Sustainability in 2024: What is Realistic?

In an era of increasing environmental awareness, businesses everywhere are becoming more aware of the importance of integrating sustainability into their supply chains. By 2050, the European Environmental Agency expects that global logistics will cause 40% of global carbon emissions without effective measures (European Environmental Agency, 2023). The logistics industry has a shared responsibility to lead with sustainability and take realistic approaches to address environmental concerns and enact meaningful change. However, achieving sustainability is complex and requires balancing ecological responsibility with economic viability.

With sustainability emerging as a primary concern to shippers, 3PL companies have a responsibility not only to reduce their emissions for the collective welfare but also to integrate eco-friendly operations to align themselves with the values of their shippers.

This article explores practical approaches to overcoming current challenges and enacting realistic strategies that can make a positive impact.

Challenge vs Opportunity

Implementing sustainability practices is easier said than done and comes with real challenges, often requiring significant upfront investments. Switching from traditional combustion engines to electric vehicles, for instance, takes massive investment, and the technological capabilities and range of Near-Zero (NZE) and Zero-Emission (ZE) limit their application.

Aside from investment, scaling sustainability projects within the supply chain is inherently complex. Companies must keep pace with a landscape of evolving regulations and increasing consumer expectations, which is challenging to predict and manage, much less scale. It’s also important to consider the difficulty of engaging suppliers in sustainability.

Despite the challenges, sustainability comes with tremendous opportunity. Third-party logistics (3PL) companies today have a unique chance to simultaneously lower their carbon emissions, improve operational efficiency, and reduce costs. This opportunity arises as shippers grow progressively more concerned with environment-related issues. Recent research conducted by EY teams revealed that eight out of ten supply chain executives are intensifying their focus on sustainable supply chain operations.

By embracing sustainable practices early on, 3PL companies can enhance their brand’s reputation while also building consumer loyalty. Companies that take a proactive approach to meeting existing and future regulations will position themselves as leaders within the industry.

Ultimately, by acting as environmental stewards, 3PL companies can contribute to the collective effort of caring for the environment which benefits all stakeholders.

Realistic Strategies for Achieving Sustainability

Researching and Measuring

Researching and measuring carbon footprint is the first essential component of a 3PL company’s sustainability journey. Starting here provides a factual basis for understanding the current state of environmental impact and identifying opportunities for improvement. It also allows a company to set realistic and measurable sustainability goals. Lastly, it helps companies define metrics and track progress over time, allowing for adjustments to strategies and initiatives where necessary. By researching and measuring, a company can make informed decisions and take meaningful action towards sustainability objectives.

Reporting on Research to Increase Transparency

It may seem counterintuitive, but reporting on carbon emissions and efforts towards reduction can be an advantage in today’s market. Reporting signals a company’s commitment to sustainability, can build up a company’s reputation, and promote brand loyalty. Transparent reporting also holds the company accountable for its environmental impact and progress toward emission reduction targets. Most importantly, it will contribute to further knowledge sharing and collaboration within the industry.

Investment in Technology and Innovation

Adopting new technology and fostering innovation are imperative steps in any company’s journey toward sustainability, particularly in the transportation sector. Leveraging Near Zero Emission (NZE) and Zero Emission (ZE) vehicles for short hauls or final mile deliveries will significantly strengthen 3PL sustainability initiatives. The California Air Resources Board predicts that operating costs could be 22% to 33% lower for electric vehicles than diesel or gasoline by 2030.

Exploring alternative fuels like biofuel and hydrogen presents another promising avenue toward sustainable transportation solutions. These fuels offer reduced emissions and diversified energy sources, which results in greater energy resiliency. By embracing these fuels, companies can gradually transition towards a more sustainable and resilient future of transportation.

Route Optimization

Optimizing transportation routes can yield substantial benefits in sustainability and cost-saving efforts. By strategically planning and minimizing distance traveled and improved asset utilization, companies can significantly reduce fuel consumption and emissions. Moving freight to rail, when feasible, is another strategy to mitigate the environmental impact of transportation. These efforts can contribute to sustainability goals while also resulting in economic advantages.

Employee and Stakeholder Engagement

Employee, vendor and customer engagement is imperative to any company’s sustainability efforts. A recent study conducted by Deloitte revealed 69 percent of employed adults want their employers to invest in sustainability efforts. Employees at all levels must be invested in sustainability initiatives, as it provides a diverse range of perspectives and ideas. Creating a culture of innovation and commitment towards environmental sustainability will further drive a company towards their goals. Engaged stakeholders will help to ensure that sustainability goals are aligned with broader business objectives. Overall, active employees and stakeholders enhance sustainability efforts and build resilience within the organization.

Understanding Regulatory Compliance

Understanding environmental regulation and anticipating future regulation can significantly help companies achieve their sustainability goals. By staying up to date on current laws, companies ensure compliance, avoid penalties, and maintain a positive reputation. Anticipating future regulation also allows companies to proactively adapt their practices, invest in sustainable technology, and become an industry leader in sustainability, which enables smoother transitions and constant improvement in sustainable performance.

Regular Sustainability Audits

Regular and consistent audits on sustainability initiatives are essential to improving operations and identifying areas for improvement. By conducting audits periodically, organizations can ensure accountability and transparency, while continuing to meet regulatory compliance. With the help of regular audits, a company can identify and implement effective, long-term strategies that are crucial to sustainability efforts.

Key Takeaway: Challenging, but Worth It

Achieving complete sustainability in the supply chain is challenging and probably a stretch goal for most, but realistic and incremental approaches will lead to significant improvements over time. Low-hanging sustainable practices—measuring impact, transparent reporting, technology investments, and so on—offer immense potential for reducing carbon emissions, improving operational efficiency, and creating consumer loyalty.

The journey to a sustainable supply chain is ongoing, but with commitment and strategic action, businesses can begin to contribute to a sustainable future for all.

ITS Logistics Commitment to Sustainability

At ITS Logistics we’re dedicated to implementing realistic and impactful strategies to reduce our environmental footprint. We understand the challenges ahead, but we firmly believe that with dedication and intention we can make a difference. If you’re interested in learning more about our sustainability efforts or would like to continue this conversation, please reach out to Lauren Miller, Manager of Sustainability, at lmiller@its4logistics.com.

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