The COVID-19 pandemic shined a spotlight on the frailty of the global supply chain. As a result, business leaders have spent the better part of two years pursuing solutions and strategies that can help them build a more resilient supply chain operation. This enhanced focus on agility and resiliency has also driven increased interest in supply chain sustainability efforts—and for a good reason.

Many companies that already had robust sustainability programs in place before 2020 quickly discovered that supply chain resiliency was an inevitable side effect of those initiatives. As a result, advocates of environmental, social, and governance (ESG) programs will likely find it easier to get support from the boardroom even as the world moves beyond the pandemic.

Why Does Sustainability Create Resiliency?

In a Stanford Graduate School of Business study, 63% of buyers and 73% of suppliers said their sustainable procurement practices helped them endure the pandemic. The Stanford study also showed that 70% of procurement leaders saw supply chain resilience as the desired outcome for their sustainability efforts. In addition, MIT’s State of Supply Chain Sustainability report showed that many companies maintained or increased their sustainability investments throughout the pandemic.

The connection between sustainability and resiliency isn’t new. It has simply become more prominent as industry leaders seek to shore up weaknesses along the supply chain. Sustainability intersects with resiliency in a variety of ways:

  • ESG facilitates responsible partnerships. When suppliers, carriers, logistics partners, and other stakeholders willingly share data about their operational practices, it becomes easier to identify risky partnerships. Building a sustainable operation requires eliminating contracts with other businesses that behave in ways that create risk for the company. Then, when the market becomes volatile, the company can rely on a more robust partner network to help it weather the storm.
  • Sustainable companies have established visibility. Sustainable companies already have visibility into their supply chains, and visibility is a cornerstone of resiliency. Through transparent collaboration between partners along the supply chain, all parties can identify mutual risks and implement measures to mitigate them. This enhanced visibility enabled sustainable companies to communicate with partners and react more quickly to disruptions caused by COVID-19.
  • Climate change is already here. The effects of climate change have already begun to show themselves in the form of more frequent storms, flooding, wildfires, droughts, and more. These events typically have a disruptive effect on the supply chain, meaning decarbonization efforts tie directly into future supply chain resiliency.

Does Your Logistics Partner Support Your ESG Efforts?

Third-party logistics (3PL) companies can play a crucial part in supporting broader corporate sustainability initiatives. Your 3PL can support your ESG efforts in the following ways:

  • Logistics providers can optimize routes to use less fuel, locate inventory nearer to your customers to minimize delivery distances, and consolidate shipments to reduce the number of trucks on the road.
  • A 3PL can help you identify greener packaging options for your shipments, contributing to a reduction in landfill waste.
  • Energy-efficient warehouses. Through simple adjustments such as climate control, LED lighting, and solar panels, your 3PL can optimize energy usage in the warehouse where your goods are stored or orders get fulfilled.
  • Reverse logistics. Your 3PL can help you to optimize your reverse logistics practices, ultimately keeping usable inventory out of landfills and allowing you to resell returns or dispose of damaged goods safely and responsibly.
  • Fair labor practices. When it provides a good work/life balance, fair wages, and responsible labor practices, your 3PL can function as an extension of your ESG initiatives.
  • Data transparency. Sharing data allows you to work with your 3PL to identify risks and areas for improvement.

If you want to have a sustainable supply chain, choosing a logistics partner that can align with your company values and practices is essential.

About Phoenix Logistics

Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.

Frank P. Crivello is a Milwaukee-based developer and Chairman & Founder of Phoenix Investors.