The logistics sector has undergone significant transformation over the past decade. The shift has been marked by a series of major disruptions that have reshaped global supply chains. From the COVID-19 pandemic to ongoing conflicts in Europe and the Middle East, the industry has faced challenges unlike any in recent history. At the same time, logistics has become a central player in addressing the global green transition, further complicating an already turbulent landscape, particularly in Europe.
The logistics sector has transformed dramatically over the past two decades in large part thanks to the shifting conversation around sustainability. “Climate change is a pressing reality. It, among other sources of disruption, is reshaping logistics from being important but secondary to being a decisive factor in supply chain success,” explains supply chain veteran Pietro D’Arpa. Recently retired from a near-40-year career in the consumer goods industry, D’Arpa spent the last seven years leading Procter & Gamble’s logistics operations in Europe, as well as several other markets. Today, he works as a visiting professor and serves as a board advisor to startups, taking a particular interest in those focused on sustainability. “Today, state-of-the-art logistics are essential for thriving in the modern world,” he explains. “This shift has spurred nearshoring, digitisation, and automation, which are redefining logistics. Sustainability has evolved from a ‘nice-to-have’ to an absolute necessity, fundamentally changing our strategic approach to logistics.”
The perks of nearshoring
After the COVID-19 pandemic wrecked the hyper-globalised, just-in-time logistics networks that came to define global supply chains over the past 30 years, the natural response has been for networks to contract. Supply chains have shortened as production has been moved closer to home. According to D’Arpa, this trend is also helping organisations align their logistics operations with sustainability goals. After all, less distance to travel theoretically means fewer emissions. Of course, things are rarely all that simple.
“Nearshoring offers resilience and enhances agility. It also shortens supply chains and reduces emissions, as well as enabling companies to tailor logistics strategies to meet regional sustainability goals,” D’Arpa explains. By reducing reliance on transoceanic routes, companies can limit their Scope 3 CO2 emissions. In 2018, commercial shipping emissions accounted for close to 10% of global emissions caused by human activities, according to the International Energy Agency’s data. Moving supply chains closer to home reduces the need for long-distance logistics, cutting a significant source of emissions. However, D’Arpa warns that “the shift to land transport will be impactful only if alternative fuels, electric trucks, and intermodal solutions are embraced. Nearshoring is a significant opportunity for companies to advance both sustainability and resilience, but it requires a conscious shift toward intermodal transport and alternative fuels”.
Going Intermodal
The essence of intermodality in logistics is in using the right type of transport at the right stage of every journey. It’s nothing new. People have been using multiple methods of transportation to shift goods throughout supply chains for centuries. Just because stagecoaches and sailing ships have been replaced by HGVs and cargo planes (and might still be replaced by self-driving robo-trucks and, apparently, sailing ships again?) doesn’t mean that the process isn’t pulling most of the same levers in the supply chain.
Seeing as intermodal transportation refers to any logistical journey that uses two or more types of transportation to move goods through a supply chain, the majority of international shipping is intermodal, with single-mode transportation being more common over shorter distances or within single markets.
Intermodal transportation typically utilises some combination of road, rail, and ship transport to move goods over long distances. Intermodality in logistics helps strike a balance between cost, speed, and resilience. Recently, D’Arpa points out, intermodality has become a key driver of sustainability in logistics as well.
“Adopting multimodal or intermodal transport involves integrating electric and hybrid vehicles for short-haul routes, which is crucial for reducing emissions. For long-haul transportation, rail is already an effective solution, but it needs to be used more. Additionally, route optimisation through advanced digital platforms helps improve efficiency,” says D’Arpa. By combining multimodality, alternative fuels, and route optimisation, organisations can significantly reduce the emissions stemming from their logistics operations. D’Arpa argues that, “while alternative fuels may be more expensive upfront, ongoing technological advancements, economies of scale, and increased government incentives are expected to drive down their costs over time. As these fuels become more cost-competitive in the future, they will provide long-term environmental and economic benefits for the logistics sector”.
The greenwashing issue
While a combination of intermodality and nearshoring promise to cut both emissions and, in the long run, costs, many organisations are falling short of their net zero commitments — either intentionally or otherwise. “Greenwashing is a real issue,” admits D’Arpa. “Some companies claim large emissions reductions, but in reality, they’re offsetting emissions instead of reducing them at the source. Don’t misunderstand me; offsetting has its place. But true sustainability comes from reducing emissions at the source, not relying on certificates as a shortcut.”
D’Arpa, who advises on the board of a carbon credit trading platform startup, explains that he believes offsetting is a necessary “last resort” on the road to net zero. “The correct approach is to focus on reducing CO2 emissions first. There may be a remaining 5–10% of emissions by 2040, which technology may not be able to eliminate entirely. For that final 5–10%, offsetting has a role,” he says. “But companies should prioritise reducing emissions as much as current technology allows.”
However, critics of carbon offsetting argue that the legitimisation of pollution for a price only ever undermines decarbonisation efforts, and that offsetting is more of a way to avoid taking critical first steps towards net zero, rather than a final leg up.
Another common pitfall D’Arpa points to is the logistics sector’s tendency to focus solely on last-mile electrification. While electric trucks are a promising solution for short hauls, they are also gaining momentum for medium-haul routes. However, D’Arpa emphasises the need to address emissions from long-haul freight, which often remains the largest contributor. To achieve true sustainability, he advocates for a comprehensive approach that integrates green initiatives across the entire supply chain, rather than isolating efforts to one specific area.
Taking meaningful steps, today
Government support to incentivise electric vehicle adoption and expand charging infrastructure is also critical, he adds. “My advice to companies is to view this as a phased journey: start with visible, achievable actions today, like route optimisation and load sharing, and explore electric vehicles for short hauls and biofuels. Technology and government intervention will play a role in the future, but companies can already take meaningful steps now.”
According to D’Arpa, the next five to ten years will be transformative, with a worldwide acceleration toward electrification and alternative fuels. “We may see hydrogen trucks become a viable option for long-haul transportation as well,” he says.
Intermodal transport will continue to evolve across the supply chain. Logistics will also play a key role in supporting the circular economy by repurposing waste, contributing to broader environmental goals beyond CO2 reduction. “In Europe, there’s a high level of awareness about these issues, and logistics will be a central player in decarbonising the economy,” says D’Arpa, but stresses that “sustainability in logistics is as much about people as it is about technology and regulation. Collaboration is essential to drive meaningful change.” He reflects that even large corporations like Procter & Gamble cannot succeed alone. “We must work with competitors, startups, academia, customers, and suppliers, aligning on goals and sharing knowledge to accelerate innovation,” he says. “The target is 2040, and while that may seem far off, the steps required to reach net zero are immense.”
- Sustainability
