Transportation and logistics include any movement of goods or people, from a raw material going to the production facility, to a finished product being delivered to the customer or an employee’s commute. Transportation and logistics can have and do have a significant impact on people and the environment, so improving the social and environmental impact of your transportation and logistics is a great place to start your sustainability journey.
It is well known that improvements in the transportation and logistics systems can have a huge positive effect at a local level, that is to say, where your goods are produced. These improvements can be seen in a reduction of greenhouse gas emissions, congestion, and noise pollution while improving local air quality. Thanks to these potential improvements, companies will also be able to benefit from increased efficiencies in business operations, and would thus save big amounts of money.
However, the question is not how beneficial it is to implement these changes in the transportation and logistics system, but how and what changes need to be implemented. In other words, how can companies make their transportation and logistics more sustainable? This week’s article aims to give fashion companies some hints and guidelines on how to do so.
Understand, track and measure how your goods are transported
First and foremost, companies need to have a good understanding of how their goods are transported at each stage of the supply chain. In order to have a good understanding, there are several elements that need to be taken into account: emissions, natural resource utilization, recycling and waste management… Once this big picture is clear across the company, the next step is to start tracking all transactions because only with accurate information can companies make effective decisions about what and how much to produce, where to locate this production, and how to best transport it. However, once these effective decisions have been made, and successfully implemented, the process should not end there. Companies should implement sustainable practices and communicate them with all parties involved along the supply chain. The following are best practices that, if correctly applied, can generate a lower carbon footprint and at the same time, create a higher profitability for the company.
Choose the mode of transportation with the lowest impact
Companies should take into account the mode of transportation they use. There are many modes of transportation to choose from: rail, road, air, water. Which mode is the most sustainable depends on the specific product and company, as each has its advantages and disadvantages. Yet, shipments by land and sea have significantly smaller carbon footprints than air shipments. Most companies use these modes of transportation until the final product is obtained. However, the very last transaction, that is, the one in which the product reaches the consumer, is usually done by air. In order to be able to implement a lower impact mode of transportation, companies also need to communicate these practices to the client. An example could be a communication campaign so that buyers are aware of the different impact their chosen delivery system has, and lead them to accept a slower but less polluting delivery. Companies can also include an incentives program that could take the form of gift cards or discounts on future purchases.
Minimize transportation distance
Minimizing transportation distance is about reducing the distance materials need to travel between production facilities, distribution centers, retail, and beyond. There are several ways to reduce the total transportation distance companies face. Consolidating and increasing the density of shipments would allow companies to move the same quantity of goods in fewer trips and would translate into reduced spending on fuel, vehicle maintenance and energy. Furthermore, companies should be constantly working with their transportation partners to comply with best practices, improve utilization and optimize routes. Lastly, although it may seem obvious, companies should look for local production alternatives. On many occasions companies get carried away by the low production costs in developing countries and end up paying the cost in transportation and environmental damage.
Use renewable energy and reduce your carbon footprint
Another option companies should consider is fully transitioning towards renewable energies in their modes of transportation to reduce their carbon footprint. Green or renewable energy refers to electricity generated from emission-free natural resources as solar power, wind power or hydropower. By switching to zero-emission green energy companies could avoid Scope 2 emissions (the indirect emissions from purchased energy). This will greatly reduce companies’ carbon footprint and will thus become an important vehicle for the companies’ climate action strategy.
In conclusion, it is not a mere pipe dream to think that we can do something to reduce environmental impact while ensuring efficient and competitive logistics. Solutions do exist, and others will be developed in the coming years thanks to advances in technology. Fashion and luxury companies should be working hand-in-hand with transportation and logistics companies to explore how they can add more sustainability and value to their existing offerings.