July 2013 | Commentary | Green Landscape

10 Trends Driving Greener Supply Chains

Tags: Green Logistics

Frank Clary is Director, Corporate Social Responsibility, Agility, 714-617-6300

Many businesses today are seeking smart ways to reduce supply chain waste and carbon impact. Over the next several years, the following trends could transform logistics operations, particularly in emerging markets.

1. Creative, collaborative planning. Logistics providers and shippers can find simple ways to better manage schedule requirements, such as building slow-steaming into overseas shipment planning. Involving marketing and sales staff in supply chain planning can help them understand customer and product demand cycles.

2. Emerging markets and infrastructure. Big improvements will occur in ports, road, and rail across emerging markets. Southeast Asia is moving to cleaner, more efficient trucking: better roads, quicker delivery, higher quality, lower environmental impact, and increased fleet regulation. In the Middle East, too, the trend is toward lower emission, more fuel-efficient vehicles.

3. Industry, government, and civil society working together. The logistics sector is collaborating with organizations such as Business for Social Responsibility, World Resources Institute, and the Greenhouse Gas Protocol to help develop standards for measuring, reporting, and managing environmental impact in supply chain and logistics operations.

4. Regulations enabling positive change and good business. If instituted holistically and sensibly, regulation can mean a step forward for clean and efficient transport, and a force for change in emerging and developed economies alike. The logistics sector can play a role in crafting and enacting sensible legislation that will enable business, and reduce supply chain environmental impact.

5. Green rail and air initiatives. Developed markets such as Europe and North America will achieve greater efficiency in their rail systems, railways will improve in emerging markets, and electric rail will be used more in logistics. Air freight will remain an important part of the overall transport mix, but shippers will continue to use it judiciously. For example, producers may ship limited volumes of new goods by air to meet initial planned demand, while most of the products ship by ocean to better manage cost and environmental impact.

6. 3D-printing use. Manufacturing and production will rely more on parts and components manufactured locally and on a large scale using robust 3D-printing operations. This may drive more efficient and cleaner inbound logistics operations.

7. E-commerce expectations. e-Bay and Amazon succeeded in managing single-product delivery to consumers' doors—and changed customer expectations. The better logistics companies manage information, the better they'll be able to adapt to environmental and resource-driven technology changes.

8. Automated vehicles. In cities, automated vehicles will be used more in last-mile delivery. Automated, GPS-controlled, driverless warehouse vehicle technology will likely undergo rapid development and become more widespread.

9. The move to closed-loop manufacturing. Product end-of-life will gain in importance, with logistics companies being more engaged in managing it. As resources become more costly, recycling and reuse will be recognized as big opportunities for optimization and cost efficiency. Manufacturers will ask for and return a deposit on the products they sell, and will reintegrate returned, used products into the manufacturer's production cycle. Logistics will be a critical enabler of this process.

10. Growing consumer awareness. Consumer awareness of product-specific carbon footprints will increase pressure that results in new regulation.