By the Editors of Supply & Demand Chain Executive
"Green" and "sustainability" have become new watchwords for the supply chain. Whether or not you believe that green supply chain goals are practical or attainable, and regardless of your feelings on topics like global warming and fair trade, the fact remains that more and more companies are beginning to incorporate green goals into their corporate social responsibility programs, and chief executives are looking to their supply chains to help meet those goals.
This year Supply & Demand Chain Executive is recognizing small, midsize and large companies that are taking steps to realize green goals with our 2008 Green Supply Chain Awards. We saw significant interest in the inaugural edition of the awards, receiving more than 50 submissions. From among the nominated companies our review panel selected 21 that stood out for their projects to incorporate sustainability objectives into their own supply chains or to enable sustainability in their customers' supply chain. The recipients of the 2008 Green Supply Chain Awards are listed below, along with a description of their projects.
Building Sustainability into the DNA
Private Sector Award Winner: Method Products, Inc.
San Francisco, www.methodhome.com
Chemical engineer Adam Lowry and his former roommate Eric Ryan founded Method Products eight years ago with a vision of bringing nontoxic, environmentally safe and yet highly effective cleaning products to market. Today, the company's innovative product designs grace the shelves at many of the best-known retailers in the U.S., UK, Canadian and Australian markets.
"It's important to note that one of our founders had been a passionate environmentalist long before the idea of Method as a company, as a brand, came to fruition," says Paul Tasner, senior director of operations at the company. "Striving for sustainability in every aspect of our business is truly part of our DNA."
Tasner says that Method is reluctant to use the word "goal" in describing its supply chain sustainability efforts. "We envision this process as a never-ending, constantly evolving effort. At Method, we believe in progress, not perfection."
The company incorporates recyclable and/or compostable packaging across its entire product line, maintains an uncompromising approach to the use of non-toxic raw materials in every product its sells, and takes advantage of solar-powered manufacturing and warehousing facilities whenever possible. It moves products by sea, rail and road – always in that preferential order. "Air freight is simply not an option," Tasner says.
Method also has worked with its third-party partners in manufacturing and logistics to instill its principles into their operations as well. As a result, its contract manufacturers re-circulate their waste water to protect the local sewage system and waterways. Method is a manufacturing member of the EPA's SmartWay Transport Partnership, and it formed a joint venture with the largest contract freight carrier in the United States – the J.B. Hunt Company – designed to deliver its products using a biodiesel-fueled, energy-efficient fleet.
Applying this uncompromising attitude to the supply chain is not always easy, Tasner admits. "As a company whose supply chain is primarily dominated by third-party relationships, our ability to effect change is considerably more difficult, we believe, than those businesses that control their own means of supply," he says. "Nevertheless, it hasn't changed our philosophy."
Extending Sustainability into the Supply Chain
Public Sector Award Winner: The City of Calgary - Supply Management Division
Calgary, Alberta, Canada, www.calgary.ca
Calgary's Supply Management Division has set a long-term goal to ensure that the goods and services purchased by the city are produced according to recognized ethical and environmental standards. In addition, Supply Management has set a goal to increase the awareness of how a supply chain can affect the environment but also how the environment can have an effect on the operation of a supply chain.
Supply Management's main strategy provides for the adoption of a "sustainable, environmental and ethical procurement policy" (SEEPP), developed with a "triple bottom line" (TBL) approach to ensure that purchasing decisions include environmental, ethical and economic criteria. The SEEPP has established guidelines so Supply Management can purchase goods and services that embody environmental benefits such as energy efficiency and recycled content.
The SEEPP is implemented through two components, including, first, a supplier code of conduct (SCC) and "assessment of leadership vendor questionnaire" that allows Supply Management to evaluate how a supplier operates its business from an ethical and environmental perspective. The SCC is a set of minimum standards that suppliers must meet with respect to fundamental human rights and environmental stewardship. The second tool is custom specifications for a product or service; this could include a certain environmental certification or certification that the product is produced in a manner that minimizes impacts on the environment.
In 2007 SEEPP was applied to four commodity areas: apparel, food, chemicals and custodial services. In 2008 the policy was extend to include print services, furniture, special events, consumer electronics, stationary, courier/freight, promotional items, paints, plastics, flooring and appliances. As a contract within these commodity areas comes up for renewal, the SEEPP is applied.
