Amazon Prime’s free two-day shipping has led to an industry paradigm shift. Online retailers — small and large — are increasingly offering the perk to keep from losing customers to the behemoth marketplace. But free shipping comes at a steep cost: Rising shipping expenditures are eating away at retailers’ margins.
Larger retailers that can better afford to eat the cost of free shipping are battling to gain an advantage over Amazon. But most retailers, particularly small ones, lack the resources necessary to compete with the massive online retailer. This has set off a race in the logistics industry: Large logistics providers are creating new services for small retailers, while logistics startups aiming to address the same market are growing in numbers.
In a new report, BI Intelligence weighs the costs and benefits of free shipping for retailers and analyzes the effects of the perk on the industry. It assesses the technologies that could become commonplace as retailers and logistics providers fight rising shipping costs. However, implementing a cost-effective free shipping strategy can be difficult, so the report also discusses various techniques that both small and large retailers can use to make free shipping work for them.
Here are some key takeaways from the report:
Small and large retailers alike are turning to free shipping to better compete in an Amazon-dominated market. But rising shipping expenditures are eating away at retailers’ margins — even Amazon reported in 2016 that its shipping costs jumped 40%.
Small retailers face even more challenges than their larger counterparts, as they often lack the resources to invest in supply chain improvements and can’t benefit from the generous shipping discounts large retailers receive. Typically, retailers can get discounts of up to 70%, while boutique shops may only see discounts of about 5%.
Both retailers and logistics companies will likely invest in technologies that help to lower shipping costs.These include augmented reality (AR), artificial intelligence (AI), and radio frequency identification (RFID) tracking. Additionally, as logistics providers continue to raise shipping rates, large retailers may move some logistics operations in-house.
Alibaba Takes Controlling Stake In Cainiao And Will Invest $15 Billion In Global Logistics
Opinions expressed by Forbes Contributors are their own.
A monitor displays Alibaba Group Holding Ltd. signage on the floor of the New York Stock Exchange (NYSE) in New York, U.S. Photographer: Michael Nagle/Bloomberg
China-based Alibaba has acquired a controlling stake in logistics company Cainiao. The e-retailer giant has further announced an intention to invest 100 billion yuan ($15 billion) in its global logistical capabilities over the next five years.
Cainiao currently executes 57 million deliveries a day. Alibaba, which had owned 47% of Cainiao, has invested a further RMB5.3 billion (US$807 million) to increase its stake to 51%.
“By enhancing the logistics capabilities within the Alibaba ecosystem and extending our investment in this sector,” said Daniel Zhang, chief executive of Alibaba Group, “we are further enabling our New Retail strategy to bring online and offline retail into one seamless experience for shoppers.”
Cainiao was founded four years ago as a collaborative venture to improve the delivery of online purchases across China. The backers were primarily financial institutions as well as other logistics companies but was always considered an extension of Alibaba’s own logistics capabilities.
Now, Alibaba will claim a fourth representative on Cainiao’s seven-seat board and can more ably target strategic investments in the future.
A company goal is the creation of a capability to delivery anywhere in China within 24-hours and anywhere in the world within 72.
Alibaba aims, according to Zhang, to “build the most efficient logistics network in China and around the world.”
This demonstrates the time-worn value of physical facilities and capabilities in the physical world as a key differentiating factor for competing online. Amazon, for example, has made massive investments into technology as its warehouses are almost entirely free of human workers and its long-term plans cite networks of automated drones making same-day deliveries.
For Alibaba’s part, we will have to wait to learn of its 100 billion yuan bet on logistics. It is likely it will make similar technological investments to enhance the efficiencies of its own operations. The major business battle of the future may be dominated by the struggle between Amazon and Alibaba.
In Europe, we already have a notion of the nature of this competition. Alibaba is already looking to build a second datacentre to directly compete with Amazon for market share on cloud computing services.
Even within China, moves are being mirrored. Alibaba today announced a joint venture with New Huadu Supercenter, a grocer in Fujian province, to create a physical retail presence. This matches Amazon’s past acquisition of the healthfood chain Wholefoods.
The more we see of this unfolding struggle of internet giants, the more that is relates to the dominance of logistics channels and physical facilities. Unlike the corporate battles of the past, the outcome of this rivalry rests also on the competitors’ abilities to leverage technological expertise as well as marshalling vast distribution networks. And, unlike previous IT battles, the winner may turn out to be the best logistician.
