Businesses continue to make pledges about reducing their environmental impact, but these statements are now being met with increased scrutiny as consumers and investors expect to see results. Transportation remains a salient concern when organizations study which actions can reduce their supply chain’s greenhouse gas (GHG) emissions. As of 2018, 24% of global CO2 emissions came from transportation, of which 45.4% came from freight operations.
Delivering on past pledges is not the only reason why companies should focus on supply chain sustainability. An enhanced focus on sustainability can be good for business because it streamlines processes and reduces inefficiencies, and in doing so reduces costs.
Key Challenges
Companies face several challenges in their effort to reduce emissions, and 4PL service providers are well positioned to help.
Challenge 1: Calculating and Reporting
It’s imperative to choose a methodology that can accurately calculate and report your GHG footprint. To accomplish this, OIA Global 4PL adopts the GLEC framework, which is the only globally recognized methodology for harmonized calculation and reporting of logistics GHG footprint across multi-modal supply chains.
Challenge 2: Reliable Data
Accessing and aggregating reliable emissions data can be an extremely demanding task. 4PL service providers manage your contract logistics to ensure that shipping data is managed by a single party. The 4PL then synthesizes the data to act as your single source of truth.
Partner applications are directly integrated into OIA’s operating systems, allowing for precise calculation of emission metrics. Your business also gains enhanced visibility on emissions through customized dashboards and distributed reporting. Notably, OIA Global’s approach toward emissions reporting is accredited by the Smart Freight Centre and is recognized as GLEC compliant.
Challenge 3: Identifying Tangible Actions
A third challenge is determining which measures will actually reduce logistics emissions yet keep the business profitable. Identifying effective measures often requires a supply chain partner to conduct a comprehensive analysis of your logistics network. A 4PL fills this void by possessing a deep understanding of your business activities and advising you when making data-driven decisions.
Supply Chain Savings
Another way OIA Global can help clients develop more sustainable supply chains is through its dedicated packaging optimization program. Packaging optimization has a direct impact on transportation efficiency and remains an easily quantifiable metric for logistics operations. This innovative program is designed to maximize productivity, reduce costs per unit and lower carbon emissions.
In a past example, OIA provided a solution to a children’s apparel brand by replacing plastic hangers with fiberboard hangers. This generated significant savings across the brand’s supply chain, with recorded annual savings of USD $4.6 million. Packing efficiency also increased which reduced shipping costs and expenditures in the distribution center. The solution allowed for recycling of the hangers at the end of their life cycle instead of turning them into plastic waste.
Author
Joris Nijman
