Why You Should Optimize Your Logistics

Because half of the time (on average), that truck you use is running empty. But you’re still paying for fuel, maintenance, driver time, etc. Consider this statistics from a recent article on How to Combat Logistics Inefficiencies in Your Organization over on Environmental Leader.

  • 25% of all freight vehicles in Europe run empty
  • 50% + of all freight vehicles in Europe run only part-full

As the article states, this is a monumental waste and has a staggering negative impact on the environment. In Europe, freight transport is believed to account for 1/4 of all carbon emissions. That’s 25% — and one sixth of the emissions are 100% unnecessary (as the equivalent of half the trucks are running empty and road transport accounts for 1/3 of the emissions). Given that road freight alone accounts for about 420 Million tonnes of CO2 per year in Europe (more than the entire carbon footprint of some countries, including South Africa, and 1/3 of global road freight emissions), that’s a lot of environmental damage!

And don’t tell me it’s not your problem, or that it’s your logistics carrier’s problem, because it’s not. It’s your freight, and you can do something about it. When you send out that RFI that asks if a carrier can service a given route, also ask if they currently service that route, how many trucks travel down the route on a weekly basis, and what % of trucks go FTL, LTL, and empty each way. Then you can define empty transport costs, carbon costs, and efficiency discounts in your sourcing model based upon how many empty trucks you will create or get rid of. If there are no full trucks going to the vicinity of your warehouse now, then the carrier will have to add trucks which will go to your warehouse empty, adding cost and carbon to your supply chain. But if there are full trucks going to the vicinity of your warehouse that always leave empty, you will be increasing the efficiency of the carrier while reducing the overall carbon footprint of the logistics carrier’s operation — and be in a position to potentially negotiate even better rates. And while the exact breakdown of FTL/LTL/empty on any lane varies by week, carriers on top of their game have these stats for the last month, quarter, and year at all times. The data is there. You just have to get it and make use of it. (And with a good optimization platform, you can!)