Benoit Gruber, VP of Product Marketing at Alpega TMS, recently gave his insights to the German publication, Beschaffung aktuell, about one of the trendiest topics of the moment: sustainability in freight transportation.
Sustainable transport as basis for corporate success
Sustainability is gaining in importance in the corporate world, particularly in the transportation sector. With increasingly rigid regulations and a growing emphasis on emissions tracking, staying ahead is no longer just a choice but a necessity.
European Sustainability Reporting Standards (ESRS)
A fitting example is the European Sustainability Reporting Standards (ESRS), which has been in effect since January 5, 2023, and that outlines reporting standards for environmental aspects like climate protection, adaptation, energy, and pollution.
For companies dealing with ESRS reporting, grasping the needed data and figuring out how to get it is key. Even if you are not doing the direct reporting, partners and clients might want your data for their reports, thanks to ESRS's push for info across the value chain.
Modernizing freight procurement for ESRS reporting
Now, when it comes to data collection, the transport tender process is a game-changer for ESRS alignment. Not everything in freight transport and emissions is in your hands. So, stressing the need for data early in the freight purchasing is a must.
Integrate your emission calculations into your freight procurement software, making tender criteria a natural part of the data analysis. By improving processes and following emission rules, procurement professionals can ensure regulatory compliance before signing contracts.
Pernod Ricard: Sustainable transport through the right freight tender platform
Pernod Ricard, the world's second-largest producer of wines and spirits, embraced sustainability ahead of ESRS introduction. The company, famous for brands like Absolut Vodka, wanted to reduce CO2 emissions by 50% in its transportation by 2020.
This ambitious goal was supported by a SaaS freight procurement solution that helped streamlining processes, optimizing spend, and identifying more sustainable transport options.
Comparison of solutions with and without HVO
In 2019, Pernod Ricard used trucks that run on HVO fuel, made from plants, instead of regular diesel or biodiesel. This fuel helps reduce greenhouse gas emissions.
Using the freight procurement software, Absolut created separate routes in the RFP, allowing carriers to bid exclusively if they met specific HVO criteria. These criteria, such as avoiding unsustainable byproducts like PDAF, were defined to align with the company's sustainability goals.
Minimize costs despite sustainable transport
To assess the cost and CO2 differences, Absolut included regular and HVO truck options in the RFP, providing a platform that enables precise definition of sustainability criteria. This flexibility empowers companies to select carriers meeting their sustainability goals. Future tenders can evaluate routes, transit times, service levels, and environmental impacts, allowing conscious decisions for a greener footprint.
Safety and sustainability are vital in freight. When Absolut implemented a freight procurement software to compare HVO options, they anticipated increased costs but used the software to ensure fair market prices for their demanded service levels. Absolut's sustainable practices aligned with Pernod Ricard's strategic initiatives, emphasizing the importance of sustainable procurement.
Shaping a Sustainable Future with freight procurement
In conclusion, shippers are increasingly willing to pay for, or consider, greener alternatives. Including sustainability criteria in the procurement process helps evaluate options and their impacts before awarding contracts. The right procurement software is important for successful procurement management. It gives a competitive advantage and helps build long-term partnerships.
In a sustainable world, businesses can save time and money by finding the best partners through strategic procurement. Strategic procurement helps businesses find the right solutions for their needs. This is important because sustainability is a priority. It's more than a green opportunity; it's a blueprint for a sustainable future in logistics.