Supply chain accountability is vital to meeting ESG goals in logistics. Fortunately, logistics service providers, port terminal operators, intermodal marketing companies and non-vessel operating common carriers have access to more efficient technologies to stay ahead of the game.

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Revamping organizations internally can be complicated. Talk is cheap, so discerning logistics interests have employed these four methods to keep partners honest and hold erring ones accountable.

1. Relationship Management

Accountability happens when each piece of the supply chain knows its responsibilities and wholeheartedly accepts them. Take eco-friendly objectives — only 75% of industry players have poured resources into pursuing sustainability-related goals based on ESG criteria. The other 25% logistics companies haven’t done anything yet, suggesting they have other priorities. The disconnect can lead to organizational culture clashes.

All enterprises can inadvertently sabotage external partners in pursuit of their interests. Nurturing positive relationships with supply chain partners allows all parties involved to familiarize themselves with each other’s unique business goals and find mutually beneficial ways to work together. Finding common ground on critical areas is the key to nailing ESG targets consistently.

Logistics partners are less likely to behave to the detriment of one another when everybody is on the same page. Betrayal of trust can happen accidentally when one party doesn’t fully understand their obligations and the other’s expectations of them. 

Both camps must discuss the risks they face and want to mitigate. Talking about the rewards each side wishes to gain from the business relationship must also be high on the agenda. Putting all cards on the table enables all parties to work collaboratively instead of competitively.

Verbal agreements are flimsy. Written legal contracts add more teeth to carrot-and-stick approaches by assigning responsibilities and spelling out consequences when a party falls short of expectations. Supply chain partners are more likely to hold their end of the bargain when every point of discussion is in black and white.

Furthermore, open communication helps forge stronger long-term partnerships. Prompt notifications aid responsiveness. Relevant stakeholders must be aware of potential and ongoing setbacks to coordinate with one another and make necessary adjustments swiftly without compromising ESG goals.

2. Orchestration

Well-orchestrated operations help eliminate blind spots between partners, putting all parties in a position to fulfill their responsibilities. Real-time data sharing fuels orchestration in the supply chain. It breaks down silos and enables stakeholders to be in tune with one another, regardless of location and time zone.

Technological transformation and integration underpin seamless information flows. Enterprise resource planning systems, transportation orchestration platforms, IoT devices and AI-based advanced analytics software are must-use technologies.

Logistics companies and partners don’t have to use the same hardware and software vendors to align their processes. All parties can get by when their technologies are compatible and they no longer use legacy solutions that hinder integration at the system level. Interoperability is paramount — it ensures relevant stakeholders from both camps can access similar data from which they can glean insights, have a single version of the truth and automatically leave audit trails.

Modern supply chain solutions support ease of adaptability and scalability. Agile decision-makers from both camps require technologies that can grow as their enterprises grow and their business requirements change, like adopting vehicle-to-vehicle communication and other measures to curb carbon emissions, so supply chain operations can remain frictionless between partners.

3. Transparency

Accountability becomes less of a concern in the supply chain when all players operate in a trustless environment. In this environment, no party has to take another’s word when investigating problems or auditing because bountiful irrefutable evidence is readily available and no party can hide or tamper with critical information when needed.

Embrace the right technologies to eliminate visibility gaps, collect granular data, produce quality video recordings and improve traceability is vital in fostering supply chain transparency.

Examples include GNSS-powered solutions that can track the movement of shipments using signals from various satellite constellations like GPS. Telematics devices constantly monitor vehicle performance and quantify driver behaviors on the road.

In addition, dashcams on fleet semi-trucks continuously capture high-resolution videos of the surroundings from parking to destination while the engine is on, producing reliable footage that can back or invalidate anecdotal claims. Blockchain renders partner activities traceable and audits painless, for this distributed ledger is immutable and can be decentralized.

The growing number of sophisticated technologies on the market gives logistics companies abundant options to attain transparency at every turn. With the right set of hardware and software solutions, organizations can gain additional eyes and note-takers to encourage partners to police themselves to avoid mistakes and come clean when something goes wrong.

4. New Partner Evaluation

Proper partner selection can solve many supply chain problems. While exercising due diligence can be painstaking work, it’s worth the trouble.

Promoting higher ethical standards and creating a culture of collaboration based on mutual trust and accountability is a pipe dream without a mechanism for telling reliable and dubious vendors apart early on. Signing deals with unscrupulous characters is a costly mistake that can trigger PR crises, drive up long-term costs and reduce responsiveness.

A logistics company’s vendor management team can effectively vet prospects by scrutinizing each one’s operational performance based on relevant KPIs. For example, when seeking new trucking partners, candidates must demonstrate excellent delivery time, truck turning, average days late, freight bill accuracy and transportation cost figures.

Moreover, doing business with new partners is an opportunity to bring an organization a step closer toward sustainability. The ideal supply chain partner must be technologically competent and open to innovation. While no industry player can claim to have figured everything out, ESG laggards are dead weight to any logistics organization trying to make honest-to-goodness efforts to be part of the solution.

Nevertheless, the strongest partnerships don’t always stem from being on the same wavelength immediately. Lesser candidates that have more promising learning dimensions and are willing to innovate — such as switching to biomass-based fuels like renewable diesel and upgrading to zero-emission vehicles — to bolster their partners’ sustainability aspirations may outshine their more established counterparts that are set in their ways.

Uphold Accountability in the Supply Chain Without Trying

Even generally ethical partners may feel liable to deny culpability for their errors when they can get away with it. Although such a tendency is part of human nature, it’s unacceptable in business — especially when logistics players are spending untold amounts of money to live up to industry standards. Implement these methods to ensure all parties behave with integrity.

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