Let’s talk about sustainability and electronic commerce. It may seem like something contradictory, a thing that has ecommerce is that it generates a lot of waste by moving boxes, materials to protect products and sending small packages to millions at a time.
Since this is a reality, We have interviewed Nacho López, the Chief Operating Officer of . ORA transport and parcel company that is making a pretty big effort to make last-mile deliveries sustainable, without emissions.
Listen to this podcast to know what can be done to avoid staying in the green washing, in the environmental position and try to do real things towards a sustainable ecommerce.
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Interview with Ignacio López (Paack)
7:00 What is Pack?
He was born in Dubai, in an accelerator, with the aim of offering an omnichannel service, taking advantage of the competitive advantage of physical stores and being able to make immediate deliveries. What we call today service from the store. We start with one of the best clients you can have for these models today.
We realized that other retailers did not have it as well prepared, not even store staff that can prepare on the scale that we do. That’s where Paack came in, to give a more outplayer service, the lifelong logistics business where we collect from the warehouse and deliver with consolidated routes of more than 100 packages depending on the city and density.
From the beginning, with the technology we have, we were born to deliver with the focus of an end customer, achieving operational excellence. We always believed that we have to offer flexibility to all customers when it comes to receiving their orders.. We started offering time slot or immediate deliveries, we decided to become a premium solution for big players and cWe managed to have a better service with a more complex product.
11:50 Today, what is your size?
we are workingWe have 400 employees but by the end of next year we will have 500 because we are in the middle of a growth phase. We are operating in Spain, Portugal, and, In Spain we cover 70% of the population and we have warehouses in the main cities.
In the UK and France we are operating in the capitalswe are consolidating ourselves in these markets by operating and growing to achieve national coverage, which is one of our objectives for all markets. We invest heavily in automating warehouses and improving technology, which we develop every day.
14:00 How much do you bill?
This year we expect to bill €100 million, we are growing every year since we started operating and we hope to exceed the year with 150,000 shipments per day. It is difficult for us to attract small businesses because in the end the few shipments they have they want you to cover nationwide.
At the larger retail level we are with everyone you can think of such as , Amazon, MediaMark… All of them can focus on more specific populations and cover all deliveries, our goal is to have 100% coverage to be able to attack all needs.
17:00 There is a lot of “ground sea” with the relationship between ecommerce and sustainability, since it is still a way of working that instead of delivering a shipment of tons, makes thousands of small shipments. How can sustainability be worked from ecommerce?
The difference between consumers between action and intention is great. Everyone talks about sustainability but the reality is that the vast majority of end customers do not give importance to this issue to justify the delivery price. Everyone wants to receive free orders at home and quickly and we have to adapt to it.
There is a lot of work that retailers they can do in terms of manufacturing, making sustainable products or in the first steps of the supply chain such as packaging. Above all, associating with transport chains that make sustainable deliveries.
For our part, How do we reduce the carbon footprint? electrifying the fleets. It’s something we’re putting a lot of effort into. We are also making an effort to carry out a 5-year plan where we seek to cover the SDGs. We work on several points so that our impact on the carbon footprint is reduced to the maximum, both in deliveries and in everything we can emit from our work centers.
20:00 Do you have data that proves your reduction?
We started two years ago, it is complicated when you meet governments at the infrastructure level, if you compare a country like the United Kingdom with Spain there are different levels. We have cities that are 100% electric like Manchester, in Spain we are at 20% we have the goal of covering 100% of city centers by the end of the year, with an electric fleet and 0 emission vehicles.
Yes, we have changed with the objective of the company, not only as a competitive advantage, but to ensure that we are not harming the environment by making these deliveries. Another point that What we want to do is start educating consumers about the impact that all actions or decisions have, pushing them to have more sustainable practices. Like circular economies, there are tons of electronic products that below 20% are collected and recycled.
On the subject of returnsmMore than 20% of consumers plan to return orders, even more than 30% have ever done so, they buy thinking of returning because they buy several sizes, this reverse logistics also contaminates. Consumers must be made to understand that their choices have an impact on the environment.
32:50 You talk about the importance of productivity, what is your delivery rate?
It depends a lot on the city and on many factors, the areas where it is distributed, the density, the routing algorithm…We move as a courier and in cities with densities like London, Paris or Madrid, an average of 7 to 15 an hour. Couriers can place between 80-120 orders today with us.
Obviously we would like to extend this ratio, as you get densities you make the courier drive less and parking once make many deliveries. Getting density to our network and being able to charge more to the messengers without them working more hours.
35:20 Do your ecommerce customers internalize your discourse and values?
Retailers are clear that consumers of both their products, staff or that are associated with charity, value everything. Here they are realizing that green washing is no longer valid, they have to understand what they are doing, what they are doing to improve it.
We are seeing that many retailers are taking this into account as a priority and make decisions taking into account that they offer sustainable services. Some are willing to pay more. others not so much, but we are noticing the change in a very strong pressure to adapt to sustainability.
37:55 Ecommerce pollutes more than the classic logistics chain, will the day come when they pollute less if you buy online than if you buy it in the store?
This can happen but it is difficult because there are many factors such as what vehicle you use or what energy the store uses. Many studies say that for more than 15 km of distance they already ensure that an ecommerce is more sustainable, there are even studies that say that buying in store had more than twice the emission than buying on the web, especially in consolidated deliveries, of more than 80 orders at a time. Taking into account the transport to the store, the consumer’s displacement, the emissions that the store entails or the technological processes.
40:41 In the long term, what trends do you see?
There are some that are already being carried outsuch as collection points, having small warehouses or partnering with stores to make deliveries. There are also microhubs, which are small warehouses scattered throughout the citiesallowing to do it on foot or by bicycle.
Other projects that are carried out but are complicated at a technological level are mobile warehouses, trucks with pre-established routes and electric vehicles that pick them up to this truck. There are projects that can be considered but they are complicated.
I suppose that Little by little, marketplaces for local businesses will appear, this can help deliveries to have an associated pick-up area in this marketplace by reducing packaging, since it is a delivery close to your home, reused bags can be used. When technology advances there will be drones.
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