Thursday, September 28, 2017
Alibaba Says It’s About to Build Up a Massive Logistics Network
Chinese e-commerce firm Alibaba Group announced it will invest 100 billion yuan ($15.12 billion) over five years to build a global logistics network and also take control of a $20 billion unit, underpinning an aggressive overseas expansion.
Alibaba is investing 5.3 billion yuan in Cainiao Smart Logistics Network to boost its stake to 51% from 47%. The investment would value Cainiao, a joint venture of top Chinese logistics firms, at around $20 billion.
"Our commitment to Cainiao and additional investment in logistics demonstrate Alibaba's commitment to building the most-efficient logistic network in China and around the world," Alibaba CEO Daniel Zhang said in a statement on Tuesday.
The announcement comes as Alibaba is rapidly expanding its e-commerce and logistics network abroad, including newly announced direct sales channels in Indonesia, Thailand and the Philippines, facilitated by a $2 billion investment in Southeast Asian online retailer Lazada Group.
Alibaba's latest investment in Cainiao also signals its intention to boost control over the domestic warehousing and delivery market, which has become increasingly competitive as firms seek to capitalize on logistics data assets.
In June top logistics firm SF Holding Co cut ties with the Cainiao coalition, which provides logistics support directly to Alibaba's top e-commerce platform Taobao, claiming Alibaba had requested data unrelated to the existing partnership agreement. Alibaba denied the claims.
Alibaba said on Tuesday the $15 billion investment will be used to develop its data technology and improve its warehousing and delivery development.
Alibaba subscribed to new shares of Cainiao to boost its stake to a majority, according to a person close to the e-commerce firm. Alibaba will gain a new board seat in Cainiao, and will represent four out of a total seven seats.
For more on Alibaba, watch Fortune's video:
Jack Ma Talks Great Ambitions for Alibaba
Fortune recently caught up with the man behind Wall Street’s largest IPO
Despite attracting billions of dollars from equity investors, Chinese logistic firms haven't fared well in recent public listings.
Shares of ZTO Express Inc, which raised $1.4 billion from its New York IPO last October in the largest U.S. offering by any Chinese company since Alibaba in 2014, are down 22 percent from the listing price.
And Best Inc, a Chinese delivery firm backed by Alibaba, raised $450 million in a U.S. IPO last week, nearly half of what it had initially intended to raise.
Cainiao is not currently considering any IPO, the person said.
Alibaba did not immediately respond to a request for comment.
Alibaba co-founded Cainiao in 2013, with partners including department store owner Intime Group, conglomerate Fosun Group and a few logistics companies. It oversees roughly 57 million deliveries a day.
Tuesday, September 26, 2017
The giant is coming: the true cost of Amazon to retailers and workers
Amazon’s arrival in Australia is imminent and, while the big guns are bullish, many smaller retailers aren’t aware of the threat
Citibank analysts predict Amazon will hit Australia in October, although the business itself won’t say. Photograph: Bloomberg via Getty Images
Down Dandenong way, on the outskirts of Melbourne, Amazon is staking out a beachhead for the invasion.
Strategically located near freeway connections to Australia’s busiest cargo seaport, the US$465bn retail superpower’s cavernous new fulfilment centre is gearing up to house hundreds of thousands of products shipped in from all over the world.
Citibank analysts predict Amazon will hit Australia in October, although the business itself is tight-lipped about the details. In the lead-up this 24,000 square metre warehouse is shedding the red-and-green branding of former tenant Bunnings for Amazon yellow, as it gears up to serve as a staging ground for a highly automated online retail operation that has deftly outmanoeuvred competitors, unions and tax authorities all over the globe – and promises to unleash the biggest disruption to the Australian market since the rise of department stores.
The incoming arrival of Amazon has seen the share value of major Australian retailers plunge, with local business leaders only helping fuel the panic. Amazon this year has been variously described as “the worst possible corporate citizen”, “Attila the Hun”, “a parasite” that “pays no tax” and threatens to “send everyone broke” – and that’s just by Gerry Harvey, the chairman of the electrical retail chain Harvey Norman, which in May had its profit forecasts downgraded by 30% by Citibank after analysis of Amazon’s impact in the US.
The colourful entrepreneur’s rhetoric has struck some as a little rich: the Retail Global founder, Phil Leahy, observed that Harvey’s “contradictions are breathtaking, given he has beaten competitors in building his own empire”.
Formerly the backbone of the Australian economy, small businesses were eaten up during the latter half of the 20th century by franchise-packed shopping centres and towering superstores like those of Harvey Norman that offered lower prices and greater range in a single location.
