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The supply chain provides significant opportunities to improve a company’s sustainability efforts. The Environmental Protection Agency (EPA) estimates that more than 75% of an organization’s greenhouse gas (GHG) emissions stem from its supply chains, underscoring the significant opportunities for improvement.

Corporate responsibility, customer expectations and regulatory requirements have shippers examining their direct and indirect emissions, especially as they relate to logistics and transportation.

Types of Scope Emissions

There are three categories of GHG emissions: Scope 1, Scope 2 and Scope 3. Each scope represents a different source of emissions, ranging from emissions created as part of a direct operation to emissions from services and suppliers.

Scope 1 Emissions: Direct Emissions From Controlled Operations

Scope 1 emissions are direct GHG emissions from sources that a company owns or controls. For shippers, this includes emissions from company-owned vehicles and equipment. Emissions from warehouse operations, such as gas-powered forklifts, are also part of Scope 1.

Scope 2 Emissions: Indirect Emissions From Purchased Energy

Scope 2 emissions are indirect, deriving from an organization’s purchase of electricity. While these emissions happen at the energy provider’s site, they are tied to the company’s operations because they depend on the energy.

Scope 3 Emissions: Indirect Emissions From Upstream and Downstream Activities

Scope 3 emissions encompass all other indirect emissions in the company’s upstream and downstream value chain. This includes emissions associated with suppliers, transportation providers and end users. Scope 3 is often the largest and most complex to manage. However, because Scope 3 sources may represent most of an organization’s GHG emissions, they often provide the strongest emissions reduction opportunities.

Emissions Reporting

Many companies are proactively providing information about their emissions even without government requirements. The Governance and Accountability Institute found that in 2023, sustainability reporting hit record levels as U.S. public companies prepared for mandated disclosure. In 2023, 99% of the S&P 500 companies published sustainability reports or disclosures, up from 20% in 2011.

The EPA has created a GHG inventory development process to help companies quantify and track emissions. The four steps include:

  1. Reviewing accounting standards and methods, determining organizational and operational boundaries, and choosing a base year
  2. Collecting data and quantifying GHG emissions
  3. Developing a GHG Inventory Management Plan to formalize data collection procedures
  4. Setting a GHG emission reduction target and tracking and reporting progress

The demand for increased transparency around emissions is expected to create new responsibilities for a company’s chief financial officer. As companies quantify their carbon output, CFOs, sitting at the intersection of strategy, reporting and resource allocation, are in an ideal position to ensure that carbon management initiatives align with their company’s strategic and compliance needs.

According to McKinsey and Company, businesses can reduce costs associated with decarbonization by zeroing in on their most important emissions drivers and investing in more accurate and granular data to inform discussions with suppliers.

Opportunities To Reduce Scope 3 GHG Emissions

Shippers are increasingly adjusting their supply chains to better align with their environmental goals, and a survey from EY found that eight of 10 supply chain executives are investigating sustainable transportation practices.

There are several strategies companies can use to reduce supply chain emissions, which include the following:

Improve Routing

Optimizing transportation routes can reduce fuel use, but optimization goes beyond finding the most direct route between two points. There may be opportunities to reduce mileage by adjusting delivery windows, consolidating orders across days of the week, determining the optimal sequence of stops on multi-stop routes or changing the trailer size.

Optimize the Network

Focusing on the entire network, including the planning and design of manufacturing, warehousing or distribution facilities, as well as transportation routes, can create significant sustainability gains. Network design should consider site selection, mode selection, routing, utilization and more to shrink the carbon footprint of freight operations and reduce waste.

Utilize Backhauls

Eliminating empty miles by utilizing backhauls ensures all miles are productive, which maximizes fuel use and capacity and ultimately results in fewer trucks on the road.

Increase Visibility

Having visibility into inventory and transportation can help companies make tactical, data-driven decisions quickly, increasing efficiency. Examples include sourcing inventory from the ideal location to eliminate unnecessary miles or getting ahead of supply chain disruptions before they become more significant issues that lead to increased miles or expedited air freight.

Consolidate Shipments

A shared network provides an alternative to less-than-truckload (LTL) shipments coupled with dedicated transportation that combines freight loads from multiple shippers going to a shared geographic area. Shared dedicated transportation networks can boost efficiency and sustainability by reducing miles and minimizing freight handling.

Use Energy-Efficient Warehouses

An energy-efficient warehouse can cut operational costs while improving sustainability. Using LED lighting, motion-activated lights and temperature controls can all decrease energy consumption and emissions. There may also be opportunities to use renewable energy within a warehouse.

Choose Suppliers Wisely

The EPA’s Supply Chain Guidance advises companies to strategically choose which suppliers to engage. The EPA has also developed several voluntary programs that companies can use when selecting partners. For example, SmartWay assists companies in advancing supply chain sustainability by measuring, benchmarking and improving freight transportation efficiency, empowering companies to make strategic and sustainable choices.

