New Articles

Why Supply Chain Due Diligence Is Becoming a Business Imperative

global trade

Why Supply Chain Due Diligence Is Becoming a Business Imperative

Supply chain due diligence requirements are growing quickly. What’s driving this shift, and why are so many companies struggling to keep up?

Supply chain due diligence is becoming much more data-driven. Regulators increasingly expect companies to provide verifiable information about where products come from, how they’re made, and whether human rights and environmental standards are being met. EUDR, the EU Forced Labour Regulation, PPWR, and the emerging Digital Product Passport framework are all moving toward the same expectation: trusted, structured supply chain data.

Read also: Set Up a Compliance-Ready Export Supply Chain

This summer alone illustrates how quickly expectations are changing. New guidance on the EU Forced Labour Regulation arrived in June, the Digital Product Passport registry launched in July, and PPWR follows in August. Many companies are still trying to meet those expectations with disconnected systems and manual processes, an approach that simply doesn’t scale as regulations become more complex.

We’ve seen the difference firsthand. One brand completed a full due diligence assessment in 31 minutes, while another needed several hours and a team of six. The regulation didn’t change between them, just their data readiness. 

You often describe supply chain due diligence as a “pre-competitive” issue rather than a competitive advantage. What do you mean by that, and why are major retailers beginning to collaborate instead of building their own proprietary systems?

Supply chain due diligence is not something companies should compete on. The goal is to create a common foundation for collecting and assessing supply chain data so everyone is working from the same baseline. The real competitive advantage comes from how companies act on those insights, not from maintaining proprietary questionnaires or duplicative compliance processes.

Historically, each retailer developed its own supplier questionnaires, due diligence workflows, and corrective action requirements. For brands selling to multiple retailers, that often meant providing the same information repeatedly in slightly different formats. Major retailers are increasingly recognizing that standardizing these processes doesn’t diminish their competitive position. Instead, it reduces administrative burden for suppliers, improves data consistency, and gives retailers higher-quality, more comparable information for managing supply chain risk. When data can be shared through a common framework, everyone spends less time on repetitive reporting and more time addressing the issues that actually matter.

Many smaller brands don’t have dedicated compliance teams. How has the current approach to supplier questionnaires, audits, and certifications disproportionately affected SMBs?

Smaller brands feel this most because they don’t have a dedicated compliance function to absorb the work. Large organizations may have specialists managing supplier questionnaires, audits, certifications, and corrective action plans, but many SMBs are trying to meet the same expectations with only a handful of employees.

That’s the gap solutions like One Retail Hub aim to close. Instead of managing a different process for every retailer relationship, a brand completes one shared assessment and reuses its existing documentation wherever it’s needed. It gives smaller brands access to the same standardized process larger organizations use, without requiring them to build an entire compliance function first.

Retailers have historically relied on their own questionnaires and compliance processes. Why is that model becoming increasingly unsustainable for global supply chains?

Every retailer asking suppliers to complete a different questionnaire may have been manageable when due diligence expectations were relatively limited. It becomes much harder when every new regulation requires more evidence, more supplier engagement, and more product-level documentation. Companies end up repeating the same work across multiple systems instead of building on information they’ve already collected.

The challenge is not just the time involved, but the growing cost of compliance. Even large brands are feeling that pressure, while smaller businesses often lack the resources to keep up. The industry needs to make compliance more practical so companies can spend less time managing administrative requirements and more time strengthening their supply chains.

How can the industry reduce the cost of compliance without lowering standards?

The industry can reduce the cost of compliance by reducing duplication, not by lowering standards. Companies shouldn’t have to collect the same evidence five different times simply because five customers ask for it in different ways.

Some manufacturers now spend around 150 hours every month on data collection and reporting, with dedicated staff focused solely on paperwork and traceability. By standardizing how due diligence information is collected and reused, companies can significantly reduce administrative effort while maintaining the same level of transparency and accountability. The goal is not to ask for less information, but to make it much easier to manage and apply across different requirements.

How can better supply chain data help companies do more than just meet compliance requirements?

Once the data exists in one place, verified and structured, compliance becomes the floor, not the ceiling. The same supplier information that proves EUDR or forced labour compliance can also show a brand where its Scope 3 emissions are coming from, which suppliers carry disproportionate risk, and where sourcing decisions can reduce both cost and impact.

We’re seeing brands use that information for real-time visibility rather than year-end reporting. Linking purchase orders to mapped suppliers means a brand knows, the moment an order is placed, exactly which facility will produce it and what that facility’s track record looks like. That’s a sourcing decision made with foresight instead of a compliance report written in hindsight.

The same data also strengthens product claims. If a brand says a garment contains 30 percent recycled material, it should have a verified data trail that supports that claim just as confidently as it would support a regulatory audit.

