We are now in our 10 post of the “Strategic Logistics” series where we are covering 10 of the ways shippers can remain strategic vs. tactical in the pursuit of competitive advantages and focusing back on the core of what they do. As a recap, we have covered the following in this series:
Driving business growth and reducing overhead costs remain the top priorities of any business. Many business owners fail to connect these two functions to logistics sustainability. Usually, sustainability is applied to ensuring operations do not negatively impact the environment. However, achieving sustainability revolves around reducing, not eliminating, the causes of environment problems. Instead, a sustainable solution in the transportation industry focuses on improving individual operations and movements to increase the efficiency of transportation. Obviously, a shipper cannot actually control everything, but it can control how its companies’ products make it from location to location. Let’s take a look at how logistics sustainability lowers a company’s carbon footprint and increases customer affinity for your brand.
Since the transportation industry involves the shipment of goods from one location to another, the basic responsibility of reducing carbon emissions takes priority. Many vehicles run on fossil fuels; however, implementing a “green” solution to today’s fleet could mean the difference between a low and high carbon footprint for your company.
Today’s transportation industry experts understand how each mile of travel represents additional emissions into the atmosphere. By reducing the overall number of miles driven, the total amount of noxious gasses released is reduced. Consequentially, the company can benefit from not having to pay excess fines or penalties for violations of environmental regulations, which depend on the location of the respective shipper.
Furthermore, streamlining transportation options through high-efficiency means, such as ocean transportation or transportation in electric vehicles, enables a shipper to create an effective, sustainable solution to transport many goods across great distances.
When thinking about transportation costs, the primary cost seems to always reflect fuel costs. However, each vehicle contains thousands of parts, gallons of oil, and at least four tires, which are all designed to wear out over time. Each of these products has a finite life expectancy, and inefficiency in transportation will only result in the replacement of these items at a faster rate. Unfortunately, this increased rate represents the loss of sustainability within a given transportation company.
For example, driving with an empty truck from a destination to a distribution center in another state creates many forms of waste. The life expectancy of all of the materials in the vehicle are cut in half immediately without any benefit to the company. This does not even take into account emissions nor wear on national roadways. Every movement costs money, and some of these costs are not even the responsibility of the company, such as damage to roadways. However, each consequential action, such as the repairing of the roads, results in additional energy expenditure somewhere. As a result, the company’s carbon footprint grows more with each movement.
Speaking of energy, the amount of energy used by a shipper reflects its logistics sustainability. If a shipper opts for a faster mode of transportation with a greater cost to the environment, the consequences could easily outweigh the benefits. This is the great conundrum of the transportation industry. The fastest option is not always the most efficient, yet the most efficient option is usually the fastest.
It really does not seem like it makes sense, but by making small changes in the amount of energy used across the board, from loading to packaging to transporting multiple parcel shipments to go via the LTL mode, a company can get products delivered on time without increasing the carbon footprint. Obviously, some customers will continue to expect immediate or priority delivery. However, shipping a single item is inefficient. Shipping multiple items by consolidation could be less damaging than shipping 20 different items in 15 different trucks across multiple states. Essentially, the less time must carry a savings equal to or greater than the cost of using the less efficient method.
Depending on your company’s location, you could face many different environmental regulations and statutes for the production and shipment of your merchandise. If you fail to achieve logistics sustainability, i.e., using logistics to support a certain level of sustainability, by a specific degree, you could be on the hook for fines, penalties, and additional criminal or civil consequences. Government-driven regulations have a basic goal of ensuring future generations the resources to survive, and you have a share in this responsibility. Not only will you save money by achieving sustainability in shipping costs, you can avoid these potential consequences.
Consumers are becoming more conscious about the type of products they buy and how the respective sellers operate. The modern world and social media has made sharing information about a company’s activities part of the lives of millions of customers, and your company’s image depends on your honesty and role in achieving a sustainable future.
A few poor decisions could lead to massive backlash and boycott across social media channels, and your business could fail. By using a carrier or 3PL focused on logistics sustianability and optimization with proven sustainability practices in place, you can help minimize the scrutiny of your operation and improve public perception of your company. Across geographic and political barriers, customers are gaining more knowledge about how your company operates.
Sustainability seems complex, yet it’s simply taking today’s actions and improving them to ensure plenty of resources for the future. Many logistics sustainability measures may require significant investment; however, the rewards will exceed the costs. Your customers will view your company with trust, and millennials will play a significant role in this process. Authoritative organizations will not hand out penalties for violating environmental codes, and your business will thrive if you follow a path to sustainability. Customers have an affinity for protecting the world for future generations, and your brand has affinity for gaining more customers. Can you afford not to become a partner in achieving a sustainable world?
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