In the age of social responsibility and economic turmoil companies large and small strive to implement strategies to make both a social and financial impact on their businesses. Fortunately, “green” (aka sustainability) initiatives are an effective way to kill the proverbial two birds with one stone.  Within an individual organization the financial and environmental impact of transportation improvement initiatives can be significant.  Extending those initiatives beyond the enterprise can yield even greater improvements for the company and the larger community.

 

For Transportation Managers, the same practices that many deem to be “green” practices have been time-proven transportation efficiency and cost-reduction strategies.  Within a company’s four walls, practices such as load consolidation, continuous move optimization, mode shifting (ie, from LTL to Truckload or from over-the-road to intermodal), round-trip routing and optimized load planning have consistently delivered; reductions in empty and circuitous miles, increased utilization of cubic capacity, reduced number of trucks required to service your business, more accurate pickup & delivery scheduling and ultimately significant reductions in overall freight expense and improved operational efficiency; for many years.  These same strategies also deliver a measurable impact to a company’s sustainability initiatives by reducing carbon emissions and fuel usage.  More than half of the strategies recommended by the US Environmental Protection Agency’s SmartWay Transport Partnership are directly related to these battle-tested, efficient transportation practices.  Green really is the color of money!

When operating within its own supply chain, a company can most often drive significant financial and environmental improvements by implementing these practices.  However, by applying these same practices and technological capabilities beyond a company’s own supply chain and extending network density to include the supply chains of your trading partners, industry peers and those outside of your own industry the cumulative impact can be substantial.

Collaborative initiatives such as; cross-enterprise continuous moves (or capacity sharing), group bids, collaborative capacity management, and consortium-based rate and performance benchmarking leverages the density and volume of the community members to further optimize transportation practices and drive incremental shared benefits across all participating community members.  The opportunities for continuous moves and load consolidation are increased, the cost and empty miles associated with asset repositioning are decreased, the efficiency and productive turn of company-owned and carrier fleets is improved – all delivering financial and environmental improvements across a broader network of organizations.

Early attempts at collaborative transportation networks have varied in their success for many reasons.  A new, more refined approach to transportation collaborative networks has emerged.  This new breed of collaboration leverages constraint-based optimization and analysis techniques to identify synergistic opportunities and repeatable patterns across multiple shipper networks. 

In one such network, in a given month:

• 51% of the community’s volume created additional capacity for community members
• More than 90% of the total monthly volume in the network was included on a tour
• 83% of tours created had > 2 legs
• Overall average length of haul was reduced to 658 miles
• Average deadhead between legs was only 37 miles!!  

In this limited example it is clear to see how extending time-tested transportation strategies to collaborative practices organically creates additional network capacity, reduces the number of assets required to serve the business, reduces total miles and further reduces those inefficient, unproductive empty miles – leading to reductions in both freight expense and greenhouse gas emissions.  The benefits of these improvements cross enterprise barriers and extend in to the greater supply chain.

If you’re a shipper seeking incremental cost and sustainability enhancements, consider extending your “circle of influence” beyond the four walls of your organization.  You just might be surprised with the results.