New Articles

How Sustainable Practices Can Bolster the Global Economy


How Sustainable Practices Can Bolster the Global Economy

Consumer demand for sustainable products is at an all-time high, likely due to a growing understanding of how consumption and energy use can impact the environment. In response, businesses are prioritizing sustainable practices and committing to goals to reduce consumption of resources, production of carbon emissions and generation of waste products.

While discussions of sustainability often center on the cost of sustainable practices, they could also be a major driver of growth for markets around the world. This is how eco-friendly practices could bolster the global economy as sustainability becomes a top business priority over the next few years.

Low-Waste Manufacturing and Safeguarding Raw Materials

Often, a key benefit of new sustainable technologies is their ability to reduce waste. They help manufacturers do more with less, reduce costs and ensure the availability of resources in the future.

For example, additive technologies, like 3D printing, are generating interest partly because they produce very little waste compared to conventional manufacturing. The process of adding material to a base via printing, rather than cutting it away to create the desired shape, makes it easier to minimize the by-product a project generates.

The growing availability of sustainable printing materials, like wood and metal, means manufacturers can also use 3D printing to mass-produce items with minimal waste.

These goods can also be more sustainable than those produced traditionally.

Some research has also found that 3D printing can use less energy than conventional manufacturing techniques, further reducing the environmental footprint. By reducing waste and resource consumption, sustainability may help manufacturers reduce costs and secure a competitive advantage.

Other manufacturing approaches look to recapture existing waste or find ways to turn it into resources other businesses may overlook. Reclaimed and recycled materials are an increasingly popular method for making manufacturing processes more sustainable.

Even as raw materials become more expensive, businesses can keep costs low by finding ways to take advantage of used materials that were set to go to landfills.

Practices that conserve limited raw materials in the first place can also safeguard future profits. Sustainable aquaculture can help fishermen limit resource consumption while avoiding overharvesting, which can result in smaller hauls and lower available revenue in the future. Sustainable lobster fishing uses techniques like v-notching — the marking of female lobsters with eggs — and trap size limits to preserve a population large enough to meet current and future demand.

In most industries, the availability of future resources will be dependent on current resource use to one extent or another. Sustainable resource generation and low-waste manufacturing are essential for businesses wanting to secure future growth.


Creating New Markets With Innovative Sustainable Products

Some products also create new opportunities for consumers. Many of these sustainable items are driving significant growth and reinvigorating markets that have been struggling over the past few years.

One of the best examples of these products is the e-bike, a transportation option often recommended to people wanting to reduce their carbon footprint. Unlike electric vehicles, which are typically thought of as a sustainable alternative to conventional cars, e-bikes create a sustainable transportation option that fills a formerly neglected demand niche.

These bikes are outfitted with a small electric motor and battery. They offer improved mobility and range over a standard bicycle, without the high speed or mechanical complexity of a vehicle like a moped or motorcycle.

In areas where environmental factors make bike travel impractical — like steep hills or long distances between important locations — e-bikes may still function as an effective means of travel. Also, because they can be plugged into any standard outlet, users in areas without EV infrastructure can adopt the bikes without worrying about running out of charge.

There is significant evidence that demand for e-bikes is one of the primary drivers behind the growth in bicycling right now. As imports of pedal-only bikes tanked in 2019 and 2020, there was an explosive increase in e-bike demand. Estimates of the market growth often have it on track to grow noticeably faster than the bike market in the near future, and some observers predict these bikes will eclipse standard options in the next few years.

For people living in or returning to cities and other population-dense areas, transportation options like e-bikes are likely to become much more popular. While bikes aren’t always an effective transportation option, e-bikes may mean consumers won’t have to turn to gas-powered methods — like public transit, conventional cars or mopeds — to get around.

Reducing Resource Consumption

The ongoing pivot to sustainable practices is also changing how and where businesses operate. One of the most significant changes has been in how buildings are designed, built and operated. Companies and architectural firms are starting to take advantage of innovative design techniques and new smart technology to reduce the resources needed to keep new buildings operational.

For example, whole-building design techniques change how structures are organized to save money or reduce energy consumption. Clever window placement can significantly increase the amount of natural lighting an office receives. This can make a building more pleasant for its occupants and reduce electricity costs.

Smart lighting systems, which can automatically adjust artificial sources based on the time of day and how much natural light a room is receiving, can optimize things even further.

Similar design strategies can help businesses cut down water usage or optimize an HVAC system. According to some industry experts, the use of high-performance HVAC equipment can result in cost cuts, emissions reductions and energy savings of up to 40% or more.

Whole-building design techniques can offer greater savings while also reducing the amount of work HVAC systems need to perform to keep a building comfortable. This can reduce the wear and tear in normal operations, meaning components may not have to be replaced or repaired as often.

Sustainability Is Driving Growth Around the World

In the near future, sustainable practices will be key drivers of business growth.

The more mindful use of resources will help ensure businesses minimize waste and keep raw materials available well into the future. New building design strategies will make offices and factories more comfortable and efficient, reducing resource consumption while boosting productivity.

Sustainable business strategies may also meet customer demands that were previously being ignored, such as the use of e-bikes. All these practices will help drive the economy to new heights and help the planet at the same time, something that benefits everyone.

global trade ocean freight rate


Bots are everywhere these days. They play poker against you and help you order a pizza. They assist in getting you hotel reservations and chat with you when you contact customer service to find out why your pizza had extra onions instead of extra cheese. And now, thanks to Cork, Ireland-based Keelvar, they can all but take over a company’s ocean and air freight procurement.

