An article in the Wall Street Journal the other day got me thinking: what are all the operational strategies companies are using today to move freight more efficiently?
The article highlighted an effort of Alcatel-Lucent, a 2010 Climate Corps company, to reduce its carbon footprint 50% by 2020. Improving the carbon-efficiency of its logistics operations is a key strategy to meet the goal. As an example of what this company has done to-date, Alcatel-Lucent disclosed an effort to cut goods movement emissions by “making products closer to customers.”
Previously, the company manufactured optical networking terminals in Asia for the North America market. Now, these products are produced in Mexico. As a result “the company avoids the need for air freight shipment and provides customers with faster order fulfillment.” The company explored a simple mode shift—air-to-ocean, but determined that approach would have required a significant increase in inventories to offset a change in transit time. Instead, the company employed a near-shoring strategy.
The case highlights how basic, operational strategies can be used today to cut goods movement emissions. Industry attention often highlights how freight carriers are exploring and deploying new technology advancements. Near-term reductions in goods movement emissions, however, are just as likely to be found through changes in the operations of shippers – the typically non-asset based entities that own the brand, such a Alcatel-Lucent, and are not primarily in the freight business. The type of best practices used by shippers can often be rolled out quickly and achieve a significant ROI.
Increased container utilization, collaborative distribution, redesigning distribution networks, and improvements in packaging are already helping companies increase carbon-efficiency and reduce costs today. By targeting inefficiencies and waste, these practices also form the foundation of progress on which future improvements in freight efficiency can be built.
EDF is seeking to catalog and share more case studies about how companies are using operational approaches to reduce costs and emissions. We’d love to hear about your shipping success story. To let us know, drop us a line at firstname.lastname@example.org.
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