Our society has become more demanding than ever before. From two-day shipping to same-day delivery, it seems the end consumer wants its goods in the snap of a finger. As businesses push to keep up with growing expectations, they’re also faced with the responsibility and opportunity to do so in a more sustainable way.
According to a McKinsey & Company report, “The typical consumer company’s supply chain creates far greater social and environmental costs than its own operations, accounting for more than 80 percent of greenhouse-gas emissions and more than 90 percent of the impact on air, land, water, biodiversity and geological resources. Consumer companies can thus reduce those costs significantly by focusing on their supply chains."
Further, a United Nations report, “Supply Chain Sustainability: A Practical Guide for Continuous Improvement,” states that by imparting sustainability into all links of the supply chain, companies can “advance corporate sustainability and promote broader sustainable development objectives.”
The carbon footprint associated with fuel, transportation and storage of perishable items contributes to the further detriment of environmental stewardship. According to the EPA, the transportation sector contributes more than any other to harmful greenhouse gas emissions.
Companies have an opportunity to draw on technology to better understand their supply chains’ carbon footprint, emissions and energy consumption, and ultimately work toward sustainability goals. Telematics has been deployed to monitor everything from routing, driver behavior and vehicle idling. Intelligent data aggregated from wireless hardware and software can help optimize loads, target deliveries and ensure a more efficient and sustainable operation.
Route and Load Optimization
Real-time data means companies have visibility to “right-size” the number of deliveries on an ongoing basis. Fewer trips and less weight mean lower fuel consumption, resulting in a lower carbon footprint and reduced greenhouse gas emissions.
Telematics optimizes routes and deliveries with the result of fewer trucks on the road. It’s an important source of data, which can be computed and extrapolated to accurately predict delivery times, accounting for such variables as traffic, weather and weight. It helps shippers and planners to pinpoint the proper combination of shipments, routes, carriers, and transport modes, to minimize the number of trips.
Second, telematics accounts for the efficiency of cargo moves. By consolidating less-than-truckload (LTL) shipments, a business can avoid under-capacity loads. And because weight also affects fuel efficiency, that variable may play a part in algorithms that determine the best loading plan or proper mode of transport.
For example, depending on the weight and bulk of a shipment and the distance it must travel, rail could be a more efficient mode than container or smaller truck transport. Rail can carry more weight with relatively little effect on fuel consumption, accounting for an estimated 0.5 percent of U.S. greenhouse gas emissions. The same decision-making information that telematics affords may be used to choose other modes and routes.
Avoiding Spoilage and Waste
Telematics’ generation of near- or real-time data and visibility helps to mitigate disruptions in the supply chain. This is especially true for adverse weather conditions when transport assets must be rerouted.
Consider the recent hurricanes in Florida, North Carolina, Puerto Rico and Texas. Knowledge of the storms, in combination with the location visibility afforded by telematics, provided shippers and carriers with information to make quick decisions to avoid areas where food and product could be wasted due to inadequate cold and dry storage, as well as long delays in reaching such facilities.
Averting waste is a contributing factor to sustainability. When agricultural products spoil, the energy used to produce and transport them is also wasted, and huge losses may occur, both financially and in terms of carbon emissions.
Telematics data can help a business determine whether to move product to or from a disaster area to avoid spoilage. Similarly, shipments can be averted and redirected through an area of less weather risk, so they are not trapped inside a disaster area where product may be damaged and further transport is halted. All such scenarios warrant additional trips if early decisions are not made.
A Sustainable Future
Insights derived from telematics can provide a useful decision-making tool in the optimal routing and modeling of shipments, routes and transport modes. Shippers and carriers can plan operations and select proper equipment and routes in line with business and sustainability goals.
As EPA points out, the transportation sector is often targeted for aggressive sustainability plans and goals. Yet the potential to make a positive change is well within reach when guided by data. And the more data that’s available, the more efficient and cost effective these changes can be for the business.
The data produced by connected fleets today serves as a new boon to shippers and carriers. It’s emblematic of a new impetus of social responsibility in supply-chain management of the future.
Paul Washicko is senior vice president and general manager of CalAmp's software and subscription services.
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