WHY IS SUSTAINABLE LOGISTICS IMPORTANT IN TODAY’S GLOBAL SUPPLY CHAINS?
Sustainability has become a buzzword in the supply chain space over the past decade or so, but there’s a very good reason for that. Supply chains aren’t local anymore; goods are shipped to and from all corners of the Earth to reach their final destination on store shelves with several stops in between. The environmental cost is high, with one McKinsey report showing that 90% of packaged consumer goods companies’ environmental damage comes from their supply chains.
Keeping that in mind, it makes sense that countless supply chain regulations have gone into effect in the past few years. Aside from regulatory concerns, companies have several reasons to prioritize sustainable logistics, including public perception and the costs associated with unsustainable practices (higher energy costs, elevated fuel costs, etc.).
Here are some of the sustainable logistics trends we’re seeing and that we expect to see more of in the coming years.
COMPANIES ARE WORKING TOWARDS REDUCING THEIR ENVIRONMENTAL IMPACT THROUGH SUSTAINABLE TRANSPORTATION
According to the EPA, transportation accounts for 27% of greenhouse gas emissions in the US, making it the largest single emissions contributor. Both federal and state governments have put regulations in place that aim to reduce these emissions, and companies across the world are getting on board with reducing their environmental impact through sustainable transportation.
Because transportation is such a large part of the logistics industry, it’s even more important for logistics companies and those companies with large supply chains to tackle sustainable transportation initiatives.
EXAMPLES OF SUSTAINABLE TRANSPORTATION PRACTICES
Many companies begin implementing sustainable transportation by using technology to reduce empty miles and therefore fuel consumption. Route planning software, transportation management systems (TMS) that look at the big picture, and technology that help last mile delivery drivers be more efficient can help companies reduce their carbon footprint.
Turning to more sustainable transportation methods is another way companies can be more eco-friendly. Using vehicles powered by alternative energy is becoming very common, and we’re seeing electric trucks become a reality.
GREEN WAREHOUSING’S ROLE IN SUSTAINABLE LOGISTICS
The environmental impact of warehousing has been previously overlooked, with more focus on the impact of transportation. However, we’re now paying better attention to how warehouses affect the environment. It takes a lot of energy to run a large, technologically advanced warehouse, so there’s plenty of room for supply chain innovation to support green warehousing.
EXAMPLES OF ECO-FRIENDLY PRACTICES IN WAREHOUSING OPERATIONS
The old adage, “Reduce, reuse, recycle,” also applies to sustainable warehousing. Recycling appropriate waste, reusing things like wood pallets, and reducing the amount of packaging materials used are some common ways warehouses can be more eco-friendly.
Many companies are exploring renewable energy in their warehouses as well. Solar energy farms are being built alongside or even on top of some large warehouses to help power the equipment and utilities required to operate them. Companies are also opting for more eco-friendly energy options when it comes to their material handling equipment.
Another eco-friendly logistics method being employed is the careful placement of new warehouses. By placing warehouses closer to customers receiving the goods stored there, fuel consumption and therefore the carbon footprint is reduced. This is not only an eco-friendly decision, but a bottomline-friendly decision.
MORE BUSINESSES WILL LEVERAGE TECHNOLOGY TO IMPROVE SUPPLY CHAIN PROCESSES
While a green supply chain isn’t always a money-saving endeavor, the good news is that more efficient processes oftentimes result in cost savings when you look at the big picture. Technology has played a vital role in the development and sustainability of modern, streamlined processes.
Supply chain solutions like route planning, last mile delivery optimization, TMS, and warehouse management systems (WMS) can all help directly reduce emissions by making logistics operations more efficient.
Blockchain technology is another solution helping to make supply chains greener. By improving visibility and accountability and providing unquestionable data, blockchain is assisting companies make smarter decisions for the planet.
Even technologies you might not expect, like artificial intelligence (AI) and machine learning (ML), have the power to reduce emissions. One report showed that by 2030, AI could reduce emissions by 4% through improving demand forecasting, smarter route planning, and improving vehicle health and longevity.
When companies are lacking the technology they need to streamline processes and, in turn, cut their carbon footprint, a 3PL may be able to help. 3PLs like SEKO Logistics often offer leading-edge technology solutions that help companies reduce energy usage and fuel consumption.
EXAMPLES OF COMPANIES LEADING THE WAY IN SUSTAINABLE LOGISTICS
There are several companies leading the charge towards green supply chains, employing supply chain innovations and setting logistics trends for carbon footprint reduction, sustainable transportation, and green warehousing.
Pharma giant GlaxoSmithKline has earned praise for its environmentally-friendly supply chain initiatives, specifically boosting its green supply chain outside of the company. The drug company is aiming to achieve an 80% reduction in carbon emissions from outside suppliers and service providers through their climate initiatives.
Athletic apparel company, Nike, has worked towards a greener supply chain by not only finding more sustainable sourcing and manufacturing methods, but also by finding new ways to reuse and recycle their products.
US-based nutrition company, Shaklee, was the first company to achieve carbon-neutral certification by reducing carbon emissions and offsetting remaining emissions.
HOW IS SEKO LOGISTICS COMMITTED TO SUSTAINABILITY?
SEKO has made a commitment to developing more eco-friendly logistics practices, with sustainability goals in place, such as to be carbon neutral at all owned and controlled facilities by 2050, including transportation. SEKO has also been a part of the Sustainable Air Alliance since 2021. Moreover, SEKO aims to do more business with other businesses that are embracing eco-friendly logistics to do our part to stop climate change. You can read more about SEKO’s sustainability goals and plans to meet those goals here.
