Parcel shippers are looking to find both profit and sustainability within their supply chains, but most don’t know where to start. With change brought on by the pandemic and rising consumer demand for green business practices, many shippers are feeling the pressure to future-proof their shipping operations while advancing sustainability efforts.
With shipping data, it’s possible to achieve both. Shipping data holds the power to eliminate waste, reduce fuel surcharges, and fully optimize supply chains for long-term sustainability and profit. Through analyzing data and implementing new technologies, parcel shippers hold success in the palm of their hands.
Start Eliminating Supply Chain Waste
Waste can creep into all touchpoints of a supply chain. But many shippers fear that the steps necessary to limit waste would be detrimental to their bottom line. That couldn’t be farther from the truth. Aiming for greener supply chains reduces not only a shipper’s carbon footprint but also their shipping costs.
Consider market expectations. Consumers have spoken, and they’re not happy with excessive packaging; in fact, they’d be willing to wait longer for delivery if it’s being shipped in a more sustainable way (think slower ground service vs. faster air service). Additionally, 57% would be willing to pay more for an eco-friendly package, rather than be stuck with overfilled or oversized boxes.
Shippers should pack like a pro. There’s a growing market for sustainable packaging made from eco-friendly materials. Modeling optimal package sizes can reduce both material waste and costs. Incentives can be given to choose green packaging at customer checkout. Additionally, inventory management technology can help create systems that eliminate waste and drive efficiency throughout shipping operations.
This is a two-fold win: You’ll be reducing waste and material costs and improving the customer’s experience. Packaging company Shorr found in a study that nearly a fifth of consumers say excessive packaging negatively impacts brand experience, and according to Sifted’s research, 81% of consumers feel that most companies are using excessive packaging.
Reduce Shipping Fuel Surcharges
The pandemic prepared shippers and brands globally for the unexpected. However, the wave of new challenges hasn’t ended. Carrier fuel hikes are eating up bottom lines, and many of these cost increases can’t be solved by simply adjusting a carrier mix.
FedEx and UPS upped their ground fuel surcharges 9 times in the first 90 days of 2022, and these charges will only continue to increase. Plus, you can expect nearly every delivery area surcharge to have a fuel surcharge attached to it.
Luckily, there are several steps that can be taken to avoid surcharge pain. Historical data and shipping ZIP Codes can uncover how far packages travel and help calculate the fuel surcharges assessed to an average package. Additionally, it can help supply chain managers determine the carbon footprint of their shipping operations and, more importantly, progress that’s been made to reduce it.
Shippers should reach out to their carrier or 3PL provider to better understand their fuel surcharges and how they can mitigate their impact on shipping operations while still meeting consumer expectations.
Fully Optimize Supply Chain Operations
The shipping industry is starting to look like a scene from Alice in Wonderland. But shippers can ‘keep their heads’ by learning to ship smarter and finding those key touchpoints in their supply chain that need enhancement.
Using shipping data, shippers can filter through their costs by zone and service level to achieve shipping goals faster and find service levels that minimize costs (and in some cases, emissions) without sacrificing delivery speed. By analyzing their data, shippers can determine key cities or regions where larger portions of their customer base is located, and position their distribution/fulfillment centers in locations close to these areas. With shorter distances to travel, they can achieve the same shipping speeds with a cheaper, more sustainable ground service, rather than an air service. This will reduce delivery times, emissions, and shipping costs.
Additionally, shippers should consider their product data when selecting their network’s locations. If certain products sell more in certain regions (for example, a yard care equipment business might sell more shovels in the northern US and more pool chemicals in the southern US) they should obviously be primarily stocked at warehouses and distribution centers in that region. Again, this will lead to shorter delivery times, lower emissions, and lower costs on average.
Analyze with Ease
Shippers that optimize all functions of their supply chains – from the point of manufacture to delivery and reverse logistics – can slash waste and maximize revenue. And there are no spreadsheets required. They can do it with smart analytic and modeling software specifically built for shipping data.
Shipping data can be the key to sustainable supply chains. Still, it’s inherently complex. Analyzing and modeling shipping data to identify and address inefficiencies is, itself, inefficient. Because of this, logistics intelligence software has become a rising force in the market, helping supply chain managers easily analyze and act on their data.
It’s clear that sustainability is top-of-mind among consumers, especially with supply chains and last mile delivery. By harnessing their data, parcel shippers can take the steps to make their operations — and wallets — much greener.
At the end of the day, what’s good for the planet is good for business.
Caleb Nelson is Chief Growth Officer at Sifted.
This article originally appeared in the September/October, 2022 issue of PARCEL.