As sustainability becomes a vital part of an organisation’s long term growth, logistics leaders must pursue three strategic partnerships to reduce greenhouse gas (GHG) emissions, according to Gartner, Inc.
Paired with internal GHG reduction activities, these partnerships must be pursued with 3PL providers, sustainability-savvy customers, and industry peers.
Third-Party Logistics Providers (3PLs)
Transportation and logistics leaders must rely on 3PL partnerships to meet the expectations of ambitious GHG reduction goals. Aside from optimisation, this will also require investment in new vehicles and engine technologies to move goods.
Sarah Watt, senior director analyst with the Gartner Supply Chain practice, said that logistics leaders must ask three questions before contracting a 3PL.
“Firstly, does the 3PL’s ambition for emissions reduction match that of the organisation. Secondly, what investments will the 3PL be making to improve emissions management, such as new vehicle technologies. Lastly, logistics leaders must understand if there is an investment gap, and if the enterprise is willing to play a part to bridge this gap,” she said.
Sustainability-Savvy Customers
Offering greater transparency about emissions impacts is one way to avoid some GHG emissions created by customers.
For example, demand for short delivery times may increase the use of airfreight. While many customers want to create less GHG emissions, they lack visibility into how their decisions can impact the environment.
Logistics leaders need to challenge the assumption that faster is always better and communicate that some shipping options may take longer to arrive but are more sustainable than same-day-delivery.
“This is not about taking away shipping options from clients to enable emissions reduction. This is about client choice of shipping options by creating visibility,” Watt explained.
Industry Peers
Reducing GHG emissions is a precompetitive issue for many organisations. By working together, for example in an industry association, leaders from different organisations can come together to share their experience and best practices and even bring their collective effort to the challenge.
Additionally, this strategy may lead to co-investment in opportunities or collective collaboration with 3PL partners.
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Watt noted, however, that it is important to evaluate an industry association before joining.
“Significant time can easily be sunk into collaboration, with no clear outcome or benefit. Take an outcomes base approach when assessing where to join or to continue to engage with an industry association,” she concluded.