Leading Green from the Top
Supplier Award Winner: Bell Incorporated
Sioux Falls, S.D. www.bell-inc.com
Back before green became a buzzword in supply chain, Mark Graham, Bell's president and CEO, provided a sustainability vision that inspired the environmentally sound practices that are a habit at Bell today. "Our senior leaders know that sustainability is good not only for Bell's bottom line, but for the customers we serve, and for the future of our planet," says Benjamin Graham, a vice president with the company.
Bell, one of the largest and fastest-growing independent folding carton companies in North America, has put its principles into practice by achieving Cradle to Cradle certification for courier envelopes. Postal Service customers use more than 200 million of the envelopes every year, and the certification, developed by design firm MBDC, verifies that every Bell supplier that contributes to the manufacture of the envelopes uses environmentally safe and healthy materials; designs for material reutilization, such as recycling or composting; uses renewable energy and energy efficiency; ensures efficient use of water, and maximum water quality associated with production; and institutes strategies for social responsibility.
Bell has applied the same level of scrutiny to its own operations and adopted a philosophy of transparency. For example, the company undertook a lead-reduction initiative with GE that involved opening for scrutiny every detail of its operations. Elsewhere, the company has undertaken activities around recycling, waste reduction and more efficient facilities, equipment and asset management. Bell also has hired for sustainability, bringing on a new supply chain manager, David Gabel, with extensive Fortune 500 experience and a world-class passion for green supply chain programs. His first public pronouncement was his intent to achieve total elimination of waste "in everything but the lunch room, and then we'll tackle that!"
Making Green Pallet-able
Supplier Award Winner: CHEP
Orlando, Fla., www.chep.com
CHEP, a leader in pallet and container pooling solutions, has established sustainable development criteria as a core component in the design and execution of all its products, services and processes in order to meet its goal of improving overall supply chain efficiency and sustainability.
An EPA SmartWay Partner, CHEP has incorporated the use of more eco-friendly methods of transportation such as barge and rail into its transportation optimization and reduction initiatives. On the material recovery, reuse and recycling side, it has undertaken biomass renewable energy generation and recycling programs for wood, corrugate, steel and plastic. And on the supply side, the company has targeted sourcing 100 percent of its lumber from certified managed forests, which help prevent deforestation through responsible harvesting, reforestation and biodiversity preservation – for example, most CHEP suppliers plant three or more trees for every tree harvested.
In terms of its service offerings, CHEP says its pooled pallet offering has been verified by waste management consulting firm Franklin Associates to produce less solid waste, consume less total energy and generate less greenhouse gas emissions than other common shipping platforms. Based on the 240 million pallets that the company issued in 2007, the company estimates that its offerings helped eliminate 1.3 billion pounds of solid waste and saved enough electricity to power every household in a city like Wilmington, Del., for a year.
Supplier Award Winner: Container Exchanger
In addition to its goal of achieving carbon neutrality for its offices by the end of 2009, Container Exchange offers its clients returnable packaging broker services, resell folding bulk containers, metal storage bins, plastic industrial totes, plastic pallets and used Gaylord boxes throughout the U.S. market. "Our clients, both buyers and sellers, use our services to reduce their own carbon footprints while simultaneously improving profitability," says David Madden, president of the company.
Returnable packaging reduces landfill waste and energy consumption when compared to expendable packaging. However, over time, as a company's product mix changes or a manufacturing contract expires, it may no longer have a use for the packaging associated with particular parts. In most cases, the packaging is still perfectly useable, but because they no longer have a use for the containers, the companies would have typically sold the containers to a scrap company, which would reprocess the materials, creating pollution, waste and additional energy use.
Container Exchange acts as a matchmaker between companies looking to dispose of returnable packaging and those looking to acquire the packaging. It is true that transportation of the packaging between buyer and seller through less-than-truckload and truckload-size shipments consumes energy, primarily in the form of fossil fuels. But Madden believes that as his company's network increases in size and adds buyers and sellers, the chances of locating a matching set of returnable packaging close to a buyer increases, and that close proximity creates a financial and environmental impact through reduced freight costs and fuel use. Container Exchange currently is running at a rate of 400,000 lbs. of repurposed material per month.
Green Supply Chain Enablers
IHS Inc. (Englewood, Colo., www.ihs.com) Green is, at its heart, a product issue, and IHS has the data that drive the green product lifecycle. The company provides expertise and information designed to help companies manage product lifecycles and enable green performance. Its areas of expertise include eco-friendly and lead-free design, green chemical performance, high reliability and sustainability, strategic obsolescence management, and supply chain and product change management.
