Waste: A Game of Snakes and Ladders? : Distribution
As a service industry, distribution does not generate waste in the same way as sectors such as primary production and manufacturing. However, road transport, the predominant mode of freight distribution, causes vehicle emission, noise pollution, and is a major energy user. Together these place a heavy burden on society. The distribution sector therefore needs to limit its own environmental impact and work with those industries it serves to minimise waste. The findings of this study show that the distribution sector is still some way behind others in the adoption of waste minimisation strategies.
The sector has an intermediary role in the supply chain but displays some concern with both quality issues and waste management. Half (51 %) of the companies surveyed are registered for BS5750, explained perhaps by the dominance of larger hauliers and distributors in our sample, with 40% currently having a formal environmental management system in place.
The distribution sector faces some difficulties in implementing such schemes due to the 'scattered' nature of its business operations, and the preponderance of small hauliers and carriers. The survey showed that 67 percent of small organisations did not have a waste minimisation programme. However, overall two in five (44 per cent) of those companies questioned currently do have a waste minimisation policy. With depots countrywide, distributors may find it difficult to operate uniform policies for recycling materials.
The pressure from large retailers with publicly stated 'green' policies is one of the strongest motivators for change and for improved waste minimisation in the supply chain. Indeed, in some cases an effective environmental strategy may have a major influence on competitive advantage for freight companies providing their services to such national and international concerns.
In addition, the environmental impact of distribution is likely to worsen. This is primarily due to changes in the location of manufacturing industries and the move towards pan-European distribution strategies, which has led to the transportation of freight by road over longer distances.
Waste minimisation focuses on energy savings (92 per cent) but with the high cost of fuel and the prominence given to vehicle emissions and particulates from diesel in the general environmental pollution debate, this is not surprising. Energy saving is an area where distribution companies can see at in waste management.
Other areas of waste minimisation are packaging change (64 per cent) and product redesign (38 per cent), but these are led by the food and retailing sectors. Consumers used to perceive volume as value for certain goods; however, this is no longer the case. For example, product and packaging changes in washing powder underline this point: supermarkets now sell smaller, more concentrated products in less bulky packaging with a potential for the subsequent reduction in freight volumes. Some distribution companies are working in partnership with manufacturing and retailing industries to minimise packaging further, through innovative returnable transit packaging systems and collection systems for recyclable materials.
Where waste is generated by large players in the distribution sector, there appears to be a strong emphasis on recycling, with one in seven of the total surveyed citing consumer pressure as the incentive. However as with all the sectors surveyed, financial considerations are the primary influence in the adoption of waste management practices.
Only 45% of those companies questioned were able to estimate their gross expenditure on waste, but where this expenditure is known, it exceeded £100,000 per annum for some 40% of companies. It appears that these costs are set to rise, unsurprising in view of the ever-increasing price of fuel. In contrast, some 52% of respondents believed that the volume of waste output would fall. In the case of companies which both manufacture and distribute their products there appears to be little appreciation of the waste costs attributable to the different areas of their businesses.
However, waste is not just a threat, but can also bring opportunities. Over two-thirds of distribution companies believe that Take Back Liability has implications for their businesses. But, part of this is to the advantage of the sector through the creation of new business opportunities for 'taking back' goods in conjunction with waste management enterprises.
The Environmental Protection Act is estimated by some commentators to have doubled the volume of hazardous goods in the UK to 'take back' (currently some 2.5 million tonnes per annum). These opportunities for distributors and waste management concerns to work in partnership are not, of course, restricted to hazardous goods but can equally be applied to all aspects of recycling and materials recovery.
The survey interviewed distribution service companies (from large logistics organisations to small hauliers), the distribution arms of retailers, wholesalers, food and drink manufacturers and industrial product manufacturers.
MAIN FINDINGS
- Over nine out of ten (92 per cent) address energy saving
- Only two in five (40 per cent) have a formal environmental management system
- Only 45 per cent know how much they spend on waste
- 52 per cent believe that waste tonnage will fall
INDUSTRY FACTS
The distribution sector . . .
- is worth over 25 billion
- sends 87 per cent of its freight by road
- represents 5 per cent of supply chain costs in those industries in which distribution plays a key role
Legislation
- EC Directive on Packaging
- Aims to reduce vehicles, eg road pricing schemes
- Routeing schemes, eg bypasses & area bans
- Targets to reduce emissions & noise
- CFC phase out
- Health and safety
Process Change
- Vehicle & engine design & technology
- Speed limits
- CFC reduction
- Transit packaging systems
Environmental Effects
- Reduced noise & air pollution
- Fewer accidents
- Change in road transportation strategies
- Pan-European production & storage centres affecting fuel consumption
- Consequence of 'just in time' activities
