Going Green in the Supply Chain!

With going green at the forefront of everyone’s mind, “green logistics” of lowering the carbon footprint is equally a priority for supply chain executives! 

Both an increase in global environmental awareness and greater regulatory and governmental pressures has combined to leverage companies into reducing their carbon footprints.  In Europe, “green legislation” is becoming a reality and eventually will in other countries.

One of the biggest carbon footprints is created through the supply chain and logistics operations in its production, storage, and transportation of goods. 

Therefore executives are rightly being forced to examine their approaches and respond accordingly.  Additionally, long-term competitive strategy is a primary concern and going green has become a crucial consideration towards achieving their goal of creating and advertising environmentally friendly supply chains.

There are three main challenges for the industry to overcome if green logistics is to become a reality.

1. Lack of appropriate technology in place to support companies in their effort
2. Lack of business processes needed to capture the data and use it effectively
3. The trade-off between green requirements and lean practices lending to smaller shipments rather than bundling.  

The supply chain going green is an industry issue that is only going to increase in stature. 

We at Unitrans are committed to going green.  Among many simple considerations we make are: reducing truck idling to save fuel and transmissions, recycling the use of packaging materials and shipping paper and metal products to a recycling company, and turning off lights in areas of the company that are not currently in use.

Carrier Costs Increase as do Shipper Costs!

The poor economy has driven thousands of carriers out of business over the past 18 months.  At the same time shipments nationwide declined.  With the lack of demand for trucking, not many shippers noticed that lack of supply in available carriers. 

Now that the economy is sputtering back to life with more of a demand for shipments, the lack of supply in carriers is suddenly noticeable by the shippers.  This lack of supply is having two effects: slower transports and rapidly inflating prices.    

In the past few weeks, the pricing power of the carriers has translated into prices rising as much as 30% in some instances.  This is especially true in difficult transportation regions of the country (Northeast, Florida, Texas, etc).  The market is changing very quickly right now, to where a quote this week might be much higher by next week!

100% of Air Cargo Screening is Still Two Years Away!

The US Department of Homeland Security’s timeline for screening international air cargo arriving on passenger flights will likely take longer than initially forecasted.  The acting director of the TSA, Gail Rossides informed the House of Homeland Security Appropriations Subcommittee that it will be feasible for all domestic air cargo to be screened by the intended August 3^rd deadline. 

However, it is estimated that only 65% of international air cargo will be screened by the deadline.  It is likely that it will take two years for before 100% of the international cargo is being screened.  The new estimate is based on the current volume of imports  (1.5 tons annually from 97 countries).  The majority of imports (85%) come from 20 countries.

The TSA has advised the US Congress on at least 2 occasions that the deadline could not be met for internationally screenings. Warren Miller, head of the Air Cargo International Programs Branch of the TSA, shared this news recently at the airfreight security conference in Frankfurt, Germany.

The TSA has learned from its work on securing intra-US airfreight shipments that the focus should be on the supply chain, and not just solely on screening.  A long-term and layered approach based on risk targeting will be needed, but this concept has not even reached a pilot stage yet. 

As Miller says, while there is no single answer for screening, we do need to increase security without impeding the flow of commerce.  One obvious point is that precedents for risk management would be easier to implement in all-cargo freighter aircraft, rather than using the “bellyhold” cargo area of passenger flights.