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Carbon Neutral Shipping – A Complete Guide

how does carbon neutral shipping work

Are you ready to cater to the 58 percent of adults who are actively conscious of their environmental impact? Want to make it easy for the 85 percent of customers prepared to take action against environmental and sustainability challenges?

If so, look no further than carbon-neutral shipping.

So your eco-conscious customers can feel good about their next online indulgence, here we:

  1. define carbon-neutral shipping,
  2. detail why it’s important,
  3. and explain how you can cultivate a guilt and emissions-free shopping experience.

What Does Carbon Neutral Shipping Mean?

Carbon neutrality, also known as “net zero,” is the practice of balancing the carbon emissions produced by a commercial activity like the use of fossil fuels, with efforts to remove an equivalent amount of carbon dioxide (CO2) or its equivalent (CO2e) of other greenhouse gases (GHG) from the atmosphere.

So how does carbon-neutral shipping work?

Carbon-neutral shipping, or carbon-balanced shipping, refers to offsetting the carbon emissions associated with the transportation of goods by being, well, carbon-neutral.

Learn more about sustainable operations for your ecommerce business.

Why Carbon Neutral Shipping Is Important

Shipping currently accounts for 2-3 percent of global GHG emissions. By 2050, it is estimated that this number could swell to 10 percent.

To address this issue, the goal of carbon-neutral shipping is to mitigate the environmental impact of shipping emissions by reducing the overall carbon footprint of the logistics industry.

Why is this important?

The logistics industry relies heavily on fossil fuels to power shipping vehicles, a significant contributor to GHG emissions.

The good news?

To help mitigate the negative environmental impacts caused by logistics and combat climate change, some big players are pledging to take action.

For example, Simon Bennett from the International Chamber of Shipping, which represents about 80 percent of the container ship fleet worldwide, stated that the shipping industry commits to achieving total decarbonization by 2050.

As around 90 percent of the world’s trade is transported by sea, Simon’s pledge is a huge deal. Companies that engage in carbon-neutral shipping can reduce the carbon footprint of shipping by offsetting the carbon emissions associated with their operations.

how does carbon neutral shipping work

Ways To Reduce Carbon Emissions From Shipping

There are several methods logistics businesses can reduce their carbon footprint and emissions.

Here’s a breakdown of the most effective strategies:

Understand & Calculate Your Carbon Footprint

To become carbon-neutral, businesses must first measure the total carbon emissions associated with the transportation of goods. This includes emissions from fuel used in shipping vehicles and emissions related to production, packaging, and transportation.

With all the moving parts within your business, this may sound daunting, but it doesn’t have to be.

One of the most accessible solutions to this challenge is to use a sustainability partner like EcoCart. Our powerful EcoCart Shopify app and soon-to-be-released API simplify the process. We’re more than just a carbon footprint calculator, with the help of emissions analysts and a proprietary algorithm, EcoCart calculates the total life cycle emissions of your productions—from production to arrival on your customers’ front door steps.

Maximize Shipping Efficiency

Once the total carbon emissions have been calculated, the next step is to reduce those emissions as much as possible.

As reported by the World Economic Forum, by 2030, the increasing demand for e-commerce delivery is expected to result in a 36% increase in delivery vehicles in inner cities, leading to a rise in emissions and traffic congestion. Without intervention, urban last-mile delivery emissions and traffic congestion in the top 100 cities worldwide are projected to increase by over 30%.

With this in mind, using more fuel-efficient vehicles would be the one way to reduce this GHG and carbon dioxide emissions issue.

However, purchasing a new fleet of hybrid or electric vehicles can be costly, particularly for small- to medium-sized businesses.

Not to mention it’s not likely to ease traffic congestion.

The answer? Split inventory.

Split inventory is a strategy in which a company maintains multiple distribution centers and stores a portion of its inventory at each location. This allows the company to more efficiently fulfill orders by shipping products from the distribution center that is closest to the customer.

The Importance Of Minimizing Packing Waste

Minimizing packaging waste, using eco-friendly or carbon-neutral packaging materials, and reducing the amount and size of packaging materials will help a business achieve carbon neutrality.

How?

Shockingly, and perhaps unintuitively, MIT researchers discovered that packaging emissions make up as much as 45 percent of emissions emitted by ecommerce businesses.

Taking into account the entire supply chain, that’s more than transport and return emissions combined—transport making up 13 percent and order returns accounting for 25 percent.

Taking this into account, a business will significantly lower its carbon emissions by using less packaging and packaging materials with a lower environmental impact.

In fact, reducing packing materials or using eco-friendly options may be the single-most effective method of combating global greenhouse gas emissions produced by the ecommerce industry.

Purchase Carbon Offsets

If a business cannot offset its carbon emissions through other reduction efforts, it can purchase carbon offsets to compensate for the remaining emissions.

