3 Reasons Carriers Can't Afford to Ignore Supply Chain Sustainability
As the effects of climate change continue to impact global supply chains, shippers are more focused on sustainability than ever before.
According to our original research study, which examines how 250 global shippers are approaching sustainability, 98% have at least some form of a “green” initiative.
One of the top three sustainability initiatives is “partnering with greener carriers.”
This means carriers must assess their own efforts and either start to implement sustainable practices or build upon existing initiatives if they want to remain competitive in the evolving landscape.
If you’re a carrier, here are three reasons why you should care about supply chain sustainability.
1. Shippers View Carriers as an Extension of Their Own Sustainability Program
As shippers reimagine their own supply chains to account for emerging sustainability trends, they expect carriers to pull their weight.
Our sustainability study revealed that partnering with “greener” carriers provides the third-highest return on investment for shippers across their sustainability efforts.
Carriers who do not adjust their own practices to account for sustainable trends run the risk of becoming irrelevant among shippers, since 81% of shippers are more focused on sustainability than they were three years ago.
This trend isn’t just limited to large, enterprise businesses. According to a recent UPS survey, 80% of smaller shippers expect their carriers to show some level of commitment to sustainability.
Carriers who adopt sustainable practices will have a strategic advantage over their competitors and reap the benefits of an overall greener supply chain.
Shippers expect their carriers to contribute to their overall sustainability goals.
2. Shippers Are Measuring Sustainability in Freight Bids
Currently, 70% of companies consider sustainability in their request for proposals (RFPs), 25% require supply chain sustainability information and 24% plan to require it in their future RFPs.
To prepare for future bids, carriers need to pay attention to what shippers are looking for and implement sustainability strategies accordingly.
Based on our survey data, shippers are measuring the following key performance indicators (KPIs) in their RFPs:
Fuel Efficiency (69% of respondents)
CO2 Emissions (60%)
Alternative Fuel Use (52%)
Personnel Skills Related to Sustainability (48%)
Fleet Age (46%)
If you establish reporting around these specific initiatives, you will be strategically aligned with the priorities of shippers and therefore, more competitive in bids.
Carriers who understand shippers’ sustainability goals will have an advantage over competing carriers in future bids.
3. Shippers Are Already Implementing Sustainability Initiatives — Borrow Their Best Ideas
As shippers work to reduce their carbon footprint, they are implementing optimization efforts in their own private fleets, tracking which initiatives provide the greatest return on investment (ROI).
This is great news for carriers who are starting their own sustainability programs and want to know where to invest their time and money.
Paying attention to what’s working well for shippers’ fleets can take the guesswork out of getting started.
Based on our survey data, shippers are finding the greatest ROI in these areas:
- Alternative fuels
- Inventory forecasting
- Optimizing fuel consumption
- Minimizing idle times
- Partnering with green carriers
Having visibility into this data presents carriers with a unique opportunity. If you use these metrics as a guideline, it will be easier to pinpoint worthwhile areas to focus your efforts as you begin to build out your own sustainability program.
By replicating the successful efforts of shippers, carriers can get a head start on their own sustainability initiatives.
Committing to Sustainability
Sustainability is a collaborative effort. Shippers around the world care about implementing sustainable supply chain solutions and as a carrier, you should too.
If you do not adapt your business strategies and prioritize sustainable supply chain solutions, your business will not survive.
The good news is sustainability is still a fairly new topic for many supply chain professionals, and most initiatives are measured in years, not months.
According to our recent research study, most shippers are focused on longer term sustainability goals that will take 4-5 years to achieve.
This means carriers have time to anticipate the future needs of shippers and plan accordingly, but there is no time like the present to get started.
You can get started by taking a look at your fuel consumption, implementing digital solutions (like CoyoteGO®) to reduce paper waste, and borrowing the best sustainability strategies from shippers.
To read additional supply chain sustainability insights, download our full research study for free.
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