The Environmental Impact of eCommerce Business

With eCommerce business and the broader eCommerce market expected to grow by an anticipated 22% between 2023 and 2027, many business leaders have asked what the environmental impact of this online retailer expansion is, particularly as it relates to order fulfilment and parcel service. This is emphasised by fashion brands that retail their products online, where a customer could make multiple small purchases and returns over a month. 

The “last mile” of delivery — not the actual last mile, but the final leg of the parcel service — accounts for 25% of overall vehicle emissions in the UK. 

This has encouraged governments and private businesses to push for the transformation of the parcel service they offer: from electric vehicles to e-cargo bikes, developments are underway to reshape the delivery and parcel service. 

But what are the broader environmental impacts of the eCommerce business and delivery services, and what more can we do to offset these harms? The UK is ranked third for online shopping globally, and around 3 billion packages are delivered to homes and businesses nationwide. So the government, local authorities and private order fulfilment businesses must have a meeting of minds—something that, as we’ll see, is already happening.

What is an environmental impact?

First, it might be a good idea to be clear about what we mean when talking about the environmental impact of businesses. What is “environmental impact”? When we talk about how ordinary companies harm the environment, we’re discussing several things: 

The loss of biodiversity

Biodiversity is the mechanism that ensures that the entire food chain can support itself. If we lose some biodiversity—by converting the land where an insect-eating bird roosts into storage space for order fulfilment, for example—that has a knock-on effect on all other organisms in that food chain. 

Rising sea levels

With increasing amounts of carbon dioxide in the atmosphere from vehicles and industry, a greenhouse effect is causing glaciers to melt. Larger volumes of water are released into the oceans every year. 

Pollution

The packing materials to which we ship our online orders end up back in the local ecosystem. For example, the microplastics resulting from single-use packaging and products end up in our oceans and, in turn, in our drinking water and food.

Resource scarcity 

The business demand for energy, land and water is rising—making natural resources scarce and increasing the cost for businesses to utilise them. Not only are fossil fuels a finite resource, but so are the metals and minerals we use to construct vehicles, buildings and infrastructure. This harms business resiliency, as lead times and costs for the materials they require to do their work increase.

Waste

Online retail produces a lot of waste—both recyclable and non-recyclable—and uses such a volume of cardboard that, even considering deliveries in the United States alone, a forest of the equivalent size would contain 1 billion trees.

Reducing the environmental impact of all companies is now imperative for businesses. Consumers also demand it, with millennials and Gen Zs believing companies should work harder to reduce their environmental impact. Still, only 12% believe corporations are addressing the issue, and 40% of those surveyed said they wouldn’t buy from a business whose services impact the environment.

The environmental impact of eCommerce business

With eCommerce businesses and the online shopping market rapidly growing, it’s probably a good idea to focus on the specific environmental impact caused by the sector. 

We’ll start with a general overview of the impact of eCommerce businesses, as well as a more detailed look at the order fulfilment and delivery sector as part of the parcel service chain of shipping and handling. 

Environmental impact of eCommerce businesses

Like enterprises in all sectors, the average eCommerce business also impacts the environment. 

Whether it’s through the natural resources they use or the waste they produce, when they don’t consider their own environmental impact, it’s easy for businesses to create pollution, use too much energy or resources, or contribute to climate change. In addition, by working unsustainably, an eCommerce business increases the risk that its costs will spiral, and its productivity and reputation will be harmed. 

Companies can damage consumers’ perception of their brand by choosing not to use recycled or reusable materials when producing their branded mailing bags and boxes or packaging their products with too many materials.

For example, Amazon was aggressive in its attempts to ensure packaging materials were reduced in size. This resulted in savings on the outlay for materials, the cost of delivery, and the time their customer service agents have to spend managing complaints. 

Similarly, by not recycling the things they use in their day-to-day operations—like ink cartridges or paper—businesses risk losing money; though small, the savings ink-refill and paper-recycling schemes can offer a company will quickly add up.

Environmental impact of order fulfilment and the parcel service

As we’ve mentioned, delivery services have environmental impacts. For example, with drivers racking up the miles, traffic congestion could cause a 25% rise in carbon dioxide emissions in city centres by 2030. 

Beyond the number of vehicles required to meet the escalating demand of eCommerce order fulfilment, delivery companies often let vans leave their depots with partially empty cargo areas, increasing the number of miles driven to deliver all the inventory at their home bases.

Delivery services can also cause environmental damage through their refrigerated fleet: the chemicals used to power refrigeration technology cause ozone depletion, increasing UV radiation hitting the earth’s surface and heating it up further. 

In addition, older trucks are less fuel efficient and create more emissions, and those that lack door-switch sensors will often use more power to cool their cargo holds, as the back of the truck is left open to facilitate unloading products swiftly.

The adoption of electric vehicles in delivery and parcel services has also met some roadblocks. Range, the scarcity of charge points, and charging time hamper the speed and efficiency of operations central to the delivery process and make business leaders hesitant to switch to a fleet of electric-powered commercial vehicles.

How delivery services and eCommerce are changing for the better

Businesses, delivery services, and eCommerce fulfilment solutions are improving, and many operational adjustments have been implemented to combat their environmental impact. 

From switching to energy suppliers that provide power from renewable sources for their offices to recycling their waste correctly, ordinary enterprises are reducing their CO2 output drastically. 

Even through simple solutions, such as installing sensors to control lighting and air conditioning, businesses can reduce their lighting electricity costs by half. When lighting accounts for 15% of global electricity usage and 5% of greenhouse gas emissions, small changes like this across many enterprises can make huge differences.

Delivery and parcel service businesses can also make the shift to electric vehicles. Although the current issues surrounding charger availability and range will limit long-distance logistics, with a full charge enabling 100-200 miles, we can tackle the environmental impact caused by that “last mile” of the delivery process. Moreover, with the UK government offering an extension of the Plug-in Van Grant (PIVG) until March 2024, business leaders will have even more incentive to make the switch.

Similarly, delivery and parcel service enterprises that utilise refrigerated vehicles as part of their wider fleet can upgrade their older vehicles to those meeting the EPA Tier 4 Emissions or Euro 6 Standards. 

As these vehicles are more fuel-efficient, the initial outlay in purchasing new fleet vans can be offset by the savings made through drivers not needing to stop at the diesel or petrol pump as often.

eCommerce businesses can also become more sustainable by switching their packaging to a reusable option, or one which uses fewer materials, or by utilising the services of a packaging supplier that focuses on sustainable and biodegradable packaging and marketing collateral. In addition, many eCommerce order fulfilment services will also have recycled packaging options for their clients.

Ensuring eCommerce business is more environmentally friendly

Another way enterprise leaders can ensure that their delivery or eCommerce business is more environmentally friendly is by planning and conducting a green audit or environmental impact assessment for their workplace and operations. “What is an environmental impact assessment,” you ask. We’re glad you did.

Planning and implementing an environmental impact assessment

An environmental impact assessment (EIA) is one of the more thorough ways to ensure that you’re managing your environmental impact. 

Doing such a review of your practices will enable your business to understand its environmental impact without the daunting task of implementing an accredited environmental management system, often beyond the capacity of small and medium-sized enterprises.

At a minimum, this review ought to cover the following: 

Discover your eCommerce fulfilment partner

Core Fulfilment offers organisations professional support with their eCommerce fulfilment needs. From inventory management to fashion fulfilment with our late order cut-off, we’re proud of being able to support the ambitions of any online retailer. Contact us if you’re looking for a fulfilment partner to help your business activities thrive.