Chapters
Annual Report 2020

2.5 Efficient transportation process

One way we convert more customers into loyal fans is by exciting them with the most fast and flexible delivery lead times. To accomplish this, we rely on our transportation partners to deliver products from production facilities to our manufacturing sites and then to our retail stores by road, air and across oceans. We recognize the environmental impact this worldwide transportation process creates and work hard to reduce our negative environmental impact in line with the global climate change agenda.

The product journey from our suppliers to our customers is covered by multiple segments, which can be broadly described as:

  • Inbound transportation: from production facilities to our cross-docks
  • Outbound transportation: from our cross-docks to our manufacturing sites and retail brands
Inbound/outbound transportation / % of total shipments

Inbound transportation - production to manufacturing sites

2020

2019

2018

2017

2016

2015

Ocean (% of total shipments)

47%

64%

75%

62%

73%

54%

Air (% of total shipments)

53%

36%

25%

38%

27%

46%

Outbound transportation - manufacturing sites to stores

2020

2019

2018

2017

2016

2015

Road (% of total shipments)

91%

99.2%

95%

92%

98%

100%

Air (% of total shipments)

4%

0.8%

5%

8%

2%

0%

Ocean (% of total shipments)

5%

0%

0%

0%

0%

0%

Inbound transportation is done by ocean and air, while outbound transportation is mainly done by road travel. Our transportation policy and performance are tied to product demand. And as our customers want a wide variety of products delivered as quickly as possible, there has been an increase of inbound air shipments.

In 2020, we faced some logistics challenges, which were mainly driven by the effects of the COVID-19 pandemic. The full lockdown in China early in the year made a slight impact to our logistics flow in terms of timing, cost and efficiency, as well as overall CO2 impact. Due to potential delays in our production process and to secure product availability for customers, we chose to ship our products by air instead of ocean freight. This resulted in an increase from 36% to 53% of shipped frames by air compared to 2019.

However, our strategy is to reduce our carbon emissions and this posed a challenge for us. Air transportation is faster than boat, but is more carbon-intensive. To mitigate our increased transportation-related environmental pressure, we focused on optimizing our product packaging. See 'Improved packaging reduces environmental impact' later in this section.

We also introduced outbound transportation by ocean to our retail brands in Denmark and Sweden in 2020 to reduce costs, lead-times and reduce our carbon footprint as much as possible in these countries.

Transportation / % of total transport movements

Transportation mode

2020

2019

2018

2017

2016

2015

Ocean

26%

33%

34%

33%

40%

33%

Road

46%

49%

52%

44%

44%

39%

Air

28%

19%

14%

24%

16%

28%

Transportation carbon footprint

Emissions type

2020

2019

2018

2017

2016

2015

Inbound (tons CO2e)

3,538

2,711

3,156

5,116

3,431

3,590

Outbound (tons CO2e)

1,766

165

691

920

303

92

Total (tons CO2e)

5,304

2,876

3,847

6,036

3,734

3,682

In 2020, we saw an increase in both inbound and outbound CO2 emissions. This increase in both categories is partially due to the COVID-19 pandemic and the subsequent lockdown in China. In order to deliver products to our customers on time, we had to ship products by air transport instead of ocean transport. We can also attribute about 5% of these inbound CO2 emissions to retail brand emergency PPE shipments.

New for 2020 is the inclusion of direct deliveries from Latin America in our outbound CO2 calculations. This additional data accounts for about 52% of our 2020 outbound CO2 emissions.

Our goal is to keep balancing customer demand while reducing the environmental impact of our transportation modes. In 2021, we will establish and implement more environmentally-focused KPIs to lay the foundation for a green transportation program. We will also explore the potential of reverse logistics, which is possible thanks to manufacturing site centralization and further streamlined processes.

Reducing CO2 emissions by rail transport

As we work to reduce our negative environmental impact in line with the global climate change agenda, we are exploring more ways to ship products to our manufacturing sites and stores. We are aware of the intense environmental impact that shipping products by plane has and are reviewing if there are opportunities to use a different method of product transportation.

Specifically, we are considering shipping eyeglass and sunglass cases by train as they are more durable and less time-sensitive products for our customers, compared to custom glasses, sunglasses and contact lens orders.

In addition to shipping cases, we are assessing more frequent railway shipping methods for all inbound and outbound deliveries to and from our cross-docks. However, we are waiting to make this decision until railway shipping is less affected by the COVID-19 pandemic to deliver products to our retail brands as quickly as possible and avoid additional transportation costs.

Improved packaging reduces environmental impact

While air transportation is CO2-intensive, it is an essential element of our transportation logistics that guarantees speedy delivery to our customers. That's why we implemented emissions-reducing practices since 2019 into our logistics with the following projects that have:

  • Reduced packaging material by optimizing box sizes
    • Result: Used fewer cartons and reduced empty space/volume during transportation.
    • Example: Optimizing box sizes reduced an estimated 20% of packaging material used (carton). This reduced an estimated 5% to 20% in transported weight on inbound ocean and air, as well as outbound truck transport.
  • Consolidated volume to optimize transport
    • Result: Fuller container loads shipped using ocean transport and more efficient truck loads for road transport.
    • Example: We introduced consolidation points in Asia, which optimized inbound flow of products by air and ocean. This will lead to an estimated yearly savings of 6% on CO2 emissions.

Although we planned to roll out more initiatives to lower our transportation-related carbon emissions in 2020, this was not possible due to a delay in our manufacturing activities related to COVID-19 limitations. And this meant we had to rely more heavily on transporting our products by air instead of ocean shipping. In 2021, we intend to get back on track with these initiatives.