Sustainable logistics is becoming the “new normal”
Despite the ongoing instability caused by the coronavirus crisis, sustainability remains a top priority for logistics decision-makers. But how can companies become "greener" in the face of current obstacles? The good news is that it's not necessary to completely reorganize the entire supply chain.
Even small steps can create positive environmental impacts for companies and gradually make their supply chains future-proof. In several industries, the current crisis is seen as a catalyst for innovation. New solutions are also needed in the logistics sector. It is crucial to react quickly to current challenges while simultaneously meeting the growing demands of environmental and climate protection.
Sustainable supply chain as a competitive factor
To remain competitive in the long term, companies must integrate environmental and social parameters into their target systems and incorporate them into their decision-making. As a result, many companies are discussing alternative “green” strategies. The focus is naturally on the CO2-intensive transport sector, particularly on long-distance transport routes, such as those between Asia and Europe. Therefore, companies are considering how they can operate more sustainably.
The crisis as an opportunity for greater sustainability
Air traffic has declined drastically as a result of the Covid-19 pandemic. This has led to a significant loss of air freight capacity and a rapid increase in prices. Sea freight has also been affected: available slots are becoming scarcer and prices are skyrocketing. Freight rates on the China-Northern Europe route have tripled in recent weeks. Companies currently have to spend around $9.000 for a 40-foot container—if they are lucky enough to get one at all, given the limited supply. It may now be worthwhile for companies to consider whether the significantly more environmentally friendly rail transport is a viable option. Access to local or geographically closer procurement markets is also being considered in many cases to keep transport routes short and maintain delivery capacity. In addition to these crisis scenarios, there are, of course, other techniques that companies can use to make their supply chains more sustainable, either wholly or partially.
SCM software ensures transparency and efficiency
Digital strategies and solutions are indispensable today for sustainably managing complex logistics processes and for better planning of routes and capacities. Implementation doesn't have to be expensive: External service providers offer the necessary infrastructure as a Software-as-a-Service (SaaS) solution. SCM software supports companies in coordinating their supply chains and can be used to better utilize transport capacities and, for example, avoid empty runs. This saves money on fuel, reduces traffic congestion, and protects the environment.
Keep an eye on the actual demand during reverse SC planning.
Reverse supply chain planning—not to be confused with reverse logistics, which focuses on optimizing returns or disposal processes—is another way to save resources, CO2, and money. Reverse supply chain planning is much more about incorporating environmental factors into delivery planning alongside actual demand. Therefore, the first step is defining when a customer needs their products for pickup from the warehouse. Are there also "green" delivery options? Upstream processes are planned and designed for maximum sustainability: For example, companies can utilize local or national procurement markets and increasingly rely on CO2-friendly modes of transport such as rail or inland waterway in their post-purchase planning.
CO2 balance as a starting point for greater sustainability
An inventory and analysis of the current situation is always advisable. Calculating one's own CO2 footprint provides companies with valuable insights for identifying optimization opportunities and thus improving their CO2 balance. Companies that have already taken this step often progress more quickly towards "green" logistics than their less proactive competitors—and at lower costs.
Step-by-step guide to long-term supply chain management
Of course, no supply chain can simply be made "green," but there are numerous approaches to making a supply chain theoretically more sustainable. The crucial factor is identifying the right levers within the organization, establishing alternatives to existing processes, and gradually transforming supply chain management (SCM). This involves both optimizing transport methods and packaging sustainably and addressing the increasing demands for traceability, transparency, and compliance. Companies must integrate environmental sustainability into the design and management of their logistics processes, collaborate with forward-thinking partners, and look ahead to remain competitive. Green logistics and sustainability are no longer optional obligations but will become the "new normal" in the future, making them essential for competitiveness.
