Supply chain disruptions have become the new norm for companies across America.
In fact, 81 percent of companies face at least one supply chain disruption a year making it imperative for supply chain managers to stay one step ahead of what’s to come.
Supply chain managers are accustomed to volatility in the market caused by economic shifts, environmental factors and increased trucking regulations, including the looming implementation of electronic logging devices by 2017.
However, there is one imminent disruption no one is talking about. This disruption can greatly affect consumer perception of your brand and ultimately lead customers to choose your competition instead – it’s the customer demand for sustainability.
A Shift Toward Sustainability
The number of consumers interested in making better decisions for the environment is trending upward. Companies are more compelled than ever to re-evaluate their supply chain strategy to offer more sustainable solutions that make their customers feel better about their purchasing decisions.
“Consumer brands that haven’t embraced sustainability are at risk on many fronts,” says Carol Gstalder, SVP, Reputation & Public Relations Solutions, Nielsen.
“Social responsibility is a critical part of proactive reputation management. And companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners and most of all consumers”
The numbers support Gstadler’s statement. According to the 2015 Nielsen Global Sustainability Report, “in the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4 percent globally, while those without grew less than 1 percent.”
Sustainability has become a factor that has seamlessly integrated itself into consumer’s price fairness perception as well with 66 percent of consumers saying they are willing to pay more for sustainable brands – up from 55 percent in 2014 and 50 percent in 2013.
These rising numbers have executives talking about sustainability in boardrooms across America. A recent McKinsey Global Survey found that “CEOs are twice as likely as they were in 2012 to say sustainability is their top priority. Larger shares of all other executives also count sustainability as a top three item on their CEOs’ agendas.”
How Green Is Your Transportation Network?
If you’re looking to contribute to your company’s sustainability efforts, follow the directions below to calculate the potential carbon savings that can be achieved by shifting freight from the highway to intermodal rail.
How to use the CSXT Intermodal Carbon Calculator
- Visit Intermodal.com/map
- Click Build-a-Shipment
- Enter shipment origin/destination, weight and units to receive carbon calculator results
Highway to Rail (H2R) conversion is an effective way for your organization to benefit from immediate – and sustainable – cost savings, while securing the capacity necessary to keep your supply chain moving.
While H2R conversion is an easy process, there are some common practices that should be followed to ensure a smooth experience.
- Identify Your Transportation Needs Aand Challenges
Requirements such as capacity needs, specialized equipment and transit requirements
- Complete a Conversion Analysis of Your Truckload Freight
CSX Transportation (CSXT) Intermodal offers a complimentary analysis, identifying the most advantageous truckload freight for conversion
- Identify Potential Internal Concerns
Departments, people or processes that will need to buy-in when converting modes
- Identify an Intermodal Provider(S)
An intermodal provider is an intermediary between you and the railroad that provides comprehensive door-to-door service
- Obtain a Price Quote from Your Selected Intermodal Provider
Joint engagement with both the intermodal provider and CSXT accelerates planning
- Consider Blocking and Bracing Needs and Costs
Blocking and bracing an intermodal load varies from truckload, CSXT offers complimentary load design assistance
- Train Field Staff
Ensure dispatchers, dock workers and staff on both ends of the move know what to expect
- Integrate Intermodal Rail
Get started with a test load to ensure a smooth transition to intermodal rail
- Scale Over Time and Continue To Evaluate
The H2R journey offers multi-year solutions, ongoing engagement identifies new lanes and conversion opportunities
The Green Supply Chain
Declarations by companies to reduce their carbon footprints and integrate more sustainable practices into their visions are on the rise. Major companies, including Coca-Cola, General Mills, Ikea and Johnson & Johnson, have committed to reduce the output of greenhouse gas emissions by as much as 50 percent in the coming years.
Eco-conscious company Tom’s of Maine was able to better align its supply chain with its commitment to sustainability by converting select over-the-road freight to more environmentally friendly intermodal rail. This resulted in a 50 percent reduction in carbon emissions in just the first year of conversion (view video above).
Intermodal conversion provides a rare opportunity for organizations to go green, for less. The fact that one intermodal train can take 280 trucks off the road means it’s not only sustainable but highly efficient, resulting in both cost and carbon savings.
Converting eligible full truckload freight to intermodal rail results in a 75 percent reduction in greenhouse gas emissions, along with an estimated 15 percent cost savings.
What Does This Mean For Your Company’s Supply Chain?
This shift to a focus on sustainability puts supply chain managers in a unique position. Through strategic and responsible transportation mode management, supply chain managers can transform their freight networks into sustainable growth engines of tomorrow.
Supply chain managers who ignore this shift are placing their organizations at a competitive disadvantage, opening up the possibility of losing customers to more eco-conscious competitors, ultimately hurting the bottom line.
If your supply chain is predominately comprised of over-the-road moves, then you are in a good position to reduce your organization’s carbon emissions and lower its overall transportation costs. Optimizing your truckload freight through intermodal rail conversionmay be a viable option to contribute to your organization’s sustainability efforts and future success.
Intermodal Rail White Papers & Guides
Transportation Management Systems & Intermodal Rail
An interactive, personalized guide to learn more about the combined benefits of a TMS and intermodal rail. Download Now!
Highway to Intermodal Rail (H2R) Conversions Deliver Bottom Line Results
CSX Transportation has found that 96% of shippers have sub-optimized freight in their network. Does your organization? Find out and learn how to address sub-optimized freight in your supply chain. Download Now!