The long-term goal is for supply chain data to reach the same level of rigor as financial data. Better sourcing decisions, stronger risk management, and more credible product claims are what make it valuable long after the reporting requirement is met.

What needs to happen for compliance to become simpler and less expensive for companies across the supply chain?

The key is moving away from fragmented, retailer-by-retailer compliance and toward shared infrastructure. 

Industry initiatives such as One Retail Hub demonstrate what that can look like by giving brands a standardized way to complete and share HREDD assessments across participating retailers while building on documentation they already have. AI can also help identify, organize, and reuse relevant information, making the process faster and more efficient without changing the underlying requirements.

As more retailers align around common frameworks, compliance becomes much easier to scale, allowing companies to spend more time improving supply chain transparency and strengthening due diligence rather than managing repetitive reporting.

Looking ahead, how do you see supply chain compliance changing over the next few years?

The biggest shift is away from compliance as an annual project. Right now, most teams still treat each regulation as its own sprint: gather evidence, submit it, then move on to the next requirement. Over the next few years, compliance will become much more continuous, with data collected as products move through the supply chain rather than assembled retroactively when a deadline arrives.

The second shift is from fragmented systems toward shared infrastructure. One Retail Hub is an early example of that, with multiple retailers agreeing that a common questionnaire is more effective than maintaining separate versions of the same process. I expect more of the industry to reach the same conclusion, not because collaboration is fashionable, but because the alternative simply doesn’t scale as regulations continue to multiply.

The third shift is that scrutiny will move earlier in the process. The EU Forced Labour Regulation’s latest guidance makes it clear that a company’s existing traceability can influence whether an investigation proceeds before it formally begins. That’s a preview of where the industry is heading more broadly. Companies with structured, retrievable data won’t just report faster. They’ll also be better positioned to demonstrate compliance from the outset.

Taken together, compliance stops being a reactive function and becomes business infrastructure that supports sourcing, risk management, product claims, and broader supply chain decision-making.

american global trade

American Airlines 2023 Sustainability Report: Advancing Climate Solutions and Operational Excellence

American Airlines has unveiled its 2023 Sustainability Report, highlighting its initiatives to combat climate change and promote broader decarbonization efforts within the aviation industry. The report also details progress in key areas such as safety, human capital, and customer experience, reflecting the company’s commitment to its stakeholders.

Read also: Climate Change: Challenges and Opportunities for Global Shipping

A significant milestone in 2023 was American’s collaboration with Breakthrough Energy and Google Research on pioneering contrail avoidance research, which aims to mitigate aviation’s impact on climate change. Additionally, the report explores how American is integrating sustainability into its sourcing and procurement practices.

“Thanks to the hard work of our more than 140,000 team members, American continues to deliver for our customers while making strides toward our sustainability goals,” said American’s CEO Robert Isom. “There is far more work to be done and many areas where we will continue to rely on policymakers and partnerships to make progress. But I’m proud of our record — from advancing the development of lower-carbon technologies, to our work to better develop and recruit a diverse and talented group of leaders with unmatched expertise throughout the company.“

The report identifies four priority sustainability issues: safety, support for team members, customer satisfaction and operational performance, and climate change and fuel efficiency. American remains committed to its long-term sustainability goals, acknowledging the complexities and challenges involved.

“American’s goal to achieve zero greenhouse gas emissions by 2050 is the right one, but it won’t be easy,” said American’s Chief Sustainability Officer Jill Blickstein. “Our report describes the concrete steps we have taken and sets the stage for the hard work in the years ahead. American is committed to working with our partners inside and beyond the aviation industry to get us and our industry on a path to meet these global challenges.”

The report also aligns with the recommendations of the Task Force on Climate-related Financial Disclosures and the standards developed by the Sustainability Accounting Standards Board, underscoring American’s dedication to transparency and industry best practices.

Read the full Sustainability Report.

global trade management

Best Practices, Resiliency, Risk Management And Sustainability In 2024

Companies with global footprints are now defining their strategic plans for the next three to five years. For many companies the first long-term planning since the pandemic put us in perpetual react mode.

Read also: Supply Chain: Challenges and Key Solutions 

From February 2020 to December 2022, the pandemic created disruption, delays, additional costs, and uncertainty.

From December 2022 until the spring of 2023, the state of global trade, supply chain and logistics very rapidly reverted to pre-pandemic scenarios.

The rebound happened very fast, was unexpected and moved so quickly that it caught every person in business and government by surprise.

The only area where change did not occur was “uncertainty.” 

The big 2024 question is this: Is uncertainty going to continue, subside, grow, or morph into a new scenario that we will have to learn how to deal with, as we had with COVID?

As that dilemma continues, we in global supply chain, operations, manufacturing, procurement, distribution, and management must plan ahead.

Our experience in managing disruption and change over 40 years has brought us to certain conclusions that can guide us in planning when uncertainty is looming.

