What is sustainable supply chain management? 4 ways FarEye helps create sustainability in supply chain operations
By FarEye | October 13, 2022
In mid-2021, FarEye CEO Kushal Nahata shared his thoughts on how enterprises can control carbon emissions in the supply chain operations delivery ecosystem in a post titled ‘Sustainability - Impact Across The Supply Chain And Modes’. He outlined how big brands are setting aggressive green goals to meet carbon-neutral targets set by the state.
Today, the topic of sustainability has gained higher prominence with Simon Kafe, the foreign minister of island nation Tuvalu, giving a speech to the United Nations climate conference in Glasgow (COP26) by standing knee-deep in island waters to emphasize the impact of climate change. The COP26 conference, which attracted delegates from 200 countries, has the plan to accelerate efforts towards a sustainable future, and that includes decarbonization of road transport; achieving zero-emission vehicles by 2040.
The Ripple Effects of COP26 in Supply Chain Delivery
In the post-pandemic world, when consumers are rapidly shifting to online purchases, transport decarbonization is a newfound challenge. It may seem that ‘transport decarbonization’ would affect only last-mile delivery in logistics. Still, it does have a significant impact in the first- and mid-mile of supply chain operations. While multi-modal logistics is part of the broader supply chain ecosystem, today, the bulk of the goods movement is handled by road transport. Consumer-facing sectors like retail, e-commerce, big & bulky, courier express and parcels that heavily depend on last-mile delivery, usually by road, will face the most significant impact due to decarbonization goals.
How can FarEye help enterprises achieve their sustainability goals?
In the last post, we suggested proactive tips to minimize carbon emissions in the delivery component of supply chain operations. After evaluating sustainability needs for the supply chain and logistics industry, we’ve augmented FarEye’s Intelligent Delivery Management Platform with capabilities that’ll help brands and enterprises fast-track their sustainability goals using a science-based CO2 reduction approach across first, mid, and last-mile delivery.
Global freight movement accounts for 7 to 8% of greenhouse gas emissions in a year. While some 3PL carriers associated with top-tier brands and in-house logistics teams of global brands have access to tools to measure CO2 emissions accurately, the majority of the enterprises lack systems to capture carbon emission readings of their fleets. The situation gets trickier if the movement of goods involves both inbound and outbound logistics with multi-modal transportation.
FarEye’s sustainability dashboard addresses this gap by allowing customers to track various KPIs tied to carbon emissions. Enterprises can track CO2 emissions across road, rail, ocean and air logistics. They can retrieve data on CO2 emissions per trip and shipments. Even the analytics allows identifying routes with the least carbon emissions and third-party carriers with the lowest carbon footprint.
Green Vehicle Route Planning
Green vehicle route planning enables customers to design route planning for green vehicles. A few years ago, the movement of goods in logistics involved fleets like trucks and vans. But omnichannel retail has changed the type of delivery fleets. E-cargo bikes, cycles and foot-delivery are recent additions in the delivery fleet category. In parallel, COVID-19 boosted same-day and hyper-local deliveries, rapidly changing the type of fleets in last-mile delivery. The green vehicle route planning allows CEP companies to effectively plan their routes, especially in busy lanes of global cities, with a mix of fleets and achieve on-time delivery of shipments with a zero-carbon footprint.
Long-haul Truck Route Planning
The long-haul trucks that move across cities, covering first- and mid-mile delivery, release a significant amount of CO2 in the atmosphere. According to the energy and global economy news publisher Visual Capitalist, heavy-duty trucks are expected to contribute 41% of road transport CO2 emissions by 2030.
The long-haul multi-day truck route planning allows carriers to design optimal routes to reach the delivery location. Some of the key parameters that are factored in to arrive at intra-city, multi-day trucking routes include anticipated roadblocks and deviations, weather conditions, truckload capacity utilization, accessibility of roads based on the size of trucks and pre-defined entry and exit timing for trucks within the city limits. This allows truckers to minimize idling times and fuel consumption and avoid long detours to overcome roadblocks. All these contribute to reduced CO2 emissions while achieving OTIF targets.
Carrier Allocation System
The critical success metrics for omnichannel retailers and e-commerce companies are on-time delivery of products and a higher CSAT score. Also, carriers should deliver products on-time while checking on carbon emissions to appeal to environmentally conscious urban consumers. Increased first attempt delivery rate and reduced damaged deliveries can minimize re-attempts in last-mile delivery and the associated carbon footprint. The carrier allocation will help retailers and carriers together achieve these metrics. It dynamically allocates the best carriers for every shipment by taking into account various parameters such as delivery destination, carrier’s historical performance rate, dimension of the parcel and agreed delivery of ETA with the customers.