Companies today are more committed to supply chain sustainability than ever before. Sustainable operations that were once “nice to have” have become table stakes, as organizations around the globe work to decrease their carbon footprint and operate more sustainably.
Examples can be found across industries. Danone seeks to eliminate deforestation in its supply chain. Aluminum producer Novelis is reducing water intensity in its operations. And International Flavors & Fragrances aims to derive 75% of its energy from renewable sources — and reduce its energy usage by 20% — by 2025.
Already the world’s largest producer of greenhouse gas emissions, the trucking industry is also the fastest-growing contributor to GHGs worldwide. And while there have been improvements in vehicle and route efficiency, the volume of travel, road miles clocked and level of GHG emissions are all still rising.
At a macro level, globalization trends and the pandemic-driven e-commerce boom have created higher demand for ground transportation. This, in turn, has put more trucks on the road. Today, transport accounts for around one-fifth of global CO2 emissions. Trucking’s contribution to international trade’s CO2 emissions is expected to grow to 56% by 2050 — an increase from 53% in 2010.
As freight activity increases, growth in air emissions from freight will exceed that from all other transportation activities, including passenger transportation. According to the EPA, the organizations involved in production, distribution and transportation of goods can help reverse this trend.
“The business community can reduce the risks we will face from air pollution and health effects caused by freight transportation,” EPA states. “By measuring, benchmarking, and assessing freight transportation activities and strategically making better choices that reduce emissions, companies can make a significant impact on the contribution of freight to cleaner air.”
According to a National Retail Federation survey of nearly 19,000 consumers in 29 countries, 57% of consumers are willing to change their purchasing behavior to help reduce negative environmental impact. With more than half of end users thinking this way — and with transportation having a profound negative environmental impact —companies that focus a portion of their ESG efforts on transportation may reap significant rewards from these efforts.
“The trucking industry has long struggled with carbon emissions and pollution. Trucks that burn fossil fuels, like diesel, naturally produce a large amount of greenhouse gas,” Emily Newton writes. “This takes a huge toll on the environment. Trucking companies would be wise to adopt sustainable practices as more consumers and corporations look to green practices.”
Newton acknowledges that electric and alternative fuel vehicles will help reduce trucking’s carbon footprint, but says that additional innovations come from the IT world. “New monitoring and driver-management software provides businesses with data management and gathering tools that were never available before,” she says. “Telematics and GPS technology can help companies monitor their fleets and driver behavior, allowing them to identify unsustainable driving habits and route choices.”
Simple changes to business processes that help maximize the number of full truckloads can have a significant impact on emissions. For supply chain leaders that want to run more sustainable logistics operations both in and out of their facilities’ four walls, Blue & Green Tomorrow offers the following five steps to developing a more eco-friendly logistics operation:
The push to make modes of transportation more environmentally sustainable has been in full force for several years now. From electric cars to ships that use low-sulfur fuels to vehicles that automatically shut off when idling, the number of “green” initiatives has proliferated, along with the number of consumers who are demanding them.
The railcar industry is no exception. A bill introduced in the House of Representatives, the Freight RAILCAR Act of 2020, proposes a temporary 50% tax credit for purchasing new freight railcars or refurbishing existing ones that result in improving capacity or fuel by at least 8%.
Technology is a key element in meeting the demand for more sustainable supply chains. According to Oxford Economics, businesses today are seeing concrete benefits from the use of cloud, mobile and the internet of things, in the form of greater process efficiency and more informed decision-making.
In particular, a global control tower can enable improved sustainability in a number of ways:
Ken Sherman is president of IntelliTrans.
Read more of SupplyChainBrain's 2022 Supply Chain ESG Guide here.
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