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03.11.2021

3 Alternative Solutions for a More Sustainable Supply Chain

The European Climate Law, adopted last June, is an important step towards the European objective of becoming climate-neutral by 2050, as set out in the European Green Deal.

A key aspect of this objective is to reduce greenhouse gas emissions. To achieve this objective, a more sustainable transportation sector is crucial: it contributes to about one-quarter of global greenhouse gas emissions. Besides top-down policy decisions, there is also an increased consumer awareness about and demand for sustainability, both in processes and products delivered by companies. Given the rising level of international trade (due to economic integration) and increasing complexity of production, a sustainable supply chain remains a challenge for companies.

To tackle this challenge, manufacturers are eager to gain a global overview of relevant solutions for their specific sector. An assessment of technical solutions, process improvements and the trends that drive sustainable transportation, allows them to identify potential partners

A market scan is an ideal approach to build relevant insights in a quick and easy way. By building a knowledge base of recent articles, patents and press releases, you can identify relevant concepts, trends and actors in the general domain of the research scope. This initial research will serve as the basis for landscaping of potential solutions, as well as a PESTEL analysis. Once a full picture has been obtained, you have defined the monitoring arena and the basis for continuously monitoring areas of interest.

Trends linked to transportation in logistics

This article briefly showcases the results of a market scan using DataScouts on three topics within sustainable transport and logistics, related to both inbound (supply chain) and outbound (delivery to consumers) logistics. The topics are green last mile, load optimization and supply chain digital twin. These are areas of interest to corporates because they are not often associated with sustainable solutions for transporting goods. Most solutions (and communication) focus on alternative propulsion methods (battery-electric trucks, hydrogen fuel cell trucks) or alternative fuels (biofuels, natural gas, etc.). 

Although both of these solutions already cover a wide range, it is interesting for corporates to broaden their scope and investigate other types of solutions to make their supply chain more sustainable. The three topics discussed here contain solutions that require less capital investment than replacing an entire fleet of trucks and are thus more readily accessible. Others, like the supply chain digital twin, are interesting to monitor as they make use of state-of-the-art innovations in AI, machine learning and the Internet of Things to simulate supply chain changes before implementing them.

Sustainble Transportation in Logistics

Last-mile delivery refers to the final leg of transportation of goods, from transportation hubs to end destinations (typically consumers). Due to the rise of e-commerce and online shopping, this step in the supply chain has become increasingly important. It is also a very costly one: a survey has indicated that its cost account for 53% of total shipping costs, and 41% of total supply chain costs. As last-mile delivery often occurs in urban contexts, it is also an important source of emissions, noise pollution, congestion, etc. This means that there is a lot of room to make it more sustainable, and various solutions have come forward:

- Autonomous delivery vehicles for local transportation (Nuro, Starship Technologies, Argo AI, Waymo)

- Sustainable vehicles for last-mile delivery, like cargo bikes and electric vehicles (DHL Express collaboration with Velove and Cargo Cycling, Foodlogica)

- Crowdsourcing platforms (Bringg, Beelivery, Onfleet)

- Dynamic route planning (Less Platform, Bringg, Onfleet, Wise Systems)

- Platforms to connect shippers to carriers (Seven Senders, Brenger, GOI)

- Last-mile optimization through machine learning (Locus, Urbantz)

Green Last Mile

Another issue with the transportation of goods is that it often happens that trucks carry empty or half-full loads and are burning fossil fuels without actually transporting goods. To avoid this, there have been a number of initiatives to connect transporters with companies that need goods transported, through digital platforms. These freight exchanges allow for optimal utilization of trucks, for example through sharing of trucks by different corporates. Examples of such freight exchange platforms are Teleroute, Wtransnet and 123cargo (which are all part of the Alpega group), Haulage Exchange, TIMOCOM, FreightCenter, Shipper, Fretlink, and Ofload.

The increasing complexity of their supply chains sometimes makes it difficult for companies to obtain and keep an overview of these supply chains. A solution would be to design a digital twin of that supply chain. A digital twin is a virtual, detailed simulation model that uses real-time data and snapshots to predict supply chain dynamics. It combines the Internet of Things, Artificial Intelligence and Machine Learning to allow analysts to better understand their supply chains and simulate changes before implementing them. Last September, Google Cloud announced their Supply Chain Twin offering, which indicates that this is a promising area to monitor, as it contains one of the global tech leaders. Other actors active in this area include Logivations, Nexxiot, Roambee and E2Open.

The solutions outlined in this article are an example of how a market scan with a broader scope can help identify key trends, actors and solutions to achieve a more sustainable supply chain.

Webinar

On Thursday, 18 November 2021, at 01:00 PM CET, DataScouts will organise an online webinar about the results of a market scan, in detail, using DataScouts Platform on three topics within sustainable transport and logistics, related to both inbound (supply chain) and outbound (delivery to consumers) logistics. Register for free from the button below!

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