Managing greenhouse-gas emission will soon be a competitive necessity for all suppliers. A report by the EDF offers innovative strategies to help shippers cut both costs and emissions.
Supply chain and freight transportation activities have a significant global footprint, and that footprint is only getting bigger. By 2020, over 90 million tons of freight a day is expected to move throughout the U.S., up 70 percent from 2002, according to the Environmental Defense Fund (EDF).
Globally, freight transportation and distribution systems are currently responsible for more than 3 billion metric tons of carbon emissions a year. That’s equal to more than 700 coal plants — or the combined output of Canada, Germany, Japan and Mexico. According to EDF, emissions from freight in the U.S. alone are expected to rise 74 percent by 2035. China’s freight transportation fuels are expected to rise by 32 percent in the same time period.
Corporations have a lot of control over their transportation footprint, and many of them have been taking steps to reduce their impact. Adopting performance-based metrics — to reduce emissions per mile, ensure the efficient use of containers, and more — is a critical one. In fact, the Carbon Disclosure Project Supply Chain Report 2012 concluded that “suppliers that do not measure, quantify and manage their greenhouse–gas emission will soon see their business move to competitors that can provide better information and clearer evidence of change.”
While the business case for measurement is strong, companies that take action now to increase the carbon-efficiency of their logistics will also help “put freight on a path towards a more sustainable future,” says Jason Mathers, who leads the charge for EDF. “In essence, they can buy time for the technology developments and new policies that ultimately are needed.”
Earlier this year EDF published its 2012 Smart Moves [pdf] report, a collection of innovative strategies that can help shippers cut both costs and emissions. The report contains success stories and examples that many businesses will want to emulate, and the following “Five Rules for a Carbon-efficient Supply Chain”:
“1. Choose the most carbon-efficient mode possible. When it comes to carbon emissions per ton-mile, planes emit 47 times more than container ships and trucks emit six times more than trains. Clearly differentiating cargo that needs to be expedited from that which doesn’t is step one; other options include vendor-managed inventory and even moving final assembly closer to the client.
2. Collaborate with other shippers. Are there opportunities to merge your warehouses and distribution assets with other companies? Ship products directly to the client and avoid warehousing altogether? Match “back-haul” lanes with other shippers to improve efficiency? All of these strategies are being used successfully.
3. Redesign your own network for efficiency. New logistics tools can help to optimize warehouse locations, shipping routes and modal connections.
4. Get the most out of each move. Set goals for trailer utilization, look for new ways to combine loads and use the best new software to optimize orders. Redesigning and consolidating packaging can also increase utilization while decreasing damage.
5. Increase energy efficiency in distribution centers. These vital links account for 11 percent of the carbon footprint of goods movement. Changes to HVAC, lighting, motor controls and refrigeration can be quick payback ways to save energy and emissions.”