Every procurement team’s strategy now includes tactics to support a greener, more sustainable procurement process. With rising global emissions, worsening impacts of climate change, and each country’s quest to reach environmental goals while addressing the effects of natural disasters and extreme weather conditions on the livelihoods of many, everyone is called to transform their old ways into greener solutions. The pressure is on procurement professionals to innovate in creating greener transportation for the supply chain. Logistics is a key area for intervention because it contributes significantly to greenhouse gas (GHG) emissions, from long-haul freight to last-mile delivery.
The best part is that there are many practical, technology-supported tactics that decision-makers and procurement specialists can use to cut emissions and prepare their businesses for the future. These strategies can help leaders and their teams to go toward a low-carbon and resilient supply chain.
In logistics, transportation is often the biggest source of emissions, especially when it comes to carbon-intensive operations, including air and road freight. According to Infosys, supply chain emissions, classified as Scope 3 emissions, make up a staggering 80% of all greenhouse gas emissions from businesses. Scope 1 covers direct emissions from fleet vehicles, while Scope 3 covers indirect emissions from third-party logistics providers and other supply chain activities.
Reducing transportation emissions is not only a matter of good ethics and good optics for businesses but also a smart procurement strategy, as climate standards and targets become stricter and consumers demand sustainable business practices. McKinsey said that using modern technology could cut logistics emissions by 40 to 50 percent by 2030.
Throughout the supply chain, transportation contributes significantly to emissions, especially for businesses that depend significantly on trucks or air freight. Employing route optimization technologies to cut down on unnecessary miles and switching to lower-emission modes like rail or sea can help firms lessen their carbon footprint.
Newtral suggested an important decarbonization strategy called modal shift. It involves shifting freight from high-carbon modes like air and road to lower-carbon options like rail or sea. Businesses can endorse this strategy by investing in intermodal infrastructure and working with logistics partners.
Digital twins and simulation software are very helpful for testing more environmentally friendly options. For instance, AnyLogistix advises determining emissions for each transport route first, then simulating the effects of changing modes or combining shipments, and finally implementing adjustments in the real world. Businesses may make low-risk, high-impact decisions with the support of this proactive approach.
Fleet upgrading is one of the most obvious and significant steps toward more environmentally friendly supply chain mobility. One noteworthy example is the recent $275 million GreenLine Mobility, an Indian logistics company, which is expanding its fleet of trucks fueled by LNG and electricity to meet its decarbonization targets.
Because electric vehicle (EV) capabilities are ideally suited to shorter routes and predictable timetables, electrification is especially successful in last-mile deliveries and urban logistics. In addition to adopting EVs, numerous logistics companies are cutting emissions through the adoption of no-idle policies, regular vehicle maintenance, and the switch to greener fuels—actions that result in noticeable decreases in carbon output associated with fleets.
One of the main factors enabling greener logistics is technology. By selecting the best delivery routes and reducing idle time, AI-powered transport management systems (TMS) help businesses improve fleet efficiency. Vehicles equipped with IoT sensors can track fuel consumption and instantly identify inefficiencies.
Innovations such as blockchain and artificial intelligence (AI)-driven carbon accounting software are assisting supply chain executives in improving sustainability performance. While blockchain offers supply chain-wide tamper-proof traceability and auditability of emissions data, AI solutions automate emissions tracking, pinpoint hotspots, and enhance data accuracy, giving you more visibility and control over carbon impacts.
Transitioning to greener transportation for supply chain operations doesn’t need to happen all at once. The way forward is obvious for supply chain executives and procurement specialists: integrate data-driven technologies, low-carbon transportation choices, and cooperative collaborations to create a logistics plan that is more sustainable. Start small, monitor your progress, and expand on what proves effective.