With the concern of climate change increasing and data on carbon footprints improving, more suppliers have been pressured to provide sustainable solutions for their customers.
Now more than ever, customers are picking products off the shelves and wondering where they came from, what they are made of, how efficiently they are transported, and what their carbon footprint looks like.
And it’s not just the customers who are stressing the need for a more sustainable procurement process — organizations like the U.S. Department of Transportation’s Office of Policy Development, Strategic Planning and Performance are placing pressure on logistics companies to monitor their energy use and emissions.
The cost of the transition has kept the majority of logistics companies from adopting a more sustainable process. But there are many ways that leveraging transportation technologies can increase your company’s competitive advantage and provide a higher ROI and at the same time reduce emissions.
“Sustainable procurement is about the process of purchasing goods and services that take into account the social, economic and environmental impact that purchasing has on people and communities. It is about considering what the products are made of, where they come from, who has made them, how they are transported and how they are eventually disposed of,” states The International Journal of Economics and Management Systems.
Being mindful of how your company’s logistical practices are affecting its carbon footprint starts with understanding the building blocks of transportation. Procurement can come in many forms and encompasses a broad range of the supply chain processes. So, what separates freight procurement from the overall procurement process? And how does it relate to sustainability?
Freight procurement is the process of sourcing multiple modes of transportation to move goods and products in quantity using rail, ship, air or road (trucks). Cloud-based procurement technology helps automate the freight procurement evaluation and purchasing process by sorting logistical criteria such as carrier rates, equipment types, service levels, and more. These factors can be used as points of consideration when procuring transportation to help reduce your organization’s carbon footprint and greenhouse gas emissions.
Transportation technologies can help make your freight procurement process not only sustainable, but seamless. Technology allows you to monitor carbon footprint and emissions and help adapt ways of thinking about the transportation sourcing, loading and execution processes.
Cloud-based freight procurement solutions can shorten business cycles, provide transparency between shippers and carriers, increase data accuracy and create more accurate timelines for logistics businesses. These systems can help achieve a freight procurement process that supports sustainability and helps contribute to a circular supply chain.
The first step to establishing sustainable transportation procurement is monitoring your Greenhouse Gas (GHG) emissions. Once you establish a baseline of your transport emissions, you can start to recognize what decisions and outcomes of your procurement process need to be adjusted and improved. Should I be sourcing more rail? Are my preferred equipment types energy-efficient? What is the CO2 footprint of my contracted carriers?
To better understand your emissions, CO2 calculators are available that monitor GHG emissions throughout the transportation execution process. Some CO2 calculators are integrated with transportation management systems (TMS) to measure a company’s carbon footprint from its transportation operations.
Alpega offers an integrated calculator to track the CO2 footprint of shipments, so you can start gaining visibility into the current sustainability practices of your transportation operations. Learn more.
Once you are able to monitor and calculate your greenhouse gas emissions, logistics planning and optimization technology can help you plan your loads and optimize your routes accordingly. By accommodating more orders per shipment, your route becomes more efficient. The less shipments required, the less miles accumulated, leading to lower fuel consumption and ultimately a smaller carbon footprint. Identifying backhaul opportunities further reduces empty miles of a carrier.
Conserving resources goes beyond emissions — consider your overall shipping practices. Sustainability can be achieved when you determine your product life cycles. Are you recycling your products if they are wasted? Are you thinking about how products will be transported at the time of product and packaging design? Are you using reused materials in production or in product packaging?
Nowadays, product packaging should be designed with transportation in mind. Reusable transportation packaging assets allow you to transport your products over and over again, using the same packaging. This allows you to improve your carbon footprint while also reducing your transport packaging consumption and costs.
Establishing sustainable methods of transportation requires many factors, but you don’t have to go through the process on your own. Alpega offers transportation technologies that can help achieve sustainability goals through cloud-based solutions such as freight procurement, reusable/returnable packaging management, TMS and more. Contact our team to begin your journey toward a greener transportation process.