Manage Your Freight Carbon Emissions with FAP

The team at Trax attended the 2023 Gartner Supply Chain Symposium in May. One of the major topics of discussion was sustainability in the supply chain. With carbon emissions skyrocketing, 90% of which are attributed to the supply chain, sustainability efforts are more important than ever.

Freight isn’t the only culprit for carbon emissions, but it is a very visible one. This puts pressure on supply chain and freight operations leaders to troubleshoot, refine ESG pledges, and create reliable roadmaps toward a greener, cleaner future.

What does the current research say about supply chain sustainability?

A growing body of research on carbon emissions in freight provides a compelling illustration of the precise sources and unique challenges leaders in this space face. A lot has been done. More can be done. Here’s what the experts say about supply chain sustainability and carbon emissions.

Trax is a global leader in freight management and supply chain solutions and one of the first to market with a carbon emissions management solution for enterprise organizations. Learn more about Carbon Emissions Manager here.

The Problem with Freight Carbon Emissions

First, let’s talk about what happens on the ground. Road-freight emissions take a measurable toll on the environment. According to a recent report by McKinsey, road freight alone makes up 53% of CO2 emissions throughout global trade-related transport.

This number is rising. As it does, companies are becoming more invested in initiatives designed to get us closer to zero emissions fleets by 2030. 

Zero-Emissions Trucks

The two major technologies behind the zero-emissions trucking initiative are battery-electric vehicles (BEVs) and hydrogen-fuel-cell electric vehicles (FCEVs). According to McKinsey’s report, a mixture of BEVs and FCEVs will power the zero-emissions movement as each technology offers unique benefits and drawbacks.

While this technology is up and running, there are still some barriers to fully implementing zero-emissions trucks. For example, a lack of charging or hydrogen-refueling stations poses a challenge for route flexibility.

The major problem with the current state of supply chain sustainability is that, despite companies’ best efforts, the work with zero-emissions trucks is not projected to limit global warming to the extent the 2015 Paris Accord promises. It’s up to global supply chain leaders to expedite additional supply chain sustainability initiatives.

Supply Chain Sustainability Serves Multiple Purposes

When it comes to supply chain sustainability, executives need to understand that this is not only essential for climate control and to advance a business, especially during times of disruption.

According to Gartner’s research, 80% of business leaders agreed that environmental sustainability helps optimize and reduce costs in response to a disruption in the supply chain. In addition, over 85% of business leaders agreed that supply chain sustainability is an investment that protects a company against disruptions. This is both timely and important.

How Supply Chain Executives Can Achieve Net Zero

While the goal to reach Net Zero is looming over everyone’s heads, some enterprises might question if this goal is realistic. Gartner also offers advice for supply chain executives about how to reach Net Zero.

We pulled out a few of Gartner’s recommendations below, along with our take on how to implement steps for change:

• Set measurable goals - Tracking carbon emissions at the supply chain level allows companies to establish a starting point and create measurable, achievable goals related to Net Zero. All carbon emissions goals should be data-driven, meaning there needs to be a level of analysis to back up the company’s goals.
• Prioritize efforts - Sometimes, knowing where to start with supply chain sustainability efforts is hard. The key is to find out where you can have the biggest impact and prioritize those efforts. Look for the low-hanging fruit. For example, a company identifies optimizing packaging as the easiest change to make and accounts for the majority of its carbon emissions.
• Find a reliable partner - With the right logistics partner, enterprises can get a solid tech stack in action. As a leading third-party logistics provider, Trax offers clients access to a full freight audit product suite. One component that is especially helpful in carbon emissions tracking is our Carbon Emissions Manager, a platform for benchmarking and tracking actual carbon emissions.
• Emphasize urgency - Climate change significantly impacts supply chains. It’s imperative to educate your team and mobilize your people. By better understanding the direct effects on a company, employees become more engaged in sustainability initiatives, yielding better outcomes.
• Consider all possibilities - This includes understanding the risks that climate change poses to your company and how innovative sustainability efforts can mitigate these risks. Conducting an in-depth freight data analysis can help you realize new opportunities to promote supply chain sustainability while managing transportation spend.

At the end of the day, tackling supply chain sustainability requires collaboration with a 3PL, as both Gartner and McKinsey state in their reports.

That’s just Net Zero. When we’re talking about full decarbonization, the importance of these partnerships becomes exponentially greater and impacts the entire value chain.

Global enterprises gain full control over their environmental, social, and governance (ESG) initiatives by partnering with Trax. Ultimately, this will put a company on track to achieve Net Zero.

Contact Trax today to learn more about forging a strategic partnership.