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Kelsey Jensen
Hi, everyone. Thank you for attending today's webinar, how to cut your supply chain emissions and cost with data driven insights. My name is KJ, and I lead the climate team at Flexport. Before we dive in, a few housekeeping notes to help everyone get oriented. If you haven't joined us before, on your screen, you'll see a sidebar to the right of the main stage where you can submit questions. At the end of the webinar, we'll also hold a q and a, and answer a few audience questions, so get those ready. And in the same sidebar, you'll also see a tab labeled docs, and that's where you can download a copy of today's slides if you so wish. Next, we'll just go over yes. Brief legal note. Please just bear in mind that all the information provided in this session is based on the situation at its current time and may not be customized to your specific business requirements. We always recommend reaching out to a Flexport export expert to get your particular, situation discussed, and we're happy to support there. And I'm excited to say that joining me today is Michelle Feioli, who is our head of supply chain optimization and analytics control tower team here at Flexport. Thank you, Michelle, for joining me.
Michelle Feole
Hey, Nice to be here.
Kelsey Jensen
and today's agenda, we're gonna start off with climate data as a growth enabler, dive into supply chain optimization introduction, go through a number of case studies to give some examples about how we actually make this work, and we'll end with some key takeaways and the q and a as mentioned. So, setting the stage here. Right? Flexport's mission is to make global trade so easy that there will be more of it. But we also know that increasing shipping costs put pressure puts pressure on businesses and that supply chain activities contribute significantly to the world's greenhouse gas emissions. So today, we're zeroing in on how supply chain managers can build more financially sustainable businesses while also keeping emissions in check. And yes.
Michelle Feole
There we go.
Kelsey Jensen
In August, we're we're kind of incorporating two two bits of of Flexport tech, let's say, to to help us zero in on this goal. One part of that is our granular emissions reporting. So in August, Flexport integrated with EcoTransitWorld, the industry's leading supply chain emissions calculator organization. And our increase in granularity into supply chain emissions leg by leg basis has helped clients better understand their emissions profile and identify areas for reduction. By incorporating these emissions measurements insights through that granularity with Eco Transit directly into other Flexport products, like our supply chain optimization tooling, we've created a multifaceted picture of how modality switches and consolidations impact not just supply chain's bottom lines, but also their emissions footprint. So that is a good segue to actually ask Michelle. If you could, give us an overview and introduction, what actually is supply chain optimization?
Michelle Feole
No. Thanks, KJ. So, we had a SCO webinar, like, a couple of weeks ago. So if you attended that, some of this might sound a little bit familiar, but we'll we'll, we'll review it again, for the new faces. So supply chain. Like, this can mean a dozen different things really depending on, you know, where do you draw those system boundaries. But when we look at, it from an optimization perspective, what we're really looking at are kind of like three nodes. Right? So you first start out with your, manufacturing node. This is really figuring out, you know, what and how much you want to produce and at what cost. This is where really your, like, demand forecasting and supplier relationships really come into play. Then you have your transportation mode. So, you know, how do you get those goods from point a to point b? Are you moving it via air, ocean, trucking, rail, etcetera? And then we have the receiving node. So that's basically where is this cargo or shipments? Where is it being stored? Is it going to a warehouse? Is it going to another, manufacturing facility? And, ultimately, the objective when we look at all of these different nodes is to manage the fact that each of these has different and often competing goals, which can play into cost and c o two and all this other stuff. So that is where we're at for for kind of SCO or what we call SCO.
Kelsey Jensen
Yeah. Michelle, can you maybe walk us through a little bit more how c o two emissions plays a role in the decision making process when we're. talking. about
Michelle Feole
To yeah. No. Totally. Totally. So it's a really great question because most of the time when we're looking at, we might be looking at optimization, our objective function might be how do you reduce cost or how do you minimize cost. But c o two emissions really play a critical role in the decision making process because every step that we were looking at before, like, from the manufacturing to the transport to the receiving to the ports, they all have a specific kind of carbon, burden, you could say, or carbon impact. And so I was looking at some stats the other day, and then, you know, when you look at freight transportation, depending on where you draw those system boundaries, can produce up to 11% of, like, you know, the global emission greenhouse gas emissions. So for today and and this discussion, we're really just gonna focus on the transportation part. So that middle part of the node we were looking at earlier, specifically looking at how does how do the different ways that you ship impact, your your your CO two, emissions. And so so at the end of the day, everything is really this battle of trade offs. Right? So you have this balance of how do I how do I balance out cost? How do I balance that out transit time? If I'm gonna have a stock out, you know, or a line down situation in a manufacturing line, not great. I'm gonna have to restart it. I'm gonna have to recover from it. And then you have this c o two impact as well. So, like, top it all off. And so you start changing one variable, then the other one start to move, and and you're you're in the situation where it's like, what is most important to to me at the end of the day? And so one question, KJ, really for you is, like, how have you seen emissions impacted, based on decisions clients make about how to move their goods?