Each of the following areas offer us a blueprint for strategically thinking through our options and devising our strategy for what many refer to as … “The New Norm.”

This two-part article offers insight and guidance for the 3- to 5-year strategic planning process. “The Management Structure” follows the critical tops-down senior-management driven planning process, then in “Additional Considerations and Challenges,” I discuss macro areas of uncertainty that must be incorporated into your planning—from geo-politics to the global economy.

THE MANAGEMENT STRUCTURE

The five cornerstones of top-down strategic planning, engaging senior management are:

  • Understand the long-term goals of senior management. 
  • Collaborate with senior management in how to best achieve those goals. 
  • Turn those collaborative processes into tactical concepts. 
  • Establish a committee of stakeholders. 
  • Create the plan and execute, once senior management “buys in.”

These cornerstones are very straight forward and easily executed. Four to six weeks should be allocated for that process. Once the strategic plan has been agreed to, the tactics need to be organized, as follows:

  • Logistics 
  • Distribution 
  • Demand Planning 
  • Customer Service 
  • Manufacturing 
  • Technology

The strategic plan and follow-on tactical plan should take in the following considerations:

LOGISTICS: You need to conduct a review and possibly issue an RFP to determine what service providers and carriers with whom you can:

Depend upon consistently.

  • Develop a “partnership” relationship.
  • Obtain the balance between price, service and value-added.
  • Develop solutions as challenges arise in freight, transportation, and international shipping.
  • Employ comprehensive and integrated technology solutions.

DISTRIBUTION: The cost of distribution skyrocketed through the pandemic and continues to be an expensive area of supply chain. We expect that as demand dissipates, distribution—which combines warehousing, inventory management and shipping—will once again have competitively priced offerings.

Other factors:

  • A study on the demographics of your customer base
  • The number, size, functionality, and location of your distribution locations
  • Should the locations be turned into Bonded or Foreign Trade Zones, where additional financial and operating benefits can be achieved?
  • Can the distribution process be improved with technology and/or business process enhancements?
  • Should we control distribution or outsource and utilize a 3PL that specializes in distribution?

DEMAND PLANNING: At best a “best guess” of future inventory needs, demand planning does have a parameter or “sweet spot” that can be established with an acceptable range for accuracy. We like +/- 5%, but each industry and business model will establish its own forecast threshold.

Demand planning simplified includes two driving factors: historical data and anticipated need. Historical data can typically be obtained easily, and it generally is reasonably accurate. It is around the area of anticipated need which requires outreach by sales and customer service to existing accounts and key prospects to develop that anticipated need. That need is usually more subjective and prone to higher degree of inaccuracy due to multiple factors, which can include a lack of seriousness, diligence and persistence of customer service and sales personnel interfacing with their client priorities or in other words, “Don’t push the client too hard.” 

The art and science of demand planning, through the utilization of technology, predictive analysis techniques along with artificial intelligence (AI) can minimize the discrepancies and bring along more accurate predictions. 

Holding customer service and sales personnel accountable to obtain quality, accurate and dependable demand data from the clients, however, requires no investment in technology or AI and is often the most accurate—and as such is a necessary component of demand planning.

CUSTOMER SERVICE: Managers of customer service must raise the bar of providing customer care, differentiation and value add into the service portfolio.

Many companies are moving to technology to reduce cost, which has been successful in reducing cost but more likely at the expense of frustrated customers.

Leaders must consciously discern between where technology can be utilized as an advantage in client relationships and where human interaction provides a better option.

Personalization in customer service is making a comeback and companies that emphasize this methodology may see some additional cost, but that is ultimately outweighed by higher margins and more sustainable client relations.

MANUFACTURING: Companies are assessing their manufacturing options and, in some cases, diversifying manufacturing as a risk management strategy, including seeking alternative sources such as nearshoring and friend-shoring.

Reducing manpower needs in manufacturing is a good example of a strong strategic plan as blue collar American-based manufacturer workers are few and far between. 

Technology can be utilized successfully in manufacturing as a business process enhancement, reducing manpower needs and providing cost effective efficiencies.

AI also has been utilized in manufacturing to streamline process and reduce manual labor including in-person oversight and supervision.

Automating Quality Control (QC) is also another option in reducing labor costs and simultaneously eliminating human errors.

Manufacturing conducted in Foreign Trade Zones is another option that can provide significant benefit in lowering landed costs, reducing import charges, deferring duty obligations, and affording tariff inversions.

TECHNOLOGY: Technology is moving at the speed of light and AI is becoming a huge contributor to technology’s growth and value-add in its applications in global supply chain management.

In every area we outlined above technology plays a role in process, communication, assessment, planning and in execution.

We must create a balanced approach in recognizing where technology can provide benefit and where it may not, drawing the conclusion that we need to not overuse technology where it ends up having a negative impact on our business model.

