How you can run a greener supply chain
Global trade is a dirty business. The International Transport Forum estimates that trade-related freight transportation accounts for about 7% of global CO2 emissions. And with global trade continuing to grow, the ITF predicts a fourfold increase in these emissions by 2050.
As CO2 emissions from trade continue to grow, some countries have mandated emissions reductions, including the United States, China, and the member states of the European Union. What’s more, many consumers now choose products based on how environmentally friendly they are. As a result of all these trends, leading brands are increasingly seeking to measure, reduce, and offset carbon emissions across their supply chains.
Measuring your carbon emissions is the first step to making a change, but getting accurate measurements isn't easy. Any part of your supply chain that relies on fossil fuels contributes to your total emissions: that includes air freight, ocean freight, trucking, port terminal operations, warehousing, buildings, electricity, packaging, and more.
Supply chain emissions calculators are available from a number of providers, and it’s also possible to develop your own. When designing or evaluating an emissions calculator, make sure that it takes into consideration the following variables: mode of transportation; shipment routing; vessel fuel efficiency; container and vessel utilization; cargo dimensions; and cargo type (dry goods or refrigerated). Some calculators depend on only one or two main variables and exclude the others, leading to distorted estimates.
At Flexport, we’ve developed our own carbon calculator that estimates CO2 emissions as part of each quote request. This allows for more environmentally conscious decision-making, and for comparison of CO2 emissions for different modes of transportation (ocean vs. air), routings, and services.
There are many things you can do to reduce emissions across your supply chain. One of the most impactful, as well as the easiest to implement, is to favor lower-emissions transit modes: ship by ocean instead of air, and rail instead of truck for inland moves. Ocean and rail are far more fuel-efficient than air and long haul trucking, respectively, due to the reduction in fuel per unit of freight.
Reducing the number of stops along your route will also help: choose alternative routings that cut the number of intermediary ports for ocean shipments, and choose direct instead of deferred flights for air. Every time your freight changes vessels, extra energy is used for unloading, moving, and re-loading the cargo.
Improving container utilization to leave no wasted space in your FCL containers can have a major impact, and so can shipping full truckloads instead of LTL. Along the same lines, if you’re flexible about arrival dates, it's much more fuel-efficient to ship one large shipment instead of two smaller ones, so staggering and batching your shipments is a best practice to reduce emissions.
We’ve found that many of our clients want to do more than just cut their emissions -- they want to fully offset their carbon footprint, bringing their emissions impact to zero. There are numerous carbon offset programs available, and it's possible to choose the best one for your organization and work with them directly to offset your emissions. At Flexport, we’ve partnered with the Carbonfund.org Foundation to offer a carbon footprint offset program, which allows clients to purchase carbon credits directly through Flexport. It's easy: you opt in, we add a line item to your invoice, and then we send 100% of the money to Carbonfund.org. On average, the cost of offsetting is roughly 1% of your total shipping costs.
To learn more about Flexport’s carbon calculator and carbon offset program, sign up to view our carbon program webinar.