How 3PL Providers Can Promote Sustainable Supply Chain Management

Success for every organization that sells, makes, or distributes goods relies on a high-functioning supply chain. For many companies, the social and environmental costs of their internal operations are much smaller than those generated by their supply chains. In fact, McKinsey has found that more than 90 percent of the consumer sector’s environmental impact can be traced back to supply chains. 

Consumers who are concerned about the sustainable sourcing of the products and services they purchase often hold businesses responsible for ensuring the ethics of both internal operations and associated supply chain processes. Near unanimous customer demand for ethical business practices  is prompting companies to consider strategic ways to reduce costs and environmental impact by placing greater emphasis on sustainable supply chain management. 

Because successful supply chains involve the interplay of many moving parts, these consumer demands — along with advances in vehicle emissions legislation — underscore the need for companies to take concerted action to reduce their environmental impact. Fortunately, by working closely with third-party logistics (3PL) providers, businesses can overcome these unique challenges and conflicts in sustainable supply chain management.

With few exceptions, no one company has direct control over their supply chain from production to warehousing to shipping, which means that 3PL management solutions are poised to help promote better sustainable supply chain management practices. One major way that 3PL providers can drive sustainability initiatives is by integrating cutting-edge technology into supply chain management. Developments in emissions-measurement tech have made it easier to track and manage the sustainability of transportation services, which in turn provides companies with sustainability reports that indicate performance metrics like fuel efficiency and emission rates. 

Beyond tracking and managing the performance metrics of supply chains, 3PL providers can help reduce the eco-impact of supply chains through the implementation of smarter, less carbon-intensive transportation solutions. These can include opting for rail- and ocean-based distribution systems or fleets of hybrid or natural gas vehicles. 

The data-driven approach to performance management helps to optimize operational processes at every point in the supply chain. 3PL providers with access to transportation data can consolidate shipments or use intermodal services — simultaneously streamlining processes for overall efficiency and reducing the environmental impact of delivery processes. Entrusting 3PL providers to monitor environmental performance ensures that shipments are in compliance with location-specific regulatory standards before they leave the warehouse. 

Data also allows for optimized 3PL warehouse management systems that store inventory closer to its intended destination, thereby cutting down on shipping costs and reduce wasted movements that come with relocating inventory between DCs. Best practices will consider factors like energy-efficient lighting, occupancy sensors, and recycling programs when looking to run inventory management systems more effectively and sustainably.

One final way that 3PL providers can contribute to sustainable supply chains is by helping to establish efficient reverse logistics operations. Creating the necessary infrastructure to support product recycling, refurbishment, or disposal goes a long way toward reducing the environmental impact caused by the end of a product’s lifecycle — as does partnering with providers with centralized warehouse and distribution points. Going paperless, reducing wasteful shipping products, and shifting toward reused packaging are other ways that 3PLs can further lessen businesses’ carbon footprint.

The Importance of Sustainability in Supply Chain Management

Investing in sustainable practices is a smart, forward-thinking business strategy that can help position companies as strong competitors in their fields. As more and more businesses realize the importance of sustainability in supply chain management, they’re choosing to partner with 3PL providers to offset their environmental footprint and improve efficiency. While many organizations will still be responsible for some degree of impact, those looking for further reduction should consider working with carriers that offer additional offsets in the form of investments directed into environmental initiatives and restorative projects.