Aim to Sustain

Green initiatives are expanding within the global supply chain

Sustainability has gained a lot of momentum in the supply chain and transportation sector over the past several years. It was also a major theme at our recent Supply Chain Leadership Summit, where Frances Edmonds, Head of Sustainable Impact at HP Canada, described some of the major steps her company has taken over the past several years to achieve greater sustainability within her organization.

HP has taken the important first step of disclosing the carbon footprint of their entire organization — all the way up to Scope 3. This impressive achievement allows them to observe trends and plan courses of action that are more detailed, precise and effective than a company that has not done similar due diligence.

Edmonds estimates that roughly 50% of HP’s total carbon footprint originates in the supply chain, making transportation a top priority for improvement. Her company is not alone. At last estimate, transportation accounted for 29% of total greenhouse emissions within the United States, beating out electricity in 2018 as the leading contributor to carbon footprint. Supply chain emissions for the average supplier are 11.4x higher than operational emissions. According to Edmonds, corporations are arriving at this conclusion in droves, and beginning to take serious steps to boost supply chain efficiency without offsetting profitability.

“Being able to measure [sustainability] is important, and being able to disclose is even more important, because really, what gets measured gets done in business.”

– Frances Edmonds, HP Canada

Working Smarter

For HP, upholding a commitment to green supply chains means, in part, entrusting all of their North American shipments exclusively to SmartWay-certified carriers. The SmartWay program is run by the US Environmental Protection Agency, and overseen by the Canadian government for shipments traveling north of the border. It helps companies advance supply chain sustainability by measuring, benchmarking and improving freight transportation efficiencies.

“The best way to describe it,” Edmonds says, “is that the average Class A truck, compared to a Smartway truck, is about an 18% energy efficiency difference…It’s a system by which you implement things like anti-idling policies, low friction tires. Those kinds of things all mount up.”

Relying on Smartway-approved carriers is a way for HP to both improve efficiency and preserve the environment, benefiting both company and carrier alike. For carriers, it’s not only a way to save on fuel — It’s also yet another bargaining chip in the race to differentiate from the competition and secure new business.

 

This quarter, FourKites announced that our latest Premier Carrier List would be recognizing companies who have met the EPA’s standards for being approved as a SmartWay partner. We believe that visibility goes hand in hand with sustainability, and the data supports this: companies who take the time to establish reliable protocols for recording and measuring their supply chain performance are often the companies in the best position to begin making major changes and improvements to their operations in terms of sustainability, efficiency and profitability.

Transportation 4.0

This move toward greater efficiency for shippers and carriers alike is part of something much bigger. It’s so big, according to Edmonds, that it’s being called the Fourth Industrial Revolution, and it includes initiatives as widespread and diverse as on-demand, on-site 3-D printing of parts and inventory, which eliminates the need to ship parts in the first place; extreme lightweighting of packaging and products, which allows more products to be manufactured and shipped with fewer resources; and much more.

Another major piece of this ongoing revolution is the move toward circular supply chains, rather than the linear ones that have dominated global trade for nearly all of human history. In fact, Gartner predicts that 70% of supply chain leaders will have made some form of investment in the circular economy in the next year. If you think about it, it just makes sense. Greater efficiency means less waste, greater overall stability, and reduced cost for company and consumer alike. And all of that is in addition to the benefits it delivers for the planet we all need to survive.

We all have a role to play in achieving this hyper-efficient supply chain of the future. In order for these initiatives to succeed, companies must continue to strengthen their commitments to sustainable business practices at all levels of the supply chain  — carriers included. FourKites is helping companies achieve circular supply chains through technologies like Lane Connect, allowing shippers to eliminate deadhead and empty backhauls through technology-enabled, mutually beneficial collaboration.

It really is like Frances said: What gets measured in business, gets done in business, and if there’s money to be saved while also saving the world’s precious limited resources, then it really is a win-win for the world’s leading businesses. It’s so exciting to get the chance to work with so many companies that are taking it upon themselves to help build this more sustainable future, and I really can’t wait to see what cool new initiatives we come up with next.

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