Sustainable logistics practices are becoming increasingly common across the industry due to the rise consumer expectations for businesses to be environmentally friendly. With more shippers and customers choosing green logistics partners who are congruent with their values, supply chain executives are shifting their focus to fostering sustainable logistics management.
According to Hotwire, 47% of consumers reported switching to another product or service provider because of a violation of their values, including environmental responsibility. Additionally, around 40% of supply chain organizations state sustainability as ‘very important’ to their company. Almost 30% named it ‘extremely important’.
Often, companies are hesitant to adopt sustainable logistics practices as they fear it will be costly, but saving on costs is one of the major benefits of sustainable logistics. In fact, the profits of logistics companies with sustainable and social responsibility practices are up to 8% higher than those of companies with low environmental responsibility. After all, becoming more environmentally responsible doesn’t mean switching to driverless trucks overnight and shutting down operations. Companies can start with small but impactful steps that will reduce carbon footprint, and will serve as a differentiator to customers. Ultimately, there are even more advantages of green logistics in the long run.
Visibility is an integral part of any supply chain, yet it is rarely attained on a superior level. Investing in technology that enables visibility, like a transportation management system (TMS), might not seem directly connected to green logistics. However, once companies are able to tap into hidden sustainable logistics and supply chain opportunities, uncover blind spots, and see the bigger picture, they are able to identify where to reduce fuel consumption, consolidate freight, alternate transportation modes, etc.
One of the advantages of having visibility is the capacity to make decisions about reducing or reforming operations. When considering green logistics optimizations, it is important to remember the largest portion of all carbon emissions are produced by trucks. One vital step towards implementing green supply chain management practices is optimizing your lanes and routes to reduce pollution. It is a relatively easy step to save fuel costs and significantly eliminate unnecessary shipping routes.
The role of warehouse spaces and inventory management in supply chains is becoming more critical. Optimizing your warehouse space and ramping up order fulfillment is essential to reduce extra operations, save building energy and utilize consolidation. Proper operations flow means fewer errors which lead to unnecessary deliveries.