A growing focus on sustainable supply chain management over the past few years has proven to be a big cost savings opportunity for many businesses. With traditional procurement strategies primarily focused on cost savings through vendor reduction, leverage spend, inventory reductions, transaction efficiencies, a shifting sustainability mindset is elevating supply chain thinking. More strategically focused organizations are evaluating business sustainability risks that extend beyond the walls of the company.
Sustainability leaders are developing a sustainable distribution strategies in which road, rail, inland waterways, coastal shipping, ports and airports all play their part in the delivery of goods. This is becoming increasingly important as observed in a recent article which identifies several of the major financial challenges facing traditional transportation modes going into 2011.
- The price of diesel: The Department of Energy projections diesel fuel will average $3.23 per gallon in 2011; 25 cents higher than in 2010.
- Trucking capacity: If the economy improves, capacity problems could develop. Many carriers sold off equipment during the slowdown, and potential driver shortages could limit the number of vehicles on the road.
- Rail regulation: There is a pending bill in Congress that would potentially change the way the rail industry is regulated. Impacts leading to higher prices, reduced productivity, and capacity constraints.
It is encouraged within our professional consulting experience for business leaders to develop a process of policies similar to the legislation to address sustainable distribution practices across all freight transport modes. Key components of a sustainable distribution strategy include: click here to continue reading.