The chief technology officer, often a new seat in the C-Suite, can manage the technology strategy and provide informed guidance on where, how, and when specific areas of the global supply chain can move forward with technology enhancements that offer “enterprise solutions.”

Technology in the global supply chain includes the following:

  • Total integration with all parties in a global transaction.
  • Provides 100% transparency to information and data.
  • Provides the platform for analysis, tied into AI … can provide extraordinary data that help in making better, more informed decisions.
  • Ties into one platform … sourcing, purchasing, vendor management, supply chain, demand planning, manufacturing, inventory, warehousing, distribution, customer service and accounting.
  • Provides robust information flows, management reports and utilizes AI for analysis.

ADDITIONAL CONSIDERATIONS AND CHALLENGES

Moving beyond the top-down strategic planning process, in this section we explore the other key considerations and challenges that we face in doing business in 2024 and beyond, all of which must be factored into our long-term planning.

THE ECONOMY AND A RECESSION: We are experiencing an uncertain economic picture:

  • Recession still a possibility 
  • Tightening of the money supply
  • Significant discourse in Washington, with the two dominate political parties rarely being able to create “bridges and compromises.”
  • A major downturn in import volumes, consumer purchasing and unused inventories.

All these factors must be weighed into any strategic decision that management in global supply chain will make.

Additionally, global demand has fallen off a cliff, creating a rise in transport capacity. 

Carriers, service providers and all aspects of the global supply chain are likely to slide. In fact, most international carriers in air and ocean freight along with domestic trucking have all been diminished, creating a pull back on asset placement, development and utilization.

Transportation in general is “pulling back.” Large trucking companies like Yellow Freight fell into bankruptcy, causing further disruption and a loss of capacity.

The shift in transportation services and capacity must be considered in establishing an informed strategy and business plan.

TRADE COMPLIANCE MANAGEMENT: Sanctions are still increasing—in number and severity. This is causing political discourse with retaliatory actions from our trading partners, particularly China, Russia and Iran.

Customs & Border Protection (CBP) has brought social compliance into its purview and is now further threatening some of our trading partners—such as China once again—with respect to “forced labor” practices.

CBP is still practicing enforced compliance and focused assessments, making the lives of import managers much more challenging.

And as the importance of corporate trade compliance management grows, its value in managing growth, spend, profits, and sustainability is evident in all supply chain business models. 

As a result, having point personnel who manage trade compliance is even more a full-time job with any company developing a formidable global reach.

THE RUSSIAN-UKRAINE CONFLICT: The United States and most of the West are providing billions of dollars of support to Ukraine and sanctioning Russia intensely. The U.S. and certain western allies are providing other levels of military and economic support to Ukraine, both directly and indirectly.

The region has witnessed great impact and even if the war ended today, the damage and upheaval in Ukraine will take decades to reverse.

Global trade has seen a residual impact in certain areas of agriculture, manufacturing, raw materials, precious metals and several other products and commodities.

Russia has paid a huge price in their image and place in the world geopolitically and may never recover to its international standing again.

The cost to the West is high and the outlay of all the military and economic aid is beginning to stress numerous politicians, governments, and the will of the masses in many countries. The U.S. support of Ukraine will no doubt play into November’s presidential election.

In the face of a constantly changing sanctions landscape, once again we emphasize the need for dedicated, well-trained personnel who manage trade compliance at the corporate level.

RISK MANAGEMENT MINDSET: Supply chain managers are quickly developing a “risk management” mindset in their operational and planning responsibilities.

A risk management mindset includes:

  • Assessing and evaluating where risk exists in every nook and cranny in the global supply chain.
  • Collaboratively working with senior management in understanding the “degree and taste for risk” in their company’s culture and business model.
  • Measuring the risks and their impact to the organization and more specifically the supply chain.
  • Creating and implementing solutions, where possible, to mitigate risk, accept risk or transfer risk.
  • Adapting supply chain policies where reducing risk and spend take high priority in the decision-making process.

While cost will always be an important factor in our supply chain decision-making, risk control and mitigation now carry much more weight.

SUPPLY CHAIN MANAGEMENT IN THE C-SUITE

The pandemic has elevated the relevance and importance of supply chains in every business vertical, every company and country in the world.

Today, the supply chain manager is likely to have “a seat at the table” in the running of an organization, become part of the senior management team; witness the chief supply chain officer position.

We believe this to be a positive consequence of the supply chain disruption from the pandemic. It now affords supply chain managers a greater and more important role in designing overall business models, operations, resilient and sustainable practices.

CREATIVE JUICES FLOWING

To survive the pandemic-driven consequences of cost increases, delays and uncertainty, supply chain managers met those challenges by:

  • Being diligent, working harder and smarter.
  • Developing creative solutions and trying techniques never-before utilized. 
  • Taking better, well-thought-out risks to make things happen.
  • Collaborating intensively up to senior management, internally to other stakeholders, with vendors and suppliers, and with customers.
  • Making the significant effort to influence the behavior of others in the above collaborations.
  • Developing successful communication skills. 
  • Finding and exploiting additional and robust resources. 
  • Leading subordinates, colleagues, stakeholders in directions not yet travelled, and doing it timely and comprehensively.

