The Delicate Balancing Act: Resolving the Supply Chain Crisis While Minimising the Environmental Impact

Posted: 18 January, 2022 | By David Quin

Back in October 2021, world leaders gathered in Glasgow, Scotland, at the United Nations (UN) climate change conference (COP26) to make a pledge to further cut carbon dioxide emissions; the major contributor to climate change. At the same time, news coverage continued to highlight the European supply chain crisis: a perfect storm created by driver shortages, unprecedented demand for goods, Brexit red tape and surging energy prices - all while the world wrestles with the COVID pandemic.

On the one hand, governments are in broad agreement that dramatic action is needed to combat climate change and decarbonize. On the other, the effects of supply chain disruption, from massive increases in the costs of building materials to queues at petrol stations in the UK, have acted as a reminder of the extent to which road transportation remains the backbone of the European economy.

According to statistics, heavy-duty vehicles are responsible for carrying 75% of all land-based freight, and account for approximately 5% of Europe’s total greenhouse gas emissions. However, recent events have highlighted an inherent conflict between two competing missions: “We need to take action to save the planet” vs “We need more trucks (and drivers) to keep our economy moving.”

What is being done?

Despite potential challenges, businesses and governments are taking steps to minimize carbon emissions from road transportation. For example, many governments are establishing congestion charges, delivery restrictions and clean air zones in cities to reduce traffic and limit access to the most polluting vehicles, as seen in London with the ultra-low emission zone (ULEZ) and London Lorry Control Scheme (LLCS).

New regulations are being imposed that oblige logistics operations to report on their greenhouse gas emissions, and the European Union has mandated that manufacturers must meet a 30% reduction in CO2 emissions from new ‘Heavy Duty Vehicles’ from 2030, with a 15% reduction required from 2025.

In parallel, increasing pressure is being put on the logistics industry by consumers and investors to act further and faster. The emergence of Environmental, Social, and Governance (ESG) as a corporate imperative has brought supply chain sustainability sharply into focus, with the onus on both shippers and carriers to provide transparency about their environmental impact.

Businesses are transitioning to more fuel-efficient trucks, and greener fuels like biodiesel to reduce the volume of greenhouse gases emitted into the atmosphere. Electric vans are also becoming more widely adopted by larger final mile operations, in particular for parcel and supermarket home delivery. 
Deloitte Report
Electrification is the long term answer

Eventually, the challenge of reducing emissions from road transport will be largely solved by the widespread replacement of fossil fuel trucks with zero emission or very low emission vehicles. However, major hurdles remain, including vehicle range limitations, lack of charging infrastructure, and the initial high cost of electric trucks vs their diesel equivalents.

Although critical to supply chains, road freight is fundamentally a significant cost to shippers that needs to be managed and ideally reduced. One of the key benefits of modern Transport Management System (TMS) solutions is their ability to select the lowest cost or cost-optimal plan. 

Carriers need to keep a tight rein on costs in order to remain competitive and maintain profitability. There’s currently little financial incentive for them to switch to much more expensive e-Trucks, even if such a vehicle were able to meet their operational needs.

Technology is making a key difference in the short term

Investing in technology can already help minimize the environmental impact of road transportation. Fleet and route optimization technology can maximise utilization of vehicles and load capacity while reducing miles/kilometres driven, which in turn reduces emissions and fuel costs. Web-based load boards and digital marketplaces can help avoid empty or underutilized backhauls, benefiting both the environment and the bottom line.

A common challenge for transport managers is accurately measuring and reporting their operational carbon footprint. One way of doing so is through the Trimble MAPS platform, which includes emissions calculation for road transport operations, taking into account the size and fuel type of the vehicle in use for specific routes, customers and deliveries. This provides greater transparency of actual emissions generated during transport execution. It can also be used in transport planning to model emissions in different scenarios, enabling businesses to optimize their logistics plans based on emissions, not just cost and time. Learn more about this here. Trimble MAPS Reporting

Sample cost & emission report of a route generated by the Trimble MAPS platform

While longer term electrification holds the key to reducing road transportation CO2 emissions, current financial constraints mean many businesses are unable to switch their entire operation immediately. In the meantime, investing in route modelling technologies can identify how and where electric vehicles should be introduced first in a mixed fleet, for example in urban areas.

Eventually zero or low emission trucks will become financially viable for operators across the board, charging infrastructure will become ubiquitous and practical issues - such as range - will be resolved. In the near-term, efforts to decarbonise logistics remain focussed on ways to manage and minimize emissions using technology rather than eliminating them all together.

Trimble MAPS can help you achieve greater emissions transparency as part of your sustainable supply chain strategy.

Browse our resources or speak to the team for more information by filling out the contact form below.



Tags: sustainability supply chain fuel efficiency delivery trimble maps platform

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