A focus on environmental issues has become a focus for many businesses and companies all over the world. Companies involved with third party logistics services are joining in with various efforts to lessen their impact on the earth. The motivations and practices taken into account for each company might be different, but 2020 looks to be a year where these practices become more widely implemented.
We continue our look at the 2020 study into third party logistics services. We’ll look into the emerging trend of a focus on sustainable practices within the supply chain.
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Reasons
There are a few reasons why third party logistics services have become increasingly willing to place importance on sustainability. These reasons have their own implications on how the industry is affected by the trend.
Public perception is one of the major reasons for this trend. Each year brings more scientific research into the effect of our daily habits on the world around us. Legislation is being passed, movements are gaining traction, and the number of people who prioritize environmental considerations is growing. A company’s perceived willingness to participate in green initiatives can have an affect on how willing some people are to work with that company. Third party logistics services are no different.
This green legislation frequently comes in the form of industrial regulations. These regulations are the main driving force behind the industry’s trend toward sustainability. For example, emissions standards are a huge consideration for the road-worthiness of vehicles in 33 states. Passing a standardized test is required in these states before a vehicle is licensed to operate there.
Sustainable practices, while frequently pegged as a burden on industry, can actually save some money. Economic considerations such as optimized routes can reduce the amount of gas used by a particular truck. Multiply this by a whole fleet and not only does a company reduce emissions, but they also reduce their cost per delivery.
Methods
The way these sustainable practices are utilized varies, but optimization is the most popular. This idea is practiced in two main ways: route planning and load consolidation. The way this works out is pretty simple. Route planning takes a little more time on the front end, but saves time in the long-term. Aligning deliveries and drop-offs so they can be grouped together reduces wasted time and miles. If two deliveries are near each other, they are ran together by the same truck. The less time a truck is driving between locations, the less emissions it puts into the atmosphere.
Likewise, load consolidation is the practice of combining loads that won’t fill a truck by themselves. They are grouped into deliveries that are in the same general area. Running full trucks instead of multiple half-full trucks reduces the amount of vehicles on the road. And again, less trucks mean less emissions.
There are also voluntary programs such as the Smartway program from the Environmental Protection Agency. As stated by the EPA:
“EPA’s SmartWay program helps companies advance supply chain sustainability by measuring, benchmarking, and improving freight transportation efficiency.”
This provides a system for tracking and documenting information regarding fuel use and emissions. It also helps companies find more efficient third party logistics services among other services.
Another way third party logistics services providers are working to increase sustainability is through the use of alternative fuels.
What This Means Moving Forward
The freight industry has seen massive growth over the last 30 years. This trend is projected to continue. A busier freight industry increases the need for a focus on sustainability. It’s been speculated that freight emissions will top those of passenger vehicles by the year 2050. Simply put, the third party logistics industry stands to make a sizeable impact on the environment.
The increased willingness for those within the industry to work toward sustainability makes it more likely for others to follow suit. Whether it’s public perception, regulation, or cost reduction, companies are finding themselves exploring the choices for alternative methods. The options and affordances of these methods will continue to grow and evolve as more is learned about them.
Alternative fuels, automated vehicles, and computer-assisted optimization are all technologies that will continue to become more widely-used and available. More shippers and third party logistics services providers will join the effort toward sustainability in the coming years. The reason for entering the trend toward sustainability doesn’t completely matter. What matters is that the increasing growth of the freight industry makes implementation of these practices more crucial.
Contact M&W Logistics for all of your third party logistics services needs today!