How Supply Chains Are Moving to Greener Shipping Solutions
With nearly 2 billion consumers projected to join the market in the next five years, there’s potential for CPG companies to experience exponential growth… and also impose greater risk to Mother Earth. As natural resources deplete, many companies are finding an even bigger incentive to adopt sustainable shipping and manufacturing practices throughout their global supply chains to ensure the long-term health of their businesses.
In recent years, companies are increasingly turning to sustainable supply chain solutions to help mitigate the ecological effects of both manufacturing and shipping. Additionally, digital supply chain management tools often provide real-time feedback and far-reaching predictions that can businesses can leverage to understand and act on their own environmental impact. But why is this corporate sustainability transformation taking place, and who’s leading the charge?
Why Is Green Shipping Important?
Manufacturers require consistent and reliable resources and raw materials to be able to create their products—and to do so affordably. CPG companies have a vested interest in taking measures to preserve and/or find alternative resources, so as to ensure the longevity of their manufacturing output. However, depending on the industry, turning to eco-friendly resources can add significant cost to the bottom line.
As such, corporate social responsibility has become a hot topic, and the low-hanging fruit for both efficiency and cost-effectivity is in supply chain sustainability—particularly when it comes to shipping said freight. Shippers can find ways to use fewer materials during the shipping process, from quoting all the way to delivery, as well as making sure those materials are reusable or recyclable. Implementing digital solutions also removes additional paper trails, with the added benefit of a transparent and permanent tracking records. And pooling freight removes unnecessary trucks from the road, and therefore a significant share of greenhouse gas emissions from the atmosphere.
Emerging Leaders in Sustainable Supply Chains
It’s not enough to just talk the talk—to implement real change, you need to walk the walk. Let’s take a look at a few companies using digital solutions to transform their global supply chain management chain into a sustainable enterprise.
In 2014, the shopping behemoth launched the Resource Efficiency Deployment Engine (RedE) in its Chinese supply chain. This proprietary online tool identifies improvements within the factories to reduce their carbon footprint and helps build targeted “efficiency projects” to address these sustainability goals, including its shipping materials, packaging, and density guidelines. Across 118 factories, Walmart saw a 10% drop in energy consumption and saved over $2.8 million in energy costs per factory. The company plans to continue its roll-out across its China operations.
Digital sustainable supply chain solutions also helped Walmart tackle its fleet efficiency in a number of ways—employing software to identify improvements in routing and driving, as well as implementing tracking and reporting measures on individual trucks to receive feedback on driver performance and, as a result, sustainability. The company even focuses on the aerodynamics of its trucks to reduce drag and therefore fuel consumption, installing fuel-efficient tires and lightweighting its fleet to help it go farther on less fuel.
The United Parcel Service has embraced sustainable shipping in a major way, acting on research gained through its Rolling Laboratory. From investing in alternative fuels and natural gas fueling stations to utilizing electric and hybrid vehicles in select fleet markets, UPS has signaled that sustainability efforts are compatible with profitable shipping. Its sustainable packaging is in partnership with global recycling leader TerraCycle; and with their new pilot program Loop, the two companies aim to eliminate disposable shipping packaging entirely, utilizing a customized tote that is dropped off, picked back up, and reused for endless shipments.
Implementing digital analytics has also helped UPS execute faster and more flexible deliveries, as well as assist other businesses roll out optimal shipping experiences. Its subsidiary Ware2Go offers digital supply chain management tools that help companies optimize inventory distribution and warehouse placement, as well as forecast seasonal demand.
These insights help smaller companies more accurately predict and execute on their shipping needs in a sustainable way. For example, with the demand forecasting tool, they can order only the packaging supplies they’ll likely need, reducing waste and increasing storage capacity for other goods and materials. They’ll also reduce their environmental impact by strategically placing warehouses on more efficient freight routes, thereby lessening the number of extra miles driven to reach their facilities.
The eponymous soup company may want to consider changing its slogan to “Mmm, mmm, green.” Recently named one of the world’s most sustainable companies, Campbell’s is using digital supply chain solutions to tackle sustainability performance from both the supplier side as well as its own manufacturing and distribution methods.
Using technology through Land o’ Lakes’ SUSTAIN program, Campbell’s provides its farmers with real-time data and analytics to help them improve the way their crops are grown and harvested. For example, identifying wheat growing as a major sustainability issue, Campbell’s found opportunities for efficiency in the fertilizer used on wheat farms to create healthier soil; similarly, its Bolthouse Farms brand uses digital tracking of variables like water, sunlight, nutrient quality, and soil health to instantly and precisely determine how to care for its crops without wasting time, money, or natural resources.
On the freight side, Campbell’s participates in the U.S. EPA’s SmartWay sustainability program, offering transparent metrics on its shipping practices and emissions outputs. In 2018, Campbell’s increased its freight density per shipment, removing nearly 560 trucks from the road—of those shipments, 94% of its goods using SmartWay-verified carriers. The company also employs intermodal freight transportation throughout its global supply chain to further reduce emissions by utilizing sustainable rail transport.
There’s no better way to reduce greenhouse gas emissions and environmental wear-and-tear than to simply remove trucks from the road. Flock Freight’s digital sustainable supply management solution, FlockDirect, does just that, taking aim at the traditional LTL industry and turning its carbon footprint on its head.
FlockDirect’s cutting-edge algorithm identifies LTL shipments that can be pooled together on the same truck and travel the same route. Instead of multiple partially-filled trucks with freight that is on- offloaded multiple times to multiple vehicles, FlockDirect brings similar shipments together at competitive rates to create a single full truckload shipment that never stops until it reaches its final destination. This equates not only to fewer trucks on the road—it also has major sustainability implications for manufacturers as well.
Freight that travels directly to its destination has a far lower risk of damage—meaning there are fewer items needing to be remanufactured, and therefore fewer resources expended overall. The trickle-down effect results in a far greener shipping supply chain, all because of a single digital solution to decades-old supply chain issues.