Earlier this year the company expanded its green portfolio with the acquisition of two leading environmental information companies: Dolphin Software, a provider of solutions for chemical data and formula information to help companies pursue the evolving discipline of total chemical management; and Environmental Software Providers (ESP), a provider of enterprise information solutions to help companies manage their corporate-wide sustainability programs.
ILOG Inc. (Sunnyvale, Calif., www.ilog.com) If green supply chain has a guru, it surely is David Simchi-Levi, the MIT professor turned software visionary who has led the development of ILOG's LogicNet solutions. Simchi-Levi has written and spoken extensively before industry audiences about applying supply chain optimization to the challenge of reducing a supply chain's total carbon footprint. In his talks on the topic, he cites examples from his own practice that demonstrate the reducing carbon emissions can go hand-in-hand with reducing overall supply chain costs.
ILOG has built Simchi-Levi's vision into its LogicNet Plus 6.0 XE solution, offering a Carbon Footprint module designed to help evaluate the impact of various supply chain network configurations and transportation strategies on their carbon footprint and provide alternative plans that will reduce carbon emissions. The goal: enable companies to make environmentally-sound choices when designing and managing their supply chains. Fonterra, a dairy producer from New Zealand that is responsible for more than one-third of all global dairy trade, uses the solution to track "food miles," the distance food must travel to reach its destination, as a key measure of carbon effectiveness and as a way to understand and calculate the tradeoffs between cost and environmental impact.
Green Supply Chain Enablers
Global4PL Supply Chain Services (Santa Clara, Calif., www.global-4pl.com). Global4PL Supply Chain Services' green supply goals are to help companies achieve the maximum reduction of the carbon footprint and minimize their negative effects to the environment by enabling its customers to achieve what it calls "green cost efficient supply chains." The company's services include understanding how its clients source their raw materials to indentify more efficient sources of supply closer to the clients' operations to eliminate unnecessary movement of goods; incorporating environmental and quality criteria factors into the sourcing and request for quotation processes; analyzing and reducing packaging requirements; and optimizing the frequency and pattern of shipments companies to achieve better consolidation and optimization volume of their shipments, reducing both the number of movements as well as reduce the cost of their movements.
Profit Point (North Brookfield, Mass., www.profitpt.com). Profit Point has developed Green Network, a standalone planning software package used to design supply chain distribution networks that must balance profitability and environmental impact. Green Network can be used to measure a company's operational footprint while it analyzes the placement and location of production facilities, distribution centers and warehouses over a multi-period planning horizon. The solution also allows a company to model its existing or proposed supply chain for a geographic area, with its locations, flow limits, costs and any number of environmental byproducts, including carbon dioxide.
Spinnaker (Denver, Colo., www.spinnakermgmt.com). This supply chain consultancy has adopted internal green goals around reducing solid wastes and energy consumption, and decreasing greenhouse gas emissions. The company has regular discussions with members of its supply base to cover "green" topics and discuss the steps they are taking to promote sustainable and environmentally favorable behaviors. In addition, sourcing teams under its management often include questions on outbound requests for products/services where providers must describe how they will support corporate responsibility goals and environmental initiatives, and help to operate the supply chain efficiently.
Green Supply Chain Enablers
Employee Services Solution Providers
GetThere (Southlake, Texas, www.getthere.com) and Rearden Commerce (Foster City, Calif., www.reardencommerce.com). As with any change, the easiest way to get people to make greener choices is to make the greener choice easy to make. Both GetThere and Rearden Commerce offer employee business services solutions that aim to do just that.
GetThere, a division of Sabre, launched GetThere Green, which it bills as the first green corporate travel program, to enable corporations to integrate environmentally focused travel policies, educate travelers about the carbon footprint of their journey and influence choices travelers make in the booking process. The program integrates carbon data and allows companies to embed a carbon calculator in the booking process, helping travelers track their emissions. It also supports the designation of "green partners" to highlight certain air, auto, hotel and rail suppliers.
The Rearden Personal Assistant from Rearden Commerce offers an online solution for managing an array of business services based on company policies and employees' own personal preferences. The solution now offers information on the environmental impact of air travel to its users through a carbon calculator that can provide information, for example, on more eco-friendly travel choices, such as opting for a Web conference rather than air travel.
Green Supply Chain Enablers
Logistics is one of the most active industries for green supply chain activities. The following companies distinguished themselves with a range of activities aimed at greening their own, and their customers', supply chains.
