The logistics industry has seen several decades of rapid growth, as companies have found innovative and efficient ways to bring goods to every corner of the globe. While that means access to more products for consumers, job creation, healthy economic growth, and closer international trade relationships, it also comes with one unfortunate side effect: increased carbon emissions.
As climate science reveals more about the effects of human behavior on the environment, many companies and industries have started to examine (and take steps to reduce) their carbon footprints. This is not just beneficial for the sustainability the planet, but it’s also good business; many consumer groups and individuals prefer to support companies with a stated focus on improving their environmental metrics.
However, when capacity is as tight as it is currently, sustainability initiatives often (and understandably) get placed on the back burner. In past years, January has typically been a slow month for businesses giving supply chain managers more time to evaluate their processes and set carbon emissions goals for the upcoming year. However, 2018 already looks to be an extremely competitive year for capacity. For companies trying to maintain a smooth a supply chain without exceeding budgets, reducing environmental impact may become less of a priority.
The good news is that there are some tactics that can check all these boxes: keeping costs down and providing necessary capacity while also reducing waste and environmental impact. Here are some things to try:
Look for ways to reduce inefficiencies
The first step in improving efficiency, profitability, and sustainability is to take a close look at how things work in your company’s supply chain. Where there is wasted capacity, fuel, or materials, expect to find wasted money.
One of the biggest drivers of waste is unused truck capacity. Where possible, consolidate shipments to get the most of your space and minimize the number of trucks on the road. Evaluate your processes to see if you’re regularly sending empty trucks back to the point of origin. If so, identify whether your company has any items that need to be transported back in that direction.
You may also consider asking your third-party logistics partner to find potential backhaul partners—other companies who need truck capacity in roughly the opposite direction you need it—to make the most of the available capacity, offset transportation costs, and reduce wasted fuel.
Think about using intermodal transport
Relying on trucks alone to move your freight is a tough proposition in the current market, especially for companies without their own fleets. Driver shortages, bad weather, and icy road conditions in many parts of the country—among other factors— have severely limited truck capacity, increasing prices across the industry. Road transport also accounts for the largest proportion of trade-related CO2 emissions— well over half, in fact.
While trucking does provide a flexible way to move goods, some companies have seen the benefit of adding intermodal solutions to their supply chain. When you’re planning for how you’ll move your freight, consider whether an intermodal strategy might be workable for your company. Identifying where rail can add value in your network is a great place to start; in addition to providing more capacity and potential cost savings, it is also much less carbon-intensive than trucking.
Get help from your 3PL
Trying to manage an efficient, sustainable supply chain when capacity is tight can be a tall order. That’s why it can be useful to get help from a trusted advisor: your third-party logistics partner. Since they’re familiar with all the moving parts of your supply chain, their insights can help you identify existing inefficiencies and find solutions that protect your bottom line while reducing your carbon footprint.
If you’re looking for a trusted third-party logistics partner to discuss any of these concerns, we’d love to talk to you about how we can help. Contact us today and we’ll be in touch shortly.