Australia, Freight News, Industry Issues, Logistics News, Supply Chain News, Transport Features

Is supply chain sustainability a bridge too far?

As new mandatory climate reporting obligations approach, how prepared are carriers and how can they use data to optimise their supply chains ahead of this challenge?

In response to a rise in green claims, more commonly known as greenwashing, the federal government, from July, will enforce a mandatory climate reporting obligation on some of the country’s largest companies and financial institutions.

Under this legislation, businesses are required to report on their emissions, ranging from self-generated to purchased, as well as any caused up or down a company’s supply chain, making transport operators, retailers and carriers a major target.

A year’s leeway will be given to allow companies to prepare, however the government has also stated that failure to comply will result in penalties.

For retailers and operators who function on expansive up and down-stream supply chains, the question is how can they make provisions for the short to medium term requirements in order to attain the long term positive impact and how can this be achieved without sacrificing performance.

Leading by example and paving the way in helping companies enact this positive change is multi-carrier shipping software company Shippit, who works with thousands of retailers, carriers and transport companies to take proactive steps towards their sustainability goals through data insights.

Co-Founder and Co-CEO Rob Hango-Zada says that the impact of the legislation on the industry will be significant but necessary.

According to Shippit data,15 per cent of deliveries originate within 15km from sender to recipient. However, the average parcel travels approximately 722km.

“That is an astonishing, unacceptable statistic,” he says. “E-commerce will only grow, and without action, so too will carbon emissions.”

In the transition towards net zero, Hango-Zada says data like this is key. He says that assuring that the insights Shippit provides can ultimately help companies embrace the legislation without having to sacrifice performance is key.

“Through data we can make fleets more efficient and less carbon intensive,” Hango-Zada says.

“When an order is placed online, through smart routing software, we can enable retailers to select the best carrier for each leg of its journey. Reducing the amount of wasted driving reduces pressure on our road systems and eases congestion experienced by all road users. So far, we’ve saved well over two million kilometres of vans on the road. That’s better for business’ efficiency and unit economics. If they’re taking these types of proactive cutting-edge measures, their incentive to embrace the legislation grows too.”

On the industry’s journey to net zero, organisational changes can also be executed to help revolutionise supply chains for optimal and more sustainable performance.

He says technology will no doubt give companies the insight they need to understand the emissions they generate, but many are also employing chief sustainability officers to help implement these.

Another determining factor, that he thinks is important and admittedly challenging, is for companies to work with their retail partners.

“For the industry to manage the transition and become compliant without any knock-on effect on their efficiency or bottom line, collaboration and communication is absolutely essential,” Hango-Zada says. “It’s about bringing the entire supply chain closer together, and pooling our collective resources and expertise to tackle the issue. We’ve seen lots of evidence – through our technology, pilot programs and research with partners – that e-commerce can become more sustainable than bricks-and-mortar. That’s exciting.”

Acknowledging that some companies will be behind on adopting the legislation and that the impact on the industry will be considerable, Hango-Zada insists on looking at the bigger picture and what it will mean not only for Shippit, but also for the future of the industry.

“At Shippit, our North Star is to power 200 million deliveries without waste by 2025, and we support any legislation that’s goal is to improve sustainability and efficiency,” he says.

“If we can look back in a few years and the legislation has increased transparency and accountability, then the steps taken were entirely worthwhile and the impact was entirely positive.”

Previous ArticleNext Article
Send this to a friend