We made it to spring. While we didn’t see the drawn-out periods of excessive weather that challenged us over the past two years, these few months did bring a handful of winter events that sent minor shocks throughout logistics networks already disrupted by port congestion and driver shortages.
Spring is a time of renewal, with a focus on the environment driven by Earth Day and the myriad other national and regional celebrations of all things “green.” For supply chain professionals, spring provides a timely opportunity for us to reconcile the impact logistics operations has on the environment.
And the impact is severe. According to McKinsey’s 2016 report on sustainability in supply chains:
- Almost two billion people are expected to become global consumers by 2025, a 75 percent increase over 2010.
- The consumer sector is expected to grow by 5 percent a year for the next 20 years.
- To meet climate change agreements, consumer packaged goods (CPG) companies will need to cut their greenhouse gas emissions by more than 90 percent by 2050.
- More than 90 percent of the damage caused to the environment by CPG companies comes from the supply chain, including 80 percent of greenhouse gas emissions.
- Fewer than 20 percent of supply chain managers say they have visibility into sustainability practices in the supply chain.
At Blume Global, we understand the ecological impacts of supply chain operations — and see technology as an important foundation of a supply chain that is both ethical and sustainable.
Let’s look at two specific ways in which supply chain technologies can directly reduce the amount of energy used in the logistics process.
Optimize routes to decrease fossil fuel consumption. Route optimization is one of the best ways to reduce the environmental impact of transportation and distribution. Artificial intelligence (AI) can work with GPS devices to optimize international, national and local shipping routes. Advanced analytics can even update routes in real time, to take account of congestion and other issues.
Consolidate shipments to fully utilize containers and transportation. An empty container is a wasted container. Predictive analytics forecast where and when goods will arrive, allowing for the consolidation of shipments from multiple suppliers to multiple final destinations. This makes the most efficient use of assets (e.g., containers and trailers) and transportation, reducing the total amount of greenhouse gases generated per unit of cargo.
In the coming months you’ll continue to hear more from Blume Global about our team’s commitment to creating solutions to power sustainable, ethical supply chains.