Sustainability in Warehouses

As efforts to make supply chains more sustainable ratchet up across the world, keying in on the most impactful areas can lead to more meaningful change. Warehouses account for as much as 3% of global greenhouse gas emissions, and nearly 25% of greenhouse gas emissions in the logistics space. As such a prominent contributor, creating more environmentally friendly and efficient warehouses is crucial for businesses seeking to promote sustainability. With technological advancements, material improvements, and reformulations of warehouse operations brought about by automation and AI, now is an excellent time for companies to rethink their warehouse designs and practices.

Energy Sourcing

One of the main forms of greenhouse gas emissions in warehouses results from energy waste or inefficiency. Think about all the moving parts required to keep a warehouse running, all the electronic devices, systems, machinery, tools, vehicles, lights. Utilizing a more sustainable energy source can provide great economic and environmental benefits. Renewable energies, especially solar and wind, are more than capable of powering large warehouses, and offer the opportunity for onsite or adjacent power production. Solar panels can be installed on warehouse roofs, or nearby if the roof is unavailable. Wind turbines can also often be placed near warehouses to provide a green energy source in close proximity.

One of the main hurdles in implementing green energy as a warehouse’s primary power source is the initial investment required to construct solar or wind infrastructure. Many companies balk at the opportunity for long-term savings in the face of steep upfront costs. However, a workaround has emerged in the form of power purchase agreements, that offer companies a best of both worlds solution. Power purchase agreements, or PPAs, entail energy companies building the green energy infrastructure a warehouse requires, and the company running the warehouse buying the power produced at an agreed-upon rate. It works effectively for both parties as the company that owns the warehouse can operate at a lower cost, buying the renewable energy produced onsite or nearby, and the energy company has a guaranteed customer for all the power generated. The energy company makes the initial investment and owns the infrastructure, freeing the warehouse company from the steep installation costs and continued maintenance expenses while allowing them to enjoy the environmental and economic benefits of renewable energy. The warehouse reduces its emissions and expenses, and depending on its location can avoid certain tax penalties or even receive tax credits for this reduced emissions output.

Machinery Upgrades and Electrification

There are more ways for warehouses to lower their emissions and energy bills than just changing their power source. The myriad moving parts mentioned earlier that keep a warehouse running all draw substantial amounts of power, and can be replaced by more efficient updated models. This holds true for items as simple as the lightbulbs found throughout a facility, with an MIT study finding that switching from incandescent to LED lighting can result in a 90% reduction in energy consumption from lights. Upgrading HVAC systems can also lead to a decrease in energy consumption, with more modern systems capable of regulating temperature and humidity more efficiently. Installing “smart windows” amplifies this effect. These windows use a type of glass that retains heat in the winter and allows for greater airflow in the summer, helping cool facilities naturally. Painting roofs white or using reflective materials for roofing further contributes to efficient temperature regulation. Installing rainwater collection systems helps reduce outside water consumption, offering both environmental and economic benefits as well.

Electrifying material handling equipment and warehouse vehicles is another impactful way to reduce warehouse emissions. Traditionally, vehicles such as forklifts and tractors have run on diesel, but newer models are fully electric. While the purchase price of the electric models is higher than their diesel predecessors, the MIT study mentioned earlier found that the savings in fuel and maintenance make up for the price difference in as little as three years. Coupled with less expensive green energy sources acquired through PPAs, transitioning to electric warehouse vehicles is a worthy investment.

Optimization and Efficiency

Technological advancements also offer indirect avenues to reduce emissions and bolster the bottom line. By implementing warehouse operations and management systems that utilize AI and cloud technologies, warehouses are able to function more productively and efficiently. With better vehicle routing and more efficient picking practices, energy consumption is reduced, with the aforementioned electric forklifts wasting less time and energy making unnecessary movements. Overall optimization efforts have effects that can be felt throughout warehouse facilities, if not the entire supply chain, and give companies the ability to better evaluate points of inefficiency. AI analysis of warehouse operations and observations and interpretations of best practices let companies address these areas of inefficiency and operate at a higher level. The potential examples of this are innumerable, and we’re sure to discover even more as warehouses around the world implement optimized processes and reap the financial and environmental rewards.