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How To Offset Shipping In Ecommerce

how does carbon neutral shipping work

Offsetting the carbon emissions of their shipments allows businesses to mitigate their carbon footprint while they work behind the scenes to reduce carbon emissions produced in the shipping process altogether. Here’s everything your ecommerce company needs to know to develop a shipping strategy that works towards global carbon-neutral goals that benefit the planet, your customers, and your business.

What Are Shipping Offsets?

Offsetting shipments means compensating for the carbon emissions generated during the transportation of goods. This is achieved by balancing these emissions with actions that remove an equal amount of carbon dioxide (CO2) and its equivalent in other greenhouse gasses (GHGs) from the atmosphere.

Why Your Ecommerce Brand Needs To Offset Shipping

Eight out of ten consumers make sustainability-based purchase choices. If your brand isn’t making noticeable efforts to be more sustainable, then McKinsey warns that it will be left in the dust in 2024.

In 2022, the shipping industry accounted for 3 percent of global greenhouse gas emissions, and by 2050, it is estimated that this number could swell to 10 percent. Implementing more offset shipping options for your ecommerce shop is the most impactful way to make your brand more sustainable today.

So how do customers respond to shipping offsets? Let’s take a look at a few case studies of brands that offer responsible shipping with EcoCart:

  • Tribe Kelley saw a 19% increase in cart conversions after installing EcoCart’s carbon offset shipping app.
  • Nuzest saw a 22% increase in cart conversions after offering shipping offsets.
  • Simbly saw a 38% increase in average order value once the brand started using EcoCart’s carbon offset app.
  • Face The Future saw a 130% higher average order value for loyalty members compared to non-loyalty members when it rewarded loyalty members for choosing carbon-conscious shipping as a part of its green loyalty program.
  • JuneShine saw a 43% adoption rate among its customers when the brand first launched voluntary shipping offset options at checkout.

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It’s important to note that with new, much-needed legislation surrounding greenwashing in California and the EU, companies that offer offset shipping need to be careful with the language that they use with their customers. 

To more accurately describe the outcome of opting into EcoCart’s offset shipping, an order can no longer be labeled as “carbon neutral.” Instead, you can explain that the carbon dioxide emissions from your customers’ orders will be offset by supporting validated carbon removal projects

If you’re concerned about this legislation, don’t be! We offer sustainability marketing resources to help you share your sustainability journey with your customers in an effective and compliant manner.

Identifying Areas For Improvement Along Your Supply Chain

To make progress toward global carbon neutrality, businesses must first measure the total carbon emissions produced by the distribution and transport of goods. This includes emissions from fuel used in shipping vehicles and emissions related to packaging and transportation.

One of the most accessible solutions to this challenge is to use a sustainability partner like EcoCart. Our powerful carbon emissions calculator simplifies the process. With the help of emissions analysts and a proprietary algorithm, EcoCart calculates the total life cycle emissions of your supply chain—from production to arrival on your customers’ front door steps.

EcoCart’s carbon emissions calculator shows brands exactly where their emissions are coming from

EcoCart’s carbon emissions calculator shows brands exactly where their emissions are coming from. Want to know where your business stands? Get your sustainability scorecard with our quiz.

How To Reduce Carbon Emissions From Shipping

Once carbon accounting has been completed, the next step is to reduce those emissions as much as possible. Improving shipping efficiency is the most impactful way for ecommerce businesses to reduce emissions and manage the growing demands of delivery. Here are several actionable recommendations for sustainable shipping practices:

  • Split Inventory: Use multiple distribution centers to store parts of your inventory, enabling you to ship products from the location nearest to the customer. This reduces travel distance and associated emissions.
  • Optimize Delivery Routes: Use route optimization software to find the most efficient paths for delivery vehicles. This reduces fuel consumption and delivery times.
  • Consolidate Shipments: Whenever possible, consolidate multiple orders into a single shipment. This reduces the number of trips needed for delivery.
  • Use Fuel-Efficient Vehicles: Incorporate hybrid or electric vehicles into your fleet. For smaller businesses, consider partnering with shipping companies that use eco-friendly vehicles.
  • Packaging Efficiency: Optimize packaging to be lightweight and space-efficient, reducing the volume and weight of shipments.
  • Local Sourcing: Source products from local suppliers to reduce the distance goods need to travel to reach distribution centers.
  • Flexible Delivery Options: Offer customers options like longer delivery times or consolidated delivery dates to allow for more efficient route planning.
  • Eco-Friendly Packaging Materials: Packing materials make up 45 percent of emissions produced by ecommerce businesses. Use sustainable packaging materials that are recyclable or biodegradable, like biodegradable packing peanuts and paper instead of plastic.
  • Carbon Offsetting Programs: Participate in carbon offsetting programs to compensate for emissions that cannot be eliminated. EcoCart offers plenty of validated carbon removal projects that you can support.
  • Customer Education: Educate customers about the environmental impact of shipping and encourage them to choose more eco-friendly delivery options. Effective sustainability marketing can pose a challenge. As part of our services, EcoCart offers sustainability marketing resources to help you communicate your sustainability strategies in a way that aligns with your brand.
  • Use of Technology for Inventory Management: Implement advanced inventory management systems to forecast demand accurately and reduce overstocking, leading to fewer unnecessary shipments. EcoCart can help with this, too! We provide a sustainability dashboard that allows you to see exactly where you stand so that you can strategize ways to reach your sustainability KPIs.
  • Collaborate with Green Logistics Providers: Partner with logistics providers who prioritize sustainability in their operations.