The arrival of Amazon is likely to have a direct impact on Australia’s fashion retail model. Photograph: Bloomberg via Getty Images
Back then it was a matter of profits being sucked from communities out to Sydney head offices. Harvey’s warning is that Amazon might just whisk the earnings out of Australia entirely as it undercuts local rivals by producing at greater scale – just as Australia’s big retailers once did to independent stores. The e-commerce giant generates nearly as much revenue as Australia’s supermarket duopoly of Wesfarmers-owned Coles and Woolworths combined, and Morgan Stanley estimates the company will generate $12bn of Australian sales by 2026.
Just as a single superstore visit suited consumers more than visiting a medley of small businesses, Amazon’s all-encompassing product range and rapid response time represents another level of convenience again: the company guarantees delivery in some areas of the US within two hours of customers clicking through to the online checkout.
Harvey says his company is up for the fight and that Amazon’s roll out cannot be as quick as expected but many Australian retailers aren’t aware there is going to be a fight in the first place. In March a Commonwealth Bank survey of more than 600 retailers found only 41% thought Amazon would be a threat to their business.
The consumer behaviour analyst Barry Urquhart, the Perth-based managing director of Marketing Focus, is embarking on a speaking tour about the scale of the Amazon challenge. He says: “Australian retailers are unprepared, ill-informed and don’t know what they are going to address. I don’t think they appreciate what Amazon is. A lot of people are confused. They think, ‘I’m protected, I don’t sell books and CDs.’ But Amazon is a platform, like Uber, and we saw what Uber did to taxis.”
The complacency might be to do with Amazon’s existing presence in Australia, where it has sold a limited range of entertainment-related products since 2012. Amazon’s full suite of offerings cover just about any product imaginable, from auto parts to furniture to sports gear. In June the company even committed to the bricks-and-mortar supermarket world with the US$13.7bn purchase of organic food chain Whole Foods – a sign that it will be ready to take part in the supermarket wars of Coles v Woolworths v Aldi.
Amazon took on half of all e-commerce sales growth in the US last year and has piled huge pressure on American retailers, which are closing at record pace: 2017 is on track for over 8,500 store closures, dwarfing the 6,200 that shut their doors during the recession-hit turbulence of 2008.
With American brands such as Sears and Macy’s shuttering hundreds of shopfronts alone, malls are struggling to find tenants. In a sign of the times, an Ohio mall that was the largest in the world is being transformed into an Amazon fulfilment centre.
An Institute of Local Self-Reliance report – published late last year before the 2017 retail apocalypse – calculated that Amazon has eliminated about 149,000 more jobs in retail than it has created in its warehouses. The company’s embrace of automation is anticipated to further increase that gap, including the roll out of cashier-free physical stores where customers can walk out with their shopping while the payment is taken care of automatically through their Amazon account.
A UBS survey found that Amazon’s arrival in Australia is predicted to eat up 16% of retailers’ discretionary earnings within five years, including 31% of department store giant Myer.
The company is undertaking new measures as Amazon arrives, including the trial of a new yellow-branded clearance section in stores and enhancing its online marketing by leveraging data collected on shoppers via its loyalty program.
In June the Myer chief executive, Richard Umbers, revealed the company would focus on offering unique brands. “I reckon that really dialling up the newness, the uniqueness of our range and in particular products that aren’t available on Amazon anyway … is the right way to defend ourselves against Amazon,” he told the Australian.
Union hostility
Amazon says it will create hundreds of jobs in the Melbourne fulfilment centre and thousands of jobs across Australia nationwide but what kind of jobs will they be?
The National Union of Workers’ national secretary, Tim Kennedy, says the union wrote to Amazon in mid-August seeking a meeting to discuss plans for Australia but never heard back.
He says a failure to engage will fit with Amazon’s record of poor labour practices.
“These include the electronic monitoring of workers and harassment to the detriment of safety,” he says. “There is a well known case of the warehouse in Allentown, Pennsylvania, where workers are forced to work in extreme heat and when people drop they are whisked into ambulances that are stationed in the car park to remove them and replace the worker with standby workers on site ready to fill the hole. Quite shocking really. No respect for the essential humanity of people.”
The scandal, which was reported in 2011, came about because the facility did not have air conditioning and Amazon did not want to leave the doors open for fear of merchandise being stolen. The company has since invested in air conditioning across a number of fulfilment centres, including at the planned Melbourne facility.