Kelsey Jensen
Totally. It's a great question. Like you said, a lot of competing priorities. So we've tried to visualize this a little bit more. And I think, if you don't already know, it I love the modality switch, which is the highest impact to start. Right? And this one is an amazing example of cost savings and emission savings going hand in hand. Right? So you can see that switching from air to ocean, for example, it's a 68 time reduction or increase if you're going the opposite direction. Reducing total container count on the water. Right? So how do we make a more efficient supply chain? Maybe moving the same amount of goods with fewer TEU. Right? Looking at optimization. Looking at improving average utilization. So that can also go on with reducing entire, full container counts, and making sure that you have an efficient LCL and FCL volume mix. Right? And then lastly, there are also what we call buyers consoles, which is largely a cost lever. So there can be reductions in that space, but it's really like, okay. How are we optimizing your supply chain? Maybe it's not reducing emissions, but you are still reducing the cost. And so these are kind of the the areas that we look at at Flexport, when we are assessing how a client might be able to save emissions within their supply chain already from an optimization perspective. And this is a lot of information on this slide. So, I would love to actually now flip it back to you, Michelle, and just ask how can a client right? We've got a lot of supply chain managers on this call. How can a supply chain manager look at this slide, know their supply chain, and see if any of these solutions or situations might actually be something that they could, they could take advantage of and incorporate into their supply chain planning.
Michelle Feole
No. Totally. No. This is that's a great, great question. And I think yeah. So, like, where where where do we begin? How do we how do we actually start? And so what we could do is, when we look at how do you move your goods the best way, sometimes the answer is is really two places. It lies in two places. Right? You have where have you been and where are you going? So maybe, like, you were a start up and and you're you're just growing as a company. You're using air freight because you need to get your goods out as quickly as possible, in order to, you know, capture your market share or something like that, during this this ramp up period. Or, you know, maybe you've you've scaled. You're at a nice stable, place in in your in your business, and, you know, speed at all cost is not really something that's sustainable anymore. And so you start looking at, hey. How can we maybe shift, shift how we're moving, maybe shift even your manufacturing footprint, you know, moving from one country one region to another? Identify more of those consolidation opportunities, KJ, that you were mentioning earlier. Maybe, you know, six months ago, stuff these opportunities didn't exist in your supply chain, and now six months later, they do. And so how do we take a look at what happened in the past and and also take a look at what's going on in the future and kind of merge those two together? So what we would like to start with is really that historical analysis. So this is kind of what has what has happened in the past, and how do we as Flexport tackle this? We really look at it through two lenses. So the first lens is how to helping essentially with strategy. So it's like a diagnostic tool. We offer two versions of this. So we have a bespoke analysis. So that's where we look at a deep dive of your data. And it it will depend on, where we wanna focus because you could focus on so many different things. Sometimes we'll start with, like, a SKU level analysis that we'll go into in a in couple slides, or we'll just look at on the shipment level. Are there any, like, you know, consolidation call consolidation opportunities? And then we also have this thing called an in app analysis. So if you're an existing Flexport client, you have this continuous kind of auditing mechanism. So it holds us accountable to make sure that, hey. Are we actually capturing these opportunities for you? It looks at both cost and c o two emissions so you can see, hey. How are the decisions impacting, how are the potential decisions that I could make impact my supply chain? And then that historical analysis is really only half the battle at the end of the day. The second lens is the forward looking analysis and so or the forward looking tool. So this is where you'll take those past opportunities that were identified, and then you'll say, how do we implement this, in the future, and how do we actually execute on this? And we'll go in a couple couple slide down. We'll talk through, hey. How does this actually work in in practice and go from there?
Kelsey Jensen
Awesome. I mean, this this sounds great, and I've I've seen it live, so I know that it's great. And everyone else here will will soon. But one of the questions that I always get, right, if we're talking about modality switches and these types of things, like, clients like, okay. Great. Yes. This sounds great. I have some of this information. But if we get into the nitty gritty details, right, which is, as they say, where the devil lives,
Michelle Feole
I would delete.
