The Competitive Advantage of Sustainability

Logistics expert Professor Frank Straube from the Berlin Institute of Technology on sustainable logistics in e-commerce plus the chances and challenges over the last mile

Professor Frank Straube, who heads up the Chair of Logistics at the Berlin Institute of Technology (TU Berlin), is a much respected national and international expert. Speaking at conferences on topics like omnichannel, the last mile and sustainability, he is also part of a group of experts that aims to create jobs in Africa together with German industry and politics through smart solutions, as well as establishing new logistics structures. In a rare moment of downtime, he takes a moment to talk to us about the challenges and opportunities of the last mile.

The increasing popularity of e-commerce means that more and more parcels are delivered. How urgent and important are sustainable solutions for transportation, for example, with regard to the last mile?

The optimization of delivery over the last mile is urgently needed on account of both ecological and social sustainability; the delivery of online orders increasingly means a burden, in particular, in city centers. The transportation costs for the last mile now make up approximately 50 percent of the total transportation costs.

Do you think e-commerce companies have an obligation to invest in green transport solutions?

 

At least an obligation to demand green transport solutions directly from their service providers and to actively help shape such solutions themselves. Through their customers’ data, e-commerce companies have clear information about buying behavior and customer preferences, which can be used to implement transportation and logistics in a more sustainable way. Customer behavior can be more actively shaped, I think. For example, that there will be an increase in the use of collection lockers, which several companies can deliver to so that the final meters will again be travelled by the customer themselves and delivery to the front door will no longer be standard but an added value service.

Professor Frank Straube heads the Chair of Logistics at the Berlin Institute of Technology (TU Berlin)

How do you evaluate Zalando’s approaches?

As an innovative and data-driven company, Zalando is in a good position to actively shape new delivery concepts and in the past, it has already proven that cost-effectiveness and sustainability do not have to be mutually exclusive.

Altogether, I see good opportunities for Zalando to influence and develop in the logistics ecosystem because it operates its own distribution centers and it is prepared to implement logistics itself. Naturally, that would happen primarily in cooperation with partners, which also include the TU Berlin in particular.

As an innovative and data-driven company,

Zalando actively shapes new and more sustainable delivery concepts.

What exactly might sustainable logistics look like in the future?

On the one hand, data from customers and logistics providers will serve to make transport more efficient, and on the other hand, it will also make information transparency possible for the customer in order to show the ecological effects of their behavior.

Further to this, special customer requests must cost more. New dynamic price formation mechanisms may also develop. The majority of e-commerce orders are made at the weekend, meaning that delivery is predominantly at the start of the week. Price incentives could be generated to force delivery in the second half of the week and therefore to reduce the concentration at the start of the week.

Do you think that sustainable delivery options may even influence purchase decisions in the future?

Yes, customers will certainly pay more attention to it and demand transparency. The current global movement for sustainability shows how highly rated it is among the general public. In particular, companies with direct customer contact and which offer sustainable delivery options can generate a competitive advantage in this way.

Many companies, especially those in the consumer goods industries, communicate openly about delivery channels, as well as good and improvable sustainability potential with a positive effect on customer loyalty.

 

The TU Berlin and Zalando have been cooperating for several years in various fields. They include:

  • Supervision of practical theses
  • Excursions to the Logistic Center in Erfurt
  • Presentation at the Day of Logistic
  • Practical presentations in lectures
  • Announcement of internships and theses by Zalando on the TU’s home page

How should companies, especially in e-commerce, act in the future?

They should be happy to experiment with new things, and in doing so, focus on open, innovative approaches, as well as the data-driven validation of the experiments. If I were Zalando or another company, I would focus even more on the question of the use of entrepreneurial actions for the customers and the society of the future.

This goes far beyond the provision of a dynamic market place, fast delivery of products and engaging additional services, and is different to other platform providers, which sometimes supply identical products. In this approach, sustainable logistics in interconnected, intelligent and data-based networks of the future is given a key role and a new definition as an economic and success factor.