Carbon offsets represent a reduction in greenhouse gas emissions. They can take the form of investments in renewable energy projects, reforestation efforts, or other activities that remove or reduce greenhouse gases from the atmosphere.

Want to make your business truly carbon-neutral? Learn more about our carbon offset services and take the first steps towards a more sustainable future.

Which Major Delivery Companies Offer Carbon Neutral Shipping Options?

Some major delivery companies are taking serious steps to curb emissions production.

Companies that currently offer carbon-neutral shipping options include:

  • DHL GoGreen.
  • USPS Blue Earth.
  • UPS Carbon Neutral shipment.
  • FedEx Priority Earth.

What is UPS Carbon Neutral?

UPS Carbon Neutral is a program designed to help reduce environmental impact by offsetting greenhouse gas emissions generated from shipping activities. It does this by investing in verified carbon standard offsets and renewable energy credits that neutralize the carbon dioxide (CO2) associated with the customer’s shipment.

FedEx Carbon Neutral Shipping

FedEx offers a Carbon Neutral Shipping program that allows customers to reduce their greenhouse gas footprint and contribute to environmental projects by purchasing Carbon Neutral certification for their shipments.

This option allows customers to offset the carbon emissions associated with their shipments through investment in carbon offset projects which will generate tangible and verifiable environmental benefits.

Carbon Neutral Shipping Shopify

Shopify offers initiatives to help businesses powered by Shopify achieve carbon neutrality, such as our app, EcoCart.

EcoCart allows businesses like yours to offset the carbon emissions of their shipments through high-leverage projects and partners.

Here’s how it works.

Unlike other carbon offsetting tools, EcoCart considers the manufacturing and production of goods and the shipping process when calculating the carbon offset.

To achieve this, our proprietary carbon offsetting algorithm, combined with the expertise of our emissions analyst team, calculates the exact cost needed to offset the carbon footprint of each customer order. The algorithm considers variables such as the materials used to make the item, the item’s weight, the distance the order will travel, and the transportation method used to deliver the order.

In addition to offering merchants access to our app, Shopify also has a Sustainability Fund that contributes at least $5 million annually to support entrepreneurs working on reversing climate change. And Shopify is also working to reduce its carbon footprint by procuring renewable energy for its buildings and employee home offices and shifting to carbon-neutral data servers hosted by Google Cloud, a 100 percent carbon offset service.

Interested in learning more about carbon offset companies?

Common Concerns With Carbon Neutral Shipping

Despite all the positives happening in the carbon-neutral shipping space, there are some common concerns business owners have that we’d like to address.

How does carbon offsetting benefit ecommerce?

There are several ways carbon-neutral shipping can benefit businesses. The most noteworthy of these include:

  1. Builds trust and loyalty. By providing eco-friendly shipping and shopping options, with the help of tools like EcoCart, ecommerce businesses can improve their reputation and attract new customers looking for sustainable choices. 
  2. Cost savings. Carbon offsetting can also lead to cost savings for ecommerce businesses, as reducing carbon emissions can lower energy costs and improve efficiency.
  3. Compliance with regulations. Carbon offsetting will allow businesses to comply with carbon emissions and sustainability laws.

Learn more: app for sustainable consumer packaged good products.

Does carbon-neutral delivery take longer?

It can. For instance, some carbon-neutral shipping companies will slow the rate at which an order is shipped to save on GHG emissions.

While slow shipping may seem like it flies in the face of customer expectations, our research suggests otherwise. Our recent survey found that 67 percent of respondents were happy to sacrifice the convenience of two-day shipping for more sustainable options.

Despite this, if you are still worried slower shipping times could cut into your business’ profits, be reassured that using the EcoCart app will not slow shipping. Our proprietary algorithm considers standard shipping times—including same-day shipping—and offsets accordingly.

How much does carbon-neutral shipping cost?

That depends on the company used, the item sent, and the shipping distance. Some companies, for instance, charge a flat rate for carbon-neutral shipping, which only sometimes matches customers’ needs and expectations.

Comparatively, our carbon offset shipping costs are calculated on an order-by-order basis.

Customers are prompted with a one-click opt-in check box when EcoCart is added to a store’s checkout. When checked, our proprietary carbon offsetting algorithm adds a few extra cents to the final price—typically amounting to only 1-2% of the total order.

Ecocart: An Easy Way To Offer Carbon Offsets For Shoppers

Achieving carbon-neutral shipping doesn’t have to be a headache.

EcoCart is the ideal solution for your ecommerce business, no matter which ecommerce CMS platform you’re using. With our Shopify app and soon-to-be-released API, your customers can effortlessly offset the carbon emissions of their online purchases with just one click at checkout, making it convenient for them to make sustainable choices and for your business to reduce its environmental impact.

Request a demo now to learn how to offset your business’s carbon footprint and join the ranks of eco-conscious ecommerce businesses leading the way in reducing emissions.

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