Kelsey Jensen
what do. clients need to consider? Right? There's a lot of different parameters, always a lot of moving parts in supply chain. So how do we go about starting these studies, and what what do our clients need to consider when they're evaluating what options might work for them?
Michelle Feole
Yeah. No. It's it's so this this one is, how do we how do we, again, how do we start? How do we look at how do we look at our own supply chain? So we really start with this kind of, like, three step framework. It's kind of like identifying what is your what are your primary goals? So identifying your constraints and your goals. Are you trying to optimize for cost? Are you trying to optimize for speed? Are you even looking at at carbon footprint? You you really can't hit a target unless you set it. So it really helps us identify where do we want to focus, and then we map out those constraints. So for example, well, do you have specific container sizing? Do you have specific, shipment sizes that you're working with? Any stackability constraints? Big thing is, like, lead time. So, for example, if you need to hit a transit time target, otherwise, there's gonna be a fee every day that you're late. That's really important to know. And then we identify, you know, what are the levers that we can use, based on your data. So can we look at things like, PO size? So, hey. Are you cutting orders in a way that can handle more efficient, shipping, consolidation opportunities that we've mentioned a lot, not just on a buyer's consolidation. So buyer's consolidation, meaning, hey. I have a bunch of of suppliers from different locations. They're all from the same same company, same client. They can go into the same container. So you can imagine you just have your big container with all your suppliers and, LCL or or even FCL consolidation. So let's say you have a supplier at a, specific location. They have a couple of shipments that are coming in the next few days. They can actually consolidate them together into a bigger container rather than having, say, two separate containers. And we can also look at at mode and, like, network design as well. So for example, hey. Where is this stuff actually going? And we'll and and, like, are you using rail? Are you using trucks? Like, how are you getting stuff maybe across across the country or so? And then once we really identify these, we can go and and pick one, you know, trial it. That's a very important acts aspect of any of these opportunity identifications. And one thing you might notice on this slide is CO two is not explicitly mentioned anywhere on here. So usually as an objective function, we've been using cost, but c o two emission is one of those things that, is really a complement to any of these analysis analyses. So, for example, when you start reducing cost or reducing container count, it naturally complements, the kind of financial impact as well.
Kelsey Jensen
That is really helpful, Michelle. Thank you for that overview. I think now we are ready to dive into a couple of examples and case studies just to put this into practice.
Michelle Feole
No. Totally. So the first one we wanted to look at, it kinda segues into this whole network design element, is let's say, for example, you're you're coming in from Shanghai. You're maybe doing premium LCL shipping or something, to LA, and then you have several different destinations. This is, The United States. So you have, say, something in Salt Lake City. You have another destination in Dallas, Texas. Then you have something else in I Ohio. And and you're you're coming into LA and then you're trucking everything, across the country. You might be doing that for a specific reason. It's probably for transit time. Right? You wanna say, hey. I wanna get there as quickly as possible, but I don't necessarily want to use air. So what we could do is take a look and say, hey. Let's take a look at your supply chain and let's see if there's a different way that we can, you know, move the shipments to your final location. That could be something like you you'll probably notice here that the number of containers in this particular example are the same, but you'll notice that the if we look at the, distribution of what's FCL versus BC, you'll see it changed a little bit. So what this is saying is there was actually some LCL volume. We were able to consolidate that together. Overall, with the LCL reduction, we were able to see a cost savings. The cost savings, though, was not just on, hey. How do I ship this? It was also what mode of transportation do I use? So let's say, again, you're starting with trucking because you wanna get there as quickly as possible, but let's say you change a little bit of the planning around. So you decided, let me try rail. So let me see if I can get to the final destination more direct, rather than going to, like, a hub and then trying to to go to my final destination, from there. Impact would be transit time. So now all of a sudden instead of getting there in maybe five days, maybe it takes an additional additional, like, ten days. But, because of that, you're actually able to reduce the c o two emissions as well, as well, as the cost. So in this case, like, for example, if you were starting with trucks, you maybe had 24 tons of c o two. And then if you go and try to use rail to get stuff at the same destination, again, with maybe an increased transit time, you'll see the reduction in c o two emissions, which is a a really, again, that complimentary solution that you can have.
Kelsey Jensen
Yeah. And just to conceptualize what 16 tons of carbon equivalencies means, it's roughly the same emissions estimated as driving around the globe 1.3 times in a regular passenger car. So, it's quite a lot and there's, again, the hand in hand, benefits of modality switch here.
