Why Material Suppliers Must Pivot to Green Logistics
- Kevin Bolland
- 18 hours ago
- 4 min read
Logistics is one of the biggest industries in the world with billions of materials, packages and products being shipped from one location to another. Without logistics, manufacturers would quickly run out of raw materials leading to a stop in both production and supply of finished items to distributors and stores. This means projects would go incomplete with business revenues plummeting.
As of 2026, the global green logistics market has surged to approximately $1.5 trillion, driven by a convergence of strict new laws, shifting capital and a revolution in AI-driven efficiency. It’s the future for all types of freight deliveries, including the supplying of materials across the word. For material suppliers, the prediction period is officially over with green logistics now being a must-have for all types of material suppliers. Here is why the pivot to green logistics is now essential for staying in business.
Why Green Logistics is Essential
UK CMA Guidance
New enforcement rules now hold businesses liable for misleading environmental claims across their entire supply chain. If your material is labeled sustainable but arrives via carbon-heavy transport, you face fines of up to 10% of global turnover. It can even impact your customers too if they source unethical delivery options.
All packaging should be eco-friendly too. This means that distributors must verify information from suppliers that all of their packaging is created using sustainable materials, such as recycled paper, reusable cardboard boxes or plant-based bioplastics.
EU Carbon Border Adjustment Mechanism
As of January 1, 2026, the EU’s Carbon Border Adjustment Mechanism is live. Importers of iron, steel, aluminum and cement must now pay for the embedded carbon emissions in their products. Suppliers who cannot prove low-carbon transport will find their products priced out of the European market, so this is now essential if they want to continue to gain their projects from exporting such materials.
Non-compliance can lead to fines of up to €50 per ton of 𝐶𝑂2 during the transitional phase, with higher penalties in the definitive phase. This is to support the EU's "Fit for 55" package, aimed at reducing greenhouse gas emissions by 55% by 2030.
Cost Savings
Logistics firms adopting electric or hydrogen heavy-duty fleets are seeing fuel and maintenance costs drop by up to 30%. Traditional internal combustion engines can be inefficient, losing roughly 60% to 70% of their energy as heat, whereas electric motors convert over 85% of battery energy into motion. In 2026, the maintenance advantage has become undeniable, as electric trucks have approximately 20 times fewer moving parts than diesel equivalents.
This eliminates complex exhaust after-treatment systems, multi-speed transmissions and frequent oil changes that can disrupt the material deliveries. All of this helps material suppliers save money in the long-term, all while reducing their carbon footprint.
Digital Twins
Companies are increasingly adopting digital twins to simulate, predict and optimise operations, directly resulting in lower freight costs. It also means they will achieve reduced CO2 emissions and improved resilience against disruptions, which can help them get materials shipped out more efficiently. These allow businesses to analyse and improve packaging design and distribution networks before implementing changes in the real world.
It can also help them switch to more efficient modes of transport. In some cases, these optimizations reduce carbon emissions by up to 70% per ton-mile when shifting from road to rail transport.
ESG Scores
Major global brands are now using ESG (Environmental, Social and Governance) scores as a hard filter. If you cannot provide real-time data on the emissions of your transport routes, you will be replaced by a supplier who can. This has come from a higher customer demand when it comes to receiving materials in a sustainable way. Gen-Z are at the forefront of this, as they are the generation who are currently most in touch with their green practices.
When looking at the data, 81% of buyers consider ESG crucial, making it a key factor in contract renewals. This percentage has risen exponentially over the past two decades, with an increasing number of companies looking to become more eco-friendly.
Investment Capital
In 2026, investors prefer supply chains where materials are reused and recycled instead of being thrown away. Banks see these sustainable companies as a much safer bet, as they are less likely to be hit by new environmental taxes or resource shortages. If a material supplier can prove they are going green they get access to more dedicated investment cash that their competitors can’t compete with.
To get the best deals on loans, suppliers must show a clear plan for cutting their carbon footprint. If a supplier uses electric trucks or optimises their routes to save fuel they actually pay less for their financing. A solid roadmap for green logistics has become a powerful financial tool that saves a company money on interest while making them much more attractive to the world's biggest lenders.
Final Thoughts
To bridge the gap between new technology and daily performance in green logistics, specialised transport training has become a critical investment for 2026. Upskilling staff in eco-driving techniques, carbon reporting and the management of alternative-fuel vehicles, suppliers can ensure their material supply becomes greener. This will help with meeting the net-zero mandate while driving long-term profitability and resilience.
Article Generously provided by Darcy Fowler
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