The supply chain managers who rose to the occasion and did well were, in most cases, shown appreciation by their senior management and their profile and significance in the organization was raised.

It is likely that from now on, supply chain management is clearly identified as a critical aspect of any company’s business model.

Creating and executing a strategic plan in the global supply chain will greatly assist a company at meeting both its short-term and long-term planning objectives. Additionally, being prepared for disruption and bringing forward ideas to mitigate risk and spend is a “Best Practice” to be followed, managed, and cherished by all prudent and successful business managers. 

Our “Best Practices in Global Trade” columnist Thomas A. Cook is a seasoned global supply chain professional, author of more than 20 books on global trade and managing director of Blue Tiger International. He can be reached at tomcook@bluetigerintl.com or (516) 359-6232. 

directive global trade silk esg logistics

EU’s Corporate Sustainability Directive: Promoting Ethical Supply Chains

The European Union’s efforts to instill ethical and sustainable practices within supply chains have reached a significant milestone with the adoption of the Corporate Sustainability Due Diligence Directive (CS3D) by the EU Council on March 15, 2024. This directive, following years of deliberation and negotiation, mandates stringent measures for large companies to identify and address human rights abuses and environmental damage across their supply chains.

Initially met with resistance, particularly from Germany, concerns over additional burdens on businesses were addressed through revisions to the directive. Notably, adjustments were made to the thresholds for affected companies’ turnover and employee count, alongside changes in implementation timelines.

Under the CS3D, companies are obligated to integrate due diligence into their policies, assess potential adverse impacts, engage with stakeholders, and develop transition plans for climate change mitigation. Failure to comply may result in fines up to 5% of global turnover, underscoring the importance of adherence to ethical standards.

Despite challenges, many businesses, including prominent names like Aldi, Bayer, and Nestle, have thrown their support behind the directive, emphasizing its role in promoting sustainability and creating a level playing field across the EU.

While the directive aims to enhance transparency and risk management, concerns linger regarding its potential unintended consequences, such as changes in sourcing behavior and the migration of production from regions with lower ethical standards to compliant ones. However, the long-term benefits of increased visibility in the supply chain and improved resilience are anticipated to outweigh short-term challenges.

Overall, the CS3D represents a significant step towards fostering ethical supply chains, aligning with the EU’s commitment to sustainability and responsible business practices.

tariff GSF shippers carbon

Enhanced CSX Carbon Calculator Helps Shippers Achieve Sustainability Goals

CSX  today announced the launch of an enhanced carbon emissions reduction calculator that will help companies achieve their supply chain sustainability objectives by converting from truck to rail.

The enhanced tool offers freight shippers increased insight into the environmental benefits of rail through analysis of customer-specific data to calculate potential greenhouse gas emissions saved by choosing rail over trucks.

The new version of the Carbon Calculator is available to customers who use the ShipCSX online platform. The tool enables carload freight shippers to generate carbon savings analyses based on their historical shipment data; to view year-to-date totals and year-to-year trends; and to apply variables that provide additional insight for weighing carbon emission impacts when making supply chain decisions.

The Carbon Calculator draws on government and third-party studies of greenhouse gas emission factors of different transportation modes to calculate how much emissions are reduced when shipping by rail versus truck. The calculator incorporates freight type, distance and volume into its methodology.

Future versions of the Carbon Calculator will include the ability to calculate emissions savings on intermodal container shipments as well as advanced features that help companies evaluate supply-chain decisions that can further reduce their carbon footprint.

To use the enhanced calculator, customers must register at ShipCSX.com.

About CSX

CSX, based in Jacksonville, Florida, is a premier transportation company. It provides rail, intermodal and rail-to-truck transload services and solutions to customers across a broad array of markets, including energy, industrial, construction, agricultural, and consumer products. For nearly 200 years, CSX has played a critical role in the nation’s economic expansion and industrial development. Its network connects every major metropolitan area in the eastern United States, where nearly two-thirds of the nation’s population resides. It also links more than 240 short-line railroads and more than 70 ocean, river and lake ports with major population centers and farming towns alike.

sustainable

10 Technologies That Promise a More Sustainable Supply Chain

Supply chains can often account for more than 90% of a company’s carbon footprint. Finding ways to reduce the carbon cost of moving goods and raw materials could help significantly cut down on the emissions businesses across the economy produce.

The growing demand for sustainable business practices has business leaders looking for ways to shrink company carbon footprints and environmental impacts.

Many new technologies from inside and outside the industry could soon transform the supply chain and help make it far more sustainable.

