Climate Risk & ESG Risk

Sustainable Logistics: 7 Steps To Reduce Emissions And Optimize Operations

Shriya Sarang

4th May'22
Sustainable Logistics: 7 Steps To Reduce Emissions And Optimize Operations | OpenGrowth

Colloquially, sustainability simply means keeping things going – but the conundrum is that keeping things going exactly as they are right now is, for obvious reasons, unsustainable. Fortunately, one thing sustainability doesn’t mean is poor business performance. Many sustainability initiatives are designed to increase efficiency and drive down costs. Fossil fuel is expensive, and solar power is cheap. Let's take a look at how you can improvise and make your logistics sustainable - 

 

7 Steps To Reduce Emissions And Optimize Operations

 

Sustainability is a process and a lifestyle rather than a few tricks. Sustainability in business requires commitment toward a process that identifies the pain points and then gradually works on them to show better results in the longer run. Jerry Greenfield, Co-founder of Ben & Jerry’s Ice Cream said, “Recycling, packaging, businesses are changing all of those things because that’s what consumers want.” Similarly, you can too make decisions that drive your customers towards sustainability. Check out the following steps in the process of sustainable logistics -

 

1. Gather data on the Pain Points

 

The most basic step towards sustainability is understanding the things we are doing wrong or right in the first place. This way, we can create a plan that tells us what is to be changed and what is to be retained. As you begin to focus internally, your greatest resource for quick-fix ways to eliminate waste is your workforce. Who better to flag inefficiencies in daily tasks than the people who perform them every day? Follow-up sessions in small groups will serve to confirm areas of concern and offer a space to begin brainstorming improvements. This can be a unique way to bring staff closer together and offer more control over the job they do. Similarly, this helps us create a sustainable supply chain.

 

 

What is a sustainable supply chain?

A sustainable supply chain tries to transmit goods as cheaply and quickly as possible to the upstream supply chain or end customers while reducing or eliminating negative environmental and social impacts. A sustainable supply chain is made up of three aspects-

  • Financial Sustainability

  • Environmental Sustainability 

  • Social Sustainability

 

2. Optimize Transportation

 

The fuel that the transportation industry uses is also added to the footprint of logistics. Today, some companies supply green vehicles that run on electricity for delivery services. Such vehicles make an amazing alternative to the vehicles that run on the ever-rising cost of petrol, diesel, etc. As a growing business, you must know about these latest trends in environment and sustainability.

You’ll need to calculate the last mile delivery costs of a petrol-run vehicle vs. a hybrid or electric-powered courier van. On average, a hybrid and/or electric vehicle costs less to run over time and will continue to get cheaper, so opt for these options to maximize profits and sustainability.

 

3. Minimize Inventory

 

Warehouses account for about 13% of all supply chain-related GHG emissions. They are large cement structures that consume energy due to heating/cooling & lightning and emit a specific amount of GHG for the breakdown of energy sources in the region (green, coal). Therefore, try to hoard a lower amount of inventory which would eventually reflect in the profit section of your balance sheet.

 

4. Reduce Waste

 

There's never a bad time to look for ways to eliminate waste from your business supply chain. This section is often accounted for the logistics that are one-time use or go for the last mile of delivery which is to the final customer. A regular person would discard the packaging contributing to the waste industry and eventually rising the demand for the one-time-use packaging. But have you ever looked at the tiffin services? They use steel tiffins with the end-user and charge a nominal amount to pick it back up. Similarly, one can reduce the waste by using reusable material which is discussed ahead in the section. 

By building checks and efficiency reporting into the core of your business processes, you can:

  • Eliminate waste and unnecessary rework.

  • Establish ongoing cost savings.

  • Ensure that no potential problem is overlooked for longer than it should be.

  • Empower employees to take greater responsibility and ownership of their job.

Commitment to continuous improvement yields even greater rewards.

 

5. Use environmentally friendly packaging materials

 

 

According to the European Union, only 1% of plastics are biodegradable. The majority of GHG-emitting products are petroleum-based. The typical plastic’s effective recycling rate is low. They are resistant, so they may live in the wild for a long time and frequently penetrate the food chain, posing a hazard to the environment and human health. Furthermore, there exist harmless plastics with BPA. Did you know about BPA and the environmental impact it has? Despite the declared facts, firms still keep on using such a packaging material due to its cheap cost.

Pete Seeger, Folk Singer & Social Activist said, “If it can’t be reduced, reused, repaired, rebuilt, refurbished, refinished, resold, recycled, or composted, then it should be restricted, designed or removed from production.”

 

6. Embrace the circular economy

 

 With circular logistic flows for returnable and reusable packaging material, you can dramatically reduce waste. A better returns process can help, too. By rationalizing the product returns process from the customer to the final dispositioning step, you can maximize reuse and optimize margins as well. Look for opportunities to reuse resources throughout production. One good place to start is with packaging.

 

7. Reuse

 

Many companies exist today in the logistics market, which make reusable materials for packaging that could become business assets in the future. Single-use consumables end up as waste in landfills or in recycling plants where more energy is utilized. Conversely, reusing “business assets” minimizes one’s carbon footprint, maximizes return on investment, and lessens the environmental burden. For example, Bolloré Logistics. They started phasing out single-use consumables by adopting alternative reusable items. The pilot project kicked off at five of its warehouses known to utilize the most consumables.

Essentially, longer useful consumables mean less replacement and optimized cost, it also contributes to circular recycling, to a healthy and safe ecosystem, and it helps to mitigate climate change as more energy will be saved and CO2 emissions minimized. Businesses can opt for supply chain solutions that reduce or eliminate the use of plastic and single-use consumables, as a solution to save costs and drive sustainability.

 

The Conclusion

 

 

Today, we need sustainability more than ever as we are all aware of the ill effects of global warming and are experiencing it in the form of extreme temperatures, irregular rainfall, water scarcity and so much more. So what are the things that we can do about it? I mean, as an individual living in a city or a country, how can just a change in one individual or one business help the global cause? 

Every small effort that an individual undertakes in their lifetime adds up to the big picture. As people, we all have different footprints. But as a whole, we contribute towards a footprint that influences nature. Therefore, when you reduce your footprint, along with the footprint of those around you, you reduce the impact that will happen on Earth.

Eventually, by creating less demand for non-renewables causing pollution, you put a stop to the extraction of such materials and boom the green energy industry. Therefore, choose the options that make your business more sustainable and help you become a responsible individual. 

 

We at OpenGrowth, are committed to keeping you updated with the best content on the latest trendy topics from any major field. Also, both your feedback and suggestions are valuable to us. So, do share them in the comment section below.

 

Shriya Sarang holds a degree in Political Science and Public Administration. Apart from having no political opinions, she advocates financial literacy among her friends. 

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