Why Your Shipping Business Must Change for the Greener —and One Way to Do It
Supply Chain Sustainability Is More Important Than Ever
The best product or service on the market, an unmatched business strategy, top-tier talent — these are the makings of a world-class organization.
However, even if your company secures these assets, many workers, potential partners, and investors alike will pass on your business if the team doesn’t demonstrate one core competency: corporate sustainability. Environmental responsibility at the corporate level is no longer a trend but a requirement, especially for enterprise-size firms.
To meet this need, businesses are supporting initiatives that help the planet and are finding ways to lower their environmental impacts. Common tactics include:
- Setting goals for corporate sustainability.
- Creating an environmental strategy and putting it into practice.
- Building a green work culture.
- Purchasing carbon offsets.
- Partnering with sustainable organizations.
Another way firms are attaining corporate sustainability is using environmental impact to guide process adjustments. In terms of operational changes, the company supply chain is a natural starting point for eliminating waste and inefficiency. Take consumer packaged goods, for instance. According to McKinsey & Company, “most of the environmental impact associated with the consumer sector is embedded in supply chains.” The primary culprit is heavy-duty transportation, which makes up 95% of all freight emissions.
But new technology is streamlining existing shipping methods, driving innovation within the freight industry, and giving shippers sustainable options.
The industry has been notoriously slow to adopt advancements in technology and sustainability, even though inefficient processes cause transportation to emit more carbon than any other economic sector in America. In fact, transportation within the United States emits 1.9 billion tons of carbon every year, and 23% of these emissions come from medium- and heavy-duty freight trucks. On a global scale, transportation contributes to roughly 17% of greenhouse gas (GHG) emissions.
Cost is a typical objection to implementing green business procedures, but shippers should make the investment for several reasons, including:
- Corporate sustainability has become a non-negotiable for market competitiveness.
- Organizations that work to reduce GHG emissions achieve superior total shareholder return.
- Your firm may need to comply with environmentally focused regulations now or in the future.
- Boosting efficiency — like fuel efficiency — can lead to improved economic stability.
- GHG abatement prices are increasing as time goes on.
This article includes highlights from a downloadable white paper from Flock Freight, a Certified B Corporation. It dives into one tactic that shippers use to address the environmental impact of freight transportation: purchasing carbon offsets.
Learn More About Carbon Offsetting
What are carbon offsets, anyway? Here’s one definition:
“Carbon offsets are a carbon mitigation tool where an organization purchases a certificate that compensates for emissions the organization has generated. The offset certificate funds the reduction of carbon dioxide emissions elsewhere.”
As businesses face mounting pressure to be environmentally responsible, some are opting to address their emissions through carbon offset programs. According to Supply Chain Management Review, “The amount of carbon traded in the voluntary carbon offset market has grown nearly eightfold since 2005, and increasing corporate sustainability commitments will likely drive further investment in this arena.” The size of the carbon offset market is likely in the hundreds of millions of dollars, “with a potential annual offset impact of 100+ million metric tons of CO2,” states the same source.
Transportation-related carbon offsets account for less than 1% of the voluntary market even though vehicle movement contributes to roughly 17% of total global GHG emissions.
The chart below shows freight-service providers that contribute to carbon offset programs. These firms, on behalf of their customers, buy carbon offsets to address their emissions. These purchases work one of two ways:
- The service provider charges shippers for the offsets.
- The service provider foots the offset bill at no extra cost to shippers.
Critics of carbon offsetting question the practice’s effectiveness and suggest companies should change practices to minimize their emissions. Flock Freight addresses this concern by supporting a carbon offset program that improves industry infrastructure.
Address Supply Chain Sustainability with FlockDirect
To provide sustainable freight service, Flock Freight does more than offset shipment emissions. The B Corp reduces GHG emissions by fundamentally changing the way freight moves. In fact, we built a shipping mode that applies the concept of carpooling to shipping: shared truckload.
Shared truckload service enables several shippers to share trailer space in one multi-stop full truckload, creating optimal shipping outcomes. With shared truckload, shipments that are traveling on a similar route move on the same truck. Shared truckload freight travels directly from its pickup location to its destination — without passing through hubs or terminals.
Flock Freight goes a step beyond sustainable shared truckload service through our FlockDirect offering:
- All FlockDirect shipments move with shared truckload service, lowering each shipment’s emissions by up to 40%.
- We address the remaining impact of each FlockDirect shipment by supporting Carbonfund.org’s Truck Stop Electrification Project. This project slashes trucking emissions with the help of an IdleAir device, which gives drivers at rest stops access to electricity without the need for engine-idling. Contributing to infrastructure change is how Flock Freight offsets with impact.
Every time a shipper books FlockDirect, we buy carbon credits that offset the impact of moving the freight. We can provide proof to FlockDirect customers that their shipments moved carbon neutral via Carbonfund.org letters of verification.
Let’s Build a Sustainable Future Together
Shippers can thread sustainability into supply chains by partnering with innovative service providers that move freight efficiently and address carbon emissions. The responsibility of lessening the freight space’s GHG footprint is on all of us — together, we can pave a greener road ahead.
B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
