Inbound Logistics: 8 Sustainable Freight Trends Smart Supply Chains Need to Embrace
By Derek J. Sine, Managing Director
By Derek J. Sine, Managing Director
Sustainability in the freight industry has sometimes been treated as a necessary evil: something to be balanced against profit margins and industrial growth. However, the most sustainable solutions offer efficiency from both an operational and environmental perspective. Those are the ideas that save money, increase performance, and steward environmental resources most effectively.
The following eight trends offer significant potential cost savings and performance enhancements while also reducing the use of limited natural resources and mitigating the negative environmental effects of transportation-related emissions.
More freight per load equates to fewer required loads, which ultimately means a decrease in carbon dioxide emissions, less fossil fuel consumption, and better profit margins and freight rates. Still, transportation department statistics show that somewhere between 30 and 40 percent of the available space on loaded trailers is not being utilized. Some of the most exciting trends in sustainable freight are targeting this wasted space.
There are several improved optimization software programs on the market that maximize available trailer space by considering not only product dimensions but also their complete 3D profile, density, and susceptibility to damage. This software continues to be improved by better imaging technology, improved algorithms, and more relevant data from upstream supply chain elements. By implementing optimization software, shippers and carriers could substantially increase the efficiency of their trailer loads.
Along with advances in data availability and use, there has been an emerging trend toward increased efficiency in packaging and loading. Since the majority of consumer goods are “cubing out” (reaching volume limits) before approaching weight limits, smart supply chain managers should pay greater attention to packaging for individual items and pallets. Shippers should reject traditionally bulky protective packaging in favor of alternate ways to ensure product safety during loading and transport while decreasing the space lost to packaging on their average full truckloads (FTLs).
“Co-loading” has long been part of the standard procedure for partial truckload shipments (PTLs), but some shippers and brokers are now looking for more strategic ways to achieve co-loading without the hassle of the multiple moves involved in hauling to a distribution center and then parsing out to various trucks. In simple terms, this means a greater use of multiple stops on single lanes, closer alignment in shipping schedules to enable low-hassle co-loading, and a new attention toward mixing items of various densities to optimize both weight and volume limits.
DOT statistics show that around 20 percent of the truck miles being driven are empty miles during empty backhauls or deadheads. Traditionally, carriers and freight brokers have tried to reduce these miles by scheduling pickups and drop offs individually, but this was an unwieldy, time-consuming, and often inefficient process.
Recently, there has been a proliferation of freight “marketplace” platforms and various apps designed to connect carriers with empty miles on a particular lane to shippers looking to move freight that same direction. Still, many carriers and drivers remain fairly resistant to new technology, and a single platform has yet to emerge that can efficiently coordinate the hundreds of moving parts involved in perfectly matching shipper and carrier needs.
This area is a great opportunity for logistics specialists to sell their services to companies looking to increase sustainability and profit margin. Any platform that emerges will somehow need to easily bridge the tangle of existing marketplaces, partnerships, and platforms. One promising platform on the horizon comes from the folks at Fraight AI, who have created a natural language AI platform that sources information from freight databases and communicates with drivers via automated text messages to help them find loads for backhauls and deadheads.
Whether the platform is able to reach the kind of critical mass needed for it to leverage the massive empty miles opportunity remains to be seen, but we think this kind of low-resistance, natural language concept is the right approach to addressing the problem, and expect similar platforms to continue to emerge and offer opportunities to savvy carriers and shippers.
One of the simplest and most lucrative ways to make freight more efficient is to simply reduce the number of miles it has to move. Recent advances in the manufacturing industry have increased its flexibility and lowered the inertia for manufacturing a new product. With 3D printing appearing ready to scale exponentially, this trend toward location-flexible manufacturing seems likely to continue.
Similarly, new warehouse management and data integration software have made it easier to start new warehouses and coordinate warehousing operations across a variety of locations without introducing the friction and confusion that would traditionally have accompanied too many separate facilities.
When considering locations for sourcing and warehousing, it’s important to look beyond simple point A to B distances. Locations along favorable shipping lanes, particularly commonly used lanes for the shipper’s particular destinations, are logical choices for shippers looking to partner with warehouses or manufacturers.
Increased transparency and integration within supply chains have helped supply chain managers conceptualize the creation and distribution of goods not as two distinct activities but as a collection of interrelated processes. This line of thinking has led many supply chains to shift manufacturing activities that substantially increase a good’s volume or decrease its inventory flexibility (i.e. assembly or customization) closer to the ultimate destination. What this means is that freight is shipped to final assembly/warehouse locations in fewer shipments that are more dense and efficient than the complete units that dominated traditional supply chains, and finished items are being created and shipped on demand from locations that are much closer to their destinations.
Recent advances in electric vehicles and intermodal freight integration software offer the potential to substantially decrease the fuel consumption and greenhouse gas emission per ton-mile. Advances in automation and electric vehicles offer the potential for widespread automated electric freight transport in the near term, at least in electric friendly urban environments.
While long-distance electric freight transport will be limited over the short term by the lack of systematized long-distance electric transport, we expect that the combination of increased localized electric freight transport and improved intermodal freight integration software will drive increased demand for comparatively more efficient rail transport over long distances paired with short-distance electric freight transport to both B2B, warehouse, and direct-to-consumer destinations.
Within traditional trucking technology, advances in engine designs and aerodynamics offer small efficiency advantages, and increasingly stringent emissions and fuel efficiency standards continue to push innovation in these areas.
Many shippers are also beginning to harness GPS and onboard monitoring technology to measure and optimize the driving practices of human drivers for efficiency. With the technology for large-scale self-driving vehicles becoming a reality, we expect such trends will continue as more and more aspects of driving are handled by automated systems capable of efficiency beyond what even the best human drivers can achieve. As shippers and drivers weigh potential cost savings and reduced non-compliance penalties against the costs and energy associated with implementing more efficient new technology and processes, by necessity, they will continue to trend in a more efficient and automated direction.
Inbound Logistics: 8 Sustainable Freight Trends Smart Supply Chains Need to Embrace was originally published in Vander Group on Medium, where people are continuing the conversation by highlighting and responding to this story.