Consumers want their packages fast. But as the supply chain and e-commerce shopping continue to evolve and expand, consumers also want their packages to go easy on the environment. This new trend has made the supply chain focus more on sustainability by reducing fuel consumption, getting rid of wasteful packing and shipping practices, and limiting the its effect on the environment as much as possible.
With so much of the country’s economy using the supply chain, implementing some of these practices could radically reduce the country’s overall carbon emissions. Here are seven reasons businesses are starting to rethink their approach to logistics.
Reducing Fuel and Packaging Costs
The biggest incentive for businesses to greenify their supply chain is to reduce fuel and packaging costs. Choosing a green supply chain means reducing travel time, using energy-efficient vehicles and making efficient use of supply chain resources. Overall, this means companies can spend less on fuel and operations and reinvest that money back into their business.
The same goes for packaging. Using less plastic and other packaging materials when prepping a shipment helps companies save money. They can opt for reusable shipping containers instead of spending a fortune on wasteful packing pellets, disposable containers and endless swirls of plastic. While reusable containers require a one-time investment, they help companies save money over time.
Simplify the Supply Chain
For many logistics companies, making the supply chain more sustainable means simplifying routes and reducing travel time. This usually comes down to companies being selective with the suppliers and retailers they work with. If a supplier across the country wants to use the company’s services, the company may decide to turn them down and instead limit its supply chain to the local region. Simplifying the supply chain makes it easier to manage and keeps overhead expenses low.
Logistics software and digital apps can help managers make better sense of how far they want to expand their operations. Accepting an order in another state may be more trouble than it’s worth if the company has to spend a great deal of money and go out of its way to meet the client’s demands. Managers can quickly calculate the cost of this added pickup and see how it will affect their current operations.
More Efficient Use of Space
Reducing fuel consumption and simplifying the supply chain also applies to the warehouse. Businesses can rearrange the setup to reduce the space between products on the shelf and the loading dock. Certain types of products may require their own loading dock so they won’t have to travel as far in the warehouse. This means less fuel for dollies and forklifts and less time for package fulfillment, which helps the company save money on fuel and reduces the need for extra warehouse personnel.
Companies can also reduce their risk by choosing suppliers and retailers with sustainable businesses practices. Being conscious of a supplier’s effect on the environment helps logistics companies avoid disaster and maintain an image of sustainability. If the logistics company or the supplier mishandles potentially dangerous materials, dumps waste water in the local river or ignores laws established by the EPA, it could lead to a nasty lawsuit or hurt the logistics company’s reputation. Adopting a green approach to supply chain management also helps logistics companies pass federal regulations with ease.
Improve Customer Service
Simplifying the supply chain and working with local suppliers and retailers also has the potential to improve customer service. If freight trucks don’t have to travel as far to reach the consumer or nearest package processing center, the shipment is less likely to be delayed. This helps logistics companies maintain a stellar reputation and make sure packages arrive on schedule.
Creating an Eco-Friendly Brand
Put this all together and logistics companies can start positioning themselves as an eco-friendly brand. Consumers looking to reward companies that go green and retailers that pride themselves on an eco-friendly image will be more inclined to give their business to eco-friendly logistics companies. This also helps those in logistics differentiate themselves from competitors in the marketplace. There are plenty of companies that can move packages from point A to B. But finding one that will do the job without negatively impacting the environment can be tricky. Logistics companies can quickly make a name for themselves by adopting a radically different approach to supply chain management than their competitors.
When it comes down to it, implementing a green approach to supply chain management will help the company save money and increase its profits. While it may not be able to accept orders and take on clients from all over the country, the company can keep its overhead expenses low and start to position itself as a leader in green supply chain management.
As consumers and businesses become more aware of how certain products are made and their effect on the environment, logistics companies that use unsustainable transportation and packing methods may fall out of favor. Sustainability is here to stay as more consumers and businesses demand transparency and respect for the environment. If logistics companies want to make inroads with these kinds of consumers and continue to increase their bottom line, going green makes a lot of practical sense.
Green supply chains are becoming increasingly popular in the marketplace as consumers and suppliers look for more sustainable ways to move products around the country. In addition to protecting the environment, going green makes the entire management process more reliable and cost-effective. Companies can save money, strengthen their brand recognition and improve their customer service if they’re willing to partner with sustainable suppliers and retailers, adjust their operations and simplify their supply chain.
Starting down a green path may seem like an uphill challenge, but the rewards can far outnumber the drawbacks. Sustainability is the way of the future, and some logistics companies may soon realize that going green is the only way to get ahead.
David Madden is an efficiency expert, as well as being the Founder and President of Container Exchanger. His passion and business is to save companies money through the use of used reusable and repurposed industrial packaging such as plastic and metal bulk containers, gaylord boxes, bulk bags, pallets, IBC totes, and industrial racks. He holds an MBA as well as a certificate from Daimler Chrysler Quality Institute for completion of six-sigma black belt training.