Supply chain operations generate emissions across transport, warehousing, material handling, and consolidation. According to CDP, corporate supply chain emissions are on average 26 times higher than direct operational emissions. Yet supply chain is often the least-monitored emission source, managed by external logistics partners with minimal visibility into actual performance.
Organisations implementing comprehensive supply chain emissions tracking typically identify significant reduction potential through logistics optimisation, consolidation, and mode shifting. Yet many organisations still lack granular supply chain emissions data, making optimisation difficult.
Why Supply Chain Emissions Are Difficult to Track
Supply chain is often outsourced. You don’t directly control vehicles or operations, so you don’t measure their emissions directly. Supply chain data exists (what was delivered, from where), but isn’t converted to emissions data. Without measurement, optimisation is impossible. You can’t reduce unmeasured emissions. You can’t identify which source contributes most. You can’t verify that efficiency improvements actually reduce emissions.
Traditional approaches estimate supply chain emissions from total logistics spend or distance travelled. This provides ballpark figures but obscures actual sources. Did emissions increase because delivery volume increased, or because delivery efficiency decreased? Ballpark estimates can’t answer this question.
How Granular Tracking Enables Precision Reduction
Granular supply chain tracking measures emissions per delivery, per vehicle type, per route, per logistics provider. This reveals which delivery patterns are high-impact and which are efficient. A consolidated delivery (combining 5 shipments into 1 vehicle) generates substantially lower emissions than 5 separate deliveries. A 50-km consolidated route generates lower emissions than the same 50 km travelled in multiple trips by different vehicles.
Tracking also reveals inefficiencies. Are deliveries to the same geographic area happening via different providers on different days? Consolidation could reduce vehicle trips significantly. Are shipments waiting for consolidation, increasing handling time and carbon footprint? Optimised consolidation windows could improve delivery speed while reducing emissions.
Large infrastructure projects like HS2 demonstrate supply chain emissions reduction through better visibility into materials deliveries (location, vehicle type, consolidation status). Better visibility enables improved consolidation and routing decisions.
Granular supply chain emissions tracking enables precision optimisation through consolidation, modal shift, and logistics provider selection based on environmental performance. Real-time monitoring with geographic tracking transforms supply chain management from estimated averages to precise source identification.
Implementing Supply Chain Emissions Tracking
Data Integration: Integrate supply chain systems (procurement, logistics, inventory) with emissions tracking. Each delivery should generate emissions data: vehicle type, distance, consolidation status, time in transit. Scope 3 tracking frameworks provide established methodologies for this integration.
Baseline Establishment: Calculate current supply chain emissions by source (transport, warehousing, consolidation delays). Identify highest-impact areas.
Consolidation Analysis: Are multiple shipments going to same location? Can they be consolidated? Consolidation can significantly reduce per-unit emissions.
Modal Shift Opportunities: Can some shipments use lower-emission modes? Rail instead of truck? Smaller vehicles instead of trucks? Electric delivery vehicles instead of diesel?
Provider Performance Assessment: Which logistics providers have lowest emission profiles per delivery? Can you shift volume to highest-performing providers?
FAQ: Supply Chain Emissions Tracking
Q: Should we own supply chain vehicles or use logistics providers?
A: Depends on your volume and geographic footprint. Asset-light approach (using providers) enables flexibility and access to optimised fleet. Asset-heavy approach (owned fleet) enables direct control. Hybrid approach (owned for core routes, providers for variable demand) is often optimal. Measure emissions for both options before deciding.
Q: How do we incentivise logistics providers for emission reductions?
A: Include emissions performance metrics in provider contracts. Reward providers who deliver lower emissions. Consider moving volume from high-emission to low-emission providers. Financial incentives work—providers improve what’s measured and rewarded.
Next Steps
Supply chain emissions reduction requires granular tracking revealing actual sources and opportunities. Without measurement, reduction targets are aspirational rather than achievable.
If your supply chain needs emissions tracking and source identification optimisation, contact EMSOL to discuss supply chain emissions measurement and reduction strategy.