The best time to plant a tree was 20 years ago. The second best time is now. The same is true about moving to sustainable logistics practices—also called sustainable supply-chain practices.
Read also: Why Is It a Good Time to Switch to Sustainable Logistics Practices?
As a grandfather with four grandchildren, I want to leave a world with green grass and a moderate climate, so I will not debate the benefits of sustainability. After all, who wants to be unsustainable? This article outlines:
What are sustainable practicesWhat sustainable practices are not just good for the environment but also the bottom lineHow to move towards sustainability in logistics
Sustainable Logistics Practices
When you do a ChatGPT-based search, the following practices are identified as sustainable:
Optimize travel routes: Minimize unnecessary travel and waiting times to reduce fuel consumption.Use renewable energy or technology: Review the potential to incorporate more green or renewable energy or technologies into your logistics strategy.Avoid wasted energy on partial capacity: Minimize waste space and energy by ensuring your containers and transport are packed to maximum capacity. Make packaging sustainable: Introduce recyclable or sustainable packaging into your logistics strategy. And don’t let the Amazon boxes pile up in the trash.Use integrated logistics: Align your supply chain across all departments to maximize efficiency.Implement greener transport options: Where possible, consider greener alternatives to your transport. While compressed natural Gas (CNG), “green” hydrogen, or electric-powered vehicles may be the rage, consider shifting modes to lower-carbon technologies like rail, barge, or sea.
What sustainable practices are not just good for the environment but also the bottom line
At this point, the list becomes shorter. Many options can be eliminated as too expensive or too impractical. For example, green hydrogen, produced by electrolysis rather than taking a fossil fuel like natural gas and breaking it into its components well, has significant potential but is not a low-cost option today. In the same matter, electric trucks are not practical for heavy-weight shipments or long-distance moves. They won’t be until batteries become lighter and a nationwide charging infrastructure exists.
Some of the options for improving sustainability are already in play. For example, renewable fuels have been mixed into gasoline for many years and have reduced the carbon footprint of my lawnmower and car. Pushing to, for instance, fully sustainable diesel fuel is slowly happening. The problem is that the feedstocks, such as used cooking oil, must be made available in sufficient quantities. Hence, the recycling percentage becomes smaller as the volume of biodiesel increases.
A few areas have significant leverage in both cost reduction and sustainability. These include:
Optimized routing. Most computer-based optimized routing solutions will generate a 5 to 15% reduction in multi-stop delivery miles, a significant improvement. Unfortunately, it’s easy to be trapped into fixed routes, which, for the receiver, provides the distinct advantage that they know when the truck will be there. They can then align staff and manage their operations with longer-term predictability. Fixed routes, however, contribute to additional miles. For example, the replenishment truck may be unnecessary if one-stop significantly reduces volume.Mode selection: Moving from truck to intermodal or rail is generally cost-effective and provides a much lower carbon footprint. But anybody associated with the rail industry knows that shipping in box cars, for example, can result in a highly variable delivery time. At the same time, intermodal moves are most economical in some lanes and not others. It all depends on how close the nearest intermodal hub is to each origin or destination.Use integrated logistics: Integration within a company can consist of having supply planning and distribution in sync. Replenishment movements can experience significant spikes and valleys when supply planning works independently from operations. Smoothing lane volume with a tool such as LevelLoad can eliminate spikes and troughs. Not only does this reduce the stress on operations, but it also facilitates the hiring of preferred carriers. Leveling also makes operations more predictable and enables carrier efficiency.Avoid wasted energy – – shipping loads that are not full.
Payload maximization has been an ongoing challenge for many shippers. When the customer orders, the shipper usually has little choice but to comply with their request completely. In some industries, for example, in commodities like steel or timber, an industry-standard tolerance gives the shipper some “wiggle room.” However, most companies want their order filled precisely as specified. In this case, clever companies have provided financial incentives for the customer to ensure they do their best to max out the truck’s payload. These pricing incentives are a big win-win for both sides of the transaction. Many companies deploy inventory to customer-facing distribution centers. In this case, they have great difficulty ensuring that they use all available trailer weight and cube capacity. When this complexity is combined with ensuring that the load is both legal and will arrive damage-free, they have a complicated mathematical combinatorial problem to solve. Put another way, it isn’t easy.
That’s why tools that maximize payload and provide 3-D diagrams of each shipment make it easier for the order writer and the loader on the dock. Most importantly, these solutions reduce shipping costs by 5-10% and carbon footprint (Scope 3 emissions) by a similar amount.
How to move towards sustainability in Logistics
While most companies boast about their sustainability efforts, the quickest way to get changes approved is to show the magnitude of the cost savings. Saving on things such as carbon footprint is often seen as icing on the cake. So, the first step in the journey towards sustainability is to calculate the cost-saving potential of each initiative. This will both prioritize effort and generate management support for funding. So, while the best time to plant a tree was 20 years ago, the best time to launch into sustainable logistics is now.
