Companies ‘passing the buck’ on green costs

Companies ‘passing the buck’ on green costs

The Logistics & Transport Industry Environmental Survey, sponsored by Kewill, a leading provider of global trade and logistics software, found that three-quarters of respondents who awarded logistics contracts included sections on environmental compliance in their tender documents. However, most (54%) failed to make provision for the extra costs that could be involved.

This will no doubt be a source of annoyance for logistics companies forced to shoulder costs pushed on to them by their clients, says Transport Intelligence, but it seems there is little they can do to avoid investing in green initiatives. In the survey, 70% of companies awarding contracts said that environmental compliance was either ‘reasonably important’ or ‘very important’.

Respondents were also asked whether their companies’ environmental enthusiasm would change in the coming years, given the chances of an economic slowdown. The overwhelming sentiment seemed to be ‘no’, but according to two-thirds of respondents, that is largely due to the ‘win-win’ of implementing green initiatives that bring operational efficiencies and also cut costs. The number who said they would continue to pay more for an environmentally-friendly alternative (17%) was balanced by the proportion who said they would base their sourcing decisions on cost alone.

When asked specific areas in which they were undertaking green initiatives, the highest proportion (33%) identified transportation. That included driver training, hybrid engines and better management of empty running. Equally important, with about a quarter of responses each, were more efficient planning through IT tools and increased administrative efficiencies. Perhaps surprisingly, warehousing was identified by only 15% of respondents as an area on which they were focusing.

Commenting on the findings, John Manners-Bell, CEO of Transport Intelligence, said: “The survey results will not surprise the more cynical in the industry who believe that the cost of these types of initiatives always gets passed down the line. However, it seems that ‘green logistics’ is not a passing fad. The business case for implementing environmental initiatives cannot be doubted due to the cost savings they bring, especially when they offset the rising cost of oil.”