Paving the road towards a sustainable supply chain

Similar to all industries, logistics and the global supply chain is routinely beset by new challenges and the need to adapt to changing attitudes. And although the ongoing pandemic is of course the most obvious of these recent hurdles – as well as the long-term impact from the Suez Canal blockage – there is actually a more hidden, ongoing disruptor that the industry needs to address sooner rather than later: sustainability.

For a long time, sustainability has been seen as ‘nice to have’ within the industry, an afterthought at best. However as global attitudes towards eco-friendly initiatives and climate change begin to shift, it may be time the industry begins to seriously consider its impact on the environment and how we can best start making strides towards a more sustainable supply chain.

This is especially the case as the issue of climate change has the potential to wreak havoc on freight transportation as major weather events across the globe continue to grow in frequency over the coming years.

Decisive action needs to be taken now to prevent the industry as a whole scrambling from crisis to crisis. But is sustainability in an industry defined by global transportation even possible?

Decisive action needs to be taken now to prevent the industry as a whole scrambling from crisis to crisis. But is sustainability in an industry defined by global transportation even possible? Well, according to leading logistics provider Freightline Carriers, ensuring that it is possible is part of the social and environmental responsibility of all supply chain stakeholders.

Sustainability efforts traditionally revolve around ensuring operations do not negatively impact the environment, however this is never going to be fully achievable in the global transportation industry. At least not until electric trains and planes become a viable part of our everyday lives.

So, in the meantime, that means reducing – not eliminating – the causes of environmental problems by focusing on improving efficiency through a number of channels.

Reducing emissions
Tackling CO2 emissions is perhaps the most obvious first step towards a sustainable supply chain, after all, logistic companies are no exception to the Paris Agreement, meaning that they have an obligation to help devise solutions to limit increases in their carbon emissions.

There are a number of actionable ways that companies can help to reduce their fleet’s carbon footprint, including method of transportation, optimising route choice and driving habits and the use of more efficient fuels, biofuels or alternatives such as natural gas and electricity.

Currently, electric vehicles are not a viable option for long-haul transportation, with the current six-to-18-tonne models available only having a limited range of 50-200km. However, that is expected to have changed by 2030. That being said, there is a clear argument for the use of electric vehicles in last-mile delivery, especially in urban areas.

Including CO2 emissions as a key criterion for carrier selection, essentially weighing the carbon emissions of transportation modes against service and cost, is another easy opportunity to make an immediate difference.

By dynamically selecting freight transportation routes and modes on an individual case basis, companies can factor in the potential carbon emissions of each option and therefore create an effective, sustainable solution

Many companies can become almost static in their decision-making process: they choose to use air cargo for example solely because that is how they’ve always done it. However, by dynamically selecting freight transportation routes and modes on an individual case basis, companies can factor in the potential carbon emissions of each option and therefore create an effective, sustainable solution.

Leverage data
However, for companies to be able to set reduced carbon emission targets, they first need to be able to confidently say what their current emissions are. The problem is that accurately measuring freight emissions depends on several variables, including the type of load, equipment type, distance and much more.

To further complicate matters many companies may have some of the data necessary but not all, or it could be spread across various systems throughout the organisation. Then you need to factor in that the methodology for determining emissions can vary from region to region.

This means that in order to move towards a more sustainable supply chain, many suppliers will need to invest in a system that streamlines and centralises data collection. Real-time transportation visibility platforms are already becoming an industry standard to track freight, but many can also be used to collect data that can be used in sustainability calculations.

Investing in and leveraging data is one of the most important aspects in determining how much of an impact an organisation has on the environment and how to reduce it.

“Covid-19 has brought increased attention to the issue of sustainability in logistics, as the world saw carbon emissions decrease due to fewer vehicles on the road and transportation in general,” says Sav Aulakh, Managing Director at Freightline. “As the economy returns to pre-pandemic levels, those emissions will unfortunately rise, which is why so many companies within the industry are now under pressure to be looking for ways to make their operations more sustainable.”

“However, many of the measures that companies can use to meet this new goal – such as enhanced space utilisation or better load planning to reduce the amount of excess or empty miles on the road – have the added benefit of also being more cost-effective. The result of this is that implementing sustainability efforts are not just good for the environment but also for the bottom line. Even before the pandemic, empty miles were considered to be one of the largest sources of waste within supply chains, but this increased focus on sustainability efforts has had a knock-on effect of forcing organisations to think and deliver services more efficiently.”

As with all things, the measures companies choose to implement will likely come down to cost. Measures that provide a positive environmental impact but a poor ROI will simply not be feasible for many companies, especially post-pandemic

However, as with all things, the measures companies choose to implement will likely come down to cost. Measures that provide a positive environmental impact but a poor ROI will simply not be feasible for many companies, especially post-pandemic.

As Aulakh explains, all companies will have to ask themselves if they are accurately accounting for their carbon footprint when balancing it against the costs of both inventory and logistics. And then, where financially possible, chose the more sustainable option no matter how small. After all, as the saying goes, every little helps.