Green Logistics: Reimagining a Green Movement of Goods

Brief Context

The movement of goods needs to align with climate goals, circularity, and energy efficiency, as the global logistics sector stands at a transformative crossroads.

Source Content

Syllabus: GS3/Energy; Environment

Context

• The movement of goods needs to align with climate goals, circularity, and energy efficiency, as the global  logistics sector stands at a transformative crossroads.

India’s Logistics Landscape

• Logistics Sector Size: It accounts for over 14% of India’s GDP and employs more than 22 million people.
  • India’s logistics market is valued at $250 billion, growing at 10-12% CAGR (Ministry of Commerce & Industry, 2024).
  • It is expected to nearly double to $428 billion by 2033.
• Rail-Based Freight Initiatives: India is targeting 45% rail freight share by 2030, up from 27% in 2023, through dedicated freight corridors (Indian Railways, 2024).
• Electric Vehicle Logistics: With the FAME II policy, India saw a 400% growth in electric commercial vehicle adoption between 2021-2024 (NITI Aayog, 2024).
• Urban Last-Mile Sustainability: 90% of India’s urban logistics emissions come from fossil fuel-based last-mile deliveries.
  • The expansion of micro-fulfillment centers has reduced delivery-related emissions by 30% in select cities (TERI Report, 2024).
• Cold Chain & IoT Integration: India’s cold chain logistics sector is expected to grow to $24 billion by 2027, with 50% of warehouses adopting IoT-enabled efficiency tools (FICCI Report, 2024).

Global Overview of Logistic Sector

• Carbon Emissions Contribution: Freight transport accounts for nearly 8% of GHG emissions, with road freight contributing 58% of this footprint (International Energy Agency, 2024).
• Green Logistics Investments: Global investments in sustainable logistics solutions are expected to exceed $1 trillion by 2035 (World Economic Forum, 2024).

Logistic Sector & Environmental Costs

• According to a report by Amicus Growth Advisors, the logistics sector is a major contributor to Greenhouse Gas (GHG) emissions and diesel consumption.
  • It accounts for 13.5% of India’s GHG emissions, largely driven by road transport.
  • Trucks, while forming just 3% of the vehicles on road, are responsible for over one-third of transport-related CO₂ emissions, and consumes about 40% of the country’s diesel.

Green Logistics in India

• It is defined as the integration of environmental thinking into logistics activities, supporting both national and global climate goals.
• According to the Ministry of Commerce and Industry, green logistics can reduce India’s logistics cost from the current 14% of GDP to 8%, while simultaneously cutting transport-related emissions by up to 35% by 2030.
• Additionally, it supports India’s commitment to achieving Net Zero emissions by 2070 under the Panchamrit agenda.
• According to the Amicus report, Green logistics is more than just integrating EVs or reducing CO₂ emissions. It requires a fundamental redesign of logistics operations, like:
  • Reimagining supply chain design;
  • Embedding sustainability in corporate strategy;
  • Shifting from linear to circular business models;

Key Strategies for Sustainable Logistics

• Cleaner Fuels and Vehicles: Adopt EVs and LNG-powered trucks for both short and long-haul freight.
• Modal Shift: Shift cargo from road to rail, leveraging Dedicated Freight Corridors (DFCs) to reduce emissions and improve efficiency.
• AI-Driven Planning: Use AI-based route and load optimization tools to reduce fuel consumption and delivery time.
• Green Warehousing: Develop sustainable warehouses powered by solar energy, equipped with efficient lighting and water recycling systems.

Initiatives By India

• National Logistics Policy-2022: It aims to create a cost-efficient, resilient, and sustainable logistics ecosystem by promoting multimodal transport, digitalization, and automation.
• PM GatiShakti National Master Plan: It aims to enhance industrial productivity while supporting green logistics and clean energy goals through multi-modal connectivity.
• Unified Logistics Interface Platform (ULIP): It aims to consolidate over 30 digital systems from different ministries for real-time, end-to-end visibility of logistics operations.
• Railway-Based Freight Initiatives: The government is shifting coal logistics toward railway-based systems to minimize air pollution and reduce carbon emissions by approximately 100,000 tonnes per year.
  • India is developing six green freight corridors under PM GatiShakti, prioritizing low-emission trucking and rail-based logistics.
• Green Logistics in State Policies: Several states have integrated green logistics into their policies, focusing on eco-friendly logistics parks, smart logistics solutions, and reduced reliance on road transport.
• Multimodal Logistics Parks (MMLPs): Developed under the Bharatmala Pariyojana, these parks enhance cargo aggregation, reduce handling costs, and promote warehousing efficiency.

Way Forward: Logistics as a Catalyst for Viksit Bharat 2047

• A green transformation of the logistics sector is not merely about reducing emissions — it’s about redefining India’s development model. It enables:
  • Inclusive growth through cost-effective, clean transportation
  • National competitiveness in global supply chains
  • Contribution to India’s climate commitments and environmental stewardship.

Source: BL