Logistics
Optimizing our logistics network is an important part of our sustainability strategy.
Sustainability
Emission reduction, at scale
The optimization of our logistics network plays a crucial role in our strategy to reduce emissions associated with shipping our goods. This involves transporting products from our four factories to our 25 sales companies. In 2022 alone, the emissions from this activity are projected to contribute 13 kt to our total emissions. To effectively execute our strategy, we have established clear targets and implemented tools and processes.
Emission Update
Between 2019 and 2021, logistics emissions increased due to rising sales and challenges in the supply chain, such as component shortages. These challenges led to an increased reliance on airfreight. However, in 2022, despite increased sales, we witnessed an encouraging decrease in emissions. This reduction can be attributed to the positive impact of our implemented reduction plans.
Reduction Plan - Logistics
Optimizing Our Supply Chain
To decrease our overall transportation demand, we are focused on optimizing our supply chain setup. One approach is regionalization, where we aim to regionalize currently single-sourced products, thereby reducing the need for extensive transportation.
Air Freight Reduction
Reducing our air shipments is vital for achieving our sustainability targets. Although air freight accounts for only 5% of our products, it represents over 30% of our total logistics-related emissions. In response to supply chain challenges, we now collaborate closely with stakeholders and customers, allowing for longer lead times and reducing the reliance on air shipments. Our target is to limit air shipments to a maximum of 1% of all shipments in Laerdal (by weight) by 2026.
Container Utilization
While ocean container freight is currently the most sustainable mode of transport, it is crucial to optimize container packing efficiency. By maximizing space utilization, we aim to improve container utilization from the current rate of 65% to 85% by 2025.
Emission Intensity
We work closely with freight forwarders and shippers to identify and implement available solutions for reducing emission intensity. This includes utilizing fossil-free road transport and low-carbon ocean shipping between distribution centers, factories, and suppliers. We also optimize routing to ports closer to the main market, prioritizing train transport for the last leg of the journey.