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Sustainable Shipping: The Push to Carbon Neutral Shipping

by Andrew Fanner,
Jul 1, 2024
carbon neutral shipping practices
carbon neutral shipping practices

Table of Contents

ESG concerns should be at the forefront of every company’s agenda. Beyond environmental concerns, logistics companies that don’t prioritize carbon neutral shipping risk significant financial, operational, and reputational damage.

Combined with rising consumer demand for sustainable products and regulatory and compliance pressures, logistics providers need to start working toward carbon neutral shipping immediately.

What exactly does carbon neutral shipping mean, how does it impact the environment, and where should you begin?

What is carbon neutral shipping?

Logistics are the backbone of modern life. But the industry significantly contributes to global pollution, specifically greenhouse emissions. The International Energy Agency estimates the transportations sector’s total contribution of emissions totals 15%.  In the US alone, heavy-duty vehicles represent about 23% of the transportation sector’s emissions.

Carbon neutral shipping is the practice of offsetting these emissions. The first thing that comes to mind for many logistics providers is the shift to electric vehicles, which is part of the solution. However, this will take years and, more importantly, only represents part of the solution.

Carbon neutral shipping is more encompassing. It involves calculating the total carbon footprint across transportation modalities. From here, companies invest in environmental projects that reduce or absorb equivalent amounts of carbon dioxide. Reforestation, renewable energy development, and energy efficiency initiatives are among the most common approaches.

How to Implement Carbon Neutral Shipping Into Your Business

Building efficiency across each of your processes as a cornerstone of every company’s push toward carbon neutral shipping. This is within the power of every company. Here are six cost-efficient practice you can adopt now:

Evaluate your current carbon footprint

Every logistics provider should have a comprehensive understanding of their operations across fuel consumption, warehouse energy, and transportation emissions. This includes vehicle mileage collection alongside fuel and energy source analysis. From here, you can use carbon footprint calculators to get an estimate of your current situation.

Route optimisation

According to fleet size, current route efficiency, and the type of goods transported. McKinsey estimates optimize reduce fuel consumption and CO2 emissions by up to 10-20% for logistics providers, proving how carbon neutral shipping can also help you drive down costs.

UPS, for example, has been able to save 10 million gallons of fuel annually through route optimization software.

Implementing Smart Logistics Solutions

The digital transformation of the logistics industry not only enables carbon neutral shipping but also drives down costs across operations. Smart logistics solutions such as real-time tracking, predictive maintenance, carrier integrations, and data-driven decision-making streamline processes, minimize delays, and maximize uptime. Moreover, they enable you to enhance service quality and boost competitiveness.

Carbon Offset Provider Partnerships

Offset providers have been central to working toward carbon neutral shipping for years now. They offer a range of certified projects, including reforestation, forest preservation, as well as renewable energy and community-based initiatives. Often, governments may have subsidies or tax incentives to encourage these partnerships, so ensure you look into what may be available to you.

Green Technology Investment

Electric and hybrid vehicles have rapidly gained ground across every step of the logistics industry. But there’s more to it than waiting for the perfect long-haul electric vehicle. You can fast-track your company’s shift to carbon neutral shipping by examining your entire operations.

This includes shifting to energy-efficient packaging materials, introducing solar and other renewable technologies in your warehouses and offices, and encouraging energy savings. This contributes towards sustainability while increasing long-term cost savings for your business.

Monitor and Report Progress

As with every stage of your operations, monitoring your carbon neutral shipping initiatives is a cornerstone for tracking progress and identifying improvement areas.

The smart logistics solutions you implement will be key for measuring effectiveness and informing data-driven decision-making to enhance sustainability initiatives. Reporting these achievements will also strengthen your brand reputation.

Even if you don’t achieve 100% carbon neutrality overnight, your customers and the broader market will value your commitment to environmental responsibility, helping distinguish you from competitors.

Carbon Neutral Shipping: A Critical Goal for Every Logistics Provider

Embracing carbon neutral shipping not only meets sustainability goals but also drives down costs and positions businesses at the forefront of the shift to green logistics. Most importantly, this goal does not require massive investment. By focusing on smart logistics solutions, you can optimize routes, enhance efficiency, and minimize emissions.

Move your company ahead and start embracing the cost, reputational, and environmental advantages these technologies can offer your organization.

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