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How do we make the sectors circular?
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Circular Economy

What is the role of the logistics sector?

The logistics sector plays a crucial role in the circular economy. Production and user processes must be linked in order to create a system without waste. The circular economy offers many opportunities for logistics companies to change their role, to innovate and to seize opportunities. A number of these opportunities are listed below: chain management, collaborative logistics, synchromodality, data infrastructure and sub-economy.

The LogiCE platform facilitates cooperation on circularity between players in the logistics sector. Companies can approach the platform for advice or collaboration. Their report (in Dutch) “Logistics in a Circular Economy” from 2019 describes in detail the role of logistics in a circular economy:

Chain management

The transition to a circular economy offers opportunities for the logistics sector, both in terms of jobs and CO₂ reduction (Nasir et al., 2017). A major opportunity lies in coordinating cooperation in the value chain. A logistics service provider often has insight into which residual flows come from where and which raw materials are requested from other organisations. Linking supply and demand ensures that cycles are closed. In order to fulfil the role of chain director, logistics service providers must take the initiative to find synergy between the various chain links.

Collaborative logistics

Cooperation between logistics parties in a circular economy has many advantages in terms of efficiency and sustainability. Sharing loading capacity in trucks, for example, ensures that there are no trucks running below capacity (efficiency) and that fewer trucks are needed, thereby preventing exhaust fumes (CO₂ reduction). A logistics service provider could, for example, rent out the empty space in a truck to a (smaller) company. Also, a truck that brings goods from a warehouse to the city on its way back could bring other goods from the city, such as waste. This is called ‘collaborative logistics’.

Synchromodality

Using synchromodality means that you have to design a good system in which you can connect the routes of trucks, trains, boats, bicycles, etc. to each other. If it is possible to change means of transport efficiently, you will have created a multimodal, synchronised logistics chain. To make this process work, standardization of transport is necessary. If everyone works with the same type of truck, container or package size, you can easily switch between modalities and make the process as efficient as possible. An example is the setting up of a mobile distribution system for the delivery of parcels. A truck takes the parcels to a residential area, where they are then parked at a central location. The parcels can then be taken to the front door by the delivery person by bicycle. In this case you create the most sustainable chain possible.

Data infrastructure

To enable synchromodality and collaborative logistics, an advanced data infrastructure is needed that can provide real-time tracking and overview. In this central digital ‘hub’ all supply chains can be connected. New methods such as blockchain may provide the tools to enable such a network. By ensuring that you have a real-time overview of the supply chain, a parcel can move through the system via the path of least resistance (and thus the least pressure on the environment).

Sharing economics

In a sharing economy, private and business are expected to share more expensive products. In this way, not every person in a neighbourhood has to buy a drill or a lawnmower (which means a lower use of raw materials). This does mean that products have to be able to be moved between people. In a small neighbourhood or an apartment complex this is not difficult; people can move the products themselves. The challenge lies where companies are going to share products such as heavy machinery. Because companies have to be able to deliver on time for their customers, it is a challenge to design an efficient logistics infrastructure for this.