In brief:
- Sustainability is important for businesses that want to succeed in a market that values environmental responsibility.
- Lead Logistics Providers (LLPs) are key partners in adopting sustainable practices throughout supply chains, helping companies operate in an eco-friendly way.
- Companies often struggle with challenges like not having enough visibility in their supply chains and problems with data accuracy, but LLPs can provide solutions to help them meet their sustainability goals.
- Working with Unipart as your LLP gives you access to proven experience and effective strategies that boost your sustainability efforts while improving your supply chain performance.
Sustainability is no longer a ‘nice-to-have’ or just a ‘trend, it’s now a business necessity.
Integrating sustainable practices into supply chains is crucial for businesses aiming to remain competitive. Those who neglect this shift can risk falling foul of regulations and losing market share in an eco-conscious landscape. Every link, from sourcing raw materials to final delivery, should be optimised to reduce environmental impact. Companies must adopt eco-friendly materials and rethink logistics to comply with evolving regulations and avoid penalties. By cutting waste, lowering emissions, and managing resources responsibly, businesses can protect the planet while boosting efficiency, reputation, and growth potential.
However, transitioning to a sustainable supply chain isn’t without challenges. Companies often struggle with limited resources, specialised knowledge gaps, high costs and internal resistance to change.
This is where a Lead Logistics Provider (LLP) becomes invaluable. LLPs offer the expertise, technology and innovative solutions needed to transform supply chains. By handling the complexities of logistics and sustainability, LLPs enable businesses to focus on their core operations while achieving measurable environmental and operational improvements. Partnering with an LLP paves the way for businesses to overcome sustainability hurdles, stay compliant with evolving regulations, and position themselves as leaders in a rapidly shifting marketplace.
Why is sustainability a business necessity?
Sustainability has become a critical business necessity for several compelling reasons.
A report from the Carbon Disclosure Project (CDP) indicates that supply chains can account for up to 11.4 times a company’s direct emissions, contributing to over 90% of total greenhouse gas emissions 1. This alarming statistic underscores the significant impact of supply chain management on overall sustainability efforts.
The European Environment Agency warns that, without effective measures, logistics could account for 40% of global carbon dioxide emissions by 2050 2. This impending crisis highlights the urgent need for businesses to take action.
Consumer and investor awareness are also driving this change. Many consumers are not only conscious of their purchasing choices but are also willing to pay more for eco-friendly products, with some willing to spend on average 9.7% more 3.Research shows that 85% of consumers are more likely to buy from a company known for its sustainability efforts 4.This alignment fosters customer loyalty and provides companies with a competitive edge.
Investors are similarly prioritising sustainability, increasingly using environmental, social, and governance (ESG) criteria in their investment decisions. Companies that implement strong sustainability practices tend to be more resilient. As Eastspring Investment notes, “companies with sustainable supply chains can enjoy cost savings, improved reputation, and increased market share, enhancing their attractiveness to investors” 5.
Changing compliance laws worldwide are also pushing companies to adopt sustainable practices to reduce emissions and meet regulatory requirements. Adapting supply chains to comply with these laws helps businesses avoid penalties and shows their commitment to environmental responsibility.
The push for sustainability is driven by the need to address significant environmental challenges, respond to consumer and investor demands, and comply with evolving regulations. Embracing sustainability is not just a moral imperative; it is a strategic business necessity.
The challenges of a sustainable business
While the priorities mentioned above are important, certain factors can pose significant challenges for supply chain executives, particularly when resources are limited. Research by EY shows that while many executives have long-term sustainability goals for their supply chains, few have the visibility, technology, and comprehensive programmes in place to measure their progress 6.
Here are some key reasons why leaders may face these challenges:
Limited supply chain visibility
Supply chain visibility involves tracking the journey of products, materials, and information from raw material sourcing to customer delivery. This transparency is essential for companies seeking to manage their environmental impact effectively. Advanced technologies like IoT, blockchain, AI, and machine learning can significantly enhance visibility, providing real-time insights into the supply chain. However, implementing these solutions can be costly and complex, leading many companies to rely on outdated systems. This reliance creates data silos and inefficiencies, complicating efforts to accurately measure and reduce carbon footprints.
