Editor’s note: Environmental, social and governance (ESG) initiatives are no longer just “nice to have,” and simply moving freight around the globe has a significant impact on sustainability. In this second of two parts, Rick LaGore, co-founder and CEO of third-party logistics (3PL) provider InTek, discusses implementing sustainability practices in logistics and the advanatges of intermodal shipping.
- What strategies can be implemented to achieve sustainability in shipping?
While it is challenging to make the shipping industry carbon neutral, there are ways to make it much more sustainable.
Examples for improved sustainability include ensuring containers/trailers are full to avoid wasting energy transporting partial loads or even empty containers. Consolidating less-than-truckload (LTL) freight is a great way to maximize cargo space to avoid moving large portions empty.
The use of intermodal transportation is a simple and highly cost-effective way to improve sustainability as it reduces the number of trucks on the road and offers far more fuel efficiency than trucking. Additionally, on the international front, using ocean container shipping rather than air offers significant emission savings. TMS software and add-ons can help optimize routes for greater fuel efficiency.
2. What makes intermodal shipping the most sustainable method for transporting freight?
There are several green alternatives that people in the industry are discussing that are still more of a concept than an existing reality. The electrification of trucking fleets is the green solution many people push for, but the reality is under today’s infrastructure and technology of the trucks themselves they are not a direct replacement for over the road diesel trucks.
Intermodal can have that immediate impact for businesses, as it is a solution that streamlines supply chains, brings additional freight capacity to shippers, and minimizes harmful emissions. A single intermodal train can carry the equivalent of 280 trucks. It takes those trucks off the road, subtracting their emissions as well as reducing traffic congestion. This makes intermodal a powerhouse in reducing the carbon footprint by 60 percent as compared to trucking. Cleveland Research reports there are 45 million truckload shipments that could be converted to intermodal service, so there is no lack of opportunity.
When looking towards the future, the rail industry is also exploring electric and hydrogen-powered alternatives to diesel for both long-haul trains and at intermodal yards. In fact, in May 2023, Forbes recognized numerous Class I railroads as companies best positioned to be net-zero by 2050.
3. Many organizations aim to prioritize ESG, yet they face pressure to limit costs while maximizing efficiency in the current financial climate. How would you address these cost concerns?
A robust ESG strategy is often associated with high cost, but intermodal transport is both green and cost-effective. Integrating intermodal transportation into a company’s supply chain brings economic and environmental impact advantages.
Intermodal brings with it 15 percent to 18 percent lower freight transportation costs compared to truckload options on the same freight corridors. The Journal of Commerce documents this savings in its quarterly Intermodal Savings Index. This strategic move optimizes logistics expenses, while making a powerful statement in favor of environmental stewardship.
In the long term, choosing green transportation solutions mitigates risk of fines/penalties. As environmental impact regulations become more stringent, businesses that integrate intermodal transportation and other sustainable supply chain solutions will find it easier to comply with emissions standards and other environmental requirements, avoiding potential financial penalties.
4. For organizations that are unsure how to reduce their carbon footprint through sustainable shipping, where would you advise they begin their ESG journey?
As managing complex supply chains can be a challenge, outsourcing logistics to a third party can make it much simpler for businesses to plan long journeys with multiple modes of transportation.
Finding partners who have a track record of putting sustainability into practice, for example, those who are EPA SmartWay certified in the U.S., will put you on the right track towards sustainable commitment.
The post Navigating the ESG Landscape in Freight & Logistics, Part 2 appeared first on EPS News.
