ADVERTISEMENT
Supply chain events are mostly transactional, not relationship-
based. A manufacturer or retailer will often instruct suppliers to
drive down costs, and use the threat of lost business as a hammer.
That won’t work here. Relationship building is an absolute must
if sustainability initiatives are to be, well, sustainable. One solid
approach is to create programs that promise mutual benefits if
successful. At the same time, these programs must lay out clearly
defined benchmarks to guide compliance.
Transparency between partners is essential. In the logistics field,
vendors of all types often complain they are denied access to
intelligence that the customer deems confidential, but that the
supplier believes would help it do a better job. When it comes
to forming mutually beneficial sustainability initiatives, however,
information must be freely exchanged regardless of the potential
for cultural pushback. This is where the customer, often the larger
of the two parties, needs to exercise leadership and ensure full
visibility of information.
For stakeholders, credible financial reporting is at the heart
of transparency efforts. When a company prepares a corporate
sustainability report it tells the world that openness is a priority
and that it is in the best interest of the company to make the
information public.
For several reasons, UPS recommends that a third party validate
and assure a company’s sustainability report and Statement of
Greenhouse Gas emissions. First, a company is willing to work
harder to produce more accurate and detailed information if it
knows the data is subject to review by an objective source. Third
party reporting also elevates sustainability to the same level of
trust as financial reporting; no serious investor would put much
stock in a company’s financial results without assurance from
a third party whose reputation is at stake. The same approach
should apply to sustainability.
Lastly, credibility breeds consistency, which allows stakeholders
to draw clear and accurate comparisons between companies. As
sustainability continues to become more important, firms receiving
third-party verifications will benefit as stakeholders put more of their
money to work supporting those with a clear history of transparency
and credibility.
For UPS, the ability to comprehensively measure its greenhouse
gas emissions can also benefit customers seeking accurate insight
into their own operations --- in many cases, UPS essentially serves
as a customer’s supply chain. For these customers, UPS offers carbon
impact analysis and carbon neutral services.
Sustainability initiatives should also be kept simple. It is, after
all, environmental science, a subject whose esoteric nature is not
easily grasped by the layperson. The science should be distilled
into actionable data that translates abstractions into understandable
outcomes for the customer and its employees.
UPS’ role here extends beyond a transporter of products. As a
company that knows a thing or two about packaging, UPS advises
businesses on efficient packing techniques that use less paper
and save on shipping costs because of less empty air. In addition,
UPS’ routing, scheduling and dispatching software is today used in
140,000 customer vehicles to reduce emissions and improve truck
productivity. This shaves 824 million miles from driving routes a year,
while eliminating about 1. 3 million metric tons of CO2.
UPS is not a newcomer to sustainability endeavors. In 1998, it
introduced a Reusable Express Envelope comprised of 100 percent
recycled fiber with 80 percent post-consumer waste. The envelope
can be used twice, which reduces waste and adds convenience
for businesses that ship documents that must be returned at some
point. After its uses, the envelope can be recycled and turned into
something else.
With more than 2,600 alternative fuel and advanced technology
vehicles, UPS is also a global leader in pioneering alternative fuel
and advanced technology vehicles. Just two months ago, UPS
announced the planned purchase in the U.S. of 700 tractors powered
by liquefied natural gas, or LNG, by the end of 2014. It also plans to
build four LNG refueling centers over that time, bringing its refueling
network to nine facilities. According to industry estimates, that
clean-burning energy source cuts CO2 emissions by 20 percent. The
importance of using LNG can’t be overstated: UPS’s transportation
network—including assets such as over-the-road tractor-trailers and
aircraft—accounts for about 70 percent of UPS’ carbon emissions.
By contrast, its ubiquitous brown package trucks account for only
19 percent. This LNG purchase will help UPS achieve its goal to
drive 400 million miles in alternative fuel and advanced technology
vehicles by 2017.
As a very important side note, LNG costs about 30 to 40 percent
less per mile than fossil fuels. Considering that a typical UPS tractor,
which often runs between the company’s U.S. hubs, logs about
100,000 miles a year, the fuel savings can be impressive.
This article has briefly touched on the role that logistics plays in
helping businesses flourish and be more environmentally aware
at the same time. It’s impossible to condense such a complex,
important and far-reaching objective into a relatively short
piece. Suffice it to say that manufacturers, shippers, carriers and
customers—as citizens of the world—are starting a long journey
that has no finish line.
