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Retail Technology, Retail technology News

Collaboration essential to sustainable logistics solutions

Tuesday January 19 2010

The distribution industry needs to work with research bodies - and each other – to create sustainable waste management solutions, says Paul Pegg, vice president of logistics company Keystone Distribution.  

The distribution industry needs to work with research bodies - and each other – to create sustainable waste management solutions, says Paul Pegg, vice president of logistics company Keystone Distribution.


Pegg made the statement at a Keystone-hosted forum for supply chain management and logistics consultants. And he urged distributors to take action now, to ensure that their businesses remain sustainable.


“The industrial outlook in 10-15 years time, in terms of waste disposal, is set to change radically,” he stated. “There will be an obligation on retailers, wholesalers and foodservice outlets to have new systems and arrangements in place, particularly for technical, electrical and specialist waste streams.”


Keystone Distribution UK exclusively manages the complete supply chain and distribution to 1,200 McDonald’s restaurants in the UK, delivering McDonald’s total product requirement, which includes fresh, frozen and ambient food, promotional items, point-of-sale material and cleaning products.


Innovative solutions to recycling sought


As part of its service, the logistics company has also pioneered the conversion of McDonald's delivery fleet to biofuel made by recycling its used cooking oil. Keystone collects 100,000 litres of used cooking oil a week from the fryers at McDonald’s restaurants in the UK. They convert this into a 100% biofuel to power a fleet of 90 vehicles.


According to Pegg, competing logistics companies will have to work together to co-ordinate delivery times and consolidate the take-back of waste streams. The focus will move away from just supplying core goods. Any spare delivery vehicle capacity will need to be used to take back recyclable material, stock and customer returns.


“We need young people, students and research bodies to help us to envisage this future and work with the industry to collaborate on these sustainable solutions,” he urged.


His comments came after lecturer Dr. Tom Cherrett from the University of Southampton’s Transport Research Group presented a case study of retailers in Winchester High Street. The research found that one provider was responsible for 82% of the deliveries to each business. Yet, 41% stated that they didn’t use this provider for back-loading. Instead, the average business received 2.4 waste collections per week and across a sample of 74 retailers, over 17 separate waste contractors were involved in removing recyclable material.


Call for new freight management approach


Dr. Cherrett recommended that freight management in urban areas be undertaken in a new, sustainable way. And that certain recognised processes or contractors should be used for the benefit of all businesses in that area. Potentially, over 130 roll cages of cardboard a week could be back-loaded from an average high street. Larger retailers with centralised distribution systems could find it financially attractive to back-load their own recyclable material and that of their neighbours.


“The issues discussed today are the start of these sustainable initiatives,” said Pegg. “Nobody can envisage the future of green logistics in detail but we do know from our research and initiatives from the Mayor of London and the government that things are going to change substantially. Keystone is putting itself at the centre of these initiatives to create forward-thinking solutions that we can share with our customers and our competitors.”


In 2009, Keystone was invited by the Greater London Authority to be a member of the Food to Fuel Alliance to help deliver five new biofuel plants in London by 2012. In London alone, Keystone’s use of biofuel has cut McDonald's distribution emissions by over 50% and stopped around 750,000 litres of used cooking oil going to landfill.


“Green logistics is a sector of our industry that needs collaboration and involvement from parties across the entire supply chain,” he concluded.