Calculating carbon emissions in the supply chain is challenging—especially as supply chains grow more complex and include third parties and stakeholders who perform outsourced operations. When companies disclose greenhouse gas (GHG) emissions, those emissions are organized into three categories, or “scopes,” as defined by the GHG Protocol Corporate Standard. While Scope 1 and Scope 2 emissions are generated by a business’s direct operations, Scope 3 emissions include all those activities that are beyond the control of the business and impact its value chain indirectly. Scope 3 emissions, better known as value chain emissions, account for the majority of an organization’s GHG emissions and result in increased carbon emissions in its supply chain.
Why Carbon Emissions in The Supply Chain Matter
A recent study has revealed that the global supply chains of multinational companies, including consumer packaged goods companies, are responsible for almost a fifth of total carbon dioxide emissions worldwide. With increasing pressure from governments, investors, and activists to reduce carbon emissions, businesses are working to minimize their environmental impact by building more sustainable supply chains. In doing so, they have also discovered opportunities to create a positive brand image and connect with end consumers who prefer environmentally-friendly products. Further, carbon footprint reductions enable businesses to improve their bottom line by burning less fuel during operations.
Ways to Reduce Supply Chain Emissions
To reduce their contribution to global carbon emissions, businesses can optimize their supply chains and minimize wasted resources. The following are a few ways operations managers can accomplish these reductions:
Implement the ‘Reverse Logistics’ Approach
The ongoing flow of materials across a supply chain does not necessarily stop once products reach end consumers. Reverse logistics account for a product’s travel back through the supply chain due to manufacturer product recalls, or customer returns and exchanges. By implementing the reverse logistics approach, businesses can ensure that damaged, returned, or recalled goods are shipped properly for repair, recycle, or disposal. Moreover, effective reverse logistics strategies can reduce returns altogether (and the unnecessary transportation moves that accompany them). And as companies achieve these kinds of reductions through reverse logistics strategies, they also decrease their supply chain emissions.
Reduce Shipment Weight
A critical component of sustainable freight transportation is shipping weight. By reducing shipment weight, companies can increase the mileage of existing vehicles and lower fuel expenditures. However, logistics managers are often challenged to decrease the weight of product loads while fulfilling the same number of customer orders. Companies have been able to meet this challenge by reducing both product packaging and shipping pallet weight.
Create Circular Supply Chain Models
Unlike a linear supply chain, a circular supply chain has no distinct start or end points. With an emphasis on recycling and reuse, a circular supply chain can minimize empty transportation legs and, in turn, reduce carbon emissions. In doing so, a circular supply chain also helps businesses optimize resources and further reduce their total cost of business (TCOB).
A cost-effective, sustainable, and easily implemented alternative can be realized by introducing plastic pallets in the supply chain.
Though companies understand the importance of green supply chain management, they often delay adopting new strategies and technologies to reduce carbon emissions in the supply chain. One underlying reason for this delay is the significant investments required to introduce new software, research durable and sustainable packaging, provide incentives to promote recycling, or make a switch to electric vehicles. A cost-effective, sustainable, and easily implemented alternative can be realized by introducing plastic pallets in the supply chain.
Switch to Plastic Pallets to Reduce Carbon Emissions
Commonly used wood pallets contribute to ongoing deforestation and often end up in landfills when they are no longer usable. Further, wood pallets can be 20 pounds heavier than plastic pallets, which increases the overall weight of shipments and leads to increased fuel consumption. Additionally, surface nails and splinters on wood pallets increase the risk of product damage that can result in expensive recalls or returns. As a result, wood pallets eventually increase carbon footprints in logistics operations and negatively impact supply chain sustainability. In contrast, plastic pallets offer the following benefits that can significantly lower carbon emissions in the supply chain.
- Up to 35% lighter with increased durability: The unmatched durability of plastic pallets reduces the chances of product damage while their lighter weight helps lower overall shipment weight. For products that ship by weighing out, plastic pallets ensure that more the overall shipment weight is based on the product, rather than packaging weight. For vehicles carrying products that cube out, plastic pallets offer a much lighter load.
- Recyclability: High-quality plastic pallets complement a circular supply chain because they are recyclable. On average, a plastic pallet can make 80-100 trips across the supply chain before it is ground down and recycled into a “new” pallet—a measure of true sustainability
- Pallet pooling: A plastic pallet pooling program can significantly increase a company’s sustainability while eliminating the need to transport empty pallets and incur unnecessary costs.
By switching to plastic pallets, operations managers can implement an affordable and sustainable circular business model. Additionally, this greenhouse gas calculator can help managers keep track of their ongoing fuel and transport savings, as well as carbon emission reductions that result from greener logistics operations.
iGPS plastic pallets improve the sustainability of your supply chain operations while helping to cut down carbon emissions. To know more about how recyclable pallets can help you minimize your company’s environmental impact, give our team a call at 1-800-884-0225, email a specialist at switch@igps.net, or visit our contact page.
