A Better Path: Three Ways Route Optimization Improves Supply Chain Sustainability
Sustainable business practices, such as establishing and maintaining emissions reduction goals, eliminating waste, and promoting the ethical sourcing of materials, offer a one-two punch for organizations. First and foremost, developing and implementing company-wide sustainability initiatives is good for the environment, and they promote goodwill among consumers. But also importantly, adherence to these initiatives enables companies to comply with climate change-related regulations from the European Union, the U.S., and other governing bodies worldwide.
However, climate advisers are realizing that companies often unintentionally neglect to trim their Scope 3 emissions, focusing instead on reducing the emissions that they have direct control over. But Scope 3 emissions, which, according to the U.S. Environmental Protection Agency, include the transportation-related emissions that occur along the supply chain, may actually constitute the majority of an organization’s emissions output. A June report from the Boston Consulting Group estimated that a company’s supply chain Scope 3 emissions may be up to 26 times higher than that company’s operational emissions.
This is why organizations should seriously consider adopting measures promoting route optimization within their supply chain. Route optimization is what it sounds like: it involves finding the most efficient route by accounting for factors such as fuel consumption, distance traveled, and number of stops. Route optimization can also go hand-in-hand with emissions reductions, as more efficient routes enable opportunities to cut emissions.
However, route optimization is much more than simply calculating the shortest distance between Point A and Point B. Determining the optimal routes can involve using algorithms to analyze and assess multiple factors and inputs to get the biggest bang for your buck.
At Searoutes, we have API tools, and our Routing API in particular, that allow organizations to gather insights about their supply chain transportation networks and assess the best routing options to reduce emissions, slash fuel costs, and maximize efficiency.
Route Optimization: A Critical Step Toward Supply Chain Sustainability
Route optimization is the art of factoring multiple conditions, such as distance traveled and avoiding hot spots and congestion-prone areas, to determine the best routes, often in real-time. It can be a pivotal element in achieving comprehensive supply chain sustainability because successful optimization lowers fuel consumption, reduces emissions, and places less stress on assets.
When route optimization occurs in tandem with partners in receiving and distribution channels, it can facilitate collaboration and enable greater network efficiency and even more opportunities to reduce emissions.
Three Ways Route Optimization Improves Supply Chain Sustainability
Route optimization is a powerful tool for reducing emissions and encouraging sustainability, not just for one company but potentially also for others along the supply chain. When one company pursues route optimization, its benefits extend along the supply chain because of the enhanced operational efficiencies that often occur.
Here are some ways that route optimization can benefit not just one company but others within the supply chain.
1. Reducing Fuel Consumption
Maximum fuel efficiency isn’t just a goal for everyday drivers running errands or going on road trips. Even freight vehicles can be utilized in such a way to reduce fuel consumption, resulting in lower emissions in turn.
For organizations, reducing fuel consumption as part of a broader goal toward route optimization means identifying the shortest or most efficient routes. Shortest implies distance; most efficient can mean routes where there is less likelihood of encountering bad weather, congestion, or traffic jams. Determining the most efficient routes where fuel savings are greatest also means taking into consideration factors such as the type of vessels or vehicles used and their fuel types.
Thankfully, there is technology available now that can not only track real-time conditions, such as weather and congestion, and their effect on route optimization, but also predict optimal routes based on machine learning analysis of historical data. This is what Searoutes’ Routing API does — it determines the shortest routes, taking in real-time factors such as traffic separation schemes, SECA/ECA zones, piracy zones, canals, and port entries, while also accounting for historical transit times and vessel speeds. By determining the shortest and most efficient routes, companies can also facilitate the pathway toward reduced fuel consumption and lower emissions.
2. Minimizing Vehicle Emissions
Transportation emissions are considered to be an area ripe for further emissions reductions. According to the World Economic Forum, the global transport system accounts for 15% of global greenhouse gas emissions; and in 2019, 71% of transportation-related GHG emissions came from roadways alone.
While world agencies such as the International Energy Agency are exploring how electrification of vehicle fleets might lower emissions, there are intermediary steps that shippers and freight transport providers can take to ensure that they’re doing their part to reduce vehicle emissions.
One option to reduce vehicle emissions is to consider fuel types, such as alternative fuels like hydrogen, ammonia, or biofuels. Another is using route optimization to avoid congestion areas in order to minimize idling time and ensure a smoother traffic flow.
The point is that there are numerous options to minimize vehicle emissions that go beyond just determining the shortest distance, and so any route optimization plan also needs to take into account those other factors such as the type of vehicle or vessel and its fuel profile.
3. Enhancing Operational Efficiency
Route optimization can also promote operational efficiency because it enables organizations to utilize assets wisely. Suboptimal routing in supply chain operations can lead to longer transit times because it fails to account for delays or congestion. Furthermore, since organizations don’t operate in a vacuum when they’re in a supply chain, delays or longer lead times on one end can affect the operational efficiency of other companies on the other end.
However, when one organization successfully pursues route optimization to achieve operational efficiency, that success can spread. By better-utilizing resources, the opportunity to reduce operational costs and improve service delivery benefits not only one organization but also others in the supply chain. When multiple actors can achieve operational efficiency, it leads to a beneficial overall environmental impact.
Searoutes: Your Ally for Supply Chain Sustainability
For companies seeking to maximize route optimization opportunities, Searoutes can help. We have advanced route optimization solutions that excel in real-time analysis, emissions monitoring, and data-driven insights.
We’ve already discussed our Routing API tool, which allows users to consider factors such as SECA/ECA zones, piracy zones and canals, vessel draft and dimensions, and departure dates in order to determine optimal routes.
But we have other API tools as well that can be used in tandem with Routing API to achieve maximum results for emissions reductions and route optimization.
Our CO2 API uses proprietary routing algorithms and vast amounts of data to enable optimal route search and accurate carbon emissions. CO2 API is especially valuable for companies needing to ensure that they meet emissions reduction targets, such as the EU’s emissions trading system.
Our Vessel API provides the historical trace of a given vessel between two dates in the past, along with the average speed and route characteristics. The API also accesses real-time information on vessel traffic by analyzing publicly available AIS data. These two capabilities together provide smart insights for users seeking to optimize routes and maximize emissions reductions.
Route Optimization is Key to Ensuring a Sustainable Future
Route optimization is essential for achieving sustainability in modern supply chains. By improving route efficiency, companies can significantly reduce fuel consumption, minimize vehicle emissions, and enhance overall operational efficiency. As regulatory pressures and consumer demands for greener practices increase, optimizing routes becomes crucial for reducing environmental impact.
Contact Searoutes today to discover how route optimization can help your organization streamline operations and support sustainability goals.