Making sustainability central to logistics decisions is smart business but requires closer collaboration and creative thinking by shippers, suppliers, packagers and retailers. That's the conclusion of participants in a GreenBiz.com webcast this week.
"Start by thinking about savings opportunities," said Stephen Silva, senior vice president of global logistics for toymaker Hasbro, during the webcast, "Smart Moves: Supply-Chain Decisions that Save Fuel, Cut Costs and Reduce Emissions." "They will go hand-in-hand with the environment and emissions. … You have to drive a culture where people are always looking for better ways to do things."
At the same time, attention to service must be at the center of any new logistics or transportation strategy. "The only way that we can get buy-in is to demonstrate this," he said. "At the end of the day, customers are not going to accept slower deliveries or empty shelves."
Transportation and logistics activities typically account for 6 percent to 7 percent of global greenhouse gas emissions, or 2,800 megatons of emissions annually, said Edgar Blanco, research director at the MIT Center for Transportation & Logistics. Road freight accounts for the biggest percentage, followed by the footprint of logistics buildings, ocean freight, air freight and rail freight, Blanco said.
Typically, the percentage of emissions associated with transportation and logistics has grown in parallel with economic expansion, Blanco said. If logistics emissions continue growing as they have historically, they will triple by 2050, he estimated.
So how can your company put the brakes on logistics and transportation emissions?
The webcast discussion centered on specific ways businesses have been modifying logistics policies to cut fuel consumption, the single biggest contributor to transportation industry emissions. Those strategies include reconsidering the specific mode of transportation, introducing better regional forecasting, optimizing transportation networks, and changing packaging and pallet sizes so that more items fit within a single load.
Next page: How Hasbro improved service and sustainability, simultaneously