those transporting ambient goods, EVs are becoming operationally and commercially viable. According to the Freight Transport Association, only a third of UK vans travel more than 80 miles in a day, comfortably within the 100-mile range of all the electric vehicles on the market.^[66] Government incentives for up to £8,000 off the price of an eligible electric van are available, as well as grants towards the installation of charge points within the workplace. Similarly, retailers can look to examples of collaborations between retail outlets and dedicated delivery services to shift their deliveries to electric vehicles. For example, Central England Co-op has partnered with Snappy Shopper in a bid to offer its customers an eco-friendly delivery service. The trial in its Derby and Birmingham stores will see shopping delivered to local residents via an electric vehicle in less than an hour.^[67]

B.    The market is moving rapidly for mid-size EVs, with vehicles imminently coming to market such as Mercedes-Benz eActros and Volta, the latter with 18-tonne capacity and range of 100 miles. This market is likely to be spurred by fines and limits being imposed by cities on large vehicles (e.g. Bristol City will charge £100 for HGV access per day, from 2021)

C.   To support electric LCV fleets, availability of charging infrastructure will become a fundamental concern for distribution centres. Logistics service providers and retailers with their own fleets should be aware of both the physical infrastructure and electric grid demands for the electric LCV fleets of tomorrow. Careful planning will be required to ensure that future sites are designed with that capacity in mind.

D.   Interested retailers should become part of the EV100 movement, showing commitment to transitioning their commercial fleets to EVs.

7.   Logistics network and route sharing

A.   Collaboration by multiple companies across logistics platforms has the potential to increase the efficiency of deliveries and correspondingly reduce emissions. Sharing data, as well as co-planning loads and journeys, allows service providers to optimize freight resources and reduce redundancies. In practical terms, some of the benefits of network and route sharing are lowered instances of empty running, fewer overlapping routes between service providers, and decreased fuel costs.^[71]

Longer term transformation for net zero

For the UK retail industry to hit net zero for scope 1 emission by 2035, and all emissions by 2040, the fuels used in logistics operations need to be rapidly decarbonised. For the largest portion of greenhouse gases from logistics, road HGVs, the future technology pathway is not yet clear, and whatever route is taken must be compatible with continental Europe for cross-border truck movements. 

In 2019, the Committee on Climate Change published research assessing the infrastructure requirements and costs for the deployment of different zero emission HGV technology options. The infrastructure considered includes hydrogen refuelling stations, ultra-rapid charge points at strategic locations, electric overhead recharging infrastructure on the roads and hybrid solutions combining these options. Findings included that:

• When the costs of the fuel as well as the infrastructure are included, the costs of deploying electricity or hydrogen HGVs are cheaper compared to the continued use of diesel.
• Moving to zero-carbon infrastructure for HGVs is a significant challenge and requires planning, coordination, supply chains, resources, materials, and a skilled workforce, as well as strong government policy to enable the market to deliver.

For the retail industry, the longer-term transformation of HGVs relies on a coordinated movement across the wider logistics sector, in step with and supported by the Government. To support progress, retailers can:

• Engage proactively with the logistics industry to support the development, piloting and implementation of solutions across economic sectors;
• Coordinate approaches to bring scale to investments and help speed transformations;
• Support the development of the appropriate infrastructure;
• Integrate decarbonisation into logistics asset investment decision making.

Pursue advances in technological solutions

Opportunities will also emerge for retailers to pursue advances in technology and become early adopters of next generation logistics solutions. There are a number of examples of advanced systems that are in various stages of testing and development, including:

• Autonomous driving systems: more traditional and recognisable vehicles that require no human driver
• Drone deliveries: Individual packages delivered via aerial automated drones
• Autonomous mobile delivery lockers: unmanned systems that can work around specific geographical areas

[61] CNG Fuels: Learn More (2020). CNG Fuels.
[62] John Lewis Partnership to build biofuel station as it transitions to alternative fuels (2020). Smart Transport.
[63] John Lewis Partnership to stop using fossil fuels across transport fleet by 2030 (2020). Retail Gazette.
[64] John Lewis and Waitrose pledge to power entire delivery fleet with bio-methane by 2028 (2020). Edie.
[65] First net zero emissions fuel for HGVs announced (2019). Commercial Fleet.
[66] Decarbonizing Logistics: Distributing Goods in a Low Carbon World (2018). Alan McKinnon. Kogan Page, London.
[67] Central England Co-op offers eco-friendly delivery through Snappy Shopper (Sept 2020) – The Grocer
[68] DPD boosts electric fleet to 600 with UK's first MAN Truck & Bus 3.5t right-hand drive electric vans (2020). DPD.
[69] Large electric delivery trucks to hit London's streets (2020). Parcel and Post Technology International.
[70] Dixons Carphone commits to cleaner, greener deliveries with EV100 initiative (2020) – Dixons Carphone
[71] Future of Mobility: Decarbonising road freight (2019). Foresight.
[72] Living Lab 3: Urban Logistics Consolidation (2019). SELIS.