Michelle Feole
K. Cool.
Kelsey Jensen
We wanted to just dive into a little bit more about seeing, you know, the lower emission technology becoming closer to cost, to traditional fuels. So diesel truck versus rail. I mean, rail has been an option for freight for generations. But there's some new technology that's also coming out, that is allowing, lower emission technology to be more accessible. With regulatory and market incentives, improving technology and operational benefits, battery electric vehicles, for example, for dryage, don't necessarily have to be a more expensive option anymore. So it's something to consider when you're when you're making decisions about network design, maybe you're moving a warehouse or you're debating which ports to go into, to start incorporating that low emission, framework into your into your planning and see, are there opportunities that you can now take advantage and support this this transition? Great. And, Michelle, just on that, so this is more of, like, the technology. Right? We're looking at modality switches. If a client can't do that, right, Supply chain is is very complex and complicated. Right? So sometimes we say modality switch, and it's like, oh, but I can't move, you know, my entire ocean or my entire air supply chain
Michelle Feole
sorry.
Kelsey Jensen
to ocean. Right? So. is there a way to identify some low hanging fruit that we can start with?
Michelle Feole
Yeah. Yeah. This this one's a fun this one's always a fun one, because it it really is kind of like a system shock, I guess you could say, to to to your supply chain when you start having,
Kelsey Jensen
Scary.
Michelle Feole
this this way this switch going on, because everything might be planned in a specific, you know, lead time, and then all of a sudden you're like, wait. I have to go faster, or or slower, whatever direction you're you're going. So, we have this concept of, like, SKU or s k u, however you wanna pronounce it, analysis for a primodality switching. So primary key here is one of the biggest cost savers. And, KJ, you mentioned it earlier, was going from air to ocean. It was like, what, the 68 times reduction in c o two emissions. That would be when when I consider, like, low hanging fruit in terms of the carbon impact, that is one of the areas that we would we would take a look at. And so how do we go about doing this is is a bit of a interesting task. So, usually, what we'll start with is, again, we have this two two components. You have your strategy side and then the execution side. And and the strategy is what we're gonna focus on, right now. And what you have is how do we identify, you know, what SKUs, should we even, evaluate for this, type of analysis? This is an interesting question because when you start looking at your own, like, business and you start looking at, hey. How many SKUs do I have? It can really vary depending on what you're shipping and and and, and how you're shipping it. So, for example, if you have something that you know is a very steady demand, so you have a stable demand, typically, those are already moving as ocean. If they're not, that is something you should consider to move as ocean. So what that means is you know that over the course of the year, you're gonna have x number of units, throughout the months. You can plan very far in advance. So that's a very good candidate for ocean without doing really any any further analysis. One thing to note is we've also seen scenarios where, for example, you have a you actually have a stable demand. And, again, this this depends on, you know, what you wanna do in your supply chain. You have a stable. demand, but you do this, like, peak order. So you order everything all at once, and then you ship everything, and and then it stays in the warehouse or something for for a while and you kinda draw down the inventory. That is a way of doing it. Sometimes, we've also seen cases where people have used air for that, and then it becomes a question of, wait a minute. Let's take a look at your inventory turnover rates to see, do you actually need to use air to ship to do this bulk, shipping at one time just to have it draw down over a few months? That's another candidate for ocean. If you have something that's a volatile demand, so, something where you don't exactly know that it's it's it's gonna, I guess, you could say go viral. So sometimes you might have top, products, that all of a sudden people really want, and then you didn't weren't expecting it. And that's really a candidate for error, to be quite honest, because you really wanna capture it, like, the market share when it when people really, really want it. Or if you have something where, you know, on the manufacturing side, if you're gonna have a line down situation, you wanna ship that as quickly as possible. That's gonna be an air candidate, not an ocean candidate. So you can kind of just by looking at, hey. What's, what am I shipping and what's that particular SKU? You can start to evaluate, hey. This is air versus ocean. If you do have something that's seasonal, this one's an interesting one because sometimes on the seasonal side, even though it's seasonal, you do know it's happening. So let's say you have something that's always going to be around the holidays. You can start planning for that far in advance, potentially, and then use ocean to kind of handle that seasonal demand as well. So it really just depends on how defined your forecast is and how much you can plan in advance for you to be able to