How retailers are saving money through supply chain sustainability

Environmental sustainability is a major trend across multiple industries. Pressure from customers and shareholders to create a greener supply chain is high — especially for large enterprises. But whether big or small, for most businesses the push towards supply chain sustainability comes from two main factors: The reduction in their environmental impact (and the pressure from customers to do so), and the reduction in operating costs that comes from doing so.

Considering a business’s supply chain accounts for as much as 90% of their carbon emissions the first factor makes clear sense. Without implementing greener practices in the supply chain, it’s nearly impossible for a business to make enough of an impact to meet sustainability goals. But how does a greener supply chain reduce operating costs?

Higher sustainability means greater efficiency

Reducing the number of trucks on the road and the number of miles traveled while still accommodating increased shipping volume is quickly becoming a necessary capability. And with the rising cost of supply chain operation this is the case not just for sustainability, but for profitability as well. The reasons are hitting our wallets hard:

• After over two years of steady increases, freight costs have leveled off a bit, but still 35% above this time last year.
• Diesel is over $5 a gallon, and is likely to increase even further when hurricane season disrupts production.
• The supply chain industry is short about 80,000 drivers right now, and predicted to increase to 160,000 by 2030 if nothing changes.

A more efficient supply chain can mean a lot of things, but it often focuses on order shipment and shipment route optimization. Optimizing your supply chain means finding lower costs and increasing efficiency, which also improves sustainability.

Reduce miles to lower emissions 

The first step to sustainability is reducing the number of miles driven. Almost all supply chain sustainability measures boil down to this, so a logical first step is to determine where it can be achieved in your own supply chain, such as:

• Finding more efficient routes 
• Consolidating more shipments on a single truck 
• Better load planning across modes 

Leveraging technology to uncover greater efficiency in these areas allows you to ship more using fewer trucks that travel fewer miles. This results in lower emissions and lower cost.

Shipwell’s Load Optimization allows orders to be automatically consolidated into the most cost and fuel efficient routes and modes, eliminating the need to manually plan shipments and look for multi-stop truckload opportunities to lower shipping costs. But reducing miles is only the first step to truly optimizing your sustainability.

Data is the key to decarbonization

The good news is that supply chains have enormous amounts of data, including hours of service, dwell time, fuel usage, freight spend, route efficiency, lane pricing, carrier and lane performance. The bad news is obvious. Getting consistent, regular data on every aspect of every shipment can be a challenge.

Planning for sustainability requires real-time data tailored for each shipment. Data points that are useful for shipping efficiency include:

• Route optimization – traffic, weather, driver availability
• Load planning – shipment details, available capacity
• Exception management – delays, scheduling conflicts

With 70% of organizations already gathering data faster than they can analyze or use, the next challenge is organizing all that data so it’s easy to understand and take action on. 

The Shipwell transportation management system (TMS) works to centralize all of this data, combining real time information, historic data and future predictions to make better, more sustainable choices. Features include load planning optimization, real-time traffic and weather information, and 250 data touch points on each shipment. By having that data organized and available at a glance, uncovering opportunities to improve sustainability and reduce costs and emissions is infinitely easier. 

Key takeaways

The pressure on big companies to take action in protecting our environment is high, but smaller businesses are feeling the push as well. For those looking to get ahead of the issue, their supply chain is the best place to get started. Small actions in this area can have a big impact, and unlike many other areas of investment, improving the sustainability of the supply chain is a win-win for both the environment and your bottom line. For supply chains, improved sustainability essentially means improved efficiency, and improved supply chain efficiency means both lower costs and faster shipments.

If your focus is on getting shipments from A to B, sustainability measures in the supply chain will actually make your job easier. You just need the right tools to get you there. For more information on how Shipwell can help, download our retail industry guide to the 2022 peak shipping season, or schedule a demo today.

Article originally published on Supply Chain Dive