Asked to respond to Kennedy’s concerns, Amazon spokesman James Lewis told the Guardian in an email that Amazon’s fulfilment centres are “a great place to learn skills to start and further develop a career”.
Lewis said the safety of workers was the company’s top priority and that “as with most companies, we have certain expectations regarding the performance of associates. Productivity targets are set objectively, based on previous performance levels achieved by our workforce and evaluated over a long period of time. The vast majority of our fulfilment centre associates perform very well. If an associate is not meeting these performance levels, managers will work in consultation with associates in an endeavour to find a solution.”
Amazon has a long and successful track record of pressuring employees to avoid unions, going right back to the year 2000 when leaked company documents detailed strategies to warn workers that unions are an expensive waste of time and telling supervisors to watch out for union activity signs such as “hushed conversations” among workers and “dawdling in the lunchroom and restrooms”.
Lewis did not respond to the Guardian’s question about whether Amazon would meet with the NUW. Asked if Amazon would allow employees the option to join unions – as required by Australian law – Lewis said: “We respect the individual rights of our associates and have an open-door policy that encourages associates to bring their comments, questions and concerns directly to their management team. We firmly believe this direct connection is the most effective way to understand and respond to the needs of our workforce.”
Employees are discouraged from using the bathroom and allocated demerit points for taking too long. They also lose points for taking sick days – examples include a worker penalised for being hospitalised with a kidney infection and another who was put on performance review for allowing breast cancer treatment to impede her work.
At the corporate end, white-collar workers are pitted against each other and encouraged to rat on their peers via an anonymous assessment tool that ranks employees for the purposes of an annual cull. Workers have reported receiving midnight emails immediately followed by text messages asking why there hasn’t been a reply.
Aside from the issue of fewer retail workers meaning fewer people paying taxes, Amazon itself has been questioned over its own tax contributions around the world.
The multinational tax avoidance expert Antony Ting, an associate professor at the University of Sydney Business School, says: “This kind of structure is common among e-commerce multinational enterprises such as Google, Facebook, Uber and Airbnb. The core of these tax arrangements is to locate intellectual properties (eg the digital platforms) to a low-tax jurisdiction (eg Bermuda), thus justifying shifting profits to that country. For these digital companies, these intangible assets, which are extremely mobile, are often their most important and valuable assets.”
Ting notes Amazon will be encountering some specific challenges to its business model in Australia in the shape of the multinational anti-avoidance tax law (MAAL), introduced in January 2016, and the diverted profits tax (DPT), which came into force in July. He says the MAAL has had some success in securing tax revenues out of Facebook and Google, with the former increasing Australian profits by a factor of 10 and Google more than doubling local profit.
Ting notes the MAAL appears to still fall a significant way short of securing tax revenues in line with the global profit margins of these companies – Facebook Australia’s net profit margin was 1% compared with a global net profit margin of 37%.
As for the DPT, he says it might further improve tax intakes from multinationals like Amazon but, as it has only just been introduced, it is difficult to predict the outcome.
“As the MAAL has been in place for over a year, it is likely that the corporate structure of Amazon in Australia will be designed in accordance with MAAL,” he says.
In response Lewis said: “Amazon pays all the taxes we are required to pay in every country where we operate. Corporate tax is based on profits, not revenues, and our profits have remained low given our heavy investments and the fact that retail is a highly competitive, low-margin business.”
Opportunities for consumers and small businesses
Gigi Foster, an associate professor at the University of New South Wales business school, says she is “broadly optimistic” about the impact Amazon will have on Australia.
“There is the potential for positive effects on Australian consumers, who have languished because of restrictions on imports,” she says. “I think it’s great you will have the option to buy a lot more stuff, people will be happier because of that. The more you can buy, the happier you can make yourself and your family.”
Foster acknowledges there could be problems for Australian retailers, suggesting that small enterprises need to make sure they stock niche products not available on Amazon.
Boxes and parcels sit stacked in bays ahead of shipping from the warehouse of an Amazon.com Inc fulfilment centre in Koblenz, Germany. Photograph: Bloomberg via Getty Images
Independent retailers that have survived through the era of big department stores are now bracing themselves for this new challenge. That includes Warren’s Menswear, an independent store in Fremantle that has been trading since 1931.
The manager of Warren’s Menswear, Teresa Serafini, says: “Competition is great but not when Amazon can undercut you so you can’t compete. But we offer service that Amazon can’t and people remember that. We’ve survived through the great depression, a world war, the rise of retail chains. We get people who come in and say, ‘Oh my dad and before him my grandfather used to come here’.”
