Decarbonization in the supply chain will be a turning point for the impact of corporate climate action. Tackling the scope of emissions is essential for businesses to understand credible climate change obligations. It allows organizations in customer-facing segments to use their influence in supply chains to speed and support rapid decarbonization all over the economy, and it can pressurize suppliers in regions where governments do not yet do so. Most of the businesses are small and medium enterprises (SMEs), working with supply chains and connecting them with those companies can increase their climate impact by decarbonizing supply chains. With the participation of suppliers to develop a net-zero supply chain, companies can improve their climate impact, enable emission reduction in hard to-abate sectors, and accelerate climate action in countries where it would otherwise not be high on the agendas.
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The amount of greenhouse gas emission created by logistics and transportation activities are 50,000 mega-tonnes of annual carbon dioxide greenhouse emissions created by human activities. Including the total emission volume from different means of transportation, road freight accounts for the largest amount with 57% of the total volume. Ocean freight is accountable for 17%, shipping volumes have grown by 101% while emissions only grew by 40% over the same time frame. This is due to the growing scale, technological innovation, and extensive operational improvements. The industry has also become more well organized through operational and technical improvements. Currently, the carbon efficiency of some vessels improved by 75%. Competitors believe an additional 10 to 20% reduction in emissions can be achieved with technical innovations and digitalisation opportunities such as just-in-time arrivals, to cut the time that ships spend waiting outside ports. For example, today’s largest container vessels can carry around 22,000 containers, compared with a maximum of around 1,000 containers in the early 1970s. Ship sizes have multiplied over the past decade alone, reducing their carbon intensity and reducing the average shipping cost per container by roughly a third. Besides transportation organization, retail and manufacturing logistics are also accountable for about 17% of the total volume, in which mineral and food products are major sources of transport emission. There are also assessments using emissions intensity per tonne-km, showing that air freight is more carbon-intensive than the road. Government and Private organizations are working on greenhouse gas emission reduction, introducing measures, and implementing programs to improve the situation.
What 3SC is doing?
The promising solution to decrease carbon emissions and the ecological impact of logistics is the digitization of supply chain operations using logistics planning and route optimization software. 3SC is soon going to launch Carbonex to increase visibility and allow instant measurement of the carbon emission of each shipment from its origin to destination to decarbonize the supply chain and logistic network.
Carbonex tool will help in –
- Measure carbon emissions from all the modes of transportation, including truck, rail, barge, and vessel.
- For all shipments, from its origin to destination.
- It will use Machine Learning and AI algorithms to determine the shortest, most optimal, and cost-effective route between any two points.
- Delivery route optimization has an environmental benefit too, it will increase the pace of minimizing greenhouse gas emissions.
Digitization is the only way to minimize greenhouse gas emission because it is a need of the hour in the logistics industry. And 3SC has taken pledged to lower the carbon emission.
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