Sustainability strategies have somewhat been sidelined over the past 12 months, as organisations have been compelled to manage the challenges created by geopolitical uncertainty, tariffs and escalating logistics risks. The requirements to report Scope 3 emissions are not disappearing, however, and organisations using third-party logistics partners need to gain deep, accurate insight into emissions generated throughout the value chain. Elmer Spruijt, VP, Global Sales, Descartes, explores the power of Transport Management Systems (TMS) and real-time insight to both track and manage transport-related emissions.

Cost and Sustainable Synergy

Scope 3 emissions – the indirect emissions generated by upstream and downstream activities throughout a company’s value chain – have been notoriously difficult to measure and manage.  For any organisation relying on third parties to handle logistics – from ships to planes, trains to lorries – gaining insight into Scope 3 emissions can be extremely difficult.  Yet with both regulators, especially in the European Union (EU), and customers raising their expectations of emissions’ visibility and transparency, the onus is on businesses to gain far greater insight into, and control, over their CO2 emissions at every stage of operations.

The good news is that optimising logistics to reduce costs should also reduce emissions. Using a Transport Management System (TMS) to minimise the number of trucks required and cut miles; opting for ocean transport rather than air, not only minimises costs but also emissions. Even though shipping is a significant generator of CO2, with 24,000 containers on each vessel, one organisation’s individual CO2 measure is small.

Real-Time Reporting

While logistics optimisation improves a business’s sustainable performance, a detailed understanding of Scope 3 emissions requires more. It demands accurate insight into the performance of shipping providers and individual vessels. It requires an understanding of each truck’s engine size and fuel type. It means tracking whether carriers are using biofuel or Electric Vehicles for last-mile delivery. It also demands the ability to compute overall cargo weight and the organisation’s contribution to that weight to understand specific CO2 emissions for each journey.

This is where the ability to leverage a TMS with access to a network of hundreds of thousands of global carriers is transformative. With information about every single vessel, train and truck type used at each stage, emissions can be automatically calculated for every journey. Furthermore, organisations can set different parameters within the TMS when planning logistics to match corporate priorities both globally and in specific geographies to reflect regulatory demands and the cultural expectations of different customer groups.

This detail also provides automatic insight into the sustainable performance of different carriers, allowing companies to better align transportation and environmental strategies based on the actual environmental performance of the specific transport required, rather than the carrier’s overall Environmental, Social and Governance (ESG) commitment and performance. 

Conclusion

Until recently, just a tiny fraction of companies had any true or trusted visibility of Scope 3 emissions. Calculations, where they existed, were at best guess work. Now, using a TMS combined with deep insight into a global carrier network, guess work and complex manual calculations are eradicated. Organisations can track CO2 emissions on a per shipment level.  They can compare emissions per kilo for different transport routes and operators. They can accurately assess carbon offset requirements.  And they can meet evolving Scope 3 reporting requirements from regulators and business partners.

Essentially, investing in a TMS provides not only the chance to optimise logistics for cost and efficiency; but also the intelligence to enable businesses to embed sustainability strategy within core logistics optimisation processes.