Skip to content
Search AI Powered

Latest Stories

newsworthy

"Going green" motivated by saving green, not the planet, survey of supply chain attitudes concludes

Cost savings trump altruism among global logistics chiefs, Alix Partners study finds.

Sustainability initiatives are catching on with top global supply chain executives, but for the economic rather than for the environmental benefits, a new survey has found.

The survey, conducted in the spring by New York-based business advisory firm Alix Partners LLC and released earlier this month, found that 72 percent of the roughly 150 respondents had sustainability policies or sets of sustainability objectives in place. The survey results, however, indicate that most of these programs are driven by potential cost savings rather than altruism. According to 84 percent of survey respondents, their customers (mostly other businesses) value the cost savings generated by sustainability initiatives more than their environmental impact. Likewise, two-thirds of the respondents said they would not pay their own vendors a premium for developing green programs. The remaining one-third said they would be willing to pay suppliers a mid-single-digit premium for their sustainability efforts.


The respondents were comprised mostly of high-level executives across 10 industries, the vast majority being shippers. Most of the executives were based in the U.S. and Europe. About 55 percent worked for companies with annual revenues exceeding $1 billion. About 21 percent represented firms with revenues of more than $10 billion. The survey represents Alix's first global effort to measure the behavioral impact of sustainability initiatives.

The survey results demonstrated what many already knew: European companies are ahead of their U.S. counterparts in their commitment to sustainability. About 88 percent of European respondents have sustainability programs in place, compared with 76 percent of U.S. companies. About one-third of European executives said green initiatives were either extremely or very important to their companies, compared with 26 percent of U.S. executives.

Alix Partners also tried to assess commitment among Asian companies but with little success. Foster Finley, managing director at Alix, said the survey was distributed throughout Asia but, outside of Japan, it elicited virtually no response. Many developing Asian nations, notably China, are focused on industrial growth and don't place environmental issues high on their priority lists, Finley said in an interview. China, in particular, has the reputation for being the world's most notorious polluter.

Finley said in a phone interview that the most important message from the survey was that sustainability has expanded from the realm of social consciousness into the economic mainstream. In the past, sustainability programs were considered a luxury that generated little more than public relations benefits for business. Today they are being developed with a primary eye towards the bottom line, Finley said.

Finley said he was impressed with the finding that one-third of companies would reward their suppliers with what is tantamount to bonuses for their investment in sustainability initiatives. "Three or four years ago, that number would have been close to 5 percent," he said.

As perceptions about sustainability change, these programs are being subject to the same performance requirements required of other segments of an organization. For example, 60 percent of respondents investing in green programs said their companies require a return on investment within 18 months; only 17 percent said their firms are willing to wait longer than that. Here too, however, the attitudes differ by continent. Less than a third of American executives said they would invest in green logistics initiatives that didn't produce positive financial returns. By contrast, 62 percent of European executives said they would invest in green programs even if they failed to turn a profit.

Overall, the lack of an adequate financial return within what is viewed as a reasonable time frame was the main roadblock toward making greater progress in this area, according to the survey. About 43 percent of respondents said they were undecided as to whether their companies would invest in a sustainability plan in the next year.

In Europe, half of the respondents said recycling raw materials, energy conservation, or switching to alternative energy forms were the primary drivers of sustainability programs. By contrast, in the U.S. the consolidation of less-than-truckload shipments into fewer but larger truckload shipments was seen as the main initiative. Nearshoring came in last on both continents as a way to advance sustainability programs.

The Latest

More Stories

Trucking industry experiences record-high congestion costs

Trucking industry experiences record-high congestion costs

Congestion on U.S. highways is costing the trucking industry big, according to research from the American Transportation Research Institute (ATRI), released today.

The group found that traffic congestion on U.S. highways added $108.8 billion in costs to the trucking industry in 2022, a record high. The information comes from ATRI’s Cost of Congestion study, which is part of the organization’s ongoing highway performance measurement research.

Keep ReadingShow less

Featured

From pingpong diplomacy to supply chain diplomacy?

There’s a photo from 1971 that John Kent, professor of supply chain management at the University of Arkansas, likes to show. It’s of a shaggy-haired 18-year-old named Glenn Cowan grinning at three-time world table tennis champion Zhuang Zedong, while holding a silk tapestry Zhuang had just given him. Cowan was a member of the U.S. table tennis team who participated in the 1971 World Table Tennis Championships in Nagoya, Japan. Story has it that one morning, he overslept and missed his bus to the tournament and had to hitch a ride with the Chinese national team and met and connected with Zhuang.

Cowan and Zhuang’s interaction led to an invitation for the U.S. team to visit China. At the time, the two countries were just beginning to emerge from a 20-year period of decidedly frosty relations, strict travel bans, and trade restrictions. The highly publicized trip signaled a willingness on both sides to renew relations and launched the term “pingpong diplomacy.”

Keep ReadingShow less
forklift driving through warehouse

Hyster-Yale to expand domestic manufacturing

Hyster-Yale Materials Handling today announced its plans to fulfill the domestic manufacturing requirements of the Build America, Buy America (BABA) Act for certain portions of its lineup of forklift trucks and container handling equipment.

That means the Greenville, North Carolina-based company now plans to expand its existing American manufacturing with a targeted set of high-capacity models, including electric options, that align with the needs of infrastructure projects subject to BABA requirements. The company’s plans include determining the optimal production location in the United States, strategically expanding sourcing agreements to meet local material requirements, and further developing electric power options for high-capacity equipment.

Keep ReadingShow less
map of truck routes in US

California moves a step closer to requiring EV sales only by 2035

Federal regulators today gave California a green light to tackle the remaining steps to finalize its plan to gradually shift new car sales in the state by 2035 to only zero-emissions models — meaning battery-electric, hydrogen fuel cell, and plug-in hybrid cars — known as the Advanced Clean Cars II Rule.

In a separate move, the U.S. Environmental Protection Agency (EPA) also gave its approval for the state to advance its Heavy-Duty Omnibus Rule, which is crafted to significantly reduce smog-forming nitrogen oxide (NOx) emissions from new heavy-duty, diesel-powered trucks.

Keep ReadingShow less
screenshots for starboard trade software

Canadian startup gains $5.5 million for AI-based global trade platform

A Canadian startup that provides AI-powered logistics solutions has gained $5.5 million in seed funding to support its concept of creating a digital platform for global trade, according to Toronto-based Starboard.

The round was led by Eclipse, with participation from previous backers Garuda Ventures and Everywhere Ventures. The firm says it will use its new backing to expand its engineering team in Toronto and accelerate its AI-driven product development to simplify supply chain complexities.

Keep ReadingShow less