1. Biodegradable Packaging

Many packaging materials are not environmentally friendly. Plastics — often in materials like styrofoam — are common and can take thousands of years to break down. When they do, they can escape into the environment in the form of microplastics. These are microscopic plastic fragments that can cause a range of health problems in both wildlife and humans.

New sustainable packaging options made from materials like prawn shell chitin, agricultural waste, and beech tree pulp, provide the support that packages need and break down in normal environmental conditions, unlike plastic. The use of these materials can help reduce the long-term environmental impact that non-biodegradable packaging can have.

2. Electric Cars

Electric vehicles have the potential to transform logistics vehicle fleets and last-mile delivery. Already, these vehicles can help businesses sustainably handle last-mile delivery.

As EV infrastructure expands over the next few years, they’re likely to become even more practical, including for companies in rural areas, where EV infrastructure has traditionally been less robust.

3. E-Bikes

Decarbonizing last-mile delivery can be challenging. Electric vehicle fleets aren’t always practical, and the high cost of adopting all-new electric vehicles can be steep.

In dense cities, bike couriers can help reduce the carbon cost of last-mile delivery. E-bikes can significantly extend the range couriers can cover without generating carbon, while also speeding up deliveries completed by bike.

Because these bikes can be charged for as little as $0.50 in major cities, they can provide a valuable and cheap alternative to cars, mopeds, and similar transport options. If necessary, companies can retrofit e-bike batteries and motors onto existing company bikes, reducing the cost of adoption, as well.

While not a total replacement for fleet vehicles, e-bikes are a potential low-carbon delivery solution for logistics professionals in population-dense areas.

4. Hydrogen Aviation and Ship Fuel Cells

While battery technology is improving fast, it’s not practical in every case. Airplanes and cargo ships, for example, can’t support the size and weight of a battery needed to power the craft from port to port or airstrip to airstrip. Maritime and air shipping experts are trying to find a more sustainable fuel instead.

Pure hydrogen fuel produces no emissions when burned. Manufacturers can create it using a carbon-free production method, reversible electrolysis, that requires just electricity and water. Other viable methods include a solar production strategy that draws power from the sun and also produces no carbon emissions.

As these methods come into widespread use, it could become possible for logistics providers to stop using high-emissions fuels like aviation fuel and heavy fuel oil.

5. Electric and Hydrogen Semi-Trailer Trucks

Soon, semi-trucks powered by batteries and special hydrogen fuel cells may also help reshape how goods are moved worldwide.

Cutting-edge electric trucks have a range comparable to semi-trucks with conventional internal combustion engines, meaning the limited range of some EVs, which has slowed adoption in the past, may not always be a problem.

As electric vehicle infrastructure expands, it may quickly become practical for shippers to switch from conventional trucks to electric ones. This could significantly reduce one of the supply chain’s most significant sources of carbon emissions.

Hydrogen-fuel trucks offer similar benefits. Several hydrogen fuel stations for hydrogen trucks are already in the works in America and could soon provide the infrastructure needed to make hydrogen semi-trailers practical.

6. Demand Forecasting Algorithms

The pattern-finding abilities of AI make it an excellent tool for solving complex problems when vast amounts of data are available. With AI trained on sales data, for example, companies can create more accurate demand forecasts and build a better picture of what customers will want and when.

During times of market instability when future demand is particularly challenging to predict, these tools can help reduce supply-side waste and overproduction.

7. Driver Behavior Analysis

Modern telematics solutions can offer data that helps logistics companies significantly reduce the carbon impact of their fleet vehicles. For example, idling can have severe environmental impacts.

Devices monitoring driver behavior can detect whether a driver has left their vehicle idling and for how long. This system can reduce idling incidents, keep companies compliant with local anti-idling ordinances, and reduce the carbon impact of their fleet vehicles.

8. Route Optimization Algorithms

Other sustainable use-cases for telematics include route optimization tools that use live traffic data and can interface with business scheduling systems.

These tools optimize driver routes, ensuring vehicles are spending as little time as possible on the road. This technology can help reduce unnecessary driving, optimize scheduling, and cut down on company carbon emissions.

9. Blockchain

Blockchain, the digital ledger technology that powers cryptocurrencies, can significantly improve supply chain visibility and transparency.

The technology, which provides a reliable and difficult-to-manipulate digital record-generating tool, gives businesses the means they need to improve supply chain transparency and guarantee ethical sourcing practices.

With the secure, trustworthy transaction records stored on the blockchain, businesses have a better chance of knowing how goods supplied by third parties were sourced — and if sourcing was done sustainably or in a way that complements other shipping practices.

10. Exhaust Scrubbers

New technology also makes it easier to retrofit existing shipping equipment to reduce carbon emissions.

