Absurdly fast shipping has a hidden cost

Absurdly fast shipping has a hidden cost
KPLR, KTVI, CNN

Search. Compare options. Click buy. Look out for a package on your doorstep the next day, or even that same day, without ever having to get in your car. The mail truck comes by and drops off your order with a bunch of others, probably on a route she would’ve been driving anyway, no extra trip needed. Totally green, right?

Well, not exactly.

In May, Amazon announced that tens of millions of items on its platform would be available not only for free two-day shipping, but same-day delivery, with a Prime subscription. Other retailers have no choice but to compete: Fast lead times at no extra charge can make the difference between winning the sale or losing it.

Following Amazon’s rollout, Walmart unveiled free one-day shipping without a membership fee, and Target already had a free one-day program for its loyalty cardholders. According to the research firm Rakuten Intelligence, over the past two years the time from purchase to delivery has declined from 5.2 days to 4.3 days. Amazon is faster still, at 3.2 days on average.

The problem is, there is a cost to the environment — and retailers are doing a careful dance to try to mitigate it without turning customers away.

“The time in transit has a direct relationship to the environmental impact,” says Patrick Browne, director of global sustainability at UPS. “I don’t think the average consumer understands the environmental impact of having something tomorrow vs. two days from now. The more time you give me, the more efficient I can be.”

In theory, e-commerce can be greener than a bunch of shoppers making personal trips in their own cars: Consolidating products and delivering them on one route to a bunch of homes requires fewer miles on the road. In a 2012 study, University of Washington professor Anne Goodchild found that grocery delivery can cut between 80% and 90% of carbon emissions, for example, compared to consumers going to pick up their items on their own. However, she says, that calculus changes significantly if items are coming from further away and have to be sent immediately, which creates fewer opportunities for lumping deliveries together.

“The efficiency and those benefits of delivery came from consolidation and sharing a big vehicle,” Goodchild says. “And as we move away from that, if we move towards basically paying someone to make a trip for us, a lot of those benefits are eroded.”

Miguel Jaller, the co-director of the Sustainable Freight Research Center at the Institute of Transportation Studies at UC Davis, found that if a delivery van makes less than about six stops on a trip, the emissions advantage disappears. (And even with more stops per trip, there still may be more nitrogen oxide involved.)

In 2017, UPS disclosed that the e-commerce boom had decreased the number of packages it dropped off per mile, leading to more trucks on the road and higher greenhouse gas emissions.

In the worst-case scenario, with one delivery per trip, the carbon emissions can be as much as 35 times greater than they would be for a fully-loaded delivery van. That doesn’t happen very often, but contracted last-mile courier services — like Amazon Flex and Walmart’s Spark Delivery — may be delivering only a few orders at once, often in a personal vehicle or small van. What’s more, many consumers are ordering online and still making trips to the store, meaning there are just more cars on the road.

With great scale comes greater efficiency

Inefficient routes are not only more carbon-intensive — they’re also more expensive for the shipper. If fast delivery is free, it’s only because the retailer is subsidizing that delivery to fight for customers at a time of fierce competition and rapid growth. That means consumers aren’t feeling the true cost — either environmental or financial — of getting their e-commerce goods super quickly.

“There are some companies that can absorb the cost,” Jaller says. “One of them — it’s one of the largest ones — has been absorbing the logistic cost for a while. And it’s in the billions of dollars per year.”

Jaller was referring to Amazon. For its part, Amazon says that the bigger it gets, the more efficient it can be. The news that Prime was transitioning to one-day shipping came with the announcement of an $800 million investment in logistics infrastructure, like fulfillment centers, trucks and smaller distribution hubs close to population centers.

Because of its scale, Amazon denies that it’s speeding up at the environment’s expense. The items eligible for same-day delivery are typically common orders, like diapers and detergent, that can be pre-positioned where consumers are most likely to need them. That cuts down on transporting things by air, which emits dramatically more carbon than ground transportation.

“Prime Free One-Day is possible because we’ve been building our network for over 20 years,” a spokesperson said in a statement. “This allows Amazon to work smarter based on decades of process improvement and innovation, and to deliver orders faster and more efficiently.”

There are a few other companies that might be able to rival that level of proximity to the customer and volume of goods, which allow them to consolidate deliveries even at a fairly rapid rate. Walmart, for one, has more than 4,700 store locations and an extensive network of warehouses from which it can deliver packages, so trucks don’t have to visit multiple locations.

Some third-party logistics providers also say they are big enough to offer same or next-day service for retail clients without sacrificing carbon efficiency. XPO Logistics is among the largest, with 90 facilities across the country, and says it uses machine learning algorithms to direct where inventory should be stored.

“We look at who’s buying the products from where, and who’s returning products to where, and are able to forecast where to have the products strategically positioned nearby the consumer,” says XPO’s chief information officer Mario Harik.

But forecasting demand is still an inexact science. Amazon itself has offered consumers a new option, called “Amazon Day,” to help them consolidate their deliveries into one drop-off per week. The company also offers discounts and rewards when shoppers choose “