The Balancing Act of Becoming a More Sustainable 3PL

From the embrace of suppliers to end consumers, sustainability is moving from a “nice-to-have” to a core supply-chain expectation.

According to IBM’s Research Insights, 57% of consumers are willing to change their buying habits to help reduce negative environmental impacts.

Clearly, doing nothing is not the answer for third-party logistics providers or our clients.

At the same time, there is no clear roadmap for adapting to this massive market shift. I have seen firsthand how a multitude of customers and tenants have vastly different outlooks when it comes to sustainability: some are gung-ho and others will catch up in due time.

How you approach sustainability should depend a lot on your role in the supply chain. It is not a one-size-fits-all evolution.

The shift to sustainability is rapid and there is significant financial investment involved, making it hard to know what to embrace. It could mean cleaner fuel and fleet electrification. It could mean smart buildings and warehouses. It could mean recyclable packaging.

One thing is clear- sustainability in and of itself is clearly not a fad. There will be sustainability changes introduced that will be impactful to the supply chain and you have to stay on top of things.

The new crop of decision-makers realize the supply chain does need adjusting. To what extent is yet to be determined, but there will be some significant financial investment involved. A big question, from a financial standpoint, is what happens if you do nothing? At some point you are going to have to justify your sustainability and validate it with evidence and think about how it is viewed by end users and manufacturers.

Can the cost be recouped? Is there a return on that investment? You can’t really measure it right now, but you have to be thinking about it.

The elephant in the room is that, yes, it is a difficult time to emphasize sustainability during the pandemic-era supply chain disruptions. With all the uncertainty and instability right now, it is hard to ask people to make these big commitments. While it is unclear whether these supply-chain shocks may last three months or three years, inventories will eventually build, and prices will stabilize.

The best organizations do not wait for things to stabilize to make decisions. They will be transparent and track progress and performance, so be flexible. Eventually there will be a consistency in place that allows decisions to pay off.

Companies will continue to do more than just dip a toe in the water. It could be one of the defining stories of the post-pandemic environment.

You have to be nimble and adapt and do what’s right for your organization. Companies that think they can operate without being aware, adapting or adopting some degree of sustainability are going to be left behind.

Although there are many approaches to sustainability, putting your head in the sand is not a good one.

Andy Kirchner is the Owner and CEO of NOTS Logistics, a customized supply chain solution company with over 4 million square feet of warehouse space and a service area covering the U.S.