Supply Chain Emissions: What Shippers Need to Know

January 6, 2022

Supply chains face an uncertain future. Consumer demands for faster transportation are rising, but more rapid transit doesn’t always amount to environmentally friendly transit. The cost of supply chain emissions is significant.

According to CDP, the environmental supply chain risk costs amount to $120 billion by 2026. While many assume most carbon emissions come from utilities, the supply chain is among the largest contributors.

Supply chain carbon emissions come in one of three forms, scope 1, 2 or 3. Scope 3 emissions in the supply chain reflect direct emissions from the transportation of goods. Let’s look at this scope of emissions and how it affects your supply chain sustainability goals.

Why Scope 3 Greenhouse Gas Emissions Across the Supply Chain Are Problematic

Supply chain sustainability depends on lowering total supply chain transportation, mainly wasted space in trucks on the road. However, meaningful supply chain emissions reductions come from a network view that considers total greenhouse gas in logistics.

CDP further noted how supply chain and shipping emissions are 11.4 times higher than operational emissions. The problems derived from more emissions are avoidable by increasing visibility.

Unfortunately, shippers and LSPs might not realize how to achieve meaningful reductions without contributing to emissions in another part of the value chain. Yet, the push for more sustainability is absolute.

According to FreightWaves, the COP26 climate change conference in Scotland reiterated the movement. Ninety percent of companies actively pursuing new emissions reductions. Companies need to find net-zero emission routes. The only way to achieve that goal is through using technology to manage the whole shipment life cycle more efficiently.

Technology Lowers Supply Chain Carbon Emissions in Transportation Management

The best way to reduce supply chain emissions rests with complete visibility into all activities. Shippers need to visualize and account for all possibilities when planning shipping transportation. Also think about how those changes will inevitably lead to higher transportation risk.

Even if you successfully plan a move, it can fall short if disruptions or unforeseen delays occur. Planning steps to reduce emissions is only as good as ensuring all freight moves as expected.

Therefore, shippers need to track the actual performance of all LSPs involved and create running metrics to ensure performance. Furthermore, if you leverage an advanced transportation management system like the MercuryGate platform, you can look beyond singular transportation modes to drive reductions.

For example, shippers can assess whether freight needs to truly move by air (which has the highest carbon footprint) and consider intermodal options for all freight, too. You may also reduce total emissions by offering customers more buy online and pick-up in-store (BOPIS) options. This lowers the stop-and-go nature of the last mile.

It’s all dependent on your customers’ needs and how you can get freight to end-users at the lowest cost to the environment.

Additional Benefits of Reducing Carbon Emissions

Reduced scope 3 emissions coincide with significant benefits in transportation, including:

More proactive management of transportation to reduce wasted space, i.e., deadheading.
Faster transit by reducing idle time and unnecessary scope 3 emissions.
Reducing excess, bulky packaging, resulting in fewer production emissions and allowing LSPs to maximize space in transit.
Offsetting higher future emissions during periods of disruption by creating and tracking carbon credits.
Minimizing risk of delays and added emissions in unloading and executing shipments by keeping everyone on the same page and accountable.
Increasing use of intermodal, multimodal and omnimodal transportation, moving the most freight at the lowest cost possible.

Calculate your potential Saving While Using an enterprise TMS

Use Our Calculator

Lower Your Total Amount of Supply Chain Emissions With TMS

Supply chain leaders have a duty to reduce their carbon footprint through fewer scope 3 emissions. Start by recognizing where and why supply chain CO2 emissions occur, and connect with a MercuryGate emissions expert to see how to drive them into retreat today with the right TMS.

To learn more about how you reduce and control supply chain carbon emissions read our eBook. It shares what you need to know about achieving meaningful reductions in greenhouse gasses across the supply chain.