switch from that air to kind of ocean modality. And so and then the other thing is new new products are, an interesting one to take as well because new products really depend on how new. So is it, like, new to the market? Like, no one has ever seen this before. That might have that might not be a good candidate for ocean just based off you don't know maybe what the actual demand is going to be. If it's new product but very similar to something else and that has a pretty stable demand, then you could probably say, hey. This should probably be ocean. So this is without going into any math at all, so just looking at it from, like, a qualitative perspective. And so then what you do on the math side of things is you start to say, hey. Like, let me take those skews that I have and do what's called, like, a segmentation analysis. So I'll take, and you can do the segmentation analysis in in a variety of ways. You could look at, hey. What's my, demand forecast? How much am I selling? What's, my seasonality or whatever whatever, way you wanna cut your your SKUs. And then you can segment your SKUs into sections. So, like, a, b, and c is, like, a very typical analysis. And then you could say, hey. All of my, maybe, a products, those ones I wanna look at and see if that could be a candidate for for air or ocean. Maybe my sea products, I don't want to to look at at all because I don't know what the demand forecast is gonna be on a a very reliable for a reliable level. So once you've done that segmentation analysis and you've identified, hey. These are the potential SKUs that I wanna take a look at, then you could start to look at how do we evaluate this air versus ocean logic and how do we choose. And that decision, is a culmination of a lot of different factors, so it's not just the transportation side of things. So for example, when you're looking at the just the pure cost of air to ocean, somebody like, oh, yeah. Air ocean is more economical. But then when you start looking at, hey. What's the inventory impact? So if I have to now my transit time changes from ten days to thirty days. How do I handle the fact that I'm not gonna have the the reoccurring shipments that I'm used to? And I'm probably gonna have to hold more inventory to maintain, like, the service levels that I was able to achieve with air. And so we'll do this analysis where we'll look at both the transportation cost and then the inventory cost based off of what your your, product distribution actually looks like. And then that's. the strategy. So that will say, hey. This these are probably the candidates that can ship from from air to ocean. And then the execution part becomes something, you know, I have these upcoming shipments. How do I apply this in the future? Maybe I should trial it, etcetera. But we won't focus on that part for this particular next few slides, more on just the strategy part. That sounds sounds good. So. with that yeah. No. So so with that, we have kind of what is the process for this? So we went through, hey. I need to identify, which candidate which skews or candidates for this analysis. So, usually, the first thing that you wanna do is once you've done that, you you wanna kind of map out your supply chain to understand the lead time. So this is how far in advance do I need to order in order to make this this, piece of material or product. And then, that will tell you, like, basically your lead time from the manufacturing process and then the lead times of, hey. If I'm shipping air, this is how long it's gonna take. And then if I'm shipping ocean, this is how long it's gonna take. So you can kind of model out the the transit times for each, process that you're choosing or each mode that you're using. After you've done that, then you wanna look at, okay, let's provide a demand forecast. So usually, we'll look in the future and we'll say, hey. This is my forecast. You like it more on a weekly level. Know that that forecast is are pretty much always wrong. Right? That's the truism there. But we'll take a look at a demand forecast over a set time horizon. Again, try to do this on a weekly level. And then from there, we'll calculate, okay, what is the transportation cost if I were to move ocean, if I were to move air? What happens to my inventory cost if I switch my modes? And then you'll get a a chart. You can kinda get a chart depending on what your, what your supply chain looks like, on that chart on the right. So you'll see on the left hand side, it's saying, hey. You should probably you can ship, ocean. And then anything on the right, it's like ship air because it will depend on, what that trade off is between inventory and transportation cost.
Kelsey Jensen
Wow. This is really cool. And, also, I mean, very in-depth. Right? Like, you pointed out, it's to make this switch, it's quite involved, but it's it's really cool to see that, you know, the supply chain optimization team you guys have developed kind of a methodology around this that helps guide, because I I'm even a little overwhelmed looking at this, so I can imagine some supply chain managers would find this very interesting. No. But this is really cool. So a question then for you because we see, you know, the the air on the one side, the ocean on the other. Is this a binary decision? Or what kind of, like, flexibility, let's say, or or live planning? Right? Because, I mean, we all work in supply chain. We all know that things change constantly. So, sort of, what's what's the flexibility there, and and is there a mix?
