Sustainable logistics are eco-friendly. But also optimized.
More and more organizations in the supply chain adapt to green logistics. At the same time, they remodel operational processes to increase efficiency.
But sustainability also aligns with social responsibility and corporate ethics and promotes cooperation and care.
Of course, managerial and operational procedures cannot change from one day to another. But, planned adjustments over time is the way to transition to the new era of optimized and sustainable logistics.
Within this scope, supply chain sustainability can be measured and evaluated under ESG criteria.
But what is ESG in simple terms?
What Is ESG In logistics?
ESG stands for Environmental, Social, and Governance activities.
These three pillars of ESG create a reporting framework that evaluates an organization’s sustainable practices and initiatives – in their broader sense.
From sustainable freight transport to business integrity, ESG supports the principles of a circular economy and a green future.
Note that the green logistics market size is projected to reach $2.9 trillion by 2032, growing at a CAGR of 8.3% from until 2032.
Overall, the statistics are very encouraging.
ESG Statistics – Green Logistics Market
Here are some interesting data and stats from last year’s European Logistics & Supply Chain Sustainability Report
- 66% of 3PLs and 43% of manufacturers won customers due to strong ESG practices.
- 48% of 3PLs enhanced employee motivation due to sustainability initiatives.
- 33% of manufacturers and retailers accessed government subsidies and financial support thanks to their green/sustainable ESG procedures.
Sounds promising, right?
But also daunting?
True, among today’s business challenges, switching to a sustainable logistic approach needs re-thinking and often re-structuring processes, infrastructures, strategies, partnerships… you name it.
For many business owners, change means instability and unpredictability. Ironically, this contrasts with the very definition of sustainability!
Understand What Sustainability Means In Business
The definition of sustainability in business is “the ability to maintain or support a process continuously over time.” It seeks to prevent the depletion of resources on all levels.
But one thing sustainability doesn’t mean is poor business.
To promote sustainability in logistics, you can:
- Optimize warehouse capacity and backhauling.
- Invest in employee training, safety, and well-being.
- Gather, analyze, and exchange data with stakeholders.
- Minimize waste on all resources.
Some lucrative examples, aren’t they?
Designing your sustainable logistics strategy to invest in areas like these equals great corporate ethics and increased profits.
What Is Sustainable Logistics?
Sustainable logistics refers to all the practices and processes that aim to improve sustainability throughout the supply chain:
- Production and supply of raw materials
- Product transformation processes
- Storage and warehousing
- Packaging and freight preparation
- Shipping and distribution
- Reverse logistics
It includes various sectors, such as eco-friendly logistics and sustainable logistics management.
Sustainable logistics also deals with practices related to the three ESG pillars.
- Climate change strategy
- Biodiversity loss
- Fair pay and living wages
- Equal employment opportunity
- Avoiding conflict of interests
- Risk management
There are so many things one can do. But, all these may sound like difficult and rather costly goals.
But are they really?
Is Sustainable Logistics Expensive?
The short answer is no. Sustainable logistics is not expensive – especially in the long run.
Sustainable logistics offers immediate benefits for business, your employees, and customers. Also, for the community and the environment. And there are numerous diverse macro-areas related to profitability and sustainable logistics.
Whether you are a logistics company, a carrier, a vendor, or supplier, now it’s the time to start evolving towards green logistics and sustainability.
If you are wondering how to make your logistics sustainable, read on for some suggested steps.
5 Ways to Optimize Your Logistical Processes For Sustainability
Data: Tracking, Transparency, Cooperation
Logistics sustainability and optimization should be done based on actionable data.
For example, freight carriers can evaluate their CO2 levels and eventually optimize routes in order to minimize emissions at their core.
Checking the “green data” of other organizations will lead to cooperations with sustainable businesses that match your environmental standards.
Last year, 28% of companies in Europe chose to work solely with supply chain partners that have set ESG targets.
In turn, don’t forget to also share your own data openly. Transparency is vital in ESG, and successful sustainable organizations are the ones that actively work on intercompany collaborations and insight.
Logistics sustainability also means less packaging and eco-friendly packaging.
Here are some ways to reduce packaging in freight shipping:
- Choose expedited trucking with few or no stops. In this mode of shipping, there is less handling. So, unless you have hazmat or other sensitive freight, you need smaller amounts of protective packaging.
- Use pallets when preparing your shipment. Palletized freight can easily fill the entire space in LTL trailers without any gaps. Plus, pallets can be reused, recycled and/or repurposed.
- Optimize backhaul transports to minimize resources “lost”.
- Select eco-friendly desiccants, like clay desiccants, that do not contaminate the environment when trashed.
Green practices like these also contribute to the circular economy model.
Adapt To Circular Economy
If you wish to run a green logistics company, you need to adopt practices that align with the circular economy model and supply chain resilience.
Reverse logistics is one of them.
Use returnable and reusable materials to reduce waste. Minimize freight loss and damage.
Other things you can do include:
- Treat circular economy suppliers with favorable terms.
- Maximize the utilization of assets and capacities.
- Work on logistics flexibility that adapts to changing market conditions.
By incorporating practices like these, you actively contribute to a viable future for the entire supply chain.
Optimize Last-Mile Delivery
Automated solutions, such as smart vehicle tracking and route optimization, increase last-mile delivery efficiency.
The flourishing of local and international e-commerce, which demands singular orders to dispersed locations, maximizes last-mile delivery challenges.
Also in freight transport, hotshots for example, may lead to empty trailers on return trips.
By deploying an efficient route planning and last-mile delivery schedule that can easily adapt to real-time challenges, you are on your way to more sustainable transportation services.
In this way, overall costs are reduced and fewer resources are used: less gas, less maintenance, and less driving time… the list keeps going. On the other end, you have happier clients and happier drivers, faster deliveries and bigger profits.
Improve Capacity Management
Look for ways you can improve space utilization in all shipping stages.
Warehousing, for example, accounts for approx. 13% of all supply chain-related greenhouse emissions – and a considerable proportion of your budget allocation.
Cross-docking and just-in-time deliveries can be an excellent solution to lessen storage needs.
During the shipping stage, machine learning offers sophisticated solutions that maximize the capacity utilization of delivery vehicles (and reduces emissions!)
Data evaluation and the will to advance to a sustainable business model create an abundance of choices to optimize your logistics processes towards sustainability.
How Pinnacle Trucking Helps Towards Sustainable Logistics
At Pinnacle we offer top trucking and warehousing services. We work on minimizing your costs while maximizing efficiency. To do that, we provide, among other things, expedited shipping, cross-dock, LTL and full T/L trucking services tailored to your specific needs.
All our shipments are monitored from pickup until on-time delivery, and our team is on call 24/7 to offer freight carrier services when and where you need them – across all continental 48 states. Contact Pinnacle Trucking for all your shipping needs.