Exhaust scrubbers, for example, are becoming increasingly popular among cargo shippers. These scrubbers are used on cargo ships to reduce the sulfur emissions produced by heavy fuel oils and similar fuels. According to an estimate by Bloomberg NEF, 4,800 vessels could be equipped with these scrubbers by 2025.

How New Technology May Enable Supply Chain Sustainability

Because supply chains account for such a large share of business carbon emissions, logistics providers will play an essential role in the ongoing pivot to more sustainable business practices.

Advanced technology will likely be critical for supply chain managers wishing to make their operations more sustainable. Electric vehicles, e-bikes, hydrogen fuel, and bio-derived packaging could soon enable managers to reduce the environmental impact and carbon emissions of shipping.

industry

How to Lead When the Industry is Volatile

In 2011, Prince William was marrying Kate, investors’ eyes were on Greek Prime Minister George Papandreou, and global trade experts were predicting a volatile 2012.

A decade later, Prince Harry just welcomed his first child with Meghan, Greece is still in the EU, and global trade experts are predicting a volatile 2022. 

As the saying goes, don’t wait for the storm to pass — just learn to dance in the rain. For the global trade industry, this translates into: get used to the volatility.

To build a truly sustainable supply chain in an era where the only stable prediction is instability, company leadership must embrace flexibility. Creating an agile organizational structure that’s ready to adapt at the drop of a hat (or the obstruction of a barge) ought to be considered a critical task for any workforce in the industry. Because — and this is the last quote I’ll reference, I promise — as General Electric’s Chief Innovation Officer Sue Siegel said in a 2018 keynote address, “The pace of change will never be as slow as it is today.”

The experts, however, got the cause of the volatility wrong back in 2011 — they thought it would be inflation. Who would have predicted the COVID-19 pandemic, or the Suez Canal disaster? 

Company leaders who pay attention to the growing data on worker productivity and how they rate their satisfaction on their work/life balance will continue to embrace work-from-home culture (now referred to as WFH by those in the know), instead of dismissing it as a temporarily allowable measure during the pandemic.

Within my own company, until last year we enforced a strict policy of keeping computers at the office — we’d decided the risk of damage during transit and at home was just too great. The pandemic forced us to reverse that policy in an instant, on a Thursday in March, without time to prepare. But we haven’t had to replace any equipment yet; it turns out adults can be trusted to take care of their valuables — and to roll with the punches. When I reflect on the resiliency our employees have demonstrated over the past year, I’m amazed.

In fact, I think the first subheading in the economy section of the 2020 history books will be “WFH.” Employees appreciate the flexibility, and those who benefit from mental and physical health-related workplace accommodations are thriving under the ability to create their own schedule and work environment. 

Meanwhile, COOs are shaking their heads wondering why we’ve been paying for all this office real estate over the years.

Leadership coaches have long preached that innovation is prevented when you’re comfortable with structure, and 2020 forced every member of the team to learn this lesson head-on.

Another takeaway for company leadership that the talking heads have been leaving out of their morning segments is that providing total visibility to clients and customers is the first way to ensure viability during a disaster. Yes, you may get an earful at the time when delivering bad news — but they’ll appreciate it in the long run (and trust you more for it) because a sugar-coated status report doesn’t allow managers to make the best decisions possible for their projects. 

Time for one more?

Those whose leadership style leans toward positivity were more likely to see their staff weather the 2020 storm. In a crisis, employees want to grab onto hope — it’s your duty to serve as their cheerleader. At the same time, make sure you have an outlet to vent that frustration away from work, lest you compress yourself into a powder keg that creates an entirely different problem down the line. 

________________________________________________________________

Richard J. Bolte, Jr. was born in Philadelphia in 1957 and joined BDP International in 1973. Throughout his 47-year career with the company, he has held positions covering a broad range of the firm’s operations in global logistics and transportation. His formative experience at BDP centered on ocean exports and supply chain management, with particular emphasis on company operations. Rich was Vice President of the company’s Northeast Region before taking the position of Chief Operating Officer. In 1996 he was named President of BDP International.
 

In 2006, Rich Bolte was named BDP’s Chief Executive Officer; and subsequently, in 2013 the Board of Directors appointed Rich as BDP’s Chairman & CEO. He now serves as the organization’s Chairman to the Board. Rich championed BDP’s global expansion, and the company now employs nearly 5,000 employees in 135 offices throughout nearly 40 countries. He can be reached at rich.bolte@bdpint.com.

Sustainability

THINK GREEN: 5 WAYS TO IMPROVE YOUR SUPPLY CHAIN SUSTAINABILITY

Concern over climate change is increasingly mainstream. In fact, the concern has gone from being hypothetical to being real: 59 percent of consumers say climate change is impacting their local communities, and 31 percent say it affects them personally. Likewise, sustainability is becoming less of a nice-to-have and more of a need-to-have for businesses—and their supply chains.

What is supply-chain sustainability?