By implementing these strategies in the shipping process, ecommerce businesses can significantly improve their shipping efficiency, move toward carbon neutral ecommerce, reduce their carbon footprint, and contribute to a more sustainable future.

Read more: Reduce Business Carbon Footprint in Ecommerce

Options For Offsetting Shipping In Ecommerce

Major delivery companies are increasingly focusing on reducing emissions. Several now offer “carbon-neutral shipping” options, catering to the growing demand for sustainable ecommerce practices.

Options for carbon-conscious shipping include:

  • Carbon offsets with EcoCart
  • DHL GoGreen
  • USPS Blue Earth
  • UPS Carbon Neutral shipment
  • FedEx Carbon Insights

1. Offset carbon emissions of each shipment

Even with the best reduction efforts, some carbon emissions from shipping are inevitable. In these cases, ecommerce businesses can turn to offsets as a solution to balance out their remaining emissions. Carbon offsets typically involve investing in projects that actively remove or reduce greenhouse gasses from the atmosphere, such as renewable energy initiatives, reforestation programs, and other eco-conscious endeavors.

EcoCart’s carbon offset app offers a seamless way for businesses to address their greenhouse gas emissions by contributing to these environmental projects. By integrating EcoCart into their checkout process, businesses can enable customers to offset the carbon footprint of their purchases. This not only helps in working towards carbon goals but also enhances brand reputation by demonstrating a commitment to sustainability.

tribe kelley carbon neutral checkout
Tribe Kelley offers carbon offsetting at checkout with EcoCart

With EcoCart, offset shipping becomes a part of the customer’s shopping experience, making it easier for businesses to contribute positively to the environment while engaging their customers in their sustainability journey.

Learn more about how to purchase carbon offsets from one of EcoCart’s carbon offsetting projects, all validated by major carbon standards.

2. DHL GoGreen

DHL GoGreen is a comprehensive program aimed at minimizing the environmental impact of shipping. It includes measures like using alternative fuels, optimizing transport routes, and investing in reforestation and clean energy projects. This initiative allows businesses to ship goods in a more environmentally responsible way by offsetting the emissions generated during transportation.

3. USPS Blue Earth

USPS Blue Earth is an initiative by the United States Postal Service focused on sustainability and reducing environmental impact. This program encompasses several green strategies, including energy-efficient operations, waste reduction, and the use of alternative fuel vehicles. USPS Blue Earth aims to minimize the carbon footprint of mail and package delivery by optimizing transportation routes, enhancing recycling efforts, and implementing energy-saving practices in postal facilities. Through this program, USPS demonstrates its commitment to environmental stewardship, offering eco-conscious ecommerce businesses a more sustainable shipping option.

4. 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.

5. FedEx Carbon Insights

FedEx offers a Carbon Insights dashboard that allows its customers to see their carbon footprint associated with shipping. It then offers resources and alternatives to help minimize their emissions, such as using Freight Shipping over Overnight Shipping. This is part of their larger strategy to become carbon neutral by 2040.

environmental impact of online shopping

Common Concerns With Carbon Offset Shipping

Despite all the positives happening in the offset 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 offset shipping can benefit businesses. The most noteworthy of these include:

  • Builds trust and loyalty. By providing eco-conscious 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. 
  • Cost savings. Carbon offsetting can also lead to cost savings for ecommerce businesses, as reducing carbon emissions can lower energy costs and improve efficiency.
  • Compliance with regulations. Carbon offsetting will allow businesses to comply with carbon emissions and sustainability laws.

Does carbon offset delivery take longer?

It can. For instance, some offset shipping companies will slow the rate at which an order is shipped to save on greenhouse gas 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 offset shipping cost?

The cost of shipping with carbon offsets depends on the company used, the item sent, and the shipping distance. Some companies, for instance, charge a flat rate for shipping offsets, which only sometimes match 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 checkbox 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.

Conclusion

Shipping with carbon offsets begins by understanding where your carbon emissions are coming from. Using recyclable materials, reducing fossil fuels used to pack and ship products, and following other sustainable practices are the best ways to eliminate carbon emissions in the shipping process. While you work to reduce emissions along the entire supply chain, carbon offsets can help reduce your business carbon footprint immediately.

EcoCart is the ideal solution for offset shipping, no matter which ecommerce CMS platform you’re using. With our Shopify app and 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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