As the freight forwarding industry braces for another volatile year, one key trend is emerging as a driving force shaping the future of shipping and logistics: sustainability. As we look towards 2023, it will be crucial for your supply chain to rise to the challenge and ensure their operations are environmentally responsible. Will your business be up for the task?
2022 has been a challenging year for achieving sustainability goals, with rising shipping costs, limited space, and uncertain ETAs. However, businesses must take action in 2023 or risk falling behind.
The Shopify eCommerce Market Credibility Study revealed that 53% of businesses are making improved sustainability one of their top priorities. Competitors are investing in supply chain sustainability, consumers are demanding sustainable operations, and profit is becoming increasingly linked to purpose. Not to mention, container ships alone emit one billion metric tons of CO2 every year.
Our team of logistics experts have compiled their best tips to help you stay ahead of the game and solidify your sustainability efforts. Let's work together to tackle these challenges and make a positive impact in the coming year.
Part 3 of 3: Supply Chain Sustainability
Trends that Defined 2022
2022 has been a volatile and tumultuous year, characterised by soaring rates and reduced space. Consequently, shipping delays became commonplace, with many shipments struggling to arrive within 3 days of ETA. In this challenging environment, it has been difficult for many businesses to prioritise sustainability in their supply chain operations.
Consumers have increasingly put money behind their beliefs. Meaning, they chose to buy from brands that have a clear commitment to sustainability.
Businesses have become more aware of the potential benefits of implementing sustainable practices throughout the supply chain. Further, they're recognising that these practices can lead to improved financial performance, which can be attractive to investors. Additionally, they can improve its reputation and attract customers and employees who are concerned about environmental and social issues.
The deadlines for achieving the United Nations' Sustainable Development Goals are rapidly approaching. Hence, governments and regulators around the world are increasing pressure to meet these important targets and address global critical issues.
Expectations for 2023
The European Union Emissions Trading System (ETS) was launched in 2005 and requires companies in the manufacturing, power and aviation industries to purchase permits to cover each tonne of carbon dioxide they emit. So, in an effort to accelerate the transition to a decarbonised economy, the ETS will include the shipping industry starting in 2023.
Consumers becoming more conscious of the environmental impact of their purchasing choices, leading to a rise in eco-friendly and sustainable buying habits.
An environmentally and socially sustainable supply chain no longer being a choice, but a necessity for businesses to thrive, as consumer expectations for environmentally-friendly initiatives are at an all-time high.
As businesses strive to reduce their environmental impact, they will be increasingly seeking out practical solutions to help them meet their sustainability goals.
Carbon offsets are gaining popularity as a way to neutralise carbon dioxide emissions and other greenhouse gases.
As government regulations continue to become stricter, it will be crucial for businesses to have easy access to real-time carbon emissions data in order to comply with these regulations.
End-to-end supply chain visibility becoming increasingly important. Businesses seeking to understand what is happening at every point in their supply chain in order to identify opportunities to reduce their environmental impact.
Top tips
"When companies are thinking through their supply chain and trying to make it more sustainable, they need end-to-end visibility to know is what is happening. Companies are lacking the transparency that they need from their suppliers through logistics, especially in areas outside of their four walls. Achieving this transparency will give them the visibility they need across their supply chain."
"Businesses need to start involving the customer or end-user a lot more because it can be extremely powerful. You can do it by showing how a slower delivery can reduce emissions or offering carbon-neutral shipping packaged with the price factored into it. It helps change consumer behaviour and promotes environmentally-driven decisions. You can market this to customers, let them use it toward their sustainability goals, and see their impact on the communities that generated the carbon credits."
Rob DePaola, Director of Customer Success at Cloverly.
"If you set the right structure up, you can account easily for all your actions and therefore decide what are the best actions to take. We suggest to start by measuring the impact to know your baseline. That's where technology can help, in that key area of measuring. Using the baseline results, a business should develop and implement strategies to improve its sustainability across the entire value chain. "
Philip Hutchinson, Merchandise and Logistics Director at Think Better Group.
Where to start
As a business involved in moving cargo, sustainability is a crucial challenge that you cannot afford to ignore. If you fail to take action, the business costs in 2023 could be significant. It's time to tackle your sustainability challenges with confidence.
As we mentioned in Part 2 of our 2023 Strategy series, freight forwarding has traditionally been a conservative industry, but in recent years new players have disrupted the market with innovative approaches.
High-tech freight forwarders like Explorate have introduced fresh ideas and easier ways of managing sustainability in the supply chain. Our customers measure the carbon footprint of each of their shipments with ease and precision, thanks to our modern platform and its port-to-port carbon emission calculator.
Carbon Offsetting
Once they've assessed their emissions, they can take action and offset their carbon footprint. Our Carbon Offset Program makes it easy to neutralise the impact of freight operations on the environment.
Here's how it works:
The Carbon Offset program is a foundational Explorate feature.
Detailed information about your shipments is readily available, including the CO2 emissions. This allows you to easily track and offset the CO2 emissions of each of your shipments.
Our transparent pricing makes it easy to understand the cost of offsetting your emissions, and adding an offset to your shipment is as simple as clicking a button. Now the offset cost is displayed alongside your shipment details, giving you peace of mind that you're doing your part to protect the environment.
We offset the carbon emissions of your shipment with a verified carbon offset project, so you can reduce the environmental impact of your logistics operations in the most efficient and effective way.
After the shipments invoice has been paid, a Carbon Offset Certification is added to your shipment. You can click on your certification and access the associated carbon credit project to see how your business is helping make a real difference for the planet.
FAQ
Why is supply chain sustainability important?
Environmentally and socially sustainable supply chains are becoming a necessity for businesses:
Consumer expectations for environmentally-friendly initiatives are at an all-time high.
Profit is becoming increasingly linked to purpose.
Investing in sustainability through their supply chain allows businesses to reap returns in customer and employee retention.
Competitors are investing in sustainable supply chains.
The container ships we rely on to carry 90% of the world's trade goods, emit one billion metric tons of CO2 every year.
Governments and regulators around the world are increasing pressure to meet sustainability targets.
What is carbon offset?
A carbon offset is a way of compensating for the emissions you're making. By funding initiatives that reduce carbon dioxide and greenhouse gases, you can reduce your companies impact on the environment.
Carbon offsetting is gaining popularity as a way for businesses to address their emissions, especially the emissions that cannot be eliminated immediately.
How do carbon offset programs work?
This is how our carbon offset program works:
We have fully integrated a carbon offset program into the Explorate platform to simplify offsetting your carbon emissions. This allows you to easily monitor, manage, and review your emissions from one convenient central point.
The platform provides clear, easy-to-understand information on the carbon emissions of each of your shipments.
Costs are transparent. With just one click, you see the cost of offsetting the emissions of your shipment.
If you are happy with the offset cost, you click 'Add Offset'. Then, the carbon offset cost is clearly displayed with your shipment.
To offset the carbon emissions of your shipment, we match them with a carbon credit project. This allows you to mitigate its environmental impact and support sustainable initiatives.
You get a Carbon Offset Certification.
We are here to help you develop a comprehensive sustainability strategy for 2023 and beyond. If you're already an Explorate customer, open the Explorate App and start your offset journey today! If you're not with us yet but are interested in seeing how we can help you reduce your carbon footprint, get in touch!
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