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Supply Chain Sustainability

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Supply Chain Sustainability

With the effects of climate change growing more noticeable, the global awareness of climate change and need for more sustainability within the supply chain is imminent.. According to the International Transport Forum, roughly 8 percent of global CO2 emissions stem from the transportation of goods, fueled by a growing economy and international trade.

As recently reported by the LA Times the US Military has identified Climate Change as a serious threat and is taking concrete steps to mitigate the impact of their flying activities as their CO impact is much bigger than others.  By installing solar panels around their Los Alamitos Airbase.  The anticipated benefits include better disaster readiness, being able to power emergency equipment like firefighting helicopters even during a power outage. 

One of the more elaborate projects I encountered are the power-charging-lines installed on the German Autobahn allowing eclectic trucks to charge while they drive that segment of the highway.  Definitely more complex and harder to coordinate all the moving parts. 

And fresh of the press – Maersk Line is making a 1.4 billion dollar bet on methanol powered ships.  Maersk A/S has ordered eight new vessels, each costing $175 million, that can be propelled by cleanly made methanol instead of an oil-based fuel. They’re set for delivery from 2024.  Having a VP and head of decarbonization in Morten Bo Christiansen, is in itself a very bold commitment to the cause of sustainability, but as he stated a lot of their customers are very, very supportive of this effort.  Maersk expects approx. 15% higher fuel cost for the carbon neutral Methanol – but given the astronomical profits the company reported this year there may be some hope that at least not all of it will be passed on.  Maersk isn’t the only shipper starting to make the transition. Oil tanker owner Euronav NV has ordered new ships capable of one day running on ammonia or liquefied natural gas. Commodities trader Cargill Inc. has said it plans to add so-called wing sails to some of its fleet.  This shines a bright light on the increasing global awareness and interest in preserving our world. 

But in civilian life there are also many opportunities ranging from more or less simple solar installations on warehouse roofs and as a dual purpose energy and shade structure on parking areas to highly complex solutions.   Transportation and technology companies around the world are innovating products and services to help mitigate the growth of damage we endure to our planet.  Here are some impressive examples I like:

While the topic and long-term solutions may seem overwhelming, sustainability does not have to be complicated or get done in a vacuum.  Fair warning, many of these topics have been near and dear to me and found their way into some of our solutions 🙂

Dynamic Global Routing and Execution

Everyone in Logistics and Supply Chain is affected by the perfect storm with record high shipping rates, severely constrained capacity in all modes.  The calls for more Supply Chain Resiliency are louder than ever, yet a multi-dimensional optimization of alternate routing choices that could even attach a value to each ton of carbon emission appears on way to few radars.  Using Freightgate’s logisticsCloud — you can compare routing options across modes as well as leg combinations with ease using a single API call or interactive user query in the cloud platform. By capturing CO emissions per leg and if possible reloading events, mode specific calculations at execution time become possible.  When correlating these emission values to for example the cost of carbon-offsets, a n-dimensional score can become your guide on best overall routing.    

Smart Procurement Options

Today there are smart procurement practices allowing companies to consider carbon emissions of their transportation choices.  Assigning values e.g. driven by the cost of carbon offsets; first by transporting their cargo on the most optimized route, another logical step for companies to set targets and report logistics emissions across their global supply chain.

By using a modern procurement solution, any company can capture, measure and track emissions from their global supply chain. Additionally, they can provide insight on smart procurement practices to minimize emissions and provide the most optimal route for shipments to reduce supply chain costs as well as reduce the impact on the environment.

Strategic RFP Process

As Carbon Emissions and sustainability are regaining momentum for global supply chain networks — collecting relevant information during an upcoming RFP is a great starting point. Being able to collect and model based on CO2 impact has become important both on the buying and selling side. Freightgate offers native support for execution level CO modelling as part of the Logistics Cloud platform, positioning our customers with strategic advantages for the future.

As the freight industry evolves, innovative companies all around the world are coming up with creative ways to improve the impact on the environment.  Re-engeniering the way we transport goods internationally and domestically to advance the health, safety and our future.

IoT Trackers and Recycling

Many companies are starting to evaluate and deploy advanced IoT trackers.  In many ways IoT is a natural vertical extension, perfectly augmenting the multi-layered PO & shipment visibility and event management.   But even here there is an opportunity to take the availability of a comprehensive recycling program into account. For 5G and 2G Solo single-use trackers weighing less than 100g, as well as reusable trackers with battery lives of over a year.  If the Trackers are eligible for advanced recycling programs,  customers can now add the best IoT tracking without negative impacts on the environment or their shipment. 

Last Mile Challenge:

Amazon for a little while now offers the option to combine deliveries — if you really think about it, it actually is a huge challenge to offer this 2nd track of processing orders .  At the same time it is a great way to reduce packaging including the associated cost and environmental impact from production to disposal, CO emission for delivery trucks, cost of gas, cost of multiple delivery drivers etc.  So a huge win for the environment and Amazon with little to no extra effort on the consumer.   I have not been able to find how many people take advantage of this option but maybe some of you that read this article will join the effort.  Of course it would be awesome, if Amazon would share some of the savings and incentifice this positive behaviour.    Like with many things the right incentive will build momentum for people to do the right thing.   Governments around the globe can also help by providing targeted incentives and tax breaks.   But as an industry we should be wary of bad apples — when people sell carbon offsets for protecting forests that were never endangered in the first place — these are sometimes referred to as phantom carbon offsets and should definitely not be supported.   

With the help of forward-thinking individuals, innovative ideas, and creative solutions, we can lessen the impact we have on our blue planet.  Let’s all take a look at what we can do and then reach out and get the talent and help we may need to round out the approach. It may seem overwhelming but if we all commit to start the world surely will be a better place in the future.

By Martin Hubert

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