Green Logistics: How Small and Medium-sized Businesses (SMBs) Can Leverage Sustainable Supply Chains to Gain a Competitive Advantage

In today’s business landscape, green logistics is not just a trend but a crucial strategy for small and medium-sized businesses to gain a competitive advantage. According to Forbes, 88% of consumers stated they are more loyal to businesses that prioritize sustainability, while a recent IBM consumer study showed more than seven in 10 are willing to pay a premium for brands that practice sustainability. So, embracing eco-friendly practices can secure customer loyalty and boost brand image? We’re just getting started…

Adopting sustainable logistics can create major cost savings, as Walmart’s fleet efficiency managed to do by optimizing its transportation routes and doubling its truck fleet efficiency. They reduced carbon dioxide emissions by 87,000 metric tons since 2015 and saved more than $1.1 billion in fuel and counting. General Motors saved $12 million annually through a reusable container program. That environmental regulations are becoming more stringent, making green logistics essential to avoid penalties and disruptions, only further underscores how critical it is to integrate green logistics.

Given all this, though, how can small and medium-sized businesses leverage green logistics to secure that competitive advantage?

In a recent webinar with Supply Chain NOW, two of DP World’s foremost experts — Terry Donohoe, CEO of DP World in the U.S. and Mexico, and Glen Clark, Senior Vice President of Freight Forwarding for DP World Americas — explored how SMBs can partner with sustainable supply chains to gain a competitive advantage. These are some of the most effective methods they identified for SMBs to gain that sustainable edge:

1. Optimize Transportation and Shipment Methods

One of the most significant ways small and medium-sized businesses can reduce their environmental impact while saving costs is by optimizing their transportation and shipping routes. Businesses may identify significant savings they didn’t expect considering greener alternatives by evaluating their shipping methods often — as Donohoe asks, “Does it really have to move by air freight, or can it move by ocean freight? Does it really have to move by truck, or can it move by rail?” Switching to more eco-friendly transportation methods, such as rail or sea freight, can significantly reduce carbon emissions and lower costs.

By making smarter decisions about transportation, SMBs can reduce fuel consumption and emissions, leading to both environmental and financial benefits. This approach not only meets increasing pressures for sustainability but also offers a direct path to cost-efficiency, allowing smaller businesses to remain competitive in a cost-sensitive market.

2. Adopt Technology for Greater Efficiency

Technology plays a crucial role in enabling SMBs to implement green logistics. Clark noted how automation and artificial intelligence (AI) are transforming the logistics industry, making it easier for businesses to adopt more sustainable practices. Real-time data and digital platforms allow SMBs to optimize routes, reduce packaging waste, and improve overall supply chain efficiency, which can minimize their carbon footprint.

Moreover, these technologies enable SMBs to track shipments more accurately, helping them avoid delays and excess costs while reducing emissions. By integrating AI and data analytics, businesses can streamline their logistics operations, cut down on fuel consumption, and better manage resources.

3. Reduce Packaging Waste

Packaging waste is a common issue in logistics, and reducing this waste is a critical component of green logistics. Clark shared how, for example, DP World helps its customers by adopting automated boxing machines that build boxes to the exact size of the shipment. “This new technology... was a great sustainability [solution], but it was also a cost saving on shipment because you didn’t have the extra queue inside of those trucks,” Clark explained.

This innovative approach to packaging not only reduces waste but also optimizes the use of space in transport vehicles, leading to fewer trips and lower emissions. SMBs that adopt similar practices can reduce material costs and enhance their environmental credentials, appealing to consumers who prioritize sustainability.

4. Select Green Ports and Terminals

Choosing the right port or terminal can also make a significant difference. As Donohoe pointed out, many ports are investing heavily in green technology. For example, nearly all of DP World’s ports in Latin America are now powered entirely by renewable energy, providing SMBs with a greener option for their logistics needs.

By selecting ports that prioritize sustainability, SMBs can further reduce their carbon footprint and align their logistics operations with global sustainability goals.

5. Leverage Sustainable Logistics Partners

Above all, SMBs need to partner with the right logistics providers that invest in green technologies to enhance their sustainability efforts without needing to make large upfront investments. Donohoe emphasized the importance of selecting eco-conscious partners, offering examples from DP World’s own investments: “There are eco-conscious logistics providers that invest and allow you, as a small and medium-sized business, to invest in green technologies.”

By partnering with the right green logistics provider, SMBs can benefit from existing green infrastructure, such as electric vehicles or energy-efficient warehouses, without needing to build these capabilities internally. In Vancouver, for example, DP World is piloting a program that uses hydrogen-powered cranes, with the intention of rolling out the initiative globally, thereby offering a sustainable solution for businesses using Vancouver as part of DP World growing global network.

As sustainability becomes a non-negotiable aspect of doing business, SMBs must find ways to integrate green logistics into their operations to remain competitive. From optimizing transportation and reducing packaging waste to leveraging technology and sustainable logistics partners, there are numerous strategies that small and medium-sized businesses can adopt. In Donohoe’s words, “sustainability is non-negotiable in today’s world.” By adopting these practices, small and medium-sized businesses can not only meet growing consumer and regulatory demands but also improve their operational efficiency and secure long-term success.

If you’re interested in how SMBs can integrate green logistics into their operations, come and find out. To watch the full webinar of Terry Donohoe and Glen Clark discussing the changing climate in which SMBs are operating click here or click here to listen.