A detailed analysis of so-called sustainability programs launched by many global third-party logistics (3PL) providers finds most are maintaining and even expanding such efforts largely due to the cost savings they've generated.
The “Third Party Logistics Sustainability Report” compiled by Robert Lieb, professor of Supply Chain Management at Northeastern University, and Kristin Lieb, assistant professor of marketing communication for Emerson College, shows that many large 3PLs increased their commitments to developing greener practices and building environmental sustainability programs despite the global recession of 2008 and 2009.
Sponsored by Penske Logistics and based on key findings from the 2008 and 2009 “3PL Provider CEO Perspective” surveys conducted by the Liebs, the report found that 28 of the 35 3PL CEOs polled said sustainability programs yielded overwhelmingly positive results. These were seen as reducing operating expenses, especially fuel costs, with one CEO noting that sustainability efforts resulted in a 40% reduction in fuel expenditures.
“I was first surprised by the breadth of the 3PL commitment to sustainability efforts in 2008, then surprised again in 2009 as many expanded those efforts in the face of the global recession,” Robert Lieb told Fleet Owner.
He said the 35 3PLs surveyed represent a total of $60 billion in revenue each year. “Our research now indicates most [3PLs] are staying on the [sustainability] path in 2010 as they are realizing economic advantages from them,” Lieb added. “Many came back surprised themselves at the significant operating savings they were achieving through sustainability efforts.”
Some 63% of the CEOs surveyed reported expanding their existing sustainability programs in 2009, with 71% indicating they had launched completely new sustainability initiatives.
Lieb stressed there's no focus in the 3PL space on one particular sustainability path. Rather, most of the companies are taking a very broad approach across their organizations. They are engaged in everything from installing motion-detector light switches to reduce electricity use, to building windmills at distribution centers to generate power, and even reducing the workweek from five to four days.
“We tallied 20 different sustainability programs affecting transportation alone,” he noted. “So no one thing stands out from 3PL sustainability efforts; these are very broad efforts.”
