The Shifting Priorities of Green Transportation

Dec. 10, 2009
The logistics industry must take the lead on developing and implementing green technologies in ways that increase productivity, facilitate better management visibility, optimize operational costs and contribute toward environment substantially

The travel, transportation and logistics industries are undergoing a global transformation in an effort to maximize revenues, increase profitability and improve operational efficiencies. At the same time, they are facing pressures from the regulatory bodies to contribute positively towards environment and comply with global “green” initiatives. Apart from stringent environmental regulations, the other motivating factor to work towards green initiative is the scope to earn carbon credits for monetary benefits.

From hybrid to electric, innovations shaping the “green transportation” sector abound. However, there are certain ways in which logistics management, and not just vehicle construction, should be contributing to the environmental movement in ways that increase productivity, facilitate better management visibility, optimize operational costs and contribute toward environment substantially.

With nearly 75% of a company's carbon footprint stemming from transportation and logistics, it is an obvious starting point from which to reduce emissions and energy-waste. In fact, in a recent survey by AMR Research, 94% logistics companies surveyed said that they already have a green initiative underway.

Such reports summarize the way forward for the logistics industry if it wants to thrive in this era of new regulations and thinning operational margins. According to eyefortransport, nearly 85% of companies surveyed said that over the next three years green issues will become more important to their transport and logistics processes. What’s more, approximately 13% identified green issues as their number-one priority over the next three years, signaling a paramount shift in corporate priorities.

One example of the industry’s shifting green priorities can be seen through the International Air Transport Association (IATA). IATA has embarked upon an ambitious project of e-freight enablement, setting its sights to electronically process 67% of all documents required in e-freight transactions. By IATA’s estimates, this will result in saving $4.9 billion annually and would also result in better traceability, improved process efficiency, faster transactions and increased accuracy.

Based on IATA data, e-freight is helping improve the environment:

● e-freight enablement will eliminate more than 7,800 tonnes of paper documents, the equivalent of 80 Boeing 747 freighters.
● Paperless cargo processing could save the industry $1.2 billion each year and reduce shipping time by at least 25%.

Across the logistics industry, improved equipment servicing and active speed monitoring are contributing the most to green transportation management practices. NIIT developed iFUEL, which is a mobile asset management system targeted at the logistics industry. It will increase productivity, facilitate better visibility to the management, optimize operational cost and contribute to environmental sustainability.

iFUEL is one company’s response not only to the pressing industry need to cut-costs, reduce wasteful spending and improve efficiency but also to the global need for climate change. As ardent believers in the importance of a cleaner, better world, we believe solutions like iFUEL represent the next wave of logistics technology innovation.

Events such as the United Nations’ Copenhagen Climate Change Conference scheduled for December, the economic recession and the ensuing supply chain cost reduction it has forced as well as the increased importance of public relations to customers choosing strategic logistics partners, all lend weight to the importance of sustainable technology initiatives in the modern era. The logistics industry must continue to respond to these events while proactively taking the lead on research, development and implementation of green technologies–for the better of our industry, the economy and the environment.

For additional background and resources on “green initiatives” in logistics, visit Logistics Today’s Greensourcing page.

Debashish Debsikdar is with NIIT, an IT solutions organization providing services in application development, maintenance, enterprise solutions and managed services.

This article originally appeared in the Logistics Today digital magazine.

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