Back at Marketing Focus, Urquhart says that kind of community relationship could see small businesses cope better with Amazon than the very retail chains that used to threaten their future.
“You look at a big retailer like Officeworks where people are buying consumables,” he says. “If customers can go on to Amazon and get something functional for cheaper, they will start buying their USBs, calculators and pens from there. Small businesses, however, can easily live with and beat Amazon simply by providing personal interactive experiences – loyalty to the individual rather than the product.”
Analysts have also noted that small enterprises offering unique products could benefit by selling their products through Amazon, using its formidable logistics capability to deliver to a huge global user base.
The lack of awareness among Australian retailers about what Amazon actually represents is a major obstacle to this happening, however, as seen by the case of the 175-year-old Oliver’s Taranga Vineyards in South Australia, one of the country’s oldest family businesses.
The Oliver’s Taranga Vineyards sales manager, Nicky Connolly, recently attended a marketing industry seminar in Sydney where Amazon was a hot topic but she left the conference still unaware that the American giant sells wine, with all the competition and potential supply opportunities that represents.
“Oh, I didn’t know Amazon do wine now,” she tells the Guardian, pausing for a moment. “They’re not just books anymore, are they?”
ALIBABA PAYS $807M TO TAKE MAJORITY OWNERSHIP IN LOGISTICS AFFILIATE CAINIAO
Alibaba is getting serious about logistics after it agreed to invest RMB 5.3 billion ($807 million) in order to take majority ownership in subsidiary company Cainiao.
Cainiao was created four years ago alongside eight other backers to bring organization in Chinese logistics, particularly around e-commerce deliveries. The company raised its first outside funding in March 2016 — reportedly RMB 10 billion ($1.54 billion) at a RMB 50 billion ($7.7 billion) valuation — from backers including Temasek Holdings and GIC in Singapore, Malaysia’s Khazanah Nasional and China-based Primavera Capital.
It is currently not profitable, but investors see its close relationship with Alibaba as the ticket to developing a lucrative business. Alibaba said the goal is to enable e-commerce services in China to fulfill customer orders within 24 hours, and those overseas within 72 hours, and Cainiao is a core part of that. Indeed, Alibaba said it plans to invest over $15 billion in the next five years to develop its global logistics network.
Today’s investment is likely to go through next month and it will take Alibaba’s ownership from 47 percent to 51 percent, which in theory gives Cainiao a valuation of RMB 132.5 billion ($19.9 billion). But that’s theoretical because Alibaba’s motivation is likely to have been influenced by other matters.
The SEC last year launched a probe into Alibaba’s accounting systems, and whether it has violated federal securities laws. The firm’s accounting of Cainiao was one component to that, since it only listed some financial information as a minority equity holder. Now, as a majority stakeholder following this deal, it is likely that Alibaba’s transparency over the company will increase going forward. Beyond more information for regulators, it may also appease shareholders curious to learn more about a company Alibaba is helping to bankroll.
We need action, not slogans, to tackle slavery in supply chains
09/22/2017 06:37 am ETUpdated 1 day ago
NICK GRONO, FREEDOM FUND
Thai fishing boat
Tackling forced labour in corporate supply chains is difficult, particularly when those supply chains span continents and extend down multiple tiers. To do so successfully requires real commitment from companies, and robust and sophisticated policies rigorously applied, with transparency and vigilance. It is encouraging to see some big corporates leading the way on this front – most notably on the issue of recruitment fees – and we applaud the commitments of companies such as Nestle and Walmart and Mars, and look forward to their effective implementation. But while some corporates are showing leadership, many are failing woefully to meet their obligations, and thereby condemning workers in their supply chains to ongoing exploitation. Some will claim that we shouldn’t call out these corporate failures, and that “naming and shaming” amounts to “beating up” on business. But such claims are simplistic, naive, and counterproductive. They are also disrespectful to courageous anti-slavery activists who, often at significant personal risk, investigate and expose abuses in supply chains.
To take just one example, hundreds of thousands of migrants from Myanmar and Cambodia are currently enslaved in the Thai seafood industry and have been for far too many years. This has been powerfully and extensively documented by the Guardian, Associated Press, the New York Times and other reputable media outlets. In their reporting, these outlets identified that big Western companies were routinely importing seafood from Thailand that was likely produced by slave labour. And what was the impact of this media “naming and shaming”? For a start, some of the companies named in the reports said they weren’t aware of the scale of exploitation until these investigations – so at very least it put them on notice of the extreme exploitation of workers producing products they were selling. But it’s also notable that some of the big companies now at the forefront of tackling global supply chain abuses, such as illegal recruitment fees, are those who were publicly identified in this reporting.
