What is green logistics and how important is it to the industry?

What is green logistics and how important is it to the industry?

What is "Green Logistics"?

Green logistics, also known as sustainable logistics or eco-friendly logistics, refers to logistics activities that aim to achieve sustainable, environmentally friendly, and protective goals by minimizing negative impacts on the environment. The term "green logistics" was first introduced in the 1980s, and since then, many organizations and researchers have put forward different concepts of green logistics from various approaches.

In Vietnam, the concept of green logistics is still relatively new, so there is currently no uniform and clear understanding. According to the Editorial Board of the Vietnam Logistics Report 2022, green logistics is logistics activities that aim at sustainable, environmentally friendly, and protective goals, minimizing negative impacts on the environment. Green logistics emphasizes efforts and measures to reduce the negative impacts of logistics activities, thereby achieving a sustainable balance between economic, social, and environmental goals.

The demand for green logistics services is growing rapidly. Customers play an important role in promoting companies to implement green logistics. In addition, customers are increasingly interested in environmentally friendly goods and services, so the development of green logistics is an inevitable trend, directly promoting the process of greening in transportation, warehousing, and product packaging activities. Moreover, many global logistics companies now require emission standards for third-party logistics companies when outsourcing services.

In Vietnam, the logistics industry is growing at a fairly fast rate, averaging about 14-16% per year. According to the 2021 Agility Emerging Markets Logistics Index report, Vietnam is currently ranked eighth among the top 10 leading countries in logistics. Vietnam has risen three ranks compared to 2020. Therefore, developing green logistics will enhance the competitiveness of businesses.

What is the importance of green logistics?

Understanding what green logistics is, it is important to also understand the significance of green logistics. Green logistics projects are not only important to Vietnam but to the entire region. Updating and directing the development of green logistics in the future will become a prerequisite for helping businesses not only survive but also thrive in the industry. Applying green logistics to business helps reduce environmental impacts and helps businesses solve the following issues:

- Reduce industrial waste:

Packaging is one of the most used and discarded industrial and household waste products today. In logistics, the most commonly used packaging is plastic wrap for goods in dry or cold storage warehouses. With green logistics, companies are encouraged to use packaging made from recycled or easily biodegradable materials or to use pallets (wood, plastic, etc.) to store products instead of using packaging that takes up warehouse space and affects the industry's green nature.

- Reduce costs:

The process of transporting goods uses multiple transportation methods (multimodal transport). Applying green logistics uses fuel-efficient transportation, prioritizing the use of clean fuels. Planning a network for transporting goods, arranging distribution centers, and choosing reasonable transportation routes such that vehicles are fully loaded in both directions, and transport is counter-current, will help reduce costs.

- Avoid waste:

Applying green logistics to warehouse design for businesses such as optimizing warehouse and inventory layouts to reduce logistics costs (reserving more or less inventory creates waste, leading to increased storage costs); Using energy efficiently, exploiting clean energy (beyond fossil fuel sources, oil); Designing a sustainable warehouse that can be used in the long term to avoid material waste, demolishing and rebuilding or quickly deteriorating warehouses.

Currently, there are many businesses that are responding to the green logistics trend, spreading meaningful messages about the environment and implementing sustainable development strategies. Among them, Nam Ha Noi Cold Storage - one of the earliest businesses providing cold storage services to respond to this trend - has been awarded the 3-star Green Energy Hanoi title by the Hanoi People's Committee. This unit applies the green logistics control process right at the warehouse as follows:

  • Control of green packaging: For its cargo packaging service, the warehouse always uses easily biodegradable wrap films made from the simplest packaging materials that can degrade in nature.
  • Control of green transport: Evaluating the activities that damage goods and the points that are not good or correct in the transportation process that have a direct impact on environmental pollution.
  • Control of green storage: Controlling all factors that increase or decrease temperature, loss of refrigerant, damage to food, etc. when goods are stored in the cold storage.

In 2022, overcoming difficulties and challenges, under the government's leadership, Vietnam's economy and society recovered and developed strongly. However, it is forecasted that 2023 will be a difficult year for the global economy in general and Vietnam in particular, requiring the continued grasp of the situation, further promoting the achievements, forecasting well, and accessing the international market to have appropriate coping solutions.

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