Analysis

Q&A: AO Logistics MD David Ashwell on sustainability

AO Logistics

David Ashwell, MD of AO Logistics, the logistics and fulfilment division of online electricals retailer AO, discusses sustainability, recycling and carbon emissions. Comments from this exclusive eDelivery interview will feature in the post-purchase sustainability Deep Dive published in February.

eDelivery.net: How can retailers balance customer demand for faster and cheaper delivery with reducing carbon emissions?

David Ashwell: While it’s important to meet customer demand, we always try to do this as efficiently as possible in order to reduce our carbon emissions. We’ve found that customers want a certainty of delivery timing, but not necessarily a specific time slot, so by encouraging customers to take a time that seamlessly fits into an existing route we can both enhance service and overall efficiency. We make use of the latest technology to ensure deliveries are completed in the most efficient way by reducing the mileage amount per delivery. This has been achieved by using more efficient vehicles, improved routing to remove waste, better customer communications to reduce the need to redeliver and using a more efficient trunking network to reduce the amount of emissions per delivery.

We have developed our double decker trailers to include moving floors and moving roofs, which now have the largest capacity on the UK roads, improving overall efficiency by 18%. We have been working closely with manufacturers to improve the payload of our 3.5 tonne vehicles from 650kg to a potential 1.4 tonnes next year. We will deliver this by engineering the main vehicle to reduce weight and improve CO2 performance through the use of lightweight carbon fibre boxes.

Is there a business case for focusing on sustainability?
Yes, as long as we can continue to deliver what the customer wants. By encouraging the right purchasing behaviour from customers, we can achieve not only a reduction in cost but also a reduction in emissions per delivery. As a business, AO is keen to invest in sustainable solutions, because when managed correctly it can lead to longer term savings and efficiencies.

What does the term “sustainability” mean to AO and what are our overall targets?

Sustainability is no longer just a buzz word that brands use to supplement results, but a broad and fundamental issue spreading across all industries. Customers are demanding socially conscious brands and companies, and it is therefore their duty do all they can to ensure business practices are done in as sustainable way as possible.

We always aim to ‘make our mum’s proud’ and we see our impact on the world as being a key part of that. We have always taken control of our social impact, and invested heavily to ensure we minimise negative effects on the planet. Our goal is to constantly push the boundaries via innovation, providing our customers with brilliant choice and service that doesn’t harm the planet.

What has been AO’s sustainability journey up to this point?

Our sustainability journey has been a long one, and we have taken some fundamental steps to drive forward the market.

Down in Telford at AO Recycling we invested £10m on Europe’s largest fridge recycling plant, which in 2017 and 2018 collected more harmful pollutants than any other UK recycler. At this site, we also have recycled over 6,000 tonnes of packaging from our deliveries. Our newly opened plastics recycling plant takes plastics from discarded fridges, and turns this into high quality reusable plastics, which we plan to use in new fridges. Due to our extensive logistics infrastructure, we are uniquely placed to collect disposed items and recycle them in an efficiency and environmentally friendly way, with a low carbon footprint.

But we don’t just think about recycling. We support local good causes around the communities where we are based, working with and donating to dozens of charities every year through AO Smile, our charitable foundation. In our offices, we are removing single use plastics, already saving 500,000 bottles annually, along with providing reusable cups and recyclable packaging for staff and customers alike. Innovation is also key to winning the sustainability battle – by making our supply chain more efficient, from delivery through to recycling, we have the ability to vastly reduce the amount of waste globally.

Going forwards, we are looking closer still at our sustainability strategy over the coming years to ensure we constantly look for ways to reduce our impact on the planet and support communities.

How important is this issue to customers in our sector?

Customers are demanding conscious and sustainable brands. We recently commission some research which indicated 77% of consumers wanted a commitment from retailers to reduce their carbon emissions, whilst 74% expected them to recycle packaging. Almost 2/3rds also believed it was large companies who should lobby government for tighter regulations on the subject.

Aside from this, we know its an important part and certainly growing in prevalence for the customer of today. As such, we have to constantly push for better and more efficient ways to do business – a key reason we have invested so heavily in the past, and will continue to do so in the years to come.