The reality is that the complexity of tackling forced labour in supply chains requires that a range of tools need to be applied applied to the task. Sometimes that requires publicly identifying systemic failures – as with the Thai seafood industry – and holding key actors to account. Sometimes it requires benchmarking of performance – as done so diligently by the KnowTheChain and the Business and Human Rights Resource Centre, drawing on data from the Modern Slavery Registry and other credible sources. And sometimes it means applauding leadership in the field as an example to others, as with the Thomson Reuters Foundation’s Stop Slavery Awards. What it certainly doesn’t need is simplistic slogans.
t’s All About the Chain, Gang: Procurement the Link to Sustainable Supply Chains
We are transitioning to a low-carbon, circular and inclusive economy. The latest arrival to the party is the procurement department — and none too soon, given the mammoth challenge ahead to make global supply chains sustainable and ethical. If you’re looking to fill your procurement cart with insights on tackling the challenges, read on for information about two tools and a city with a supply chain vision.
There is now an international standard to guide sustainable procurement: the ISO 20400lays tracks for a sustainable economy. As a member of the Canadian technical committee that advised on the standard, I can confirm it is a robust, comprehensive – and highly ambitious – framework. Supply management teams should benchmark their own practices against this guidance.
Another handy sustainable supply chain tool is the Best Practice Framework for Sustainable Procurement. This tool profiles next-generation sustainable procurement practices such as Risk, Opportunity and Innovation; Supplier Engagement; and Buyer Collaboration as top strategies to proactively identify transition opportunities.
Both tools recognize that effective sustainable procurement goes beyond screening products for their sustainability attributes. It requires measures to incentivize a diverse and socially beneficial supply chain, and to engage suppliers in continuously improving their sustainability impacts. It is through measures such as this that companies such as Unilever and Nike seek to decouple their negative environmental impacts from their growth, while doubling their social benefits.
While the private sector is making sustainable procurement inroads, so is the public sector flexing its procurement muscle. Recently, the City of Mississauga, a large Canadian city that neighbours Toronto, adopted a Sustainable Procurement Policy and Plan modeled on these best-practice tools. Its new sustainable purchasing policy and plan leads the way in several areas. The City of Mississauga:
Commits to a visionary long-term ambition for its supply chain
Social, economic and environmental sustainability is fully embedded in our procurement practices. We have a diverse, inclusive and fairly-paid local supplier base which benefits from our collaborative approach, with new sustainable practices that create value for our suppliers and their customers. Our procurement is a catalyst for social and environmental innovation leading to a low-carbon, circular and inclusive economy.
Consider all costs and impacts: The City considers the total cost incurred over the Goods or Service life (“Total Cost of Ownership”), value for money achieved (“Best Value”) and the lifecycle benefits and impacts on society, the environment and economy resulting from procurement activities (“Lifecycle Cost”); and seeks to be proactive in preventing potential short- and long-term environmental and social risks.
Collaborate and influence: The City will collaborate with peer organizations to achieve Sustainable Procurement objectives in their shared supply chains; and encourage and support suppliers to continually improve their sustainability practices and outcomes, and the sustainability impacts of their Goods and Services and supply chain.
Consider procurement alternatives: The City seeks to reduce demand through efficient use by considering possible alternatives to buying new Goods, including reuse, sharing between divisions, refurbishing, appropriate order quantity, leasing rather than buying, and considering dividing large and multiple category contracts to provide greater access to bidding opportunities for suppliers of all sizes.
Address social opportunities: The City will consider purchasing Goods and Services from social enterprises, which provide employment and training for youth and people with employment barriers (e.g. people with disabilities, new immigrants, chronically unemployed, ex-offenders, etc); and from suppliers that demonstrate best practices in workplace diversity, inclusion and accessibility (e.g., women, indigenous, minority-owned businesses or businesses owned by persons with disabilities).
These four commitments underscore the City’s innovative approach to fostering an inclusive, circular and low-carbon economy. For more details, check out the City Council sustainable procurement report adopted last June.
In embracing this program, the City joins other leading municipalities across North America catalyzing billions of dollars in public spending towards sustainable outcomes. With international standards, benchmarks and best practice organizations such as the City of Mississauga, procurement departments now have the tools at their disposal to scale and accelerate a new, sustainable economy.
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