Sustainability in Logistics
In recent years, Global sustainability initiatives have become drastically more important. According to a recent study, 84% of respondents claimed that “a brand’s sustainability practices influence their ultimate purchase decisions”.
Energy and Emissions
According to the Global Energy Perspective, 2021 by McKinsey & Company, the impacts of COVID-19 have permanently shifted energy-demand curves. It is expected that in one to four years demand could rebound to 2019 levels, but demand curves have permanently shifted from their previous growth path. At this rate, global greenhouse gas emissions will decline only by 25% by 2050, implying a 3.5°C pathway which does not meet the goal of a 1.5°C pathway in the Paris Agreement.
What is the Paris Agreement?
This multinational agreement requires parties to address all emissions and establish ‘economy-wide emission reduction targets. At the current forecast of CO2 Emissions, country-based emissions reductions need to increase by 80% beyond nationally determined contributions to meet the 2°C pathway target. World leaders will meet in November 2021 for the successor to the landmark Paris meeting of 2015. Their plan is to discuss the progress of each country’s carbon-cutting ambitions.
Emissions and the Supply Chain
Supply chains aren’t just responsible for getting goods from point A to point B, they are also major players in the efforts to reduce greenhouse gas emissions. According to a recent study, worldwide transportation and logistics emissions (trucking, air, rail and freight) contribute over 40% of the world’s annual emissions.
According to the fourth International Maritime Organization (IMO) greenhouse gas study, the total shipping industry greenhouse gas emissions increased from 977 million tonnes in 2021 to 1,076 million tonnes in 2018, a 9.6% increase.
The IMO’s Energy Efficiency Design Index (EEDI) is the first globally binding design standard aimed at abating climate change from shipping. This three-phase plan hopes to see ships delivering 25% more efficiently by 2025.
Paystar’s Commitment to Environmental Best Practices
At Paystar we aren’t just committed to a better solution for our clients and carriers. We also want to do our part to find a better solution to lessen our environmental impact. As a SmartWay partner, we’re committed to doing our part to decrease our carbon footprint while increasing satisfaction across our freight network.
Freight transportation is a large contributor to air pollution. The transportation sector is responsible for over 50% of NOx total emissions inventory in the U.S., over 30% of VOCs emissions in the U.S., and over 20% of PM emissions in the U.S.
Optimizing Your Supply Chain for Environmental Sustainability
These are 3 things that businesses can do to help create environmentally friendly, sustainable supply chains.
Make Big Strides by Starting Small
You don’t have to reinvent your manufacturing and distribution process overnight, but you should take the time to map out your full supply chain and identify areas for improvement. Many businesses think that making meaningful environmental impacts requires sweeping change, but that’s not the case and it’s very common to see improvements through small, iterative improvements.
Supply Chain Brain recommends some of these objectives for building more sustainable supply chains
- Reduce waste by simplifying supply chain processes
- Minimize over production through better supply and demand planning
- Reduce fossil fuel usage by mapping the most efficient routes
- Optimize distribution by consolidating shipping
- Ensure ethical sourcing practices
- Monitor for existing environmental risks in your supply chain
Commit to Environmental Certifications
Regardless of your industry, there are a variety of programs and certifications that exist to help businesses push for environmental stewardship. Take time to research these certifications and identify the ones that align with the mission and values of your organization. Then, commit to an action plan to reduce your impact and become certified.
At Paystar, we’ve committed to maintaining the EPA’s Smartway Certification. One of our key goals is to create sustainability for partners across our organization and we are proud to be recognized as a SmartWay High Performer.
SmartWay is a program by the EPA that was created to help companies in the freight industry advance supply chain sustainability. As a SmartWay Partner, we join the EPA in its quest to build a more efficient, productive, and sustainable freight industry. Learn more about our certification and the impact it creates.
Decrease Carbon Footprint Through Green Logistics
“Going Green” has become a buzzword for a range of environmental concerns and is typically employed to suggest compatibility with the environment. According to Transport Geography, green logistics are “Supply chain management practices and strategies that reduce the environmental and energy footprint of freight distribution, focusing on material handling, waste management, packaging, and transport.”
Over the years, many major corporations have committed to achieving “Net Zero Carbon” as a green initiative. For green logistics, this looks like Implementing internal benchmarks across the supply chain to push towards net 0 carbon levels. According to McKinsey, negative emissions must scale up rapidly to meet climate targets.
Each step of your supply chain, from manufacturing to final mile delivery, impacts your carbon footprint. Take time to assess where excess waste occurs, review which steps in your supply chain are the biggest contributors of environmental harm, and where you can make adjustments to diminish your footprint.
Why Does It Matter?
Many businesses are acknowledging the benefits of sustainable operations in their supply chain. Supply chain sustainability can grow consumer interest, increase ROI, and make an impact on your business as a whole. But most importantly, we have an obligation to the world around us to be environmental stewards and push to reduce the impact of our daily lives and business operations.
ONE YEAR OUT: HOW PANDEMIC SHUTDOWNS ARE IMPACTING SUPPLY CHAINS
Despite their best efforts, supply chains across industries are still in flux from the impact of global manufacturing and shipping shutdowns in spring 2020.
FINDING THE RIGHT LOGISTICS PARTNERS FOR YOUR RETAIL SUPPLY CHAIN
Effective supply chain management means identifying gaps and delays and working to optimize your operational systems to improve them.