Achieving success in sustainability requires everyone to do their part to achieve a greener future. As the single largest contributor to greenhouse gas emissions, the transportation sector is responsible for making significant improvements in the push toward supply chain sustainability.
Historically, the cost of going green costs a lot of green, hindering substantial improvements. Growing concerns about the climate crisis loom large; technology helps make a sustainable supply chain profitable, while consumers are making it loud and clear with their spending dollars that sustainability matters.
This article demystifies supply chain sustainability by defining:
- What it means to be green.
- Common challenges.
- Actionable guidance for achieving supply chain sustainability.
What Does it Mean to be Green?
Kermit the Frog was right when he sang, “It’s not easy being green.” While understanding what it means to be green can prove just as challenging as being green, we’ve developed a working definition that covers the five aspects of what it means to be green in logistics.
1. Explanation of ESG Standards and Their Relevance
The environmental aspect of ESG encompasses energy use, waste management, water, energy consumption, and reuse. The social component focuses on worker’s rights and labor practices. Lastly, governance refers to corporate policies, procedures, and ethics as a complement to regulations.
As businesses navigate the complexities of supply chain sustainability, adhering to ESG standards offers a framework for minimizing adverse impacts while enhancing corporate reputation and long-term viability.
2. The Circular Economy
Achieving “green and circular supply chains” remains one of the top 10 trends among supply chains, according to the Association of Supply Chain Management (ASCM). The circular model strives for efficiency and sustainability at every product lifecycle stage, from raw materials to end-of-life. By embracing circular economy principles, companies significantly reduce waste and environmental impact.
3. Scope 1, 2, & 3 Emissions
Several years ago, the Security and Exchange Commission (SEC) hinted that it would require companies to report scope 1-3 emissions, but this has yet to take shape.
- Scope 1 covers direct emissions from owned or controlled sources.
- Scope 2 accounts for indirect emissions from the generation of purchased electricity.
- Scope 3 includes all other indirect emissions.
Understanding the distinctions among scope 1, 2, and 3 emissions is fundamental for comprehensive carbon footprint management strategies.
4. Compliance and Regulations
Through compliance and strategic supply chain management, companies meet legal requirements and drive meaningful reductions in carbon emissions.
5. Sustainability in Transportation
Green transportation involves strategic route and mode selection to minimize environmental footprints. By concentrating on route and mode optimization, businesses substantially reduce CO2 emissions. MercuryGate is committed to providing solutions that support these sustainability goals.
With these pillars of green supply chain management firmly established, we focus on the challenges ahead. Navigating these hurdles requires innovation, dedication, and a nuanced understanding of the obstacles businesses face as they strive to align their operations with sustainability principles.
Challenges of Achieving Supply Chain Sustainability
Staples found this out when they limited the top speeds of their delivery trucks, resulting in a 20% reduction in fuel consumption. That reduction translated into $3 million in annual fuel savings.
- Financial Constraints: Historically, the financial outlay for sustainable practices has been substantial. Initial costs of green technology, sustainable materials, and compliance with environmental standards can strain budgets, especially for small and medium-sized enterprises. However, something as simple as zone-skipping provides an environmental and financial benefit.
- Empty Miles: Up to 40% of trucks in certain regions roam empty, returning without cargo. This phenomenon underscores a persistent inefficiency within the industry. The persistence of empty miles underscores a critical challenge and an incredible opportunity to achieve a greener supply chain.
- Optimizing Every Mile: The quest to green the transportation sector hinges on a meticulous examination of the journey from start to finish, ensuring that each segment of the trip is executed with maximum efficiency and the least environmental impact. We believe the earlier you start the planning process, the better. This allows you to gain greater benefits. One MercuryGate customer eliminated 500 tons of emissions while reducing freight charges by hundreds of thousands of dollars.
As Tom Szaky, CEO of Terracyle and sustainability champion, puts it, “The challenging part is in the beginning; it’s a leap of faith. But I think the most important thing is to just do it. Start.”
MercuryGate’s Role in Fostering Sustainable Supply Chains
MercuryGate’s Platform: A Conduit for Sustainability
At the heart of MercuryGate’s approach is our comprehensive platform, designed with sustainability as a core objective. This platform boasts features facilitating aspects of green logistics, from route optimization to carbon footprint analysis.
Leveraging MercuryGate’s tool to centralize dispatching allowed one company to reduce its fleet size by 40%, improve on-time deliveries, and significantly reduce emissions, all while doubling its volume of deliveries. The emphasis on data-driven decisions enables companies to identify opportunities to operate more efficiently, creating a win-win scenario for the bottom line and the environment.
Championing Green Supply Chain Best Practices
MercuryGate stands at the forefront of advocating and implementing best practices for the supply chain sustainability. Through strategies such as load consolidation, route optimization, and the promotion of eco-friendly transportation modes, MercuryGate helps businesses significantly reduce their environmental impact. By minimizing empty miles and optimizing transportation strategies, the platform ensures companies reduce CO2 emissions without compromising service quality.
Empowering Businesses to Measure, Reduce, and Report Carbon Emissions
A critical aspect of MercuryGate’s contribution to supply chain sustainability lies in our ability to enable businesses to measure, reduce, and report their carbon emissions accurately.
The Smart Transportation platform provides detailed insights into Scope 1, 2, and 3 emissions, empowering companies to identify improvement areas and implement targeted emission reduction strategies. Furthermore, MercuryGate’s compliance features ensure that businesses can easily navigate the evolving landscape of environmental regulations, making carbon reporting comprehensive and straightforward.
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MercuryGate’s Integral Role in Supply Chain Sustainability
As the transportation sector continues to navigate the push toward a greener future, MercuryGate’s role as a facilitator of sustainable supply chain practices becomes increasingly vital. MercuryGate’s commitment to sustainability is evident not only in its platform’s capabilities, which enable companies to manage carbon emissions effectively but also in its advocacy for best practices that minimize environmental impact without compromising operational efficiency.
Take the next step toward sustainability in your supply chain by exploring how MercuryGate can transform your logistics operations. Discover more about our commitment to sustainability and how our platform helps you achieve your green logistics goals in our webinar, “Being Green While Staying in the Black.”
