10 TIPS
Eight of 10 supply chain executives are investigating sustainable transportation practices, according to EY. This is an excellent focus area because transportation represents 24% of global greenhouse gas emissions. Here’s how to ensure sustainability. Ensuring Transportation Sustainability
8 ROUTE TRUCKS IN REAL TIME.
1 CREATE TARGETS FOR COST, CARBON, AND CUSTOMER SERVICE. You must track cost, carbon, and customer service because you can’t control what you don’t measure. For simplicity, calculate Scope 3 emissions—those by your carriers— using mileage. Targets should not be fixed but indexed against other metrics like sales. If the company doubles in size, adjust the targets similarly.
Real-time (dynamic) routing systems use algorithms and real-time data to determine the most efficient routes, reducing unnecessary travel delays. Think “Waze for trucks.” Efficient static routing minimizes the distance traveled but dynamic routing cuts the time spent on the road, directly reducing CO2 and other greenhouse gas emissions. 9 SMOOTH OUT SHIPMENTS. Deadhead miles (without cargo) represent about 15% of all miles driven. Violently fluctuating demands from shippers cause many of these wasteful miles, forcing them to reposition empty equipment over long distances. Consider the costs a carrier incurs to accommodate 24 shipments one day and three the next. Cutting this variability in replenishment using network capacity optimization generates savings for shippers and carriers.
2 USE ALTERNATIVE MODES. Shippers may have to move to more cost-effective and carbon-efficient modes to cut carbon emissions and reduce fuel usage. For example, move from air to truck, truck to intermodal, intermodal to boxcar, or boxcar to ocean. 3 CONSOLIDATE MORE SHIPMENTS. In addition to consolidating orders and creating multi- stop loads, shippers need to utilize vehicles as full as possible. Rather than shipping as soon as you receive an order, accumulate demand and send it out on a published “sailing schedule,” say, each Wednesday. This enables getting more on each vehicle and creates fuller trucks. For example, shippers may eliminate most parcel shipments, drastically cutting LTL volume. 4 AVOID ADDING INTERMEDIATE MOVES. Consider this scenario: A major food plant has a small on-site warehouse that couldn’t accommodate all the
volume. It could hold only a day or two of production. Their solution was to get a large warehouse 25 miles away and ship everything there to redistribute to their own DCs as well as perform customer shipments. With intelligent technology and the recognition that they could utilize space on empty trucks returning from the outside to bring back items needed for an order, they managed to ship 40% of the product directly from the plant warehouse. 5 SEEK OUT INEXPENSIVE ALTERNATE FUELS. No, we are not saying to switch to electric trucks, as 25% of U.S. electricity is generated by burning coal, a major source of CO2. Instead, biodiesel mixes are sustainable and don’t require special expensive equipment.
Existing diesel engines can use biodiesel fuel with little to no modification. 6 MANAGE CUSTOMER ORDERS TO FILL TRUCKS. Offer incentives such as better pricing if the customer orders more than, say, 44,000 units. Shippers can also use order-sizing technology that understands product stacking constraints and axle weight restrictions and flags loads if the truck needs to be utilized appropriately. 7 MAKE USE OF PALLET POOLING. Pallet pooling — where multiple companies share a common pallet pool to transport goods — helps avoid bringing in or removing non- managed packaging items over long distances. It also eliminates landfill for items such as odd-sized pallets.
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YOUR TRUCKS. With 91% of trucks underloaded, using math optimization technology for load building saves 5-10% on costs and reduces the number of trucks on the road, which saves fuel and reduces carbon emissions.
SOURCE: TOM MOORE, CEO AND FOUNDER, PROVISIONAI
8 Inbound Logistics • August 2024
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