Transportation management can drive more sustainable supply chains: Here’s how…

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By Craig Summers, Managing Director UKI, MEA & Nordics, Manhattan Associates.

Sustainability is no longer a luxury – it is a priority for businesses and a necessity for retailers and consumers alike. Reducing a company’s environmental impact requires many changes across an enterprise, but improvements to supply chains can make the largest overall impact.

According to Accenture, supply chains currently generate around 60% of all carbon emissions globally and its transportation component undeniably occupies a significant share of global CO2 emissions. Therefore, an effective Transportation Management System (TMS) is an essential part of supply chain sustainability.
  
Here are three simple ways in which a TMS can help companies reduce their carbon footprint while improving their bottom line.

Route Optimization & Consolidation

Whether incorporating real-time weather or traffic, smarter, data-driven route optimization solutions can have a significantly positive effect on environmental emissions while avoiding detours and delays. It can also identify consolidation opportunities and combine shipments, which can reduce the number of vehicles. Additionally, multi-compartment shipment planning and dynamic cross-docking can also help increase consolidation. 
  
A good example is that of Super Retail Group in Australia who reduced their split-order shipments by 24% thus reducing fulfilment costs by double digits through less packaging and fewer miles on the road. 

Load Optimization

Ship products, not air! An empty space isn’t merely wasted space; it’s an environmental hazard. Unifying load building tools and implementing smarter algorithms with TMS can ensure maximum load capacity per shipment, reducing not just the number of trips but also the accompanying emissions. For example, now there are new load building capabilities to optimize trailer space. With less packaging used throughout the supply chain and less air being shipped, volume per shipment is reduced, and transportation becomes more efficient.
  
Let’s take an example in the grocery space. Giant Eagle, one of America’s largest grocery retailers and distributors, manages deliveries for nearly $9 billion in annual sales and more than 460 stores. By combining and consolidating its technology platforms, the company was able to reduce the overall miles driven. Giant Eagle leveraged advanced route optimization technology to activate both daily and every-other-day deliveries, as well as align associates’ schedules with delivery windows. All told, the company was able to reduce empty miles by 8%, total miles by 7.7% and fill available capacity with backhauls. For Giant Eagle, it was a win, not just for bottom-line profitability, but for supply chain efficiency, the customer experience, and the environment as well.

Identifying Backhaul Opportunities

In conjunction with implementing a modern TMS, key approaches include working with freight brokers to find additional loads, leveraging customer relations for referrals and new lanes, embracing collaboration with other shippers for increased operational efficiency, expanding networking to capture more opportunities, reducing backhaul rates and monitoring load boards for accessible and real-time information on available freight.
  
Ultimately, as sustainability becomes a priority for businesses and end-consumers, and government regulations increase, it is imperative for companies to re-evaluate their approach to transportation and be conscious of the environmental impact of their supply chain activities. We have an opportunity to address the challenges presented by climate change, to act responsibly and proactively, and to play our part in a coordinated effort toward a more sustainable and environmentally aware future.

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