The question of how to reduce the environmental impact of transportation is an important one. Projections from the U.S. Environmental Protection Agency (EPA) show that shipments of U.S. goods will grow by 23.5 percent between 2020 and 2025, and by a total of 45 percent by 2040.
That means that the total number of nitrogen oxides (NOx), particulate matter (PM) and volatile organic compounds (VOCs) that is emitted into the air from the transportation industry will continue to increase, causing smog and poor air quality.
Because transportation continues–and will continue–to rise, sustainable supply chain management isn’t just a perk a company can offer. A study by the MIT Sloan Management Review found that there are clear benefits for those companies making the move towards sustainability goals, including winning more business, saving more time, money and fuel, and avoiding regulatory fines.
What’s more: according to the Harvard Business Review, sustainable supply chain strategies are becoming the norm. “In recent years a rising number of multinational corporations have pledged to work only with suppliers that adhere to social and environmental standards. Typically, these MNCs expect their first-tier suppliers to comply with those standards, and they ask that those suppliers in turn ask for compliance from their suppliers–who ideally ask the same from their suppliers. The aim is to create a cascade of sustainable practices that flows smoothly throughout the supply chain…”
But creating a sustainable supply chain strategy and incorporating environmental goals into your organization’s framework doesn’t need to be a daunting task. Here we break down some things to consider when putting together your strategy.
As previously mentioned, creating a sustainable supply chain strategy is a must-have, not only for those organizations that are concerned about the environmental impact of their goods and services, but for the growth of your company. Putting a sustainable strategy in place can:
Making changes today to reduce the environmental impact of transportation will not only put your company in a better position with those companies that are looking for supply chain partners who have a sustainability strategy, but it will give you time to implement them rather than needing to put something together suddenly.
Alpega has a range of products available to help you make the changes you need to cut back on your transportation emissions. See more information on how to reach your sustainability goals.
It’s true that you don’t know what you don’t know, so the first step to creating a sustainability strategy is to figure out what your metrics–especially your carbon footprint–look like currently.
A carbon footprint is the total amount of greenhouse gases (those gases like carbon dioxide and methane that cause global warming) that an individual, organization, or process creates via their actions. Calculating your carbon footprint means that you’re taking a holistic view of your operations. For example: cutting emissions from one aspect of the process can be great, but if the changes cause more emissions in another aspect of the process, your carbon footprint won’t decrease (and can sometimes increase!).
The Harvard Business Review described a situation in which Esquel, a leading producer of premium cotton shirts, was looking towards an increase in organic cotton production, but they found that the crop yield would drop as much as 50 percent and, due to organic cotton fibers being weaker than that of conventional cotton, would need extra processing while producing more waste. In that case, trying to lower their carbon footprint in one area by utilizing organic cotton led to higher waste, energy and water use.
Understanding your company’s carbon footprint and how different processes affect one another will help you to understand how changes can be made that will lead to an overall lower carbon footprint. Once understood, you can use measurements to create benchmarks–like creating a goal of 10 percent reduction in the next year, then increasing to 15 percent in the year after, etc.–and assess your performance.
Alpega’s Carbon Footprint Calculator makes it easy for organizations to measure, benchmark and assess their transportation carbon footprint.
Once you have an understanding of your current carbon footprint and have formulated some ideas around what benchmarks and goals you’d like to achieve, the next step is to find solutions to reach those goals. The following are tried-and-true methods other companies have used that may work for you and your organization.
One of the biggest ways that transportation emissions can be cut down is by simply planning better. How can loads be optimized so that less shipments are required leading to less miles driven and fuel consumption? Can a route be tweaked so that loads can be picked up or dropped off in an order that keeps from having to backtrack? Can extra shipments be added so that a truck is carrying the most product as possible to keep a second trip from occurring? Optimizing loads and routes via Alpega TMS can make shipments more efficient, cutting down on emissions while also saving time and fuel.
Just as your organization is taking a look at its sustainability strategy, many others across the supply chain are doing the same. Being able to see logistics provided by other companies related to their own carbon footprint can help you to analyze and award business. Additionally, being able to define your criteria, such as wanting to work with companies that have electric trucks over diesel or who use rail vs. road, allows you to work with other organizations that will help you reach your sustainability goals.
Alpega’s TenderEasy freight procurement platform allows you to define the criteria when it comes to freight tendering, spot bidding, and the ability to source and evaluate a preferred carrier network.
Likewise, Alpega TMS provides a collaborative platform to connect with supply chain trading partners and share your carbon-neutral goals and measurements. By collaborating throughout the transportation process, you make it more efficient – which reduces cost and greenhouse gas. Working together, you can gain more insights and understanding as to how to hit your own goals.
Sustainable procurement is a process where goods and services take into account the social, economic and environmental impact of that purchase. It looks at what the product is made of, where it came from, who made them and how they were made, how they were transported, and, finally, how they are eventually disposed of. This is also called assessing the lifecycle of a product: understanding the entire process from mining or harvesting the materials to what happens after the product is done being useful.
You can also look at freight procurement in the same way. Cloud-based procurement technology, such as Alpega’s, helps an organization develop and evaluate the criteria important to their organization and sustainability goals i.e. alternate modes of transportation, carrier engine types, fuel types, etc. This gives you the information you need to identify what the lowest carbon footprint option might be for moving goods.
The carbon footprint of transportation extends to every aspect of the process, and that includes packaging. If packaging is just tossed at the end of the route, that’s time, money, and resources into the waste bin. Reusable or returnable transport packaging allows you to move your products over and over again within the same packaging containers, reducing your carbon footprint as well as your transportation packaging consumption and costs.
Alpega’s Reusable Packaging Management solution can help manage those reusable/returnable packaging assets, inventories and movements across your supply chain network.
Once your organization has determined where changes can be made to create a sustainable supply chain strategy, it’s time to implement. The first thing you’ll want to do is get your executive management or board to sign off on the strategy and/or goals. With a top-down approach, it’s easier to get all employees on the same page.
Remember to also create check-ins to continue to monitor the progress of your strategy over time. Seeing how the metrics have changed from month to month or quarter to quarter can help you make the necessary changes to improve your company’s performance.
Creating a sustainable supply chain strategy to reduce your company’s environmental impact doesn’t have to be overwhelming. Alpega’s range of products from TMS and freight procurement, to our carbon footprint calculator and reusable packaging management, allows you to identify ways in which your organization can reduce your environmental footprint while saving time, money, and resources. Soon you’ll see that a sustainable supply chain strategy can be a win-win for both the environment and your company.