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Challenges Sustainable Logistics Will Bring

Companies worldwide are looking for ways to increase sustainability. Therefore, here are the challenges sustainable logistics will bring.
A view of the shipping containers.

The concept of increasing sustainability is now commonplace. Most businesses in a wide range of industries are looking for ways to improve their sustainability. This is particularly true in the United States and Europe. In fact, many C-suite executives rank sustainability as necessary, if not more important than profit maximization. On the other hand, applying sustainability principles to supply chains is a relatively new concept. With that in mind, the supply chain is the best place to start working toward sustainability objectives for most companies. The primary reason is that company supply chains account for up to 80% of typical greenhouse gas emissions. As a result, most businesses today must prioritize the sustainability of their supply chains. That being said, today, we will discuss the challenges sustainable logistics will bring.

What Sustainable Logistics Is

The term sustainable logistics refers to the practice of reducing the environmental impact of shipping and other logistical processes. Consumers becoming more eco-conscious makes them increasingly likely to choose green businesses. This makes it much more important for companies and supply chains to reduce carbon dioxide emissions, manage trash and other waste, use recyclable products, etc. This is especially important since we’ve been in a supply chain crisis for the better part of two years.

Goals of Eco-Friendly Supply Chain Management

Every industry has its way of implementing sustainability. Supply chains can improve sustainability by:

  • Determining the exact carbon footprint of the supply chain. Measuring the carbon footprint of logistics operations is useful to begin thinking about sustainability measures and managing their effects. Certain frameworks can assist businesses of all sizes in estimating their energy consumption and greenhouse gas emissions.
  • Analyzing the effects of each logistics area, particularly those associated with transportation, can help reduce air, soil, water, and noise pollution.
  • Reusing old containers and boxes for shipping.
  • Creating sustainable methods of packaging. The design of products and their packaging significantly impact eco-logistics and its ability to spread sustainability throughout the supply chain – one or the other needs to be made with the environment in mind.

Companies worldwide are developing technologies to improve the global supply chain, including improvements to sustainability. However, these developments are not without their challenges.

With Sustainable Logistics Come Higher Costs

The main reason why sustainability may be more expensive is that it requires a change in the way businesses are used to operating. As with any other type of transition, there will be growing pains and adjusting periods. Due to this, certain industries may find it much more challenging to make the necessary transition to sustainable logistics. However, according to moverstech.com experts, the higher cost of sustainable logistics is not a long-term issue. As a result, it may be a problem for businesses that can’t stand working at a loss during the adjustment period.

Supply chain reform, which entails reevaluating existing supplier networks, developing new standards, and putting them into practice, requires more workforce, money, and time in the short term. However, once companies implement this new model, sustainability can improve their supply chain in several ways. This includes boosting brand reputation, fostering new alliances, accelerating innovation, and so on. Long-term, the benefits to the supplier’s brand and bottom line more than make up for any money that companies would lose on implementing a more sustainable model.

Inadequate Infrastructure

As supply chains in many parts of the world begin to reach record lows in warehouse space, among other issues, it is easy to see why logistics infrastructure may be difficult to adapt to a more sustainable model. Most companies see the lack of storage space as a more pressing issue. Therefore they are not making strides to make their logistics sector more sustainable. However, local governments are now in charge of enforcing emission limits. This means that governments worldwide are beginning to implement policies that will compel businesses to build adequate infrastructure for a sustainable logistics model.

Measuring the Impact of Sustainable Logistics Solutions Is Difficult

Measuring and quantifying is crucial for gaining a complete understanding of the results that sustainability models can produce. Without this data, it may be impossible to determine the effectiveness of any one sustainability strategy. Tangible benefits, those that companies can quantify, and intangible benefits, those that they cannot, result from sustainability initiatives in the logistics sector. Compared to the qualitative social and environmental dimensions, the economic one is more quantifiable. However, the social dimension is grounded in real-world material conditions; social phenomena are abstract and hard to quantify. Therefore, it may be difficult to accurately quantify sustainability, especially when focusing on the social dimension.

The Challenge of Persuading Stakeholders

Needless to say, a high upfront cost combined with significant uncertainty about ROI can put stakeholders in a difficult position. For this reason, many logistics companies struggle to implement sustainability initiatives. However, there have been instances where environmentally conscious stakeholders have decided to implement a sustainability initiative for their company outright. However, this is not always the case. In most cases, the problem stems from a diverse set of stakeholders, each with its own set of goals, needs, perspectives, and interpretations of the same scenario. Businesses face challenges when engaging in SLBC due to the need to manage and prioritize the interests of numerous stakeholders. For this reason, in order for companies to implement these initiatives, they need to find ways to persuade stakeholders to accept them.

Conclusion

As with new and unproven initiatives, there are a lot of challenges sustainable logistics will bring. These obstacles, however, are not insurmountable. Companies can not only overcome these challenges with the right approach and enough time, but they will also be able to operate at a much higher level of proficiency while reducing their impact on the environment and people around them.

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