As an evolving concept, sustainability is hard to pin down. Broadly speaking, sustainability refers to a framework for decision-making that considers the economic, social and environmental consequences of the decisions in question.

Sustainability provides the context, or guidelines, to make decisions about resource use with a focus on long-term viability rather than just immediate risks, benefits and costs.

Why does supply-chain sustainability matter?

As a concept, “sustainability” has been popping up more often: in ads, product branding and social media. It can be tempting to place sustainability in the buzzword box. But, according to data from GetApp, with 76 percent of Americans shopping for eco-friendly products at least some of the time, it’s not a term businesses should shrug off so readily.

Your customers are beginning to expect transparency around your business’ practices, and supply chains are ripe with opportunity. Every stage of the supply chain—from production to distribution—can be evaluated on the sustainability of its practices.

In addition to taking environmental measures such as examining emissions levels and resource efficiency, businesses can evaluate the ethics of their labor practices and fairness of their economic practices. A GetApp survey found that respondents also think sustainable companies should donate to a social cause (28 percent), follow ethical practices (53 percent) and not test on animals (32 percent).

Make your supply chain more sustainable with these 5 steps

1. Understand the risks and opportunities in your supply chains

Because of the complexity inherent to many supply chains, businesses often don’t have a full understanding of its sustainability impacts. A good first step in closing that gap is mapping your supply chain: listing suppliers, identifying social and environmental risks associated with each one and prioritizing related efforts.

One way to prioritize suppliers is to consider spending, volume of business and geography. Top suppliers can then provide sustainability metrics to further classify them based on environmental performance. This information can later be built into the design and procurement of future projects.

You don’t have to take everything on at once, but focus on the areas that will have the most impact within as short of a time frame as possible. Your suppliers are different: Assess them differently.

2. Set sustainability targets within the procurement process

To evaluate your suppliers and build sustainability into your business’ procurement processes and operations, set sustainability targets. Targets will help you track supplier performance and incorporate these new standards into future contracts.

Communicate these goals to your teams, customers and suppliers to make them a part of the conversation. It’s not only important to make sure all stakeholders understand the importance of sustainability and the goals your business has set; it also matters that they are able to take ownership of these initiatives.

Hyatt Hotels established sustainability goals under their 2020 Vision plan, with the objective of reducing GHG emissions and water and energy usage. In just two years, Hyatt reduced water usage by 18% percent, GHG emissions by 19 percent and energy consumption by 10 percent in the United States.

3. Set a baseline supplier performance

Once you’ve mapped your suppliers and set targets, collecting data from your suppliers will help your business understand where they stand.

One way to do this is to administer a baseline questionnaire or survey that suppliers can use to self-assess their performance on various key areas.

Some businesses have chosen to model their surveys after GRI guidelines and CDP questionnaires. A few industries, including the pharmaceutical industry, have also gone as far as to implement a standard survey so that suppliers don’t have to fill out a different survey for each client.

These surveys can be used to check supplier performance on energy and water usage, waste generation and disposal, and greenhouse gas emissions, among other things.

4. Leverage data to make informed decisions

You’ve mapped your supply chain, set goals and measured supplier performance—congratulations! Just one more thing to consider: Taking these steps probably means you’ll have lots of data on your hands. Managing this data isn’t easy, but it’s essential to making informed decisions.

Making use of your business’ supply chain data can help you spot inefficiencies, automate decision-making and improve customer experience. The more accurate your data, the more efficient you’ll become and the clearer your picture of your business and suppliers will be.

5. Use software to analyze data and automate processes

The key to wrangling your data and squeezing the most value from it may be to use a reliable supply chain management software solution. Not only will the right system gather the data you need, it will also analyze it, derive insights and automate processes.

Not sure where to start? Look for solutions that include at least a few of the following features:

Supplier relationship management: Enables users to plan and manage interactions with suppliers. This centralizes communication, ensuring a consistent message and improving collaboration between several teams. SCM software that has this feature may also help with step No. 3 (setting baseline performance) by gathering relevant survey data and tracking responses.

Asset management: Tracking assets and delivering maintenance in a timely manner will help you ensure your business’ operations run smoothly but also keep you ahead of their depreciation curve and running on minimal energy.

Shipment tracking: Tracking shipments will keep you in the know but can also allow you to benchmark carrier performance. Timeliness encourages resource efficiency, but the logistics side of your supply chain has more potential: Think route optimization and fuel efficiency, among others

Reporting and analytics: This feature is essential to leverage your data. A solution that processes data, identifies trends and triggers alerts will reduce manual processes and improve information accuracy.

_______________________________________________________________

Victoria Wilson is a specialist analyst with GetApp, an online resource for software buyers to compare products side-by-side with free interactive tools, detailed product data and user reviews. Founded in 2010, the Barcelona, Spain-based Gartner company also serves as an online lead generation channel for SaaS.