Sustainability is an often-discussed concept that can be a reliable source of differentiation for CPG manufacturers.
Consumers have demonstrated that products must do more than satisfy their demands for a particular good. Shoppers now want to purchase from brands that are congruent with their personal values.
And sustainability has become a standout issue for many US consumers. That is especially true in the consumer-packaged goods marketplace.
In a 2019 survey from Hotwire, 47% of consumers said they had recently switched to a different product or service because the company had violated their values. Again, sustainability stood out as the most cited consideration for jumping to a competitor’s product, with 47% of respondents saying they wanted to do business with environmentally conscious brands.
Now, when most think of sustainability, they think of ethical sourcing or environmentally friendly packaging. But sustainable logistics practices can have a profound effect on your brand.
Companies can gain a competitive advantage by improving their environmental sustainability processes and marketing their efforts to consumers.
When it comes to the supply chain, you need to know where to look to find opportunities for improvement. Here is what some CPG vendors and logistics providers are doing to achieve a greener supply chain.
Decreasing Fuel Consumption through Route Optimization
Many are familiar with more environmentally friendly vehicles that have become increasingly popular in media coverage. Although massive improvements to fuel efficiency and alternative energy vehicles occurred over the past few decades, widespread implementation of these advancements is still aspirational.
Companies like Nikola Motors, Tesla, and Daimler Trucks are poised to bring electric semis and vans to the logistics market. However, there are still hurdles to overcome before this becomes the norm.
In the meantime, one of the best ways for manufacturers to find fuel efficiency improvements and emission curbing opportunities is through route optimization. Advanced technological suites and logistics planning methodology combined with other initiatives can help brands find optimal routing for their deliveries. Thus, reducing route miles and other inefficiencies that truck drivers commonly encounter.
Aligning Parts of the Supply Chain
Misaligned production, warehousing, and transportation functions are also a large source of supply chain inefficiencies, and they can cost you in wasted resources, time, and money.
By better aligning the disparate parts of a supply chain, manufacturers can find ways to eliminate operational issues that contribute to less sustainable practices within an organization. This recalibration can be achieved by performing an in-depth network evaluation to understand how production, storage, and outbound logistics can collectively work toward sustainability.
Finding Freight Consolidation Opportunities
Freight consolidation offers a multitude of benefits to CPG vendors. Besides reducing fuel costs and emissions, brands can use consolidation to increase logistics performance and reduce other inefficiencies.
Consolidation can bring about supply chain improvements that allow for more sustainable practices and hit key metrics with retailers like OTIF and MABD requirements, improving customer relationships.
Considering Alternative Transportation Modes for Sustainable Logistics
How you ship products is another way to demonstrate your commitment to sustainability and connect with consumers who are becoming increasingly likely to use environmental responsibility as a purchasing decision.
According to the Environmental Defense Fund (EDF), trucking is more than six times more carbon-intensive than rail. Trains can now move one ton of cargo approximately 484 miles on just one gallon of fuel.
The impact of adopting an intermodal shipping strategy is significant in contributing to sustainable operations. If just 10 percent of the freight that moves by the largest trucks (Class 7/Class 8) were carried by rail instead, greenhouse gas emissions would fall by approximately 17 million tons. That reduction is the equivalent of removing around 3.2 million cars from US highways for a year or planting 400 million trees.
Tracking Key Metrics to Drive Sustainable Logistics Performance Improvement
Technology has transformed the way the supply chain operates by increasing visibility throughout it.
This added transparency allows vendors to track key performance indicators (KPIs) to drive performance initiatives.
These typically translate to increased sustainability by eliminating inefficiencies that drive up cost and use resources. Reducing KPIs like transit time to distance or average dwell time can benefit your supply chain’s sustainability.
Working with Providers That Value Sustainability Logistics
Brands unable to complete in-house audits or performance improvements should consider working with partners to augment these sustainability strategies. Many of the most forward-thinking providers in the industry leverage a comprehensive approach in which cost-saving and performance improvements create a more sustainable supply chain.
When choosing external logistics providers, enterprises must work with partners that share similar values. If sustainability is important to your organization, it is critical to find a provider to help you achieve that goal.
What a Sustainable Logistics Partner Looks Like
Zipline Logistics continually works with customers to identify ways to reduce emissions and move toward sustainable logistics practices.
We help customers reduce both carbon emissions and overall transportation spending by leveraging data analytics and optimization technologies to identify unique order consolidation, scheduling, and routing solutions.
Additionally, we work alongside our carrier partners to fill empty backhaul miles and reduce unused truck space. Maximizing assets and identifying shared transportation opportunities between partners is a win-win—fewer trucks on the road, higher efficiencies, lower emissions, and smarter spending.
Is your organization looking for a sustainable logistics solution? Reach out today.
