The backbone of any sustainable supply chain relies on an effective and reliable transport network. And transport networks are clearly the lifeline that drives economic engines. Therefore it’s pretty easy to deduce that the transportation sector needs to be a well oiled, highly efficient and highly productive system. An interesting 2007 University of Massachusetts research study that I recently read studied the importance and criticality of transport systems in supply chains- and just as importantly how “sustainability” plays a vital role in planning and execution. From the study, the authors concluded:
“Without transportation, inputs to production processes do not arrive, nor can finished goods reach their destinations. In today’s globalized economy, inputs to production processes may lie continents away from assembly points and consumption locations, further emphasizing the critical infrastructure of transportation in product supply chains.”
“Indeed, companies are increasingly being held accountable not only for their own performance in terms of environmental accountability, but also for that of their suppliers, subcontractors, joint venture partners, distribution outlets and, ultimately, even for the disposal of their products. Consequently, poor environmental performance at any stage of the supply chain may damage the most important asset that a company has, which is its reputation.
This study underscores the messaging from a great monthly meeting that I attended this week of the Portland Chapter of the Council of Supply Chain Management Professionals (www.cscmp.org). The main topic concerned methods for measuring carbon emissions in the transportation sector. Excluding a full scale life-cycle analysis of the manufacturing of a product, transportation of goods and services represents a key carbon emissions point (second only to the utilities sector).
The presenters were from a unique company, GreenShipping (www.greenshipping.com), located in Hood River, OR, at the opposite end of the beautiful Columbia River Gorge from where I live In Vancouver, WA. The Columbia River has itself served as a vital “lifeline” of commerce since the early 1800s, when the Hudson’s Bay Company established quarters just down the road at Fort Vancouver. But I digress.
The folks from GreenShipping shared with the audience the key drivers (no pun intended) that are motivating freight transportation companies and logistics providers in a direction to measure and manage their “environmental footprint.” In some cases, companies that don’t measure their carbon emissions are finding themselves shut out of contract opportunities. Research has shown that trucking, rail, marine and air modes of transport all have their up and down sides and it’s best to look at point to point options that will result in lower energy/fuel costs, use of modes that use cleaner fuels (LNG, ultra low sulfur diesel), and generate fewer greenhouse gas emissions (use of larger ships that employ more efficient equipment or operational practices). To that end, the transportation and logistics sector has been proactively looking at ways to improve efficiency, while simultaneously reducing environmental footprints associated with moving goods.
This post cannot get into the full range of transport avoidance, operational and technological changes that can be implemented to reduce the environmental footprint associated with moving goods (later posts for sure!). However, as an example, Freightliner Trucks addressed the issue of fuel savings by focusing on more efficient aerodynamics. The aerodynamic features to the company’s Cascadia truck result in 7.8 percent to 22 percent less drag than other aerodynamic tractors, resulting in annual fuel savings of $900 to $2,750 per truck. Translate that into carbon emission reductions and the numbers would be enormous.
Meantime, there are also a number of tools that are available to assess GHG emissions and other environmental attributes associated with supply and transport, to allow you to accurately capture data and measure the true value of your supply chain. And that is where companies like GreenShipping.com can offer ways to measure and quantify what are called Scope 3 (indirect) carbon emissions. The company can help to ship, track, measure carbon emissions and (and here is a unique feature) offset the carbon generated by shipments through a partnership with the Bonneville Environmental Foundation (http://www.b-e-f.org). It’s also important to throw in that In 2004, the United States Environmental Protection Agency (EPA) launched SmartWaySM— an innovative brand that represents environmentally cleaner, more fuel efficient transportation options http://bit.ly/amztNk.
The transportation sector makes great leaps in addressing its environmental footprint, so if you’ve not already started exploring your own environmental footprint, it’s a great time to start leading the way—or risk being a laggard.
A key takeaway from yesterday (attended by many logistics providers and goods manufacturers) was that taking a proactive look at supply chain logistics through a “green” lens is good for a company’s bottom line in terms of efficiencies and cost savings. But the residual reputational and environmental upsides are enormous in a challenging and competitive economy.
Your thoughts and ideas? What is your company doing to tackle this challenge?
This post was originally published on my New Green Supply Chain Blog, which can be found at https://community.kinaxis.com/people/DRMeyer/blog