Michelle Feole
Yeah. It so I know we were saying, like, hey. If you're gonna the chart on the left is like, if you're gonna shift from air to ocean, this is what it would look like. But the the answer I feel like everything in splice is like it it depends. It's never it's never black or white or. or binary,
Kelsey Jensen
That's
Michelle Feole
must be this. So, for this one, again, the response is it depends. It would probably be, you could also do one, one option that you also have, which is a good option as well, is a hybrid option. So you don't necessarily have to say, hey. Oh, I wish I was everything was air, and I wanna ship everything to ocean. I'm gonna make this this this switch, and it has to be one or the other. Another great option is a hybrid approach where you say, hey. Maybe up to a certain amount. So, like, maybe you know you're gonna have some level of stable stable demand, but then you're gonna have some, peaks and valleys depending on, you know, the time of the year. Then you could say, hey. Up to a certain point. So maybe up to a certain number of units, and you could set those units and say, I'm gonna ship all these ocean And then anything that's above that, so if I have any peaks, I'm gonna ship that air. So then you can handle kind of the the variability in your demand forecast, but still take advantage of the fact that I know that some I will always have, like, a base demand. So I would say it's never one or the other, and it might switch also. So one thing that we didn't talk about was, like, hey, this decision making process, this this strategy making process, how often should you do it? Like, once a year, every quarter, every ten years? So it will it it I would recommend you you do this type of, like, retrospective analysis. See, maybe even once a year because your supply chain is is it's a like, considered, like, a living organism. It's always changing. And so what worked yesterday might not work tomorrow, and there's always this level of continuous improvement. I don't know if that. answers your question.
Kelsey Jensen
Yeah. Definitely. I I I really like the idea of having kind of this baseload ocean supply and then, right, making air the as needed and the exception, not not the rule. Right? So still giving I would say, generally, when I talk to supply chain managers, right, it's like they get a lot of pressure from sales teams. So, like, we have to have this in. We have to be meeting, you know, x, y, and z. So having that, that that base load supply and then being able to to handle that that increased demand or those peaks with air freight as as an exception, I think gives a lot of a nice flexibility.
Michelle Feole
Totally.
Kelsey Jensen
Great.
Michelle Feole
I
Kelsey Jensen
you.
Michelle Feole
guess and then that kind of segues into we were we're talking a lot about strategy. Right? Like, hey. How do I choose whether we should do this or that? And that's always great, but it's still the past, and you can't change what happened in the past. So how do we move forward in the future? And so the last thing we wanted to share, was, you know, how do you improve container utilization, just with with upcoming shipments? So we're gonna focus we're gonna kinda shift back into the ocean side of things. So let's assume, hey. You went from air to ocean, and now you wanna look at how what are some optimization opportunities with even within the ocean space. And and just one thought while I just remember this since we were talking about air. On the air side, there's also it's not just the, air to ocean switch, but there's also opportunity if you do air consolidations where you can save c o two emissions as well. Maybe the overall KG is the same, but then when you start looking at the destination side, right, like, if you start consolidating truckloads, that should help impact, your your c o two emissions. Right, KJ? Totally.
Kelsey Jensen
Yeah. It's, just just as you said, it all it's always comes back to it depends. But the more consolidations, right, the fewer movements that you can perform with a higher utilization regardless of the mode is gonna be a benefit.
Michelle Feole
Awesome. So that's how that's how I wade right into this, which is, hey. Let's look at how we can, use SCO to reduce costs while still meeting transit times. And, again, the carbon impact is still complimentary. So let's take a look at an example here. So let's say we had, three three actually, three containers. Each supplier, they has their own PO associated with each container, and then we'll take a look at the c o two emit the c o two impact here. I put that in, bigger value so everyone can take a look at it. Now let's say there's an optimization opportunity. Right? Right? You can just see it visually. Like, if you look at, the second container, it's, like, half full. We're assuming that this is stackable, so you could still add a few more things inside. And so then we'll say, hey. Like, let's look at the recommended scenario. So now we went from three to two containers, and then we'll look at, hey. The c o the cost, went down, as as anticipated. The utilization goes up, and then your c o two emissions in this case went down, by a little bit as well. So how can we take a look at this in real time? I'm gonna switch to another screen. Let's see if this works. So alright. You guys should be seeing, kind of the home page. This is where we have our supply chain optimization main page or or dashboard. So imagine you're coming in and you say, hey. I have some shipments, and the purpose of, this tool is to surface recommendations to you. You don't have to accept or reject, but at least you have the opportunity to say, hey. I do have a couple of upcoming shipments that might be able to con to consolidate together. And depending on the constraints, again, that you set, if you're flexible on transit time, not flexible, this will this will take all that information and and surface those recommendations based off of your specific case. And so what you could do here is you could come in and you say, hey. Like, these are the savings available. This is actually the c o two, reduction, ton the t c o two reduction over here. And so then what you could do is click on this, and then you'll get a list of of potential opportunities. So you get something like this. And I've opened one up already, so we could just take a quick look at it. But imagine you're coming in and you say, hey. Let me look through my options, and then you click on one, and then this is what you'd see. So you'll say, hey. Like, this is this is my, recommendation opportunity. So this is a mixture of FCL and LCL. So you'll have a slightly underutilized FCL container and then some, LCL shipments that could be combined together. You'll see the transit time impact. So usually, if you're doing a buyer's consolidation in this case, the FCL will be a little bit later, but then the LCL, because you are missing that deconsolidation, like, I guess KJ also goes with that less touch less movement, like, less touches on the shipment. It will actually come a little bit earlier. And then what you could do here is take a look at the estimated carbon impact as well. So you can kinda see a picture of, hey. How what is this recommendation? And then, being able to to make a decision a little bit more quickly because the data is just just, right there out of you. So this is how you could execute in, real time, and then I'll come back.
