16 NOVEMBER 2021

Green Logistics As A Condition For Modern Environmental Management

Author: Mario Chobanov, MSc

Logistics as a business function is incorporated in the activity of all manufacturing, trading and service business entities. This business is not new, but in the last twenty years begins trying for its optimization and efficiency.

Today, logistics and business logistics in the academic environment is given great attention, so if you observe logistics as a modern scientific discipline, it is an interdisciplinary and multidisciplinary discipline. On the other hand, the management (hereinafter: management) of the environment and its protection is becoming an increasingly relevant topic in a modern society, due to the current problems we face.

With the actualization of the circular economy and sustainable development, green logistics is also developing. Green logistics is a common challenge for economists as well as environmentalists and lawyers. That is why it is necessary to merge scientific and organizational knowledge in order to permanently integrate logistics activities in the concept of management and maintenance of the environment.

Green logistics, also known as environmental logistics, refers to sustainable policies and measures that focus on reducing the negative effects of the traditional logistics approach on the environment and its quality. This means configuring logistics processes, organizational structures, logistics systems, equipment and means used in the transport field. Green logistics and sustainable development policies and measures are also being expanded in the area of distribution, developing new sales methods also as new inventory management methods in the warehousing area.

Transport, i.e., shipping currently accounts for half of the global oil consumption and almost 20% of global energy consumption and nearly 40% is related to urban transport (urban logistics). In fact, the International Energy Agency predicts that these figures will double by 2025, mainly due to online shopping, so the logistics industry must find a smarter and more innovative method of distributing goods, while considering the balance of economic growth, but also the protection of the environment.

Besides logistics is not known for its sustainability as an industry, green logistics strives to reduce the negative environmental effects of logistics processes and operations, air, soil, sound and water pollution, and to use resources and raw materials rationally. Precisely for this reason, in the higher education of the study programs where business logistics is studied, the subjects from the problem of green logistics, reverse logistics, as well as the management of the resources in logistics are introduced more and more. This means that the education sector also strives to educate young researchers on new aspects of logistics based on environmental regulations.

Customers evaluate and have a positive impression of companies that implement green practices. Therefore, in marketing we say that green sells better. Green consumers are most prevalent in South America and Asia, while consumers in Europe remain reserved towards green practices.

To achieve a green economy, companies must choose to systematically modify their activities and to include environmental impact into their strategic and operational plans, which is likely to have a positive impact on their business operations. The challenge called green logistics means finding models that will allow us to balance the various problems: reducing costs, improving the quality of service, defining the appropriate level of inventory, etc. Besides raising awareness of companies, green logistics need to be supported by the state, primarily in the form of green campaigns and promotion of green strategies and tactics.

In the global market, companies are already beginning to advocate the following practices: application of alternative propulsion systems for vehicles, such as liquefied gas, hybrid or electric vehicles, optimization of fleet management, utilization of intermodal transport, consolidation of shipments, improvement of shipments inventory management processes and reverse logistics, setting up warehouses or stands where freight forwarders can dispose dozens of parcels at one point, etc.

There are many initiatives that advocate for green practices. One of them is Lean & Green, a multi-sectoral European initiative aimed to inspire supply chain members to reduce carbon dioxide emissions by 20% over five years in the logistics processes of 500 authorized companies in Luxembourg, Belgium, Germany, Czech Republic, Slovakia and Switzerland. Participating companies (in the initiative?) will also reduce their costs, increase their transparency and traceability, and will benefit from knowledge sharing.

The planning of logistics processes and operations based on modern environmental principles is a safe way to protect the environment, and on the other hand provides logistics efficiency and sustainable development.

In the future, companies will measure supply chain efficiency by their ability to integrate their traditional logistics goals – cost and quality of service with environmental impact.

As a final thought, it can be noted that when-then consumers will value companies according to the impact they have on the environment, in addition to the standard consumer problems related to quality and prices. This awareness will be since it is the new generations who grow up with environmental problems and learn from the mistakes of others.

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