Green logistics and transportation optimization — a win-win opportunity

  • June 29, 2023
Idyllic winding road through the green pine forest

Increasing efficiency and lowering costs is the mission of logistics. Fewer loads, better driver deployment, mode shifting and minimizing miles through better routing not only reduce your freight costs, these measures also result in less fossil fuel consumption, fewer emissions and reduced environmental impact.

Increasing supply chain efficiency benefits more than the bottom line
Logistics management is primarily about finding the lowest cost way to move goods through the supply chain. You can create significant cost savings by optimizing (and re-optimizing) your transportation network. And those efficiencies come with other benefits: fewer emissions, a reduced carbon footprint and a lower environmental impact.

The greener your supply chain management methods become, the more likely your business will save money. And be more economically and ecologically sustainable. It’ll also make your brand more appealing to environmentally conscious customers. Companies with an acknowledged sustainability focus will become more attractive partners to future vendors and suppliers in the long term. All these things add up to competitive advantages and long-term success.

What’s transportation optimization and how can it help you evaluate cost-saving and sustainability opportunities in your network?
Transportation optimization is a set of tools that provide a “sandbox” to test and understand the vital elements of freight transportation. It helps you evaluate the competitiveness of your existing operations. You can also perform strategic what-if scenario analyses to review and compare various transportation strategies, modal mixes, rates and service levels. Many companies use this analysis to create the best transportation strategy after restructuring supply chain networks or combining assets and operations.

Optimizing transportation helps address a variety of supply chain issues
You can use transportation optimization to evaluate what-if scenarios. The most common situations include:

  • Determining how to improve overall load efficiency using pool points, zone-skipping, intermodal or multi-stop truckload strategies
  • Simulating the effects of disruptions like a critical port facility shut down and identifying the best contingency should the event occur
  • Evaluating significant changes to delivery options due to carrier strikes, lane closures or modal rate hikes
  • Understanding internal shifts like volume increases, new customer or supplier additions, or moving from decentralized to centralized distribution
  • Determining the impact of regulatory changes like new hours of service rules, driver shortages or natural changing market conditions

Leveraging transportation optimization for sustainability
An optimized transportation network reduces fuel consumption, lowers emissions and, as a result, decreases your carbon footprint. Less carbon released into the atmosphere supports international efforts to stabilize temperatures and stave off the worst effects of climate change. However, transportation optimization is simply the foundation of an environmentally friendly logistics strategy.

The supply chain offers other opportunities to reduce your environmental impact. You can explore recyclable and reusable packaging systems, along with lighter materials for both packaging and shipping containers. There are pilot programs that study alternative fuels such as biodiesel and hydrogen, as well as fuel-cell technology. You can also investigate electrification for drayage and last-mile delivery and prep for quick application. Examining these and other emerging technologies should be part of a comprehensive “green” logistics program.

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