Because freight transportation is responsible for 8% of global greenhouse gas emissions (28% in the U.S. alone), many leaders focused on sustainability in logistics are rethinking practices to adopt leaner strategies that reduce carbon footprint.
MIT’s 2024 State of Supply Chain Sustainability report shows companies are under increasing pressure, especially from investors, to reduce carbon emissions. However, many companies still fall short of sustainability goals. Insufficient investment often fails to match ambitious targets.
The Rising Impact of Transportation Emissions
The rising impact of transportation emissions presents both a challenge and an opportunity. Companies can cut emissions by adopting greener technologies and improving efficiency while boosting performance. With pressure from regulations and investors growing, those that act now will gain both sustainability and a competitive edge.
Challenge 1: Emissions on the Rise
The growth of the e-commerce platform market, estimated at $8.58 billion in 2023, is expected to rise at a CAGR of 18.1% from 2024 to 2030. As more consumers embrace the convenience of online shopping, transportation emissions have surged. Transportation now accounts for roughly 21% of global carbon dioxide emissions, driven by the increasing reliance on trucks, planes, and ships to meet the demands of a global marketplace. Inefficiencies like underutilized loads and long routes exacerbate the financial cost impact.
Challenge 2: The Scope 3 Puzzle
Scope 3 emissions encompass all indirect emissions throughout the supply chain and are notoriously difficult to track. These emissions often originate from external partners, including suppliers and logistics providers, making visibility a significant challenge. Without precise data from every link in the supply chain, companies struggle to accurately measure their carbon footprint. Collaborating with partners to improve data sharing and leveraging technology to gain real-time visibility are crucial steps in addressing this issue. Ultimately, reducing Scope 3 emissions requires comprehensive supply chain oversight and coordination across borders.
Effective Strategies for Sustainability in Logistics
Technology provides critical capabilities to support emissions reduction, as well as cost-saving opportunities and enhanced efficiency. You can reduce emissions by improving transparency, tracking CO2, optimizing vehicle use, and even advocating for partnerships between companies to further cut empty miles and lower the collective carbon footprint.
Solution 1: Technology Leading the Way
According to McKinsey & Company, businesses can achieve a 40-50% reduction in logistics emissions by 2030 using available technologies. These include optimizing routes, reducing distances traveled through network redesign, and making data-driven decisions to minimize emissions per mile. The MercuryGate Transportation Management System (TMS) provides a platform for companies to manage and reduce their transportation emissions by leveraging smart planning, real-time visibility, predictive analytics, and automation.
Solution 2: Rethinking the Supply Chain
Disruptions over the past few years opened many people’s eyes to the value of the global supply chain. An efficient, resilient, sustainable supply chain benefits companies, consumers, and the environment. There are opportunities to take giant leaps through smart transportation. For instance, Empty miles contribute 87 million metric tons of CO2 emissions, MercuryGate subject matter expert John Martin shares in Being Green, While Staying in the Black, solving or even reducing empty miles would drastically reduce the industry’s CO2 impact.
Small changes can make a big difference; as Martin points out, “limiting a truck’s top speed to 60 miles per hour resulted in $3 million in fuel savings annually and a 20% reduction in fuel consumption.”
Calculate your potential Saving While Using an enterprise TMS
Embracing Technology to Drive Sustainability in Logistics
Leveraging technology like the MercuryGate TMS offers a powerful solution for reducing carbon footprints through smarter supply chain optimization. By utilizing dynamic routing and planning features, companies can reduce unnecessary miles, lower CO2 emissions, and improve overall efficiency.
Ready to transform your logistics operations and make a measurable impact on both your bottom line and your sustainability initiatives?
Download our eBook, Sustainable Transportation Strategies that Reduce Carbon Emissions, to discover actionable strategies for optimizing carbon planning, reducing emissions, and driving efficiency.