Contact us to learn more about how Penske can help you track, quantify and reduce emissions in your supply chain.

At Penske Logistics, safety is not characterized solely as a priority; it is one of the company's core values. This philosophy reflects the importance of safety, a small word for a vast area of responsibility that has become more challenging in line with the growing complexity of the logistics business.

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Just as artificial intelligence (AI) and machine learning (ML), remote sensing, and predictive analytics are transforming supply chain operations, they are also bringing huge changes to safety programs.

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Shared dedicated transportation networks offer a creative and innovative shipping solution, providing all the benefits of dedicated contract carriage, along with high-touch deliveries, customized execution based on customers' delivery requirements and specialized equipment, all at a lower cost. The solution provides high service levels with next-day delivery, minimal freight handling and consistent delivery times.

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Shared dedicated transportation networks provide shippers a unique offering that combines the benefits of dedicated contract carriage with the economic advantages of a less-than-truckload approach. Shared services also offer customized high-touch deliveries, minimal freight handling and consistent delivery times.

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Operating private fleets often provides fleet operators with a greater perceived sense of control over things like customer service, capacity, over-the-road performance, cost controls, safety and more. Yet, more and more private fleet operators are challenging their thinking and operating models by turning to dedicated contract carriage (DCC) solutions.

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White glove logistics refers to a delivery service that provides additional assistance and attention to detail upon initial delivery. Standard shipping typically involves getting something from point A to point B. However, white glove services go beyond that and include tasks such as unpacking, restocking or setting up products. In so doing, the delivery driver often interacts face-to-face with customers while doing their job. White glove logistics services are frequently seen within the food and beverage industry to ensure the freshness and rapid replenishment of food and drink items.

Change can be hard, especially in complex operations with multiple moving parts. In transportation and logistics, the stakes can be even higher — ensuring business continuity, maintaining legacy knowledge and business data, and retaining staff are all top priorities when a transition occurs. Penske Logistics has transitioned hundreds of companies to its dedicated contract carriage services and has developed critical best practices to minimize disruptions and maintain continuity.

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E-Book: Making the Case for Using Shared Dedicated Transportation Networks

Download our e-book today

There are a lot of issues keeping logistics, transportation and supply chain managers up at night right now. Labor shortages, transportation capacity crunches, persistent supply chain disruptions, rising fuel costs and geopolitical disputes are just some of the outside factors impacting the steady flow of goods. Customers also expect faster deliveries and are placing more online orders, two forces that only add to the complexity of planning, securing and budgeting for transportation.

Download and read the entire e-book to understand how using shared dedicated transportation networks could be the answer to overcoming some of your most pressing supply chain issues.

The supply chain continues to deal with ongoing disruptions, which have become increasingly numerous, larger in scale and more simultaneous. While technology plays a critical role in keeping products moving, 3PLs and shippers can’t overlook the value of getting back to basics and focusing on core supply chain principles that have proven successful time and time again.

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Supply chain operations are always complex, and each link in the chain must operate as planned to avoid disruptions. The food and beverage supply chain brings even greater complexities that must be managed to ensure overall success.

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Guide to Dedicated Contract Carriage

Download our free white paper to learn how the right dedicated transportation partner can deliver your products safely and efficiently

When it comes to choosing a Dedicated Contract Carriage (DCC) provider, it’s important to identify your requirements and fully understand the benefits of a well-structured DCC arrangement before starting the selection process. That’s why we created this guide – to make available the critical information you need to make the best decision possible. Whether you currently operate a private truck fleet, utilize common carriers, or are evaluating the options available in ground transportation, this booklet will be a helpful resource in determining if DCC is right for you. It also provides a “how-to” in selecting a specific provider as your dedicated carrier.

There are many new entrants into the DCC market as the product continues to evolve. The more you know about DCC, the better decisions you can make for your transportation needs.

New e-book examines range of transportation solutions available to minimize disruptions and successfully manage inbound freight.

Visibility and collaboration are at the core of a successful inbound freight operation. By successfully improving overall visibility, you can identify a potential problem earlier and build in a necessary contingency plan.

This new e-book from Penske Logistics includes information about how to create the perfect inbound solution, by taking a detailed look at a variety of options, including:

  • How to effectively make a change in providers
  • What private fleets can do for you
  • The best way to incorporate freight management services
  • Dedicated contract carriage and the ability to secure capacity
  • Keys to finding the right transportation partner

Then take the necessary steps to discover how you can maximize your freight management solutions.

Fleets are working to take advantage of tight capacity by optimizing their lanes and converting empty miles to revenue miles, and Penske is finding creative ways to maximize backhaul opportunities.

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