Despite extensive evidence that strengthening sustainability efforts brings long-lasting, efficacious results, the corporate community has been hesitant to dive in. Their deep-rooted concern is that changing the way business is done is bound to stunt productivity and reduce profits.
While this belief is ingrained in most industries, the supply chain and transportation sectors seem to have a different view. Practitioners in this field know that operating in a green manner will not only keep the planet sustainable, but also promote the long-term viability of the operation itself. Few industries are in a better position than the supply chain and transportation industry to achieve both goals — improving performance and economic viability while contributing to a healthier planet.
These advantages are enough to persuade most, but for hesitant business owners, the soon-to-be-implemented climate disclosure requirements might be just the nudge they require to take action. The proposed ruling from the Securities and Exchange Emissions (SEC) would oblige every publicly traded company to provide their climate reports from the previous year, including Scope 3 emissions.
While this may seem daunting, it’s widely known that practicing mindfulness when it comes to your company’s environmental impact makes business sense. This is why the current push for sustainability could not be better aligned with the needs in supply chain and transportation.
The proposition is simple: achieve sustainability goals, and you gain a stronger profit.
Consider these five priorities for transportation companies:
1. Reduce Mileage
The environmental imperative is to reduce carbon emissions. But if transport companies can reduce their mileage and improve asset utilization, they can reduce costs by up to a third. Simply achieving more accurate ETAs can reduce miles by eliminating re-deliveries and missed appointments. With the right strategies, knowledge and technology tools, this is absolutely possible in today’s industry.
2. Increase Freight Pooling Operations
Hardly a radical concept for LTL carriers, pool distribution combines goods into shipments using larger trucks and trailers. It has been compared to carpooling — but for goods rather than for people. Reduction of carbon emissions is also the environmental imperative here, and estimates are that transport companies can save 10-15% on overall costs by getting the most out of using pool-point operations.
3. Reduce Paperwork
We all understand: The forests will cheer when we use less paper, but so should any company involved in the transport of goods. That’s why many have made this a key priority. In recent years we have seen the emergence of excellent technology to not only replace time-consuming paperwork, but to speed up the processes that depend on it. As just one example, many new transportation management systems can automate invoicing, and enable quick, easy digital payments. Not only are you eliminating the use of paper for items like invoices and bills of lading; you’re also getting paid faster. So your cash flow gets a boost, just like the one you’re giving the forests.
4. Reduce Shrinkage
Mis-laying inventory is a nightmare. It costs carriers money, forces delays on customers, and often requires items to be re-manufactured and re-shipped — often at a loss for the carrier. By taking advantage of technologies like advanced scanning solutions, we are now seeing tools to protect against shrinkage. This not only prevents all the problems described above, but also results in sustainable consumption and production that bolsters the planet.
5. Gain Network Visibility
Enterprises can and should be able to collect information in real time so they can respond to potential supply chain disruptions. This could mean swapping carriers when a first option becomes unavailable, or navigating through a port delay. Both the environment and the company's bottom line take a hit when supply chain disruptions cause delays and rising costs. Network visibility provides for the resilience that fights off these disruptions.
Carriers who have not prioritized sustainability must do so. The planet needs it, shippers will soon be asking about it (if they’re not already), and public policy will demand it. Don’t fall behind with sustainability, and be caught in the lurch when Scope 3 emissions reporting becomes a requirement. The time to act is now. Putting yourself in a reactive position will only lead to more headaches and potential trouble down the line.
The good news is that all of those goals will make carriers more profitable, efficient, and reliable as a business partner. Ecological concerns may be prompting the effort, but it’s an effort any carrier will find well worth making.
Anantha Rao is chief technology officer and chief operating officer at nuVizz.
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