Soaring e-commerce demands call for the implementation of greener, more optimized logistics activities in urban areas, said experts.
The necessity to improve logistics practices was emphasized by experts at the “Cost Optimization with Logistics Hubs and Circular Economy” symposium, co-organized by BW and the Ministry of Industry and Trade within the framework of the 2022 Vietnam Logistics Forum.
“Urban logistics has never faced such change as it does now. Without intervention, it’s predicted that, inner-city traffic in some places will be severely disrupted in the next three years,” said Fion Ng, COO of BW Industrial Development Joint Stock Company (BW), at the symposium.
According to a November 2020 World Economic Forum report, without intervention, the number of delivery vehicles in the top 100 global cities will increase by 36% through 2030 to meet growing online shopping demands.
This has environmental consequences, as emissions from these vehicles are estimated to add 6 million tons of CO2 by 2050. Traffic congestion is also estimated to increase by more than 21%, or an average of 11 extra minutes for one person to commute to work per day.
Last-mile deliveries are also heavily affected, especially in the freight segment, which accounts for about two-thirds of the current number of inner-city delivery vehicles.
Due to the increasing number of delivery vehicles and emissions, inner-city areas will continue to struggle with traffic congestion and air pollution in the future.
Vietnam Logistics Forum 2022 held in Hai Phong on November 26-27. Photo by BW
Greener logistics solutions are being implemented in many Asian countries. The most obvious is the discovery of new and more environmentally friendly modes of transportation, such as electric or hybrid motors.
In September, global carrier Maersk announced the use of electric vehicles capable of achieving a 100% charge within 45 minutes for deliveries in India.
In the first phase of implementation, the company will focus on a 100-kilometer radius for business-to-business (B2B) distribution, intending to reach 50 vehicles by the end of this year.
Kuehne and Nagel, a freight service provider, also partnered with retail chain Lotus to become the first supermarket retailer in Thailand to use electric vehicles for cake delivery.
Coupang E-Commerce Company (Korea) announced the development of medium and large electric cargo trucks with Kia by 2025.
And, in Singapore, global carrier DHL Express intends to add 115 electric trucks to its fleet within next year.
According to the October 2022 annual report on Southeast Asia’s digital economy (conducted by Google, Temasek, Bain & Co.), if e-commerce-related logistics are optimized, carbon emissions and transportation activities can be reduced by 30-40% and 20-30%, respectively.
Experts talk at the “Cost Optimization with Logistics Hubs and Circular Economy” symposium. Photo by BW
Green logistics solutions in Vietnam
According to Fion, the increase in electric vehicle initiatives across the Asia Pacific logistics sector has gradually produced encouraging results toward the net zero emissions targets.
“Learning from successful applications of this model around the world will create the foundation and motivation for logistics enterprises in Vietnam in the near future,” she said.
In that respect, electric vehicles and hybrid engines are increasingly prevalent in Vietnam, although the overloaded infrastructure system and public charging system remain a critical challenge.
“Once the construction of urban logistics hubs is optimized, carbon emissions could be much lower than they are currently,” said Fion.
Fion Ng, COO of BW, presents logistics trends at the event. Photo by BW
According to the BW representative, e-commerce growth has transformed the field of urban logistics. Logistics and delivery service providers, which are closely related to the growth of online businesses, are experiencing growth rates of up to 70% amid fierce competition.
In addition, investments in and deployment of advanced technology applications have also been enhanced.
For example, BW’s e-commerce logistics hub in Tan Phu Trung Industrial Park (Cu Chi, Ho Chi Minh City) recently became a destination for e-commerce-related businesses, such as Shopee, J&T Express, and Best Logistics, with many other tenants being last-mile delivery units.
BW chooses strategically located warehouse points for logistics infrastructure and offers cost-optimization models such as ready-built warehouses and high-rise ready-built warehouses.
The company also adds new destinations and models, such as Xuyen A (double-story ready-built warehouse) and Phu Nghia (single-story ready-built warehouse) in Hanoi, which are considered potential logistics hub development points.
In addition to the general advances in technology, solving logistics problems requires the cooperation of all stakeholders.
The parties currently involved are not only logistics infrastructure providers such as BW, industrial park infrastructure providers, logistics service providers, and transport units but also technology providers, manufacturers, government, and consumers.
“Closer cooperation between logistics stakeholders and the authorities is necessary to quickly transform the industry and serve the end consumer while contributing to protecting the environment,” Fion concluded.
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