Arguably, the supply chain has never been such a hot topic. Disruption to global transport activities during the Russia-Ukraine war are being compounded by soaring oil prices that make logistics operations even more expensive. And in the United Kingdom, a combination of a pandemic-enforced business slowdown and new Brexit-based immigration rules and tax changes has created a serious shortage of drivers that serves to amplify the growing supply chain crisis. It’s a situation that cost cutting and operational efficiencies can’t fix—but sustainability might.
According to the International Transport Forum, the freight sector is responsible for around 7% of global emissions—an incentive in itself for the sector’s decarbonization. Yet, global commerce is leading to increased demand. Organisations are looking for quicker and cheaper transport solutions. Supply chains are increasing in complexity—often manufacturing process, from the raw materials to the finished garment, involves visiting several countries before delivery to your door.
Naturally, global manufacturers are often hesitant to change tried and tested supply chains. But taking an “if it ain’t broke, don’t fix it approach” only works if the situation has proven it “ain’t broke.” From the fact that carbon emissions of common refrigerants are on average 500% higher than fossil fuels, to reports of air and water pollution, or to the impact of high sea traffic on marine life, there is evidence of the consequences of ignoring the sustainability agenda. And even though road transportation is proven to be four to five times more carbon intensive than sea, still two-thirds of the world’s freight is transported by road—a problem compounded by consumer demand for speed which can involve air transportation.
While carbon emissions are not the only measure of supply chain efficiencies, there are consequences for organisations that fail to consider sustainability impacts. Organisations are under pressure from investors and customers to decarbonize freight. Failure to do so could pose a risk in terms of revenue loss or increased difficulty in accessing capital.
Regulations may play a role as carbon taxes could be potentially reflected in the price of raw materials that are key to the manufacturing and maintenance of vehicles. Any proposed ban on diesel vehicles could significantly disrupt existing logistics operations, causing a loss, not only to revenues, but also to competitive edge as organisations are challenged by businesses that have already embraced other fuels and energy sources.
Even the weather can create havoc with supply chain success. Extreme weather that affects transport infrastructure, water and air travel can cause delays in the delivery of goods, increase costs and, ultimately, impact revenue streams. For example, the summer of 2018 saw a heatwave in Europe that made parts of the river Rhine—a key inland water route—unnavigable. The low water levels were considered responsible for Germany’s economy shrinking by 0.2% and a damaging 10% fall in chemical and pharmaceutical production.
There are plenty of sound reasons why manufacturers should adopt a sustainable mindset to better manage transportation. For instance, logistics improvements could be realised through optimizing loads and reducing the distances travelled. Less reliance on fossil fuels naturally aids resilience in times of fossil fuel scarcity—reducing vulnerability in the face of increasing prices while helping to secure savings in the long-term.
Switching to low carbon transport, such as electric vehicles or hydrogen fuels, can help organisations to achieve challenging net zero and science-based targets faster—and make a satisfying contribution to the reduction of local air pollution.
In all, those organisations that choose green freight have an opportunity to improve not only how they run their businesses, but also mean they are able to enhance their sustainability position and reputation. It’s an enviable win-win.
Avieco has been working with organisations to help decarbonize their logistics’ emissions for more than 15 years. By measuring, benchmarking and assessing freight transportation activities and strategically making better choices that reduce emissions, we’ve seen how organisations can make progress toward freight’s contribution to cleaner air.
For example, ReBOUND Returns, the fastest growing eCommerce returns provider, has seen decreases of more than 25% in the carbon intensity per parcel for key long-haul routes in only the second year of calculating its carbon footprint. By identifying unnecessary stopovers and other poor routing decisions following the first carbon footprint, ReBOUND was able to engage with those carriers to streamline its network, implementing more direct routes, cutting down not only on carbon emissions, but also saving transit time.
Clearly, there are some fundamental fuel-efficient behaviours everyone can adopt, such as braking and accelerating gradually or checking tyre pressure regularly, to lower fuel consumption and emissions. In the longer term, introducing greater sustainability into your supply chain can be achieved if you:
With many supply chains looking increasingly fragile, seeking out innovative ways to repair or replace them is becoming more urgent. By embracing sustainability measures, logistics teams or transporters could find a solution that serves their own needs—and those of the planet.
more than a word.