With rising concern among the public and government for the environment and a push toward sustainability, it’s logical that businesses will be held responsible for their environmental impact. These days, many companies adopt sustainable business processes to meet customer expectations and fulfill their corporate responsibility.
Third-party logistics (3PL) is no exception. Whether you realize it or not, third-party logistics has a large carbon footprint with a direct negative impact on the world around us. Paper and plastic are often wasted when packing items, and fuel is used to transport items from warehouses to customers.
How can 3PL companies fulfill their responsibility to the environment without sacrificing logistics effectiveness? Read on to find out.
What Is Third-Party Logistics?
Third-party logistics is a service where companies take over a client’s entire order processing operations. The third-party logistics provider takes care of everything including receiving, inventory management, picking and packing, shipping and handling returns.
This service is popular because clients don’t have to operate their own warehouse or have a dedicated inventory management team. All they need to do is pay the subscription fee and have the manufacturer or vendor send items to the 3PL company’s fulfillment centers.
What Is a Sustainable Supply Chain?
A sustainable supply chain is a supply chain that applies ethical and sustainability practices. Having a sustainable supply chain means every link in the chain must have as little carbon footprint as possible.
Additionally, eco-friendly supply chains must be transparent. You can’t just say that your 3PL company implements green supply chain management – you also need to prove it through action.
Here are four sustainability initiatives 3PL companies can pursue:
Reducing Your Carbon Footprint
A carbon footprint includes all the greenhouse gasses like carbon dioxide and methane that an activity produces. The larger the carbon footprint, the more environmental pollution your supply chain activities make. The supply chain produces a lot of carbon because many of its activities involve transporting products from one place to another.
A 3PL company can reduce its carbon footprint by adopting environmentally friendly business practices and green initiatives. This means reducing waste, recycling resources, choosing eco-friendly suppliers and other sustainable practices.
Product packaging is a large source of waste because most people throw them away as soon as they get the item. One of the best ways to implement green packaging in a 3PL business is to use biodegradable and compostable materials, meaning they’ll break down quickly once thrown away.
Many companies spend resources on making elaborate packaging that’ll be tossed quickly by the end customer. To counter this, you can implement discreet shipping and packaging, which entails simple and unadorned packages bearing only essential information about their contents and recipients.
Choosing Sustainable Transportation
Your goods transportation method matters because different transportation methods consume different amounts of fuel.
Third-party logistics companies can reduce their freight emissions by choosing transport methods like trains, ships and biofuel-powered cars. Fortunately, recent developments in alternative fuels, fuel efficiency and electric vehicle technology make sustainable transportation more affordable.
They can also minimize their carbon emission rate by reducing the distance between fulfillment centers and the customers.
Optimizing Energy Use in Warehouses
Warehouses use a lot of energy and tend to have a large carbon footprint, so it’s something third-party logistics companies must address. They can optimize their energy consumption in warehouses by switching to LED lamps, using lights only when needed and generating their own power through solar energy.
Why 3PL Sustainability Matters
3PL sustainability matters because it’s your responsibility as a company to watch your carbon footprint and improve sustainability. That also means implementing environmentally friendly practices.
It’s not just for 3PL companies, either. While there are differences between 2PL, 3PL and 4PL companies, all logistics service providers should implement supply chain sustainability measures to minimize their carbon footprint.
In the end, being sustainable and reducing your carbon footprint ends up benefiting all of us. We’re all living on the same planet, and it’s our responsibility to leave a world that our children and grandchildren can live in by preserving natural resources and saving energy.
Gen Z Is Looking for Change
Gen Z makes up around 20% of the American population. This large demographic is mostly environmentally aware, meaning they often prefer to buy products from sustainable brands. In fact, three-quarters of them are more than willing to overlook brand names and change their buying habits in favor of sustainability.
If you and your business partners want to increase customer loyalty from Gen Z, you need to demonstrate your methods are sustainable and can make a positive impact on the environment. Choose environmentally friendly transportation and work with eco-conscious partners to boost your chances of attracting their attention and fostering customer loyalty.
What Sustainability Means for 3PLs
The increasing customer pressure for sustainability means 3PL companies need to adopt environmentally friendly practices if they hope to attract business from sustainable business organizations.
This might prove to be a challenge since you may need to revamp whole business processes to reduce your carbon footprint. Moreover, logistics operators need to implement environmental initiatives in competitive market conditions without sacrificing operational or financial performance.
Fortunately, 3PL companies aren’t alone in this endeavor. You can work with environmental advisors, industrial experts and 3PL consultants to ensure the new business processes have smaller carbon footprints while still retaining logistics effectiveness.
Sustainability is a major concern for companies, and 3PLs should follow suit. Some sustainable development initiatives 3PL companies can implement include:
- Implementing green packaging
- Choosing sustainable transportation methods
- Optimizing energy use in warehouses
However, environmental sustainability isn’t just a social performance to attract business. Implementing sustainability initiatives is important because companies have to be responsible for their greenhouse gas emissions. Minimizing your environmental footprint through sustainable initiatives means keeping the planet livable – not just for us but also for our descendants.
Sustainable 3PL FAQs
What is sustainable supply chain and logistics?
Sustainable supply chain and logistics is an eco-friendly principle where companies minimize the environmental impact of their logistics activities. This means reducing their carbon footprint by implementing sustainable practices like green packaging and eco-friendly transportation.
What are the four types of 3PL?
The four types of 3PL are:
- Standard 3PL providers: These companies provide the basic 3PL services to handle a client’s order processing and warehouse management operations.
- 3PL service developers: These companies help clients build their company’s IT infrastructure and management to handle inventory operations.
- 3PL customer adapters: These companies take over almost all of the client’s logistics functions, including negotiating shipping rates.
- 3PL customer developers: These companies take control of the client’s entire supply chain operations, essentially becoming the company’s outsourced logistics department.
What are third-party logistics and what are the examples?
Third-party logistics are services where companies handle a business organization’s entire order-processing operations. Third-party logistics service providers receive items from manufacturers, store them at warehouses, ship them out to customers and handle returns from customers.
Some examples of third-party logistics operators include ShipHero, FedEx Fulfillment, Red Stag Fulfillment and many others.