There’s no question air cargo really needs help right now, given the volatility in the market. Capacity is down, way down—nearly 40 percent from China in mid-February, 20 percent over the last year as a whole. Ocean capacity has also dropped. Meanwhile, demand has been rising, due to the pandemic. Optimizing sourcing at a time when rates, transit times and carriers are changing so rapidly is challenging for even the largest firms. 

For Keelvar, there are few better times to unleash their bots.

“We’ve been helping shippers to find ways to bring the product to market faster,” says Keelvar CEO Alan Holland. “It’s automated—that’s what’s different about what we’re doing. A bot can go to work as soon as someone wants to move something, say, from Montevideo to New York. It’s always available. That’s the biggest competitive advantage.”

The bots that Keelvar and many other companies make these days are simply software that automates specialized tasks. Keelvar calls the artificial intelligence (AI) bots it makes Sourcing Automation, which it defined in a June 2018 white paper as “a new category of software that leverages intelligent systems to automate complex human reasoning that exceeds expert standards.” 

Holland likens his bots to those that entered the world of online poker a few years ago. The earliest poker bots could play the game well, but couldn’t best professional players. But as the software evolved, the AI learned how to play better. Today, even the best poker champions in the world can’t beat the latest generation of poker bots. Holland’s goal, which he articulated in the white paper, is creating software that performs sourcing work for companies better than the experts in the field.

“The sobering fact is that AI is defeating the best human experts in most tasks where the boundaries and constraints on decision making are well-defined closed systems,” states the Keelvar white paper. “It would be a mistake to assume that AI won’t be competitive in the task of strategic sourcing and then ultimately overtake humans in this role. Once the boundaries of decision making are communicated, then the game-theoretic reasoning for optimizing the mechanism for sourcing goods and services becomes just another complex but the tractable calculation for Artificial Intelligence.”

In other words, Keelvar says their bots can automate all bidder communications in sourcing: opening, feedback generation, data cleansing, closing, termination-criteria monitoring, and activation. They basically run a company’s sourcing events, though logistics officials are always free to override the bot’s preferred course of action. Sourcing events can be complex and require the labor of many employees, some with years or decades in the procurement field, but Keelvar’s sourcing automation can basically handle it all.

“This process is tedious to execute manually and the more bidders there are, the more onerous the tasks above become and also the more likely that short-cuts are taken, and mistakes are made,” states Keelvar’s white paper. “Furthermore, the slow pace in manual events leads to curtailment of the rounds of bidding and inevitable lost savings opportunities due to the frictional effect of manual operations.”

What’s more, Keelvar’s ocean freight bots can even account for the pollution emissions of cargo vessels when conducting sourcing events (a feature that will eventually be available on the company’s air cargo bots). “Humans can’t get to that level of detail to do emission-sustainable options,” Holland said.

While the ocean freight bot has been around a year or so, the air freight bot only became available in January. Keelvar says the bot can automate 90 percent of a company’s tactical sourcing processes.

“It’s a natural evolution from our first bot, the ocean freight bot,” Holland said. “There’s a finite set of airport codes, but different logic around recommendations in air freight. Bid sheets are different, and cargo tends to be weight-based, rather than container-based, which is how ocean freight works.”

For Felix Plapperer, a venture capital investor and CEO of Paua Ventures, Keelvar’s sourcing bots will “dominate” the procurement market. Not merely because the bots are inherently more efficient than manual labor, but also because they learn the sourcing job better every time they operate. 

“When a tender/auction is conducted by a bot, the number of actions is between eight and 20, depending on the complexity,” Plapperer wrote in a June 4, 2020, post on Medium on why he invested in Keelvar. “If each bot action costs less than $1, then the cost per event is roughly one or two orders of magnitude (yes, that is 10x to 100x times) cheaper than for an event operated by manual labor. Now, these cost savings only capture the value driven by process automation. As ‘mini-tenders’ are not run by sourcing experts, little to no optimization takes place (in fact, often personal relationships drive the outcome). Sourcing bots, in contrast, analytically optimize each and every event based on business priorities. Thus, they create additional value in reduced spend—every time they are at work.”

Of course, the bots aren’t replacements for a company’s procurement teams, but were designed to work alongside them. Major companies such as BMW, Novartis, Siemens and Coca Cola are already using Keelvar’s bots for their procurement.

Another of Keelvar’s recent customers, McKesson Corp., is an Irving, Texas-based healthcare and pharmaceutical company founded back in 1883. According to Keelvar’s marketing materials, McKesson was on track to save 6 percent of its global freight budget prior to the pandemic, and had already saved 6 percent the year prior, through the use of sourcing optimization products from Keelvar.

“Excel is nice, but it’s not where we need to be,” said Tad Strong, McKesson’s Vice President of Global Operations during a March 2021 webinar hosted by Procurement Leaders. “And over the next few years, we’ve some pretty big plans on making that shift into a more automated, more robust system.” 

So, what does the future hold? Holland wouldn’t comment on whether his company is developing a bot to handle ground freight logistics (though that would be a logical step for the company), but he did say the next generation of artificial intelligence bots are just on the horizon.

“This is all level four automation, but level five automation systems in the future will have more autonomy,” said Holland. “We want the bot to autonomously decide on new carriers. There’s a lot of strategy on negotiating rates. You learn by experience which strategies are best. In level five, the bot learns new strategies.”

Holland said the first of examples of his level five AI bots in ocean freight should appear in the fourth quarter of this year.