In today’s economy, sustainable business practices are no longer a “nice to have” but a “must-have.” This puts pressure on CPG business leaders to demonstrate greater environmental stewardship and social responsibility across all facets of the business – including the supply chain. A recent McKinsey report found that more than 90% of a company’s greenhouse gas emissions are attributable to its supply chain.
Selecting a 3PL that values supply chain sustainability is a key success driver to minimizing your environmental footprint and producing a greater return on investment.
As supply chains become more global and complex, projections say by 2025, shipments of U.S. goods will grow another 23.5 percent. At the same time, air emissions from freight transport will exceed emissions from all other transportation combined. This staggering reality underscores how important it is for suppliers to strategically make better choices regarding freight management to reduce emissions. As a result, and in an effort to decrease their carbon footprint, more and more CPG suppliers are turning to Retail Consolidation. Compared to Less-than-Truckload (LTL), where product is handled at multiple stops from supplier warehouses to retailer distribution centers, Retail Consolidation combines shipments with other brands to streamline the transportation footprint. One consolidated truckload actually eliminates an average of 34 complex Less-Than-Truckload (LTL) loads. LTL loads make numerous stops to unload, cross-dock and reload creating openings for compromised inventory and poor delivery performance. Retail Consolidation also requires just two days’ transit time, versus LTL’s average five-day transit time, and it generates 20-30% cost savings. Suppliers achieve a greener, more cost-effective and efficient retail supply chain management and benefit from consistently increased in-stocks and sales.
Leverage the retail consolidation advantage to minimize transportation emissions, reduce fuel consumption and grow market share.
How do suppliers gain control, increase efficiencies and decrease their environmental footprint? By partnering with a 3PL that owns its own assets and provides in-house value-added services. Let’s explore why these attributes are a difference maker for today’s sustainably-minded suppliers. Asset-based 3PLs own their trucking fleets and operate their own warehouses. They eliminate the need for middlemen – for extra layers of outsourcing that require additional mileage and create process inefficiencies. It also allows the 3PL to control its carbon footprint through fuel-efficient engines and complementary sustainable policies. Likewise, 3PLs that offer value-added services, such as repacking, labeling, bar coding, point-of-sale display services and more, eliminate the need for middlemen, limit transportation between facilities, and enable suppliers to move products through the Middle Mile more efficiently.
With buildings accounting for nearly 40% of all U.S. energy consumption, green warehouses are an integral part of the sustainability equation. Ensure your 3PL meets the following criteria when it comes to warehouse environmental best practice.
Companies that participate in the EPA’s SmartWay Program are leading the world in reducing emissions impacts and making freight transportation more sustainable. By measuring, benchmarking and assessing freight transportation activities to reduce emissions, suppliers can make a significant impact on the contribution of freight to cleaner air. When selecting a 3PL, ensure your partner of choice is doing its part to advance sustainability in freight transportation.
Building a sustainable supply chain is a strategic business decision. Partner with a 3PL that is a catalyst for decreasing your environmental footprint.
RJW Logistics Group is positioned to deliver sustainability best practices across your supply chain. Find out how today.
RJW Logistics Group is positioned to deliver sustainability best practices across your supply chain. Find out how today.
