Using Freight Audit Data as Carbon Emissions Management
It’s obvious that freight and delivery have an effect on the environment. Major organizations such as the International Energy Agency (IEA), Accenture, and the Environmental Protection Agency (EPA) have shared research related to the current state of carbon emissions in the supply chain demonstrating the magnitude of this effect.
Just take a look at some of the statistics:
- The transportation industry accounts for 37% of global energy-related CO2 emissions
- Supply chains generate 60% of global carbon emissions
- The supply chain accounts for over 90% of a company’s carbon emissions
Knowing the impact of the global supply chain on the environment, it’s important for companies to diligently manage carbon emissions. A critical piece of this involves leveraging their transportation management systems to collect and analyze data related to carbon emissions. Read on to learn how supply chain leaders are leveraging freight audit data to manage their carbon footprint.
Trax empowers organizations to gain control of transportation costs and reduce carbon emissions. The Trax product suite and premium advisory services pave the way to spend management maturity.
Strategies for Carbon Emissions Management
Many companies are prioritizing Environmental, Social, and Governance (ESG) in the supply chain. From carbon offsets and credits to carbon insetting, decarbonization initiatives are certainly gaining traction in today’s market. However, something that can be overlooked is the power of using existing data to drive ESG initiatives.
Working with a reliable third-party logistics provider like Trax offers enterprises the chance to manage transportation spending as well as carbon emissions by utilizing the latest TSM technology to collect, analyze, and report on freight audit data. Two prime examples of using freight audit data include condition monitoring and AI-powered systems.
Condition Monitoring Curbs Carbon Emissions
A main part of the freight auditing process is tallying up expenses related to shipping and delivery. The condition of a company’s equipment can lead to either savings or extra expenses when it comes to supply chain logistics. Therefore, adopting condition monitoring systems is a key focus for curbing carbon emissions.
What is Condition Monitoring in the Supply Chain?
Condition monitoring in the supply chain incorporates everything from installing a monitoring system, collecting baseline data, and continuously collecting and analyzing data related to what is happening to cargo between logistics checkpoints. Condition monitoring is also tied to The Internet of Things (IoT) because the physical devices used to track and convey data over the Internet often require little to no human interaction.
Using Condition Data for Sustainability Efforts
Collecting condition-related data during a regular freight audit lets supply chain leaders identify issues early on and quickly pivot their efforts to improve efficiency. For instance, if shipments are consistently being delivered damaged, extra costs are incurred to replace the product.
Ultimately, by failing to keep cargo up to acceptable standards, businesses can double their carbon footprint. When dealing with supply chain logistics, the company’s freight audit and payment solution should communicate with any condition monitoring systems. By integrating a condition monitoring system with the right financial management solution to track data in real-time, supply chain leaders can address low performers, reduce costs, and manage carbon emissions related to shipments.
AI Systems Reduce a Company's Carbon Footprint
Once a company has a system that reliably and accurately manages freight data, the next step is to apply advanced analytics like machine learning and AI systems. We’ve previously covered different types of data analytics for supply chain efficiency - descriptive, diagnostic, predictive, and prescriptive.
Conducting freight audits and employing a reliable freight audit and payment system requires advanced analytics. Whether creating dashboards to track rates and spot quotes, or ensuring compliance by lane, carrier, and region, supply chain leaders must understand how to manage big data. Specifically, when a company approaches predictive and prescriptive analytics, there will likely be machine learning models and artificial intelligence involved.
AI systems can analyze volumes and distances while also documenting which modes of transportation are inefficient. Furthermore, machine learning can be used to optimize routing, cut down on deadhead miles, and improve fuel efficiency. Together, this results in a significant reduction in a company’s carbon footprint.
According to Supply Chain Brain, there are three key ways that AI systems enable supply chain sustainability:
- Monitoring - Identify both strengths and weaknesses related to supply chain sustainability
- Predicting - Forecast future carbon emissions based on complete historical data
- Reducing - Apply the findings from these analyses to make measurable improvements
While the ultimate goal is to reduce a company’s carbon footprint, it’s important to acknowledge that monitoring and predicting come first. Therefore, supply chain leaders need a logistics partner that can take big data and feed it to AI systems to achieve each of these goals.
Introducing the Trax Carbon Emissions Manager
In addition to condition monitoring and general freight AI systems, there are targeted solutions available to manage carbon emissions in the supply chain.
This past year, Trax launched its Carbon Emissions Manager solution, which is a platform for tracking and benchmarking actual carbon emissions across transportation networks. This includes monitoring all modes, vehicles, and geographic regions, while also integrating with comprehensive ESG reporting.
As a result of this unparalleled solution Trax has been recognized as a leader in carbon emissions management with the Supply & Demand Chain Executive 2023 Pros to Know Award.
Find a Logistics Partner for Carbon Emissions Management
It’s clear that employing condition monitoring and AI systems in a company’s logistics operations can decrease carbon emissions related to transportation. Furthermore, working with a trusted logistics partner gives enterprises a competitive edge when it comes to these supply chain sustainability efforts.
Trax offers its clients the latest technology related to freight data management through its entire product suite, including the new Carbon Emissions Manager. By gaining greater visibility into all areas of the supply chain, business leaders have the chance to identify problems and address them efficiently. Contact a member of the Trax team today for assistance with all of your transportation spend management needs.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.