What Is Sustainable Shipping? A Practical Introduction

by Vector | Oct 31, 2021 12:25:39 AM


Sustainability is a buzzword in conversations across the logistics community. Trucks, railroads, and tanker ships move billions of tons of freight every year. The dirty fact is, logistics burns a lot of fuel. The growing e-commerce boom and the global supply that supports it contribute a lot of carbon emissions to the atmosphere. Thus we're faced with the paradox of sustainable shipping.

According to McGill University, "Sustainability means meeting our own needs without compromising the ability of future generations to meet their own needs."  In general, most people would agree that sustainability is a valid goal. Let's do more with less. Let's find alternate ways and means of conducting business that don't burden our future.

So how does this apply to logistics?

From my perspective, the primary roadblock for sustainable shipping is the pressures that companies face. Historically, I think there's been more pressure on short-term revenue performance than long-term sustainability. In other words, the problems and incentives of today, this month, and this quarter cloud our vision of the future. That's human nature. I get it—change is difficult for hairless apes.

But we know there are better, more sustainable shipping methods possible. And I don't mean that in the sense of, "Gosh, if only we could find a better way someday." On the contrary, this article identifies several examples of sustainable shipping methods already in practice. And as you'll see, they're not only not hurting business. These sustainable shipping examples are launching companies into pole position.

The Power Shift Toward Electric Vehicles (EVs)

When Volvo Trucks announced it would produce electric trucks, that was a significant moment for sustainable shipping. Volvo made a big move away from dependence on fossil fuels. The goal is to reduce carbon emissions and reduce the human impact on climate change.

This wasn't a surprising move from Volvo. The company has long been one of the only heavy machinery original equipment manufacturers (OEMs) to require all its suppliers to be registered under the ISO 14001:2015 standard, which has to do with environmental management.

The International Organization for Standardization website defines ISO 14001:2015 as "intended for use by an organization seeking to manage its environmental responsibilities in a systematic manner that contributes to the environmental pillar of sustainability." Put another way, this standard is for organizations that are striving to attain objectives related to environmental sustainability.

In essence, a ISO 14001:2015 program is a way for massive OEM companies like Volvo to commit at an enterprise level to building a sustainable future. The ISO 14001:2015 on Volvo.com should be seen as a badge of honor, if not courage. And Volvo's forthcoming EV trucking fleet shows that its commitment to sustainable shipping isn't merely lip service.

EV Use Is Ramping Up

Volvo isn't alone in its push into the EV space. Amazon has teamed with the electric car company Rivian to build a fleet of tens of thousands of electric delivery vans.

In addition, Port of Long Beach announced it will now use an all-electric locomotive built by Progress Rail for use on the Pacific Harbor Line. Progress Rail's CEO stated, “We look forward to continuing to address customer needs around the globe, including helping meet or exceed their ambitious environmental requirements and goals with the latest rolling stock technologies.”

We've looked at vehicles. What about packaging?

Returnable Packaging: The Basics

The returnable packaging industry is a niche inside logistics—and a core tenet of sustainable shipping. In essence, the idea behind returnable packaging is similar to recycling. Returnable packaging essentially replaces single-use packaging, such as cardboard boxes and wooden pallets. Instead, companies use plastic and steel shipping containers.

A cottage industry around returnable packaging has popped up in support of original equipment manufacturers (OEMs). For example, companies in the construction and agriculture industry, including Volvo, Caterpillar, and John Deere, will buy the same part over and over from the same suppliers. This creates a purchase-delivery loop that people in the industry call a "milk run."

Before returnable packaging, suppliers used literally tons of cardboard and wooden packaging (also known as dunnage) to keep parts damage-free during transit to the factory. But once the parts arrived at the factory, that dunnage became garbage.

One day, a warehouse manager must have noticed how wasteful it is to throw away so much cardboard every time an order of parts arrived. Thus, not only did returnable packaging emerge, shipping capabilities improved in a number of other ways as well.

Returnable Packaging: An Example

The engineers who design returnable steel shipping racks can customize them to a significant degree. How so?

Returnable shipping rack designers use the same software the OEM uses to design the parts. This synchronization allows shipping rack designers to cradle each part at the ideal locations to lessen the chances of damage during transit. Shipping racks full of parts go to the factory, where workers empty them. The racks then go back to the supplier for more parts. This cycle is repeatable and sustainable.

Unfortunately, returnable packaging costs more up front than cardboard boxes and wooden pallets do. But the long life of returnable packaging, along with significant reduction in part damage, more than offsets the up-front costs.

Contactless Workflows to Reduce Wasted Paper and Time

The logistics industry has had a healthy appetite for paperwork for a long time. This is certainly due to some of the legal requirements involving documents such as bills of lading (BOLs) and proofs of delivery (PODs). Beyond that, paperwork like vehicle inspections, scale tickets, receipts, and logbooks formed an ever-growing mountain of paper. This mountain moved from within a driver's cab, to a back-office filing cabinet, to a banker's box in cold storage.

Thanks to sustainable shipping apps like Vector, technology has changed the game. Vector's app includes contactless eBOLs and digitized versions of all other freight-related documents. In addition to eliminating paper, Vector eliminates the time wasted performing back-office paperwork.

For example, Vector's digitized documents integrate with your company's transportation management system (TMS) and include cloud-based search. Also, Vector's one-touch invoicing is a feature that allows trucking companies to bill customers automatically on delivery.

From the driver's perspective, contactless freight means they can perform checkins, signatures, and checkouts virtually, in their cab, from their phone. Ultimately, this technology can reduce dwell time, increase overall efficiency, and improve sustainable shipping metrics up and down the supply chain. The best part? Vector allows carriers and warehouses to do more with less. In other words, if you're looking for an easy win toward sustainable shipping goals that also helps your bottom line—check out Vector.

Just-In-Time Shipping and Other Lean Methods

Not every sustainable shipping initiative involves an equipment purchase. For example, just-in-time (JIT) shipping and other lean manufacturing methods involve analyzing shipping data and behavior in order to right-size purchases and shipments. In other words, let's use data to order, build, and ship just the right amount of freight: no more, no less.

The concept is to harness the power of big data, right-size shipments, and benefit the entire supply chain.

Imagine Two Scenarios

The alternative to right-sized sustainable shipping is a classic nightmare scenario. For example, all of a sudden, the assembly line will have to shut down unless one tiny part gets shipped ASAP. But no less-than-truckload (LTL) truck can handle the shipment. As a result, that single tiny part ships on the back of a full 53-foot trailer, surrounded by nothing but air.

Alternatively, JIT methods aspire to the proper advanced planning that keeps trucks packed to capacity even while warehouse inventories remain low.

Including Lean Practices

Similarly, classic lean practices, such as Six Sigma and 5S, are all about removing process waste. Any organization or warehouse can enlist these lean methods to streamline daily workflows. The ultimate goal of lean practices is continuous improvement toward stated goals. Clearly, lean practices and sustainable shipping can work hand in hand.

Early Adopters Get a Leg Up

In the past, sustainable shipping efforts might have hurt bottom lines. But more and more, sustainable shipping measures have turned a corner and come into alignment with sustainable commercialization goals. But in addition to the black-and-white numbers, there are some soft metrics to consider. In short, the public may judge brands harshly or favorably according to their commitment to sustainability.

There's still plenty of work to do for everyone. But early adopters of the technology and ideas we discussed today will be included with the leaders and innovators who are making the future a brighter place.

This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.

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