Kelsey Jensen
What I love about this is that exactly as we've said before, if if you have already shifted your supply chain, right, and you have that ocean that ocean based freight or you've got, you know, your your kind of flow, right, your forecast for the year. We all know that forecast change. And so I what I love about this tool is that it does surface those potential opportunities at the time. Right? Actually, when you're freight and you're still able to make those decisions for your supply chain so that every new every year, you're not just running a retroactive, right, or retrospective look at what could have we end up in differently. We're trying to, let's say, move things up up in the cycle of your shipments to be able to identify those early on, which I think is a yeah. It's really cool. It's just it's really bringing the cost savings. And then now with our integration, given our new emissions,
Michelle Feole
Yeah.
Kelsey Jensen
expanded emissions reporting, also the emissions impact of these these opportunities further up in the chain, which is really cool to see because that's where it has to happen.
Michelle Feole
Fully. I
Kelsey Jensen
Awesome.
Michelle Feole
will here. Then I think. that is what we had for real time, execution recommendations, and maybe I'll hand it over to you, KJ, for the key takeaways. And. then
Kelsey Jensen
No. Thank you, Michelle, for running through this. I'm always, excited to be on calls with you because great energy, and also just to see how your team is thinking about this and incorporating the information, you know, that we already have, on on our clients' supply chains. Right? That and being able to be more proactive and support them in being more proactive in making decisions that are better, for their defined, as you said, right, their defined, requirements. So thank you for running us through that. Yeah. You know, we we know supply chain managers have a lot of competing priorities. We kind of structured, this webinar sort of around Earth Day, you know, our integration or expanded emissions reporting to try to also bring bring another lens through which supply chain managers can look at their supply chain planning. And our goal is, you know, building these products that allow our clients to measure, manage, and compare, the impacts of decisions across time, cost, emissions, etcetera. We have three kind of main takeaways there. So a reminder, use your emissions data as a decision tool, not just a disclosure, and a check-in the box. Right? They emissions data can surface your most expensive lanes, so focus on those low hanging fruits. As we talked about in the SKU, example, right, make that the exception, not the rule. Remember that the biggest emission cuts are also the biggest cost cuts if we're talking pure modality switches. Right? Same thing, you know, air to ocean, rail to, truck to rail. Those are cost savings and emission savings. And then lastly, and this is hugely important for every element across the supply chain, build those cadences across your teams. So build that optimization mindset across teams, whether that's your sales or your procurement, your logistics teams, optimizing and keeping in mind your network design, and then monitoring those choices regularly. Right? So we've provided or we're building now this proactive tool, but also setting up that cadence that you review, you know, how many emergency air shipments did we have last month? What was the root cause of that? Helps get all the teams, really engaged and seeing seeing this as a win win across the board. So I think that is what we have for our key takeaways. For all Flexport clients, you also have dedicated emissions report on the Flexport platform. So if you're actually not at all sure what your emissions currently are from your supply chain, go check that out. It's under, insights and reports. And you can also request a free analysis for supply chain optimization. Reach out to your account manager, and we are always happy to help.
Michelle Feole
Amazing.
Kelsey Jensen
I think that brings us to the. q and a now. Okay. Let's see. Sorry. Give me one second. I haven't done a webinar in a while. So
Michelle Feole
You could do I think the first maybe we could, look at the air ocean hybrid routes. That's actually a good question. too because we didn't really we spoke about hybrid in the sense of, hey. You know, you could ship, like, the full route, like, one part ocean and then use air for the kind of variability part. But then there also is that air ocean hybrid. So, where the the the latest one is actually going from APAC landing in LA, via you you could do that via Premium Ocean, and then from LA taking air, an airplane to to Europe. I would say that in terms of where the industry is at, I I I think this is one of the key modes that you can use as a means of transportation. I I don't think it's a like, an emergency backup plan or anything. So I would say that it's definitely an option, to evaluate for for your specific supply chain.
