CeMAT Insider

Sustainable transport: Is it the future of supply chain management?

Posted by CeMAT Team on 04-Nov-2016 12:23:27


Promoting economic growth through sustainable transport isn’t only great for the fight against climate change. Some of the world’s leading logistics companies are now coming to terms with the idea that transport options with indefinite sources of energy can drastically reduce operational costs for many businesses.

A report recently released by the UN sets out a path to a sustainable future driven by greener transport options. It’s been understood for a while now that existing technologies and policies will only be able to take us a small fraction of the way we need to go.

It is for that reason the UN is calling for the private and public sectors to work on presenting a wider range of transport modes and sectors. In their report titled Mobilising Sustainable Transport for Development, the UN is trying to change the way we think about transport stating itself shouldn’t be seen as end, but rather as a means to allowing goods and people to get from point A to point B.

This post looks at why sustainable transport options are so important for the logistics industry by looking at how DHL and Toll have transformed their operations.


Why be more sustainable?  

Sustainable transport is actually quite a broad term, but it is most well known for making a positive contribution to the environmental, social and economic sustainability of communities.

Strong economic activity relies on effective logistics to supply materials to industry and to move products along the supply chain. But the downside to all this great economic activity is that freight transport is both a large contributor to greenhouse gases and congestion.

This issue isn’t that it is just occurring now, the problem is that both of these factors are only set to get worse in the future. As freight volumes across the globe are set to increase, one of the biggest challenges for governments and the private sector is to plan transport effectively so that we can meet short-term deliverables with long-term gains. 

CeMAT-Insider-quote-39.pngThere is a growing need for organisations to integrate environmentally sound choices into supply chain management because it can also help increase long-term profitability. In a sustainable supply chain, businesses look to reduce environmental, risk and waste costs. This means that businesses will begin to integrate sustainable practices into their strategic focus and more sustainable options become available. 

According to the UN report, long-term planning for more sustainable freight and passenger transport including integrated port terminals and well-planned airports (as well as collaboration on standards and regulations for efficient border crossings) could produce a global GDP increase by US$2.6 trillion.

Transportation, logistics and supply chain management all have a tremendous impact on businesses, society and national economies. So ensuring everything runs safely, sustainably and efficiently can only have a positive effect for all.

But before we achieve this, we need to first look at businesses that are making strides to create benefits for the collective whole. Take a look below at how DHL and Toll are working on improving their sustainability.


DHL’s GoGreen program  

Not all businesses have the opportunity to tackle sustainable transport in as big a way as Deutsche Post DHL Group has, but it’s GoGreen program is a great case study for how the private sector can achieve excellence in this area.

In 2008, the Group set an ambitious target to improve its efficiency by 30% by the year 2020. In a statement on their site, the Groups states that stakeholders, including their customers, have an expectation of DHL fulfilling their obligation of being more sustainable.

GoGreen is an environmental protection program that aims to measure emissions from a diverse range of business activities using standardised procedures. They focus on the measures that will create the biggest efficiency gains while also striving to reduce energy and fuel consumption.

The Group is also currently trying to help its clients reduce their omissions as well, so this is a great example of how a business can implement sustainability into their longer term business strategy.



Toll is committed to reducing the impact of their operations on the environment while also delivering optimal results for their customers. And luckily, these two things go hand in hand. But Toll has taken a different approach to DHL.

Rather than using an incentive systems as the DHL Group has, Toll look to applying new technologies and practices to actively reduce consumption. This means replacing non-renewable resources such as diesel and gas with renewable sources as they become more and more viable.

Eventually the idea is that Toll will be complete green, and in turn, many of their customers’ supply chains will also be green.


Final thoughts                                                                                                                                           

Not all businesses have the opportunity to take such drastic measures straight off the bat. But there are some small changes you can make to ensure you have a more sustainable future.

Smarter driving - Even something as small as training driver to better anticipate the driving task, to keep within engine rev ranges, and minimising idling behaviour can all drastically affect the fuel economy.

Smarter energy - There are a growing amount of new technologies available to supply chain and logistics professionals that can drastically help receiver costs of inefficient energy sources. Initiates like intelligent lighting systems and rechargeable forklift batteries are just a few examples.

Smarter planning - Brining sustainability into your business model will help you save money while also becoming more efficient. Trying to achieve optimal sourcing, managing supply chain lead times and introducing packaging initiatives that reduce volume and weight are all things that can save you time and money on your energy bill.

Let us know if your business has implemented a sustainable supply chain initiative by contacting us or comment below. We’d love to profile you in our next post.

Topics: Supply Chain Management