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Reaching ESG Goals via 4PL Supply Chain Optimization
4PL logistics service providers are well-positioned to help companies with their ESG goals and challenges.
17 March 2023
An enhanced focus on sustainability can be good for business as it often streamlines processes and reduces inefficiencies, which subsequently reduces costs. Businesses continue to make pledges about their ESG goals, but these statements are now being met with increased scrutiny as consumers and investors expect to see results.
Key Challenges
Challenge 1: Methodologies
Transportation remains a salient concern when organizations study which actions can reduce their overall greenhouse gas (GHG) emissions. It’s imperative to choose a methodology that can accurately calculate and report such emissions.
OIA adopts the GLEC framework, the only globally recognized methodology for harmonized calculation and reporting of logistics GHG footprint across multi-modal supply chains.
Challenge 2: Reliable Emissions Data
Accessing and aggregating reliable data can be extremely demanding. 4PL companies offer advanced transportation management services while also ensuring that shipment data is compiled and managed by a single party. A 4PL then synthesizes the data to create a single source of truth.
OIA’s operating systems directly integrate into partner applications, allowing for precise calculations. Businesses also gain enhanced visibility on emissions metrics through customized dashboards and distributed reporting.
Notably, the Smart Freight Centre has already accredited OIA Global’s approach toward emissions reporting.
Challenge 3: Identifying Tangible Actions
A third challenge is determining which ESG measures will actually reduce logistics emissions yet keep the business profitable. 4PL companies fill this void by possessing a deep understanding of your business activities. A 4PL will begin by conducting a comprehensive analysis of your logistics network to identify effective measures for your specific situation. Next, they advise you when to make data-driven decisions.
Supply Chain Savings
In addition to transportation management services, OIA helps clients’ ESG efforts through its dedicated packaging optimization program. Packaging optimization has a direct impact on transportation efficiency and remains an easily quantifiable metric for logistics operations. This innovative program is designed to maximize productivity, reduce costs per unit and lower carbon emissions.
In a past example, OIA replaced plastic hangers with fiberboard hangers for a children’s apparel brand. This solution generated significant savings across the brand’s supply chain, with recorded annual savings of USD $4.6 million. Increased packaging efficiency also reduced shipping costs and expenditure in the distribution center. The solution allowed for recycling of the hangers at the end of their life cycle instead of turning them into plastic waste.
