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The Importance of Sustainability in Logistics and Supply Chain

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​Green ideas and climate risk awareness are currently the main drivers, not only for business, but also in our private and community life. Whilst the environmental impact of COVID-19 has yet to fully pan out, the tendency towards implementing green initiatives has grown significantly over the last few years. This is particularly evident in the logistics and transportation industry, in a bid to adopt more environmental-friendly practices. Land, air and sea transportations have also seen a rise in the use of compressed natural gas and liquefied petroleum gas instead of conventional petroleum due to the increasing public awareness of the environmental impact and contribution to climate change. The combination of new government regulations and increased public demand for accountability are forcing the industry to look for sustainable logistics and supply chain options. In this article, I discuss what sustainable logistics means, how technology helps in enabling logistics providers to achieve a sustainable badge and how we are witnessing the changes of future logistics.

So, what is Sustainable Logistics?

Sustainable logistics refers to the practices and processes aimed at improving the sustainability of supply-chain activities, ranging from the supply of raw materials to the storage, manufacture and distribution of products. Transport is second only to the energy sector in terms of CO2 emissions and greenhouse gas production. That means it is responsible for one-fifth of the global CO2 emissions. Furthermore, the industry's contribution to CO2 emissions has increased by 1.9% annually since 2000, most of which can be attributed to the rise of globalisation and increased demand for consumer goods. So as the consumer creates the necessity for more movement of goods how can logistics companies meet the demand whilst still achieving that sustainable badge? The general belief among most companies with logistics operations is that shifting to sustainable solutions is an expensive venture. Many companies consider logistics processes as mere costs that do not generate any value for the company and its customers. These companies will tend to compress these costs as much as possible, selecting suppliers based on the lowest price, trying to limit the consumers visibility on these elements. But in reality, that's not always the case. Organisations can still comply with the sustainability guidelines and advanced planning tools and maintain a high profit margin.

Technology Advancement and Data

Thanks to advancing technologies, there are now also different sustainable logistics and supply chain management tools available. These remove the difficult choice between making profits and saving the planet. Using data to improve inefficient systems within the supply chain can be one of the most productive solutions. For example, it can help to reduce the number of unnecessary trips by optimising truck loading and give better routes with less stops meaning a more efficient engine. Being sustainable is no longer a nice to have as governments are taking strong action to slow down climate change. Renewable energy and efficient systems are becoming a regular part of global logistics. Transforming businesses to include these factors can help companies win bids with logistics tenders - companies that pollute less have higher chances to win contracts. It also improves compliance with government guidelines and increases awareness of the brand through customer engagement. The more efficient the system is, the higher your profit margins will be.

Singapore towards achieving a Green Logistics

Singapore is researching methods to help reduce emissions in the country but how much of that is targeting the logistics industry? Under the Sustainability Singapore Blueprint, the government has also set initiatives and plans to achieve a cleaner and sustainable living environment by reducing greenhouse gas emissions and the logistics industry plays a vital role in this plan.

Technology Breakthroughs in the Logistics industry

Most would know that the logistics industry is deemed to be a conservative industry. Lack of digital culture and training is still the biggest challenge facing transportation and logistics companies. However, I have seen most transport and logistics companies in Singapore moving in line with other industries in planning to invest their revenues in the next few years. Adopting technological innovation in the form of AI, robotics and Internet of Things (IoT) will make it easier to facilitate autonomy. Taking advantage of the ability to embrace new technologies will enable the business to thrive in this new economy. This has also led to an increase in new roles that were traditionally not found in the logistics sector beginning to emerge with technology adoption. These include data-analysis and data-management roles, software development job roles, & digitalisation and automation job roles. In the longer-run, I foresee that logistics companies need to embrace technology transformations so that they can move towards customer-centricity and build agile and resilient supply chains. Wouldn't it be interesting to see constantly evolving technologies such as drones or other advanced robotics as the future of logistics technology and sophisticated warehousing solutions? After all, going green is not just for ourselves but for the many generations after us. I'm Dilla and I recruit in the Maritime logistics and freight forwarding sector. Connect with me or contact me and let me see how I can help you find your next role in the APAC region.


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