Kelsey Jensen
Yeah. Great. I've got a question here. With CSRD coming into scope for more European businesses, how confident can we be that flex emissions data from Flexport is audit ready? So, as I mentioned at the top of this, Flexport is integrated with Ecotransit World, which is an alignment with GLEC, with the Global Logistics Emissions Council framework, which is the basis for ISO 14 o 83. So we work very closely with the ecotransit team to integrate. And what we're doing with our integration is we feed the data that we have from your specific shipments in your specific, chains of control, modes, hub reporting, and we also have additional air pollutants, which such as the NOx, SOx, air pollutant, information. So we have the reporting available, and we're always happy to walk through if you have any questions on that. Let's see.
Michelle Feole
Give it consolidate. There's okay. So there's another question about, Flexport allowing consolidations using different forwarders. So that's an that's an interesting one. The what we shared with the in app scope, it it's all the Flexport, handled shipments. We we've done historical analysis. So, for example, if you wanna take a look at your entire supply chain, and it's always good to have, like, eggs in in multiple baskets as well. We could take a look and see, just in an historical perspective. But right now, the tool is not using, information from from different different folders together.
Kelsey Jensen
Yeah. I have a question here about container utilization. So what is the container utilization rate we should be targeting before we consider a shipment well optimized? So, yeah, kind of, I guess, what is the benchmark for a good utilization?
Michelle Feole
a fun one. Yeah. No. That's a fun one, because the container utilization one is all it it's it's it's fun, but it's a tricky one because if someone says to you, hey. My container utilization is 70 without any contacts like, context, I'm like, is that good? Is that bad? And what I mean by context is, hey. What's going on? Like, what's going on upstream? What's going on downstream? That's the that's an important element to understand if if 70 is is, good or bad. I guess we shouldn't say good or bad. Like like, most effective or not. So what do I mean by that? It it depends on which industry you're actually working in. So for example, maybe you're in ecommerce type thing, industry, and you need to get stuff out a little bit quickly. Otherwise, you're gonna stock out, and you're not gonna meet your your customer's expectations. Having a slightly underutilized container is actually more important for you because the cost of that stock out event is more important than the not more important, but is is going to cost you a little bit more than, hey, if you were to wait another week and then you ship a full container and then no one's there to, to take that material, then you're you kinda lost out there. And same thing with, like, if you're in a manufacturing plant and you need to get material at to whatever location at a specific time, you might have to ship something a little bit, underutilized, in order to to meet your your expectations. So, I would say that your your container utilization will depend on what you're shipping, which industry you're in. And then, for example, what I've seen is, like, furniture is depending on the size of the furniture, if you're in very, like, nice, boxes and flat boxes, you could fill a container really well. But if you're, like, an odd shape, you're probably not gonna be able to achieve really, really high container utilization. So if you are interested in that, we could take a look at your your shipments and see like, hey. Is there any opportunity that we can increase it a little bit more? Obviously, we'd love to increase it because then, you you get the the carbon impact as well as the cost savings there as well.
Kelsey Jensen
Yeah. That's also an an interesting one from an emissions perspective. And where we get into, there's kind of a difference between the absolute emissions, right, which is when you're thinking about, you know, five tons of carbon equivalencies versus your emissions intensity. And that's actually a a a measure of how, efficient a move was. So the higher and the more that you can build up a container and you have more weight in that container, the more efficient your supply chain is going to be. Gleck and, the ISO have kind of a standard measure for how much, what, let's say, the carbon is on a on one TEU, for example. So the more weight you can build up in that TEU, the more efficient that move is going to be and the more efficient from an emissions perspective your supply chain is. So great. Let's see. I think that is it. And if you click the button, it should say poll, I think.
Michelle Feole
Yeah.
Kelsey Jensen
If you're interested in saying in in having a supply chain optimization study with Michelle and her team, please click yes, and we would be happy to help you with that. Like Michelle said, you know, we can do historical analysis. We can also look at your your non Flexport shipment emission or shipment, shipment data, provided you have that information available to really look at your entire supply chain. If you are a Flexport client, there are in app solutions for supply chain optimization. There is reporting for, emissions as well, and your account managers will be able to point you in the right direction, if you have specific questions there. Thank you all so much, for joining us today. We hope you found it useful, and we are looking forward to making cleaner decisions a part of your supply chain planning. Thanks. very much, and,
Michelle Feole
Thanks, everyone.
Kelsey Jensen
have a great rest of your day.
Michelle Feole
Bye bye.
