Logistics Sustainability: Reducing Carbon Footprint with Technology
Every year, billions of tons of goods are transported worldwide by ships, trucks, planes, and trains. There’s no wonder that freight transportation makes up for 8% of global greenhouse gas emissions (11% if counting warehouses and ports). And without significant changes in motion in order to achieve sustainability, logistics is set to become the highest carbon-emitting sector by 2050.
International organizations are showing determination to revert this trend. The EU, for example, released plans to accelerate carbon neutrality by 2050 legislation, increasing the cut of 1990 carbon levels to 55% by 2035. The ambitious project, titled Fit for 55, will represent a challenge for countries that already have variations in climate, energy, and transportation capabilities.
For global shipping companies, meeting logistics sustainability standards will be vital to retaining business. But making strides has been particularly difficult. Even the most innovative carbon reduction efforts are met with the pressures to respond to the ever-growing demands of the eCommerce sector, bound to reach $1.4 trillion in volume by 2025. The logistics industry thus can’t afford to wait for a miracle; it needs to strategically marry new inventions with an unprecedented focus on supply chain efficiency.
How can technologies become a crucial asset in achieving logistics sustainability?
Leveraging Powerful Data Dashboards
A more focused environmental narrative across the supply chain is bound to drive increased demand for technology. More than ever, the responsibility will fall directly on companies – and their ability to prove their compatibility with best carbon-cutting practices will be crowned a critical competitive advantage.
Such needs will require complete visibility into a company’s operations. Without accurately identifying inefficiencies and “resource leaks”, there’s no direction for optimization – and ultimately for steps to control the most carbon-emitting processes.
By helping create robust data structures, AI builds a baseline for conscious operations and their easy management. With dashboards that enable decision-makers to generate reports, they can better assess which routes are most efficient, deploy their vehicles smartly, and even adjust capacity. For example, well-designed routes for trucks with prearranged stops and real-time readjustments are fundamental to ensure no fuel is wasted.
Supply chain management has been notoriously opaque – AI empowers companies to identify their weak spots (especially in terms of carbon-emitting issues) while helping to tackle those in the best way possible.
Making Empty Container Management More Efficient
Moving empty containers costs the logistics industry over $20 billion yearly – representing substantial environmental damage that can be alleviated. On top of that, amidst the current drop in demand, it is expected that there will be 13 million excess containers globally. Implementing AI technology for optimal empty container management can improve efficiency, and cut unnecessary costs while also decreasing the environmental impact of shipping operations due to higher fleet utilization
What is the secret? It’s mostly predictive analytics – relying on historical data and external factors – vital for ensuring accurate resource utilization. Using it to build solid forecasting models, shipping companies can learn how much safety stock they need, identify extra capacity across ports and depots, and even decrease the amount of fuel spent on repositioning containers.
This enables proactive, data-driven empty container management on local, regional, or even global levels and provides full business process visibility. In other words, incorporating AI and Predictive Analytics will not only create a competitive advantage but will also reduce storage and repositioning costs and introduce more sustainable business practices into your organization.
Fleet Management & Logistics Sustainability
As AI provides visibility into fleet performance, it gives supply chain planners and experts the tools to optimize asset positioning. Ensuring that an organization always has the correct number of assets (and utilizing them optimally) at the desired location is vital for cutting carbon emissions and achieving logistics sustainability.
Particularly when utilized with its sister technologies, including the Internet of Things (IoT) and telematics, AI can be a transformative force from individual trucks to the entire fleet. Tracking and real-time monitoring solutions enable operators to control idling, speeding, and other inefficient driving behaviors – preventing the production of excessive CO2 emissions. This is extremely relevant, considering that while ships carry nearly three-quarters of the world’s cargo, road vehicles make up the majority (62%) of freight emissions.
Today, inefficient logistics processes and supply chain gaps are responsible for wasted resources, detrimental to both organizational budgets and our planet. From optimizing empty container moves to increasing fleet utilization, AI and predictive analytics may be the key to reducing the environmental impact of the sector and paving the way for more sustainable logistics.