The Vital Role of Logistics in a Sustainable Future: Optimization and Collaboration as Key Drivers

Logistics plays an essential role in our daily lives, affecting businesses, cities, and consumers alike. In a world that is increasingly interconnected, with the rapid growth of e-commerce services and goods, logistics is no longer just a technical domain reserved for experts like supply chain managers or network planners. According to the Osservatorio e-Commerce B2c Netcomm – School of Management del Politecnico di Milano, Italy’s e-commerce sales are expected to grow by 6% in 2024, reaching a total value of €38.6 billion. This highlights the importance of efficient logistics in an era where both business opportunities and societal challenges—such as the climate crisis—demand a radical shift in the way we think about transportation and supply chains.

The Green Mile: Efficiency and Sustainability Go Hand in Hand

Through methods like the hub-and-spoke network model, consolidation of packages, optimization of last-mile routes, and the use of alternative delivery points, the logistics industry continually seeks to maximize efficiency while minimizing resource expenditure. Simply put, the most efficient solutions are often the most sustainable:

“the greenest mile is the one not driven or flown”

Take for example a company managing shipping orders for its customers. Its goal is to reduce costs and externalities, and often, the most cost-effective option is also the most sustainable. Yet, it’s not enough to focus solely on operational efficiency—logistics companies must also embrace emerging technologies and innovative supply chain strategies. The goal of achieving carbon neutrality in its global operations demonstrates that setting ambitious sustainability targets is not just good practice, but a business imperative. These advancements, along with the milestones to reach the targets, are outlined in the Global Reporting Initiative (GRI). For companies that don’t have logistics at their core, sustainability efforts often fall under external partnerships with logistics providers. However, shortening supply chains and enhancing transparency will become increasingly critical as new ESG reporting regulations, such as the Corporate Sustainability Reporting Directive (CSRD). This will place pressure on both retailers and producers to ensure their logistics operations align with sustainability goals.

Urban Logistics: Collaboration Is Key

There is no one-size-fits-all solution to sustainability, especially in urban logistics. The electrification of last-mile fleets, for instance, is now a necessary step. However, this doesn’t fully address the issue of urban congestion, especially in historic city centers like Milan. Here, public space management has become the key concern.

In cities with dense populations and a high volume of tourism and commerce, like Milan, local policymakers and logistics operators must find flexible, sustainable solutions. For example, cargo bikes are being increasingly utilized to reduce traffic and carbon emissions, but electric vehicles alone are not the silver bullet.

Drastic measures can sometimes backfire, as evidenced by Barcelona’s attempted B2C delivery tax, which the Catalan judiciary struck down as discriminatory. The tax would have raised costs for businesses and consumers, highlighting the need for collaborative dialogue between city officials, businesses, and logistics providers to find equitable solutions.

A promising model for such collaboration is the UNCHAIN project, which we have been developing with the City of Florence since 2023. Funded by Horizon Europe, the initiative fosters better information sharing among logistics stakeholders, aiming to develop solutions that work for municipalities, businesses, and citizens alike. By studying best practices in cities like Madrid and Berlin, the project hopes to create sustainable models that can be adapted to a variety of urban contexts.

Long-Distance Logistics: Rail Transport as a Sustainable Alternative

While electric fleets are becoming more common in urban settings, long-distance logistics still present significant challenges. Just-in-time services are often constrained by the flexibility and speed of rail transport, which is sometimes overlooked in favor of road freight. Yet, rail transport and intermodality offer significant sustainability advantages, especially for longer routes where electric vehicle (EV) technology is not yet a viable solution.

This is where the logistics industry can further innovate by integrating rail transport into its operations, improving both business outcomes and environmental sustainability.

UPS for example has implemented a multimodal solution in collaboration with Cargo Beamer integrating road and rail to move shipments between Germany and Italy saving approximately 1,900 kilometers of driving per trip while sticking to committed delivery times.  It is essential to measure progress through annual sustainability reports, which include third-party certifications. These reports do not focus solely on environmental impact but also take into account social and governance factors, demonstrating the multifaceted nature of sustainability in logistics.

A Synergistic Approach to Sustainable Growth

In the race toward climate justice, true sustainability can only be achieved when all sectors -environmental, social, and economic – work together in a synergistic effort. The logistics industry is at the forefront of this challenge, as it directly impacts everything from global trade to urban life. Initiatives like the UNCHAIN project and the carbon-neutral commitment represent steps in the right direction. But more work is needed to align urban planning, long-distance transportation, and the growing demands of e-commerce with sustainable goals.

The article was originally published in Italian in the ESG360 magazine, titled “Logistica urbana: collaborazione e innovazione per un futuro sostenibile”. You can find the original article via this link: https://www.esg360.it/sostenibilita/logistica-urbana-collaborazione-e-innovazione-per-un-futuro-sostenibile/.

The English translation and publication were authorized both by UPS Italia and Marzia Picciano.