Is e-commerce really a key factor in decarbonizing freight transport?

This article was originally published in our newsletter "Mobility Analysis," June 2, 2021. To receive future articles by email as soon as they are published, Subscribe now.

With growth in 2020 reaching +37% [1], e-commerce* appears to be the big winner of the COVID-19 crisis and its successive lockdowns. As it continues its spectacular growth and becomes a permanent fixture in our consumption patterns**, a heated debate rages over its carbon footprint compared to traditional in-person shopping, with various studies reaching conflicting conclusions [1][2].

E-commerce: What Is Its Carbon Footprint?

When analyzing the emissions reported by e-commerce companies that publish a carbon footprint without omitting any significant items, it is important to note that The manufacturing of purchased goods and the use of sold products account for virtually the entire carbon footprint of these companies (between 85% and 95%), compared with just 5–10% for transportation-related emissions (upstream freight, downstream freight, visitor travel) [3]. Thus, before comparing the relative merits of different shopping methods, let us not forget that it is, first and foremost, unnecessary consumption that drives greenhouse gas emissions. In addition to indirect emissions, the development of warehouses dedicated to e-commerce—built on agricultural land or undeveloped land—also helps reduce carbon sinks. While land development caused by e-commerce currently accounts for less than 1% of the average annual land area developed in France [1], it is primarily the current pace of construction and the lack of a regulatory framework for these logistics facilities that are being challenged, as e-commerce warehouses are not subject to the climate law aimed at limiting the construction of commercial space in natural areas.

E-commerce vs. In-Store Shopping: Is This Victory Not as Clear-Cut as It Seems?

Despite its seemingly “dematerialized” nature due to digital technology, e-commerce is in fact a highly carbon-intensive activity. However, many stakeholders and studies present it as a lower-carbon alternative to traditional retail [2]. So, e-commerce vs. in-store shopping: who comes out on top in this race to be the lowest-carbon option? The classic argument in favor of e-commerce is that the customer’s car trip to the store is “replaced” by optimized delivery to multiple customers, which results in fewer trips and therefore fewer emissions. This claim needs to be qualified in two key respects:

• E-commerce is said to be replacing traditional retail: counting the emissions avoided by e-commerce compared to in-store shopping is only relevant if one truly replaces the other. However, very few consumers have stopped going to stores to shop because of e-commerce. Not only has the total retail floor space remained generally stable over the past 15 years despite the growth of e-commerce, but the expansion of e-commerce does not necessarily lead to a reduction in travel. In fact, in some cases, mobility for personal shopping remains unchanged, and thus home deliveries result in a net increase in mobility [4]. Thus, E-commerce-related emissions in these areas would not replace those from traditional commerce, but would be in addition to them.
• Delivery by couriers would be more efficient than trips made by individuals to stores: using an “average case” masks the disparities in shopping habits, whether in-store or online. In fact, even though the car remains the standard mode of transportation for in-store shopping, its modal share varies greatly (from 24% to 88%) depending on location (large metropolitan areas or medium-sized cities, city center or outskirts) and the type of retail establishment (big-box stores or small/medium-sized stores), with the alternative often being low-carbon modes of transportation such as walking, biking, or public transit (ranging from 10% to 74%) [5]. In the latter cases, the “100% car” baseline scenario is obviously no longer valid. Furthermore, consumers often combine purchases during a trip to the store, which can significantly reduce the emissions associated with purchasing the product in question at the store. However, bundling purchases is not taken into account in studies comparing e-commerce and in-store shopping that use as a baseline the purchase of a single product [2]. Furthermore, route optimization is increasingly being called into question, particularly due to product return rates (ranging from 10 to 30 percent depending on the industry), additional deliveries due to the recipient’s absence (the absence rate on the first delivery attempt is approximately 15%), and new consumer trends, such as express delivery [1]. The race toward ever-shorter delivery times has led to lower truck load factors and increased reliance on faster, higher-carbon modes of transport [6]:

Greenhouse gas and NOx emissions by delivery time per package | in kgCO2 or gm

Thus, Several factors are key to the greenhouse gas footprint of last-mile logistics:the type of vehicle, the vehicle load factor, the no-show rate for home deliveries, and the product return rate [1]. Thus, E-commerce encompasses a wide range of practices by carriers that have varying carbon footprints, as well as an equally diverse array of reference scenarios., between someone who drives to make a single purchase and someone who combines their purchases and travels by bike. And depending on the comparison chosen, the more climate-friendly option will sometimes be e-commerce and sometimes brick-and-mortar stores, as illustrated by the study “Environmental Analysis of US Online Shopping” (2013) [7]:

Comparison of greenhouse gas emissions between in-store shopping and e-commerce (“traditional shopper”: in-store shopping; “online shopper”: e-commerce without expedited delivery; “impatient online shopper”: e-commerce with expedited delivery) | in kgCO2e

So, no knockout victory for e-commerce. But is this comparison really the right battle to fight? Given this lack of a clear answer—and with e-commerce now firmly established in our consumption habits—isn’t the real challenge rather to adapt our behaviors to ensure that commerce is as low-carbon as possible, regardless of how we shop?

How can we reduce the carbon footprint of e-commerce?

1. The role of consumers:

• Virtually all emissions associated with e-commerce stem from the manufacturing and use of the product. Therefore, the key is to rethink our needs and avoid succumbing to overconsumption.
• Delivery method: Choose pickup at a pickup point whenever possible and opt for low-carbon transportation options when picking up the package (for example, based on the environmental information provided by e-commerce platforms; see below).
• Delivery times: Keep expedited deliveries to an absolute minimum. Do we really need that new grill in less than 24 hours?
• Combine your purchases into a single delivery.

1. The role of e-commerce stakeholders:

• Prioritize lower-carbon modes of transportation for upstream logistics: choosing air freight over sea freight can dramatically increase the carbon footprint of a purchased product (since the emissions factor for air freight is about 100 times higher than that of sea freight).
• Decarbonization of the “last mile”*** (or even the preceding segment leading to the final logistics warehouse): Vehicle propulsion is still overwhelmingly based on internal combustion engines. Numerous solutions exist, such as cargo bikes and the development of alternative propulsion systems [8].
• Display the carbon footprint of different delivery options (pickup locations or home delivery, delivery time, etc.) to raise consumer awareness.

--- Article written by Juliette Sorret (Consultant) juliette.sorret@carbone4.com

* Online sales of products and their delivery to a pickup point or to a customer’s home ** E-commerce accounted for 13.4% of retail sales in 2020 *** This terminology should not be interpreted literally: the last-mile segment is generally longer, since it connects the final logistics warehouse—usually located in the suburbs or on the outskirts of cities—to the end customer, who may be well over a kilometer away from the warehouse … ---

Sources: [1] France Strategy [2] Olivier Wyman, Coliposte Eco-Comparison Tool, FEVAD [3] Analysis based on the annual reports of e-commerce companies, disclosures from the Climate Disclosure Project (CDP), and Carbone’s expertise [4] 6t [5] CEREMA [6] MIT Center for Transportation and Logistics [7] UC Davis Institute of Transportation Studies [8] Carbon 4