What stops Logistics Companies Achieving Sustainability?
1st August 2024
Sustainability is an important subject in 2024, especially when faced with rising pollution and climate change crises, writes Serge Schamschula, Head of Ecosystem at Trimble. Global logistics, which involves the transportation and storage of materials and information through supply chains, is part of the challenge that affects every industry.
Despite the crucial role the logistics and transport sector plays in global trade, its contribution to the environmental impact equals 11% equivalent to its share of the global national product.
Moreover, by 2030, the demand for urban last mile delivery is expected to increase by 78%, leading to a 36% increase in delivery vehicles in the world’s top 100 cities. Ultimately, responsibility for action rests with all of the companies involved, from shipping companies to delivery companies to airlines to retailers. Additionally, this exponential growth in delivery services is further compounded by the rapid expansion of e-commerce.
And while there are numerous challenges from this hard-to-abate sector, many companies are tackling their carbon footprint with strategies that deliver greener modes of transportation and more sustainable supply chains – from optimising routes to digitising logistics, electrifying freight fleets to solar-powering logistic facilities.
The Golden Ticket to Decarbonisation
Decarbonisation can’t be achieved by one single element, it requires a larger set of initiatives working in tandem together. There are a number of pressures both regulatory and financially on businesses to decarbonise their fleet. As mandated by the Paris Agreement, the British government has set ambitious targets for organisations to meet in order to achieve net zero emissions by 2050, and 68% reductions by 2030. Additionally, another pressure comes from customers, who are now choosing to purchase products and services from businesses that are committed to sustainability.
As a base for assessing its emissions outlay, fleets need to begin by collecting data and calculating greenhouse gas emissions, improving fleet, load and route planning, and reducing fuel and energy consumption. It is important to note that most of these solutions don’t just help reduce a company’s carbon footprint, but they also help reduce supply chain costs in many cases. For example, fleet monitoring, driver support systems, and eco-driving can reduce GHG emissions as well as fuel costs by as much as 20% at the same time.
The Challenges
Decarbonising fleets is a complex challenge, but one that businesses must address if they want to play a role in combating climate change and doing right by the planet and people. By taking action now, even if it’s small steps, businesses can help to create a more sustainable future. The biggest challenge for companies lies in data collection. Traditionally, Shippers and 3PLs have usually only planned transportation data of moderate quality, but by tapping into planning data, fleets can unlock a plethora of benefits, especially in reporting where they can see the gaps.
The use of planning data will lead to results for reporting purposes, but in reality, the actual emissions will significantly differ between carriers. The businesses need a neutral partner that can connect the supply chain players, be scalable, and allow them to obtain more realistic data by lifting what is called ‘primary data’ from the transport process. In the case of more than one consignment, the weight factor determines the share of the accountable weight, the type of energy, the mode of transportation, and the empty trip factor.
Refining processes
Through proactive refinement of key operational processes, businesses can reduce the environmental impact of their fleets and combat climate change. Fleet management systems are a prerequisite for businesses to track fuel usage and driver behaviour, with the information used to identify areas where significant fuel savings could be made. As an additional measure, route optimisation is likely to be of the utmost importance, along with driver training as a solution that is identified. In tandem, these two can lead to improved fuel efficiency for drivers, ensuring that everyone in your fleet knows the same level of best practice on the roads.
In an era defined by environmental awareness and sustainable business practices, industries are called upon to reevaluate their operational methods. And it’s no secret that the transport and logistics sector, known for its pivotal role in global connectivity, is also recognised as a substantial contributor to carbon emissions. As a result, incorporating innovative technologies and continuous refinement of strategies will enhance route planning’s transformative potential and enable organisations to meet their sustainability objectives for 2024 and beyond.
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