How can the public sector work with logistics service providers to support innovation and environmentally sustainable practices?
The largest source of emissions within many supply chains can be attributed to logistics. It's not hard to see why.
Ours is a global economy. Many of our products contain components and raw materials sourced worldwide. The device you are using to read this article includes parts supplied by more than 200 companies in China, South Korea, Europe, Japan, India, and the United States. Often, these components must be shipped to a final assembly line - probably in Asia.
The environmental implications of our global logistics, the transport and storage of materials and information through supply chains, cut across all sectors. Organisations committed to reducing their negative impact on the environment are looking for ways to reduce the polluting effect of their logistical operations. The public sector is no different.
Incremental change is key to achieving environmental policy goals
There are many ways the public sector can work with suppliers to introduce changes that lead to more environmentally-friendly operations. Fortunately, you don't always have to make sweeping changes to see an impact. Technical innovations and expertise available now can contribute to achieving your environmental policy goals.
This article is not an exhaustive list of suggestions, it's a starting point. The aim is to offer some ideas to discuss with your supplier to help reduce carbon emissions in your supply and logistics chain.
Five ways to minimise carbon emissions in public sector logistics contracts
1. Identify the carbon culprits in your logistical activities
A core principle of any procurement function is to minimise waste, which applies to carbon reduction as much as it does to finance. The cost' of goods and services is more than financial, and every product and service also comes with an environmental price tag.
On the road to net zero logistics, buyers should consider where carbon waste can be minimised, substituting traditional products and services for alternative but equally effective, greener practices.
Examine the different logistics and supply chain stages to understand where greenhouse gas emissions are highest. Doing so will help identify what practices and decisions are supporting that carbon price tag. For example:
- what transport methods do you use that carry a higher emissions ticket?
- are there alternative ways to move pallets of supplies, materials, parts, and commodities, with minimal plastic packaging?
- how can you better optimise vehicle journeys when moving goods?
- what can you do to minimise the number of less-than-full containers and truckloads?
- do your suppliers have carbon reduction plans in place?
A thorough audit of all stages of your supply chain can give you a more accurate figure of its carbon footprint. The good news is that minimising carbon-emitting inefficiencies often benefits the bottom line.
2. Incorporate consolidation measures
In transport, carbon efficiency goes hand-in-hand with cost efficiency. Making the most out of every mile travelled carries a cost saving in fuel and vehicle maintenance while also reducing emissions. For these reasons, simple consolidation measures are a good way for you to begin reducing your supply chain's carbon footprint.
There are many ways to introduce consolidation practices. The most straightforward approach is to allow the carrier to make the best use of their load space. For example, transporting a full truck, vehicle, or container load maximises value from each mile travelled, reducing overall emissions.
Other ways you can achieve consolidation include:
- delivering larger full truck loads less frequently
- reconsidering the need for dedicated transport
- arranging to use a shared consolidation centre system with your supplier
Consolidation centres are offsite locations where inbound delivery vehicles are diverted so their cargo can be unloaded and consolidated into full truckloads or vehicle loads before onward delivery to the client. A consolidation centre decreases the volume of supply chain traffic into the delivery site and reduces the volume of congestion and associated pollution.
Consolidation centres can be dedicated spaces or shared by multiple users. These places may also link to smaller inner-city hubs where loads are broken down before the final mile delivery, using low or zero-emission transport. As a result, you avoid additional pass-through of Ultra Low Emission Zone (ULEZ) charges.
3. Use different modes of transport
Every method of transport comes with a carbon cost: the faster the transport, the higher the carbon cost. In addition, different modes of transport produce different levels of emissions. For example, air and ocean freight can add more to your supply chain's logistics carbon footprint. Even road and rail transport add up.
While urgent services often require faster modes of transport such as road or air, advanced planning can allow more choice and a better balance of transportation methods. Planning ahead with your suppliers can make selecting alternative, lower-emission shipping methods possible.
Slower and more eco-friendly shipping modes like rail and ocean freight can be considered by sharing forecast information and arranging a level of contingency stockholding. When combined with appropriate consolidation measures, the overall carbon cost is reduced further.
4. Engage with your suppliers earlier: communication is key
In most cases, when asked, logistics providers will say the key to supporting the public sector in reducing carbon emissions lies in transparent collaboration. Opening up lines of communication early between you and your supplier can reap enormous benefits.
Engaging with suppliers early on to communicate what service and policy requirements you need puts the supplier in a better position to prioritise your net zero ambitions. For example, bringing suppliers into early discussions before a final specification is written gives them more opportunity to suggest new technologies, innovations, and alternative approaches at a stage where more substantive operating model changes are possible and beneficial.
Sharing your sustainability goals goes a long way to helping to dispel misconceptions that cost savings is the primary objective for the public sector.
5. Consider a longer-term contract
As a buyer, if you are looking to work with your supplier to start to reduce the negative environmental impact of your logistical operations, consider longer-term contracts.
Longer-term contracts give suppliers more freedom and flexibility to offer innovative solutions, which may require more investment. In addition, a longer term enables the supplier to spread the expense associated with environmentally sustainable approaches. As a result, they can minimise the cost impact while ensuring the initial investment costs are recoverable.
Longer-term contracts, as long as they are carefully managed, can offer more scope for continuous improvement and innovation, not least in achieving environmentally sustainable delivery aims. As logistics partners become more familiar with contract requirements, suggestions for further carbon efficiencies can be explored and tested.
Committed to helping reduce your logistics' carbon footprint
Crown Commercial Service (CCS) works with a range of suppliers, supporting public sector storage and transport requirements. These suppliers offer services to the health sector, central government, and wider public sector agencies.
The services available from our agreements include:
- logistics and warehousing solutions and services, including collection, receipt, warehousing and storage, management, processing and onward distribution
- storage, distribution and kitting solutions and services under one agreement, which includes UK and international storage and transportation, quality control of items and specialist collection and delivery services
- courier and specialist movements from simple parcel deliveries to complex and large-scale specialist services
- flexible relocation and removal services for government offices, warehouses, and public sector settings
- the design, implementation and management of customised solutions, including consultancy for bespoke and complex requirements
Bring more power to your procurement
CCS offers you flexible solutions for public sector storage and transport needs. To find out more and take your next step, get in touch using our online form quoting logistics and warehousing' or call us on 0345 410 2222.
Explore how we can support your sustainability journey by visiting our carbon net zero website. You can also view additional articles about carbon-neutral warehousing and freight transport decarbonisation.