Logistics - Emissions and Towards Meaningful Solutions

Logistics is one of the low hanging fruits in journey towards carbon neutrality. In fact, reduced emissions make great business sense as that reduces costs of sourcing and distribution- helping profitability.

Transportation and logistics is one of the key contributors to Green House Gases (GHGs)- accounting for over 17% of emissions. With action on climate change becoming urgent world-wide, trucking companies, 3PLs and their customers will find themselves under a lot of pressure to reduce GHGs.

Most business in India even today do not have a cursory understanding of Climate change, its impact, the nation’s and world’s Net Zero commitments; and many upcoming regulations for compliance. Unless, companies do not invest today, they are likely to be left out of global supply chains or incur heavy penalties.

Companies can adopt a range of strategies to achieve emissions targets

Circular supply chains - Companies need to critically look at materials used for manufacturing, packaging and as raw material to see how they can set up or contribute to a circular economy. For example, Starbucks uses recycles material for its furniture in many stores around the world. Companies can source packaging material made of recycles paper. Retailers can insist on stores re-using cartons to send return material. Apparel industry worldwide is promotion re-use of unsold clothing to make new designs.

Optimized Distribution Networks -  At present, distribution networks are designed with highest sales in mind. This results in underutilized warehouses, overlapping distributors and additional shipping trips. Companies can use technology such as Network Center of Gravity Analysis, Network Planning, Load and Route planning to focus on better utilization of resources and reduced distribution network. This also reduces cost of doing business and reduces Carbon Footprint of supply chains.

Supply Chain Net Zero goals can be achieved on trip at a time, one lane at a time, one DC at a time. This means companies need to measure detailed data across its supply chain and even gather data from secondary supply chains- not directly under their control. Algorithms couple with machine learning can provide insights from this data and suggest granular action points. Many such small actions then result in reduction in carbon footprint. For example, with data science customers can find out what vehicles are resulting in higher emissions and ask transport partners to replace such an asset.

Green Logistics can result in reduction of operational costs, optimization of distribution networks and better customer services. Thereby, companies investing in green supply chains stands to win better customers and also compete better in global markets. New set of younger customers will increasingly differentiate between companies based on their green score and may chose not to buy products of companies. Finally, with ESG compliance becoming a regulatory requirement – companies may find themselves frozen out of many investment opportunities. Thus, green logistics will soon become a survival issue for companies. It is best to adopt green strategies and take leadership position rather than react to crisis.

--By Apurva Mankad, Founder and CEO, WebXpress Transportation

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