Data accuracy and availability
Successful sustainability efforts depend on accurate and reliable data. However, many organisations struggle with inconsistent data collection and a lack of standardised formats, making it difficult to assess their environmental impacts effectively. Manual data handling and the absence of automation can lead to errors that affect decision-making.
Supplier collaboration
Getting suppliers to adopt sustainable practices can be challenging, especially in regions with different environmental regulations. Aligning suppliers’ operations with a company’s sustainability goals requires ongoing communication and collaboration, but differing practices and priorities can slow progress.
Why do you need a Lead Logistics Provider (LLP)?
In today’s complex supply chain environment, Lead Logistics Provider (LLPs), also known as 4th-party logistics (4PL) are key partners in promoting sustainability and improving operational efficiency.
LLPs manage the entire logistics process, ensuring that goods and materials move smoothly to meet demand. Their role includes selecting and overseeing partners such as carriers, freight forwarders, and warehouse operators, as well as managing order fulfilment, inventory, customer service, and claims.
The demand for LLPs is increasing. Reports indicate that by 2030, around 20,000 companies will adopt 4PL services, a 50% rise from the 10,000 that utilised these services in 2021. North America is expected to become the second-fastest-growing 4PL market, following Asia-Pacific and surpassing Europe 7.
How LLPs support sustainability in supply chains
Data-driven carbon reduction
LLPs leverage detailed data analytics to map and visualise CO2 emissions across every stage of the supply chain, providing the insights needed to reduce carbon footprints effectively. This data-driven approach enables businesses to optimise logistics strategies, from refining transportation routes to implementing energy-efficient processes and selecting sustainable materials, resulting in both environmental benefits and cost reductions.
Circular economy expertise
LLPs bring deep expertise in sustainability and the circular economy, supporting companies in designing and executing strategies that not only meet regulatory requirements but also promote resource efficiency and innovation. By fostering a shift towards circularity, LLPs facilitate resource recovery, sustainable product design and leasing models, helping businesses extend the life cycle of materials and reduce waste.
Supply chain optimisation
The focus on supply chain optimisation goes further, incorporating network design, efficient routing, and sustainable packaging solutions to minimise environmental impact while maintaining operational excellence.
Collaboration and transparency
By fostering collaboration across the supply chain, LLPs align suppliers, customers, and stakeholders around shared sustainability objectives. They encourage open communication and provide regular updates, keeping everyone informed and engaged.
Strengthening reputation
This collaborative approach drives improvements and enhances a company’s reputation. In a competitive marketplace, a commitment to sustainability is essential. Partnering with an LLP helps businesses embed sustainability into their operations, creating long-term value for all stakeholders.
Why make Unipart your Lead Logistics Provider?
Unipart Logistics has a proven track record in partnering with companies across the automotive, technology, and healthcare sectors. With deep operational expertise and advanced technology, we are a trusted Lead Logistics Provider (LLP), delivering reliable and effective strategies.
Building strong, collaborative relationships with colleagues, customers, and partners is central to how we enhance service delivery and strengthen supply chains through our LLP approach.
We are focused on continuous improvement. Our recent partnership with Shippeo, a leader in real-time multimodal transportation visibility, further strengthens supply chain transparency across a wide network of providers and regions.
To learn more about our Lead Logistics Partnership, download our whitepaper or contact Iain Brunton at iain.brunton@unipart.com.
References
- CDP, Scoping Out: Tracking Nature Across the Supply Chain Global Supply Chain Report 2022, 2023
- Carboncare, Responsibility of Transport and Logistics, 2024
- PWC, Consumers willing to pay 9.7% sustainability premium, even as cost-of-living and inflationary concerns weigh: PwC 2024 Voice of the Consumer Survey, 2024
- Llamasoft, Sustainability The Missing Link, 2019
- Eastspring, Why sustainable supply chains matter for investors, 2024
- EY, How sustainable supply chains are driving business transformation, 2022
- Polaris market research, 2022