Zara owner Inditex, the world’s largest listed fast-fashion retailer, has significantly increased its reliance on air freight to transport clothing from factories in India to its logistics hub in Spain. This strategic shift aims to circumvent shipping delays caused by disruptions in global shipping routes, particularly in the Red Sea. However, the move has raised concerns over the company’s environmental commitments, as air freight generates substantially higher carbon emissions than sea freight.
A Growing Dependence on Air Freight
Inditex’s air shipments from India soared by 37% in the 12 months to the end of August 2024, with a total of 3,865 consignments, according to Reuters’ analysis of trade data. Notably, 3,352 consignments were sent since January 1, coinciding with increased attacks on container ships in the Red Sea.
The share of air freight in Inditex’s shipments from India climbed to 70% in the first eight months of 2024, up from 44% in the previous year. Similarly, shipments from Bangladesh saw an increase, rising to 31% from 26%. Most air consignments from India arrived in Zaragoza, Spain, a key logistics hub for Zara.
Spanish Trade Agency data highlights a broader trend: the value of fashion goods brought to Spain by air rose by 28% in the year to September 2024 compared to the same period in 2023.
Environmental and Emission Concerns
Inditex’s increased reliance on air freight is likely to inflate its transport emissions, which surged by 37% in the 12 months to January 31, 2024, compared to the previous year. Transport accounted for 12.1% of the company’s total emissions in 2023, up from 8.4% in 2022, though changes in reporting methodologies may have influenced these figures.
The company has committed to halving its Scope 3 emissions, which include transport, by 2030 from 2018 levels. However, its 2023 Scope 3 emissions, at 16,418,450 metric tons of CO2 equivalent, showed a 0.2% increase from 2018 levels.
An Inditex spokesperson emphasised efforts to reduce emissions through alternative fuels, route optimisation, and maximising cargo occupancy. However, with rising transport emissions, the company may need to focus on other areas of its supply chain, such as material production and processing, to meet its climate goals.
Balancing Profitability and Climate Goals
Investors remain divided over Inditex’s increased use of air freight. At the company’s annual shareholder meeting in July, members of the Shareholders for Change network urged management to provide detailed data on air freight emissions and strategies for reductions.
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However, other investors, such as Nick Clay of the Redwheel Income Strategy in London, expressed support for the company’s pragmatic approach. “In the short term, we would rather Inditex do what’s necessary to support profitability and cash generation, provided they still aim to lower overall greenhouse gas emissions,” said Clay.
By prioritising timely deliveries, Inditex mitigates risks of stockpile build-ups and the potential need for heavy discounts, which can erode profitability.
The Broader Industry Context
Inditex’s reliance on air freight mirrors a wider trend in the fashion industry, where Red Sea disruptions have led many retailers to adopt faster but more emission-intensive modes of transport. Despite these challenges, Inditex continues to source over half of its products from suppliers close to Europe, including Morocco, Portugal, Spain, and Turkey, balancing efficiency with environmental considerations.
Inditex’s increased air freight usage underscores the tension between maintaining operational efficiency and achieving climate goals. While the strategy safeguards the company’s profitability and ensures timely product deliveries, it complicates efforts to meet ambitious emission reduction targets.
As the fast-fashion giant navigates these challenges, its commitment to sustainability will likely come under greater scrutiny from stakeholders, particularly as it prepares to meet its 2030 Scope 3 emissions goals. Whether the company can strike a balance between environmental responsibility and business pragmatism remains to be seen.
