The net effect: environmental implications of e-commerce and logistics

Abstract

The advent of the Internet and e-commerce has brought a new way of marketing and selling many products, including books. The system-wide impacts of this shift in retail methods on cost and the environment are still unclear. While reductions in inventories and returns provide significant environmental savings, some of the major concerns of the new e-commerce business model are the energy and packaging materials used by the logistics networks for product fulfilment and delivery. In this paper, we analyze the different logistics networks and assess the environmental and cost impacts of different delivery systems. We find that the definition of analysis system boundaries and input assumptions determines the overall assessment of economic and environmental impacts of e-commerce for book retailing. With a return (remainder) rate of 35% for best-selling books, e-commerce logistics are less costly and create lower environmental impacts, especially if private auto travel for shopping is included. Without book returns, costs are comparable.