With developing economic powerhouses like China, Brazil and India not covered by the second wave of Kyoto reforms, commonwealth members such as Canada opting out deliberately, and faltering support from Russia and Japan, many distribution companies many inside the UK are losing their commitment to reduced carbon emissions in the coming years. They feel the Kyoto protocols have become ineffective, and many economic pundits agree.
While many UK freight forwarding or warehousing and distribution companies feel Kyoto oriented targets are unrealistic, many others have found that the kind of carbon footprint efficiency they demand means the kind of cost efficiency that profitability on today’s markets requires anyway.
European distribution companies working towards the Kyoto protocols
Several prominent and up-and-coming warehousing and distribution companies across Europe are implementing new developments within protocol guidelines. Deutsche Post is a good example. They have developed an express delivery service called Go Green which proposes to make deliveries to over 35 countries while offsetting the resulting carbon emissions with various external projects. Of course, this is an example at the larger scale of market participant. SMEs rarely operate with such scope.
In the aftermath of the recent economic crisis, logistics and distribution companies seem to be shifting their focus dramatically. Back in the 1990s, environmental focus was in vogue, and much talked about even if not universally enacted. Now many of the distribution companies seem focused on improving process efficiency, working with government to increase employment where practical, and expanding into international markets.
Current challenges to warehousing and distribution companies is to create distribution hubs in places where logistics services can be concentrated. Where they can easily reach their markets, but take advantage of lowered costs or tax incentives, and where they can reduce their overall carbon footprint in ways that save, rather than cost money.
Limbourg is one area where we see this kind of development. It is located in the far east of Belgium, an area that allows easy (and therefore efficient) physical access to a large number of people, and offers tax benefits to warehousing & distribution companies located there.
Efficient and cost effective distribution companies in Essex
Similarly in the UK, Essex is an area poised to take advantage of these efficiencies. It shares its western border with Greater London, easily the UK’s largest population centre, so distribution to a maximum number of people can be achieved quickly and with minimal energy expenditure. Many distribution companies find that real estate prices prevent them operating within or around major centres of population, but Essex seems to have some unique advantages here.
Not only does it offer access to substantial (and reasonably priced) docks and related facilities and rail links, but the region has not yet seen the kind of large scale real estate price recovery that nearby London has. Land, labour and many services costs are unusually low there, and this allows warehousing and distribution companies located in Essex to operate in a kind of ‘goldilocks zone’ where they have access to the population of Greater London (and the South in general), but do not have to content with the kind of prices that access usually entails.
Overall, it seems that if the Kyoto protocols are really to be met, the solution cannot be a drop in the amount of goods shipped or distributed. Gains must be made in the efficiency of our distribution networks, and in seeking direct access to population centres without paying the premium to operate within them.