Rise of e-commerce counteracts net zero emissions efforts
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Rise of e-commerce could counteract net zero emissions efforts

29 Nov 2021

A new report titled 'Clicks & Consequences – accommodating the rise of e-commerce' explains the rise of e-commerce and retail deliveries in the UK could prevent the country from reaching its net zero emissions targets.

Rise of e-commerce could counteract net zero emissions efforts

The report, which was conducted by Dr Walter Boettcher, the Head of Research & Economics in the UK at real estate firm Colliers, explains e-commerce will halt net zero emissions as it will lead to an extra 38,885 extra heavy goods vehicle (HGV) round trips per day in the UK by 2025.

The rise of e-commerce to halt net zero emissions targets in the UK

Dr Boettcher points out the vulnerability of UK supply chains from a sustainable point of view. He says: “With transport accounting for approximately 30% of all territorial carbon dioxide emissions in the UK in 2020, it is clear this needs to be a focus area if the UK is to meet its net zero target.”

The report explains the extra vehicles needed to meet demand by 2025 could take up one lane of the motorway from London to Aberdeen in Scotland bringing the UK’s road network to a halt by the end of this decade, unless drastic action is taken.

Similarly, an extra 54.5 million square feet of industrial logistics space, including warehouses will also be needed to satisfy existing shortfall and meet anticipated growth by 2025 if the levels of e-commerce continue.

Dr Boettcher says: “The distribution model in place for the growing volume of e-commerce is not without its problems. One being that it has a substantial environmental footprint that may equal, if not exceed, that of traditional ‘bricks and mortar’ retailing. Furthermore, the anticipated large-scale repurposing of ‘bricks and mortar’ retail assets into other uses could unwittingly exacerbate the problem and act to undermine the path to net zero.”

He adds: “Much attention is focused on ‘last mile delivery’ solutions, but the real existential questions have more to do with the sustainability of bulk transport from port quays to inland warehouses and on to urban agglomeration hubs.”

Dr Boettcher believes consumerism is driving the distribution challenge, and this is set to continue and increase.

He explains that in 2010, UK retail sales amounted to GBP325bn, rising to GBP438bn in 2020 and are expected to reach GBP651bn by 2030, according to Oxford Economics forecasts.

The e-commerce share of total retail sales has risen from 7.3% in 2010 to 19.2% in 2019 before reaching an annual pandemic fuelled peak of 27.9% in 2020. This share is expected to fall back to 25% in 2021, but will resume its long-term climb to 27% by 2025 and finding greater stability at around 35% by 2030 according to Colliers’ forecasts.

David Fox, co-head of retail agency at Colliers added: “Do we curb consumerism for the greater good of the environment? Well, we can’t stop the customer from gravitating towards a seamless shopping experience, whether this is online, omni-channel or bricks and mortar. E-commerce is here to stay but retailers need to adjust by providing the best experience for societal expectations whilst guiding customers towards a sustainable outcome.”

He adds: “We must get better at communicating the impact of people’s consumer choices on our carbon footprint so that we can all make more informed decisions, that go beyond the most convenient or cost effective.”

Alongside additional facilities, Colliers has identified a series of critical areas that must be addressed, to meet this growing consumer demand and structural change, including:

  • Investment in ports and efficient multi-mode conveyancing systems, including a shift of emphasis from road to rail for shipments between ports and inland warehousing, especially for north-south trunking, but also for downstream supply to large conurbations.
  • Review of road taxation to distribute transport infrastructure maintenance and development costs more evenly among all the actors in supply chains whose business models all rely on this infrastructure that is still generally understood as ‘public’ amenity.
  • Integrating supply chain infrastructure investment into government regional development planning, especially the ‘levelling up’ agenda, but also advancing reforms that will unblock investment by pension funds into long term strategic assets vital for UK economic development generally.

Dr Boettcher explains: “This is an opportunity to craft a new sustainable footprint for UK commerce and now is the time to take action if the current trajectory of consumer demand is to be met, while also delivering against the UK’s ambitious net zero targets.”

He points out however that it will require UK central government and devolved administrations to take active leadership roles, including co-ordination and creation of regulatory frameworks and investment incentives.

Dr Boettcher concludes: “Without urgent action, it’s highly likely the supply and logistics challenges of today will, in a few years’ time, be remembered simply as a minor inconvenience. It’s a scenario that, if left unchecked, could paralyse the UK economy for a substantial period and block an already uncertain path to net zero.”