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In years past, sustainable logistics companies have been outliers among the broader freight transportation industry. Today those companies have set the standard for proactively and retroactively addressing the environmental impact of the supply chain. McKinsey shared that "Two-thirds of the average company's environment, social, and governance footprint lies with suppliers. Procurement leaders who take bold action can make a decisive difference in sustainability." As evolving logistics trends continue to take the stage, procurement methods that enable sustainability will become the norm.
Decades ago, many rolled their eyes at one designated day annually to do a good deed for the planet. As more data returns about the global impact of emissions, consumers increasingly change their priorities. "Invest In Your Planet" is the theme for Earth Day 2022, which is fitting as buyer motivation has caused an increase in sustainable logistics. Paper and packaging industry considerations have gained popularity over the past few years, and businesses are seeing eco-friendly requests coming from consumers of all ages.
In July 2021, Business Wire explored Gen Z's impact on Gen X's perspective on sustainability. That article included the following insight: "Today, nearly 90 percent of Gen X consumers said that they would be willing to spend 10 percent extra or more for sustainable products, compared to just over 34 percent two years ago." Sustainable logistics companies have used these changing consumer trends to further examine the sustainability in logistics, such as the connections between poor freight visibility and difficulty tracking CO2 emissions.
Although investing in company-wide reusable water bottles can be a great start to demonstrate sustainability in logistics matters, quantifiable measures like tracking CO2 emissions for all freight provide even more valuable data. Actionable analytics drive sustainable logistics by incorporating machine learning analytical tools. By programing expected CO2 rates into an AI-enabled sustainable logistics tool, deep learning continuously scans freight data for inconsistencies in emissions amounts. CO2 tracking over time can reveal significant emissions differences between specific carriers or routes that are otherwise missed by simply tracking the timeliness of a shipment. For example, railway fuel efficiency is significantly higher than truck fuel efficiency and thus has quite different CO2 data. Although moving freight by rail has lessened over the years, emissions insight might suggest omnimodal transportation to get the most amount of cargo moved collectively at minor environmental damage.
While buyer motivation is the main item that turns the tide of sales, sustainable logistics can benefit shippers and BCOs in other ways. By being active participants in their own data, decision-makers can leverage it to guide decisions instead of letting the opportunities waste away. Shippers who choose carbon-conscious routes also reap the benefits of reduced fuel costs per route which is the direct cost of road transportation.
Sustainable logistics might also guide a BCO to diversify procurement, such as nearshoring items previously shipped across the Atlantic. However, if sustainable logistics has amended every area of the business transaction, some circumstances, such as reverse logistics operations, are simply inefficient by nature. ML-enabled business logistic tools can reveal options such as collecting return items at a carbon-conscious warehouse before gathering them together to ship on one efficient load instead of requiring parcel service.
While celebrating Earth Day with investments in planted trees or reusable water bottles is an excellent way to promote sustainability awareness in the supply chain, there is simply more to do. As the global supply chain emits emissions as high as certain countries do on their own, every freight management party needs to do its part. Many have chosen to outsource freight auditing to ensure they can see every element of sustainability opportunities. By distilling all data through a single source of truth, shippers and BCOs can discover where their transportation costs are and which ones directly link to the most CO2 emissions. To partner with a sustainable logistics company equipped to leverage your data and CO2 emissions for maximum efficiency and optimization, start a conversation with Intelligent Audit today.
Set up a call with one of our experts to discuss how Intelligent Audit can help your business uncover opportunities for cost reduction and supply chain improvements through automated freight audit and recovery, business intelligence and analytics, contract optimization, and more.
