Building the Case for a Greener Supply Chain

David Biederman’s recent story in Journal of Commerce suggests the growing environmental logistics movement is more than just a corporate nod to sustainability.  Although sustainable logistics makes for good PR, companies such as Nike, Wal-Mart, Cisco Systems and Baxter International are also embracing a greener supply chain to improve bottom line.

The Environmental Impact of Logistics

The global logistics supply chain is responsible for 3 billion metric tons of carbon emissions annually. With a carbon footprint comparable to 700 coal fired power plants and an annual emissions output equal to that Canada, Germany, Japan and Mexico combined, the long term sustainability of the global logistics supply chain is no longer in question; the system is need of a drastic overhaul.  Fortunately, some of the nation’s leading companies are beginning to recognize a growing synergy between reduced carbon footprints and lower logistics costs.

Moving Toward A Greener Supply Chain

One of the best examples of this new-found synergy is a greater reliance on intermodal shipping.  Intermodal Containers designed to travel by cargo ship, rail, and trucks limit the need to handle freight when switching between transport modes.  This efficiency, combined with reduced fuel costs and lower emissions is making intermodal a critical component of a greener supply chain.  In 2009, Nike switched from air freight to intermodal, reducing emissions per product by 4% while saving $8 million annually.  In 2010, health-care giant Baxter International increased intermodal shipments to 12.8 percent, slashing carbon emissions by 14,000 metric tons. Levi Strauss reduced its carbon footprint by 60 percent with intermodal shipping.

For companies relying on third party logistics providers (3PLs), choosing a strategic partner committed to sustainability can also have a direct impact on carbon emissions.  Although UPS delivers an estimated 15 million packages to more than 200 countries daily, they were the first small-package carrier to offer a carbon neutral service for deliveries within the United States.  Not surprisingly, UPS is constantly looking at ways to create a cleaner, more fuel efficient delivery fleet.  This strategy not only moves UPS to a more sustainable business model, but also has a tremendous effect on the bottom line.

Although some of the largest reductions in carbon footprint stem from changes made on the transport side, greener packaging and eco-friendly pallets are making a difference too.  Cisco Systems recently launched a new green packaging program as part of a sustainability initiative.  Use of recycled packaging materials, digitized product documentation, and recyclable plastic pallets saved the tech-giant $24 million annually.

Some of the old arguments against more sustainable logistics management practices (too expensive, too complicated) are clearly being reconsidered by the industry leaders in the manufacturing and retail sectors.  Slowly, small and mid-size companies are following suit.  Moving toward sustainable logistics is a process, not a project.  Incremental changes accruing over time may present the most realistic path to a greener supply chain.

Rethinking Your Company’s Pallet Use

At Litco International, we are helping to create a greener logistics supply chain by providing an innovative presswood pallet solution.  Our Inca presswood pallets are the first to be Cradle to Cradle Certified cm Silver. They are formed using wood fibers from damaged logs, wood waste, and other wood by-products that might otherwise occupy the local landfill.

Presswood pallets are designed to be nestable.  Up to three times as many presswood pallets can be transported and stored in the same space as comparable conventional wooden pallets. The nestable feature saves the cost of fuel, manpower and helps to reduce lift truck traffic and related injuries and fatalities.

Litco’s presswood pallets also present a cost effective alternative to plastic and most traditional wooden pallets too.  Pallet type and design is just one factor of many when considering a sustainable logistics initiative.  To learn more about the advantages of switching from plastic, corrugated or traditional wooden pallets to presswood for your export or domestic pallet solution, or to request a quote, contact Litco International for more information.


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Building the Case for a Greener Supply Chain