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Can Sustainability Be Profitable?

April 18, 2022 Kevin Baxter

Sustainable profit

Aside from the most noble reason a company may implement sustainability practices - care for the environment - those concerned with the bottom line will get on board only if doing so is profitable. The good news is, companies can have their cake and eat it too in this regard, as sustainability most certainly can be profitable. While there are often up-front costs associated with sustainability efforts, those costs tend to be investments that pay off, whether with immediate dividends or longer term profits. And depending on how far a company goes to develop sustainable operations, profits can come from multiple avenues. A more sustainable operation is simply good modern day business in just about any industry, including freight and logistics.  

How does sustainability cause profitability?

There are a number of ways sustainability can lead to profitability for companies that adjust their operations, including

  • More operating efficiencies
  • Tax incentives
  • An improved reputation
  • Future-proofing

When it comes to operating efficiencies in freight and logistics - since that industry happens to be our focus here - that term covers quite a bit of ground. It includes reduced fuel and energy consumption, fewer wasted miles with smarter routes, reduced transport of empty or partially empty loads, choosing the most environmentally friendly shipping method and less idle time to name a few. And just about every state, the federal government and governments around the world offer incentives - tax or otherwise - to adopt green technology.

We've mentioned before, customers of every stripe overwhelmingly say they're more likely to patronize a business that cares about sustainability. So a sustainable mindset put into practice gives you a leg up over your competitors. As far as future-proofing, many green initiatives address updates that will eventually be required anyway. For instance, governments may require lower emissions or better fuel efficiency when it comes to transportation. Getting fleets updated ahead of those requirements means your business won't miss a beat, and won't have to deal with a major unplanned expenditure. Plus, of course, you get the other benefits noted above.

On the flip side though, there is an upfront cost, and there can be ongoing costs as well to making your business sustainable. For one, an outlay of green technology and equipment to replace what you already have can be pricey. And equipment optimized for these purposes tends to be a bit higher cost than equipment using older technologies, with sometimes more expensive maintenance depending on scarcity of service and parts options. On top of that for manufacturers, sustainable raw materials needed to make sustainable products are more expensive to grow or produce, and often to manufacture or process as well. But again, there are often tax and other incentives to mitigate these costs, and there are no absolutes when it comes to how much green and sustainable products cost. Then in the long run, the benefits tend to considerably outweigh the costs.

If you're ready to take the next step, at InTek Freight & Logistics, we can help. Just tell us what you need and we'll discuss how our expertise can help with the unique shipping challenges your business faces. Rather do a bit more research first? View our Freight Guides for comprehensive articles and eBooks on all things freight and logistics.

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