Tuesday, September 24, 2013

Green Shipping Initiatives Aren't Enough

Capgemini's 2016 Future Supply Chain stressed the importance of companies today rethinking their approaches to supply chain in the future. With increased government regulations, rising economic costs, and consumer pressures for sustainable and social justice business practices, it is in the best interests of firms to prepare for the inevitable push to more environmentally friendly production networks. This report caused me to wonder what shipping companies can do to reduce their environmental impact. After all, in terms of carbon footprint, often times it is the shipping companies doing the bulk of the "dirty work" of a company.

I chose to examine UPS, a self-branded leader in logistics. According to their website, UPS in aware of the negative effect transportation has on the environment and shares its conscious customers' concern of its shipping consequences. This concern lead UPS to develop a variety of measures to lessen their environmental effects. These include carbon neutral shipping options (UPS purchases "certified carbon offsets" to balance the emissions produced during shipping), contributions to a variety of green initiatives (e.g. preventing deforestation, destroying landfill gases), and environmental monitoring evaluation for both UPS and their clients (miles driven, fuel/paper/water used, noise produced, etc). Furthermore, UPS has established Decarbonization Synergy for Energy & Efficiency a comprehensive set of strategies to reduce carbon emission through supply chain efficiencies and technology innovations.
While the strategies and services are impressive, their impact is relatively limited. These services are not included in their base level shipping services; it takes a socially-minded company to seek out these services. In fact, the webpage for carbon neutral shipping pinpoints this with the headline, "Are you conscious about the impact your shipping has on the environment?" The question becomes how much of an effect can UPS's green programs (and those of other shipping companies) ultimately have on the environment if the companies they distribute for continue to push for the less environmentally friendly options. For example, air shipping uses the most resources and leaves the greatest footprint and yet in an era when online shoppers are accustomed to quick deliveries its a critical resource for suppliers. The Capgemini report recommended the use of broad-based supply chain strategies in which companies look at the entire supply chain as a single entity rather than in silos. Because chains are only as successful as their weakest link, initiatives like those of UPS will not alone be enough to reduce the environmental impact.

For more information on UPS's environmental programs visit http://www.ups.com/content/us/en/bussol/browse/carbon_neutral.html 

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