More than 15 years ago, Walmart’s CEO at the time, Lee Scott, gave a speech titled “Twenty-First Century Leadership” that arguably kicked off the supply chain sustainability era. Over the years, some companies have made sustainability a priority while others have not. What is the current state of supply chain sustainability? Are more companies making it a priority today? If so, what factors are driving this increased focus? And how can technology help companies achieve their objectives in this area? Those are the main questions I discussed with Glenn Jones, VP Product Strategy & Marketing at Blume Global, during a recent episode of Talking Logistics.
A Renewed Focus on Sustainability
I began our discussion by asking Glenn what the current state and level of interest is in the marketplace for sustainability. Glenn notes that, like a lot of things, the push for sustainability subsided during the pandemic. But this year he sees renewed interest from companies in sustainability and becoming carbon neutral. He says companies are looking at how their selections of carriers, routes, and other considerations are impacting their carbon footprint. “They want visibility into that so they can make better decisions,” Glenn says. This drive for sustainability is being driven by consumers and employees worldwide, especially among the younger generations.
Opportunities for Improvement
When focusing on opportunities to improve sustainability within supply chain operations, Glenn describes two main areas within logistics that companies are looking at: vehicle emissions and empty miles. As examples, Glenn mentions the move by ocean carriers to reduce sulphur emissions through burning low-sulphur fuels or adding scrubbers, and the move by railroads to consider emissions in their purchase decisions of new locomotives. He notes that companies want these carbon footprint statistics incorporated into decisions which formerly only looked at cost and speed.
Glenn also points out that reducing empty miles doesn’t just pertain to trucking. He mentions the thousands of 40-foot containers that come into the country from ocean imports that then travel via rail to domestic locations. Rather than have these containers return empty to the ports for shipment back to their origin points due to the imbalance in imports to exports, Blume Global has a domestic reload program that helps railroads and ocean carriers match the containers to domestic loads going from internal locations back to port cities. “This program has grown exponentially in this past year,” says Glenn.
Within the trucking and delivery industries there is also a move toward electric vehicles to support sustainability. Glenn notes that carriers are using these conversions to promote their value to shippers from a sustainability standpoint, going beyond just cost and service.
How Technology Helps Sustainability Efforts
In addition to enabling the domestic reload program, I asked Glenn how technology can help companies meet their sustainability goals. Glenn states that besides facilitating obvious moves such as less-than-truckload to truckload consolidations and route optimizations, technology can help carriers and shippers match loads to backhaul opportunities. For example, he describes how a container may be trucked from a railhead in Chicago to a customer in Indianapolis. The technology can examine potential loads in Indianapolis or nearby that may be destined for Chicago or nearby to match with the empty container. Glenn notes that the financial aspects of this load match is particularly difficult since the truck, container, and chassis are often owned by different companies. So, in addition to managing the load matching and route optimization, the technology also helps manage the financial settlement of the move.
Glenn further points out that technology helps companies become more agile in dealing with the inevitable delays and disruptions in global supply chains. But while optimizing responses to meet customer needs, it also provides visibility into the carbon footprint implications of each option.
Glenn says that the technology allows companies to weigh the importance of cost and service versus sustainability considerations in decision-making. He also notes that the ability to support sustainability efforts is increasingly important in software purchase decisions, especially for freight-forwarders and logistics service providers.
The Future of Sustainability
Given that many companies are still in the early stages of their sustainability efforts, what does the future look like for this important discipline, and what will separate the leaders in this field from everyone else? Glenn shared some interesting thoughts on this topic, so I encourage you to watch the full episode for all of his insights and advice. Then post a comment and share your own thoughts on sustainability.