Environmental adjustments changing logistics strategies

By Ahmed ElAmin

- Last updated on GMT

Related tags: Cent, Us

Environmental supply chain logistics, once seen as a "necessary"
evil is becoming de rigueur for industry, according
to a survey by Eye on Transport.

While it is still the case that some view supply chain greening as a necessary evil, the most innovative and successful companies of all sizes have discovered the business case for going green, stated the logistics information service. "And, even those who were skeptical are being forced to admit that there is a return on investment (ROI) in supply chain greening, and it is a business essential, rather than just an add-on, in today's market,"​ Eye on Transport stated. ​ With up to 75 per cent of a company's carbon footprint coming from transportation and logistics, many manufacturers are focusing on their supply chains in a bid to meet consumer and regulatory demands to reduce their environmental impact. The Eye on Transport global survey found a correlation among the responses between the degree of importance of green issues and a companies annual revenue across all regions. "This suggests both that it is high grossing and highly successful companies who are prioritising green issues the most, and that this high prioritisation of green issues likely contributes to their success,"​ Eye on Transport reported. About 6 per cent of logistics professionals surveyed in the US worked in the food and beverage sector. About 2 per cent of those surveyed in Europe and Asia worked in the sector. Eye on Transport found the size trend was fairly consistent across all regions, with green issues being somewhat more important to companies with annual revenues of between $50m to $1bn n the US, as compared with the other regions. The trend for reports of very high importance of green issues to companies' overall strategies was capped by the European findings, where About 67 per cent of European companies reported green issues are either important or very important to their companies' overall strategy. Another 18 per cent reported green issues as fairly important, 12 per cent as somewhat important, and only 3 per cent as not important. In the US 59 per cent reported that green issues are either important or very important to their companies' overall strategy, 20 per cent as fairly important, 15 per cent as somewhat important, and 6 per cent as not important. In the Middle Eastern and Asian and Pacific, 57 per cent of respondents reporting that green issues are either important or very important to their companies' overall strategy. Planned green transport actions ​ What actions are companies taking to improve their carbon profile? In Europe, the most popular current or planned initiative by far was improving energy efficiency (68 per cent), with emissions measurement or reduction (51 per cent), vehicle rerouting to reduce miles (43 per cent) and strategic warehouse and DC placement (43 per cent) also receiving high responses, Eye on Transport reported. Intermodal transport changes was the lowest reported strategy, but at 29 per cent it was chosen by European respondents more than those in any other region. In Europe companies most popular option was the shift of mode from road to rail, which for some may be one of the easiest environmental initiatives to implement, and therefore the first to occur, Eye on Transport stated. The second most popular response was carbon off-setting. "Some of the more interesting responses from Europe include creating a culture of change, data centre greening, horizontal collaboration across supply chains, partner guidance, green energy sources, marketing the benefits of green logistics, renewable energy in warehouses, routing and scheduling optimization software, use of durable packaging, and short sea transport,"​ Eye on transport stated. In the US, 59 per cent of those surveyed said their companies are or are planning to improve energy efficiency. About 42 per cent are or are planning to both use vehicle rerouting to reduce miles, and to use strategic warehouse and distribution centre placement to go green. A further 39 per cent of US respondents reported emission measuring and reductions as another favoured initiative. About 26 per cent of US respondents are trialing or planning to use alternative fuels, and more environmentally friendly logistics providers. The least frequent choice for US respondents was moving freight away from air towards other modes. "With green transportation and logistics initiatives proving to be a challenging yet rewarding reality for companies if they wish to compete in today's market, much uncertainty about how to go about making these changes still exists,"​ Eye on Transport concluded. "Nonetheless, the industry agrees that success and profitability in the future requires thinking and acting green today, and that transportation and logistics greening is the smart way of achieving that goal." ​ The company surveyed 271 transportation and logistics professionals in the US, and 265 in the European, Middle Eastern, Asian and Pacific markets.

Related topics: Market Trends, All Asia-Pacific

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