Green logistics: who pays for it?
Have you ever wondered why some logistics companies receive orders from major players, while others do not? In European countries, the answer lies in the word ‘ecology.’ Green logistics is not a fashionable trend, but a way of making money in the modern world. And while you are still planning to implement eco-technologies, your competitors are already receiving lucrative contracts and government support.
Experts at Sargona Private Capital Greece discuss how green logistics works and how profitable it is to implement it.
Experts at Sargona Private Capital Greece discuss how green logistics works and how profitable it is to implement it.
The most common mistake is to simply raise the price. The customer sees the higher tariff and goes where it is cheaper. As a result, you lose orders. But if you explain correctly why the customer has to pay extra, the situation changes. Eco-friendly transport means fewer problems with inspections and fewer delays due to restrictions on transport in Europe. In essence, you are not just selling transport, but reliability and predictability, according to managers at Sargona Private Capital. And customers are willing to pay for that.
Green logistics is a way of organising transport and warehouse operations to reduce harm to the environment. It includes reducing emissions and cutting fuel and electricity consumption. When a company starts operating according to environmental standards, costs almost always increase. You need to upgrade your transport, install emission control systems, and switch to other energy sources. All of this is expensive.
Tariff increases due to environmental requirements
At first glance, it seems logical: invest in new technologies, increase prices and recoup the costs. But in practice, this does not always work. Customers pay for results. If they do not see any benefits for themselves, they will not want to cover your investments.
A more sensible approach is to discuss the introduction of new technologies with regular customers in advance. If they themselves work according to ESG (environmental, social, governance) principles, you can build a joint strategy. In this case, the costs are perceived as a joint project rather than your personal initiative.
A more sensible approach is to discuss the introduction of new technologies with regular customers in advance. If they themselves work according to ESG (environmental, social, governance) principles, you can build a joint strategy. In this case, the costs are perceived as a joint project rather than your personal initiative.
Is it possible to simply pass on the costs to the customer?
The transition to electric trucks requires significant investment, warn experts at Sargona Private Capital. You need to buy equipment, organise charging, and train employees. If you do this just for the sake of image, you can freeze a significant part of your budget and not get a quick return. However, with the right calculations of load and payback periods, electric transport can offer advantages, according to Sargona experts. It allows you to operate in areas with strict environmental requirements. Before purchasing, it is important to calculate the TCO (total cost of ownership). This is an indicator that takes into account all costs over the period of operation.
Many large customers today choose partners based on environmental performance. If a company does not have an emissions reduction programme, it may simply not be selected. Environmental strategy is becoming a prerequisite for access to contracts. Ignoring this requirement automatically narrows your market.
Electric trucks are trendy, but are they profitable?
Environmental friendliness as a competitive advantage
In many tenders, compliance with environmental standards is a mandatory requirement. At the same time, European countries offer government incentives and subsidies to help companies offset some of the costs of modernisation. Businesses that regularly monitor grant offers for support find that logistics become cheaper and therefore more profitable for the customer.
If green logistics is not implemented, the company loses money and opportunities, according to experts at Sargona Private Capital. Investing in the environment opens up new markets for you. Those who postpone change now may face unnecessary costs and risks in the future.
If green logistics is not implemented, the company loses money and opportunities, according to experts at Sargona Private Capital. Investing in the environment opens up new markets for you. Those who postpone change now may face unnecessary costs and risks in the future.
Large projects and government support
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