The past decade saw a revolution in the supply chain sector. Ambitious ESG and supply chain sustainability goals evolved from nice-to-haves to must-haves in the face of consumer pressure and tightening regulations. Firms have made significant investments in waste and carbon emission reductions, as well as supply chain visibility and traceability. And demand for greener practices and transparency have transformed sustainable supply chains into a major competitive advantage.
As economic uncertainty grows, supply chain leaders may find their zest for pursuing supply chain sustainability waning. Conversations on lowering emissions or adopting more environmentally friendly packaging are less urgent in the face of a looming recession and a global energy crisis. But as supply chains enter a third year in crisis mode, economic and geopolitical pressures are quickly losing their edge as pretexts for inaction. Moving forward, firms will have to learn how to strike a balance between short-term survival and a longer-term commitment to their ESG goals.
Supply chain sustainability in the face of volatility
Supply chain sustainability isn’t just a lofty goal—it’s critical for resilience and long-term survival. Sustainable practices promote efficiency, which yields significant ROI in the shape of time and resource savings. While the current downturn may force firms to make tradeoffs and defer some ESG initiatives, there are still ways they can continue forging ahead in their journey toward sustainability.
1. Shipment consolidation. Small changes, such as consolidating loads into fewer shipments, reduce carbon footprints while cutting shipping expenses. Shipping three times per week instead of five, for example, can significantly affect long-term operational efficiency and bottom lines. In addition, optimizing inbound and outbound logistics can provide shippers with additional savings in the face of record-high carrier rates.
2. Sustainable packaging. Packaging is one of the biggest sources of waste in supply chains. Using less and more sustainable packaging can make a noticeable difference in a firm’s environmental footprint while cutting considerable costs.
3. Mode selection. The most environmentally friendly modes of transportation—land, and ocean—also happen to be the most affordable. Even when working under tight schedules, firms can find ways to create longer lead times that enable more sustainable transportation.
4. Sourcing. Sourcing is also ripe for change. Switching from an international supplier to a local alternative can cut down on shipping times and bolster agility at a time when shortening supply chains is more valuable than ever. Whether the main goal is supply chain sustainability or resilience, firms should strive to create a healthy mix of local, regional, and international suppliers.
5. Carrier and supplier choice. Supplier and carrier practices significantly influence a firm’s indirect environmental footprint. Studies have found that a significant portion of supply chain emissions come from far-removed, Tier 3 suppliers. Improved supply chain visibility through a 3PL can help firms gain a deeper understanding of their partners‘ business practices and make informed decisions about business partners. In addition to high-quality data, a 3PL can provide firms with access to a wide network of vetted carriers—including those that best align with their performance and ESG goals.
Leverage data to build a more sustainable supply chain
As one of the biggest greenhouse gas contributors, supply chains are crucial in the global race toward halving emissions and meeting the 1.5 C target set by the Paris Agreement and upheld at COP27. Measuring carbon emissions will be instrumental in reaching those goals.
Shippers worldwide trust CTSI-Global’s suite of software tools to provide them with the data they need to reach ambitious ESG goals. Contact us to learn how we can help you build a more sustainable supply chain, no matter the challenge.