Cookeville, Tenn., www.averittexpress.com
Founded in 1958 to haul dry goods mostly between Nashville and Livingston in Tennessee, Averitt Express now is one of the nation's top freight transportation and supply chain management providers. Averitt Express' stated environmental goals are to provide the research, resources and education necessary to:
1. Use less energy, including fuel and electricity
2. Use less water, plastic, paper and other consumables
3. Reduce emissions that reduce the quality of its air
Averitt is one of 52 charter members of the Environmental Protection Agency's SmartWay Program. Through the program, the company voluntarily committed to meeting specific environmental and energy-saving goals and sharing its progress annually with the EPA. With the help of this program, Averitt established a systematic approach to emissions reduction and fuel conservation.
The company has worked to incorporate responsibility for the impact it makes on the environment a part of its culture. "We understand that the business choices we make today directly affect its living world tomorrow," says a company spokesperson. "That's why we're committed to reducing its carbon footprint and finding better, more environmentally friendly ways to go about its business every day."
Specific goals for Averitt include fuel conservation, which the company views as the most important impact it can make on the environment. As part of its efforts to achieve the highest fuel efficiency possible, the company has committed to use only ultra-low-sulfur diesel (ULSD) at its in-house fueling stations. Coupled with its employment of the new low-emission diesel tractor engines, ULSD helps the company reduce emissions of particulate matter and nitrogen oxides.
Other initiatives include using biodiesel in select markets; equipping road tractors with auxiliary power units (APUs) to maintain driver comfort and reduce fuel use through idling when parked for extended periods of time; installing sophisticated electronic technology that gathers data from tractor engine computers to track and measure fuel efficiency on an individual tractor level, as well equipping trucks with systems that automatically shut down idling engines; and using leading-edge software to plan routes as efficiently as possible and alert drivers to the most cost-effective fueling locations.
Averitt also is researching and testing innovative tires that are specifically designed to keep proper inflation, thus increasing fuel efficiency. The company participates in an automated vehicle identification program that allows its drivers to bypass designated weigh stations, which subsequently reduces unnecessary tractor idling and improves roadway safety, and it has worked to improve tractor aerodynamics through such aftermarket modifications as roof fairings and cab extenders. Finally, Averitt uses underground fuel storage tanks and electronic fueling overflow detection devices at its facilities, and it provides drivers with access to a roadside service that enables them to reduce tractor idling when parked for long periods of time.
On the maintenance side, the company uses low-viscosity lubricants and engine oils that lower the frequency of maintenance service intervals, therefore producing fewer waste products; captures 100 percent of the Freon it uses when servicing its tractors' A/C units and recycling it accordingly; as well as recycling all used oil and oil filters, and using only non-hazardous waste parts cleaners.
The company also educates its workforce on steps that can be taken to increase fuel efficiency, reduce engine idling and improve processes that impact the environment, and it says it fosters an atmosphere in which customers, associates, vendors and the general public can conduct an open dialogue on areas of improvement in terms of environmental protection.
Results: Since joining the SmartWay program in 2004, the company says it has lowered its carbon dioxide (CO2) emissions by an estimated 26 percent; reduced nitrogen oxide (NOx) emissions by 16 percent; lowered particulate emissions by 13 percent; and saved an estimated 2.5 million gallons of diesel fuel.
Santa Monica, Calif., www.casestack.com
CaseStack aims to provide sustainable supply chain solutions for its customers by offering services such as biodiesel fueling and retailer-driven consolidation programs. Biodiesel reduces environment-damaging emissions and greenhouse gases, while CaseStack's retailer-driven consolidation programs mass-transits products by combining many separate deliveries heading to the same distribution center (DC), store or region into one full truckload delivery. This minimizes dock congestion, reduces the number of trucks on the road and prevents "shipping air."
It is the goal of CaseStack to expand the consolidation program to include more retailers and more warehouse locations in the future. The consolidation program offerings widened in 2008 with the announcement of the opening of the company's Laredo warehouse, augmenting the current consolidation programs currently run out of the Los Angeles, Dallas, Chicago, Atlanta and Scranton warehouses. This addition paves the way for companies to transport products from Mexico to major U.S. retailers in a more economically and environmentally sustainable way.
It is the vision of CaseStack to integrate sustainable ideas and practices into everyday business operations and service offerings. As a 3PL working with SmartWay Transport Providers, CaseStack says it gives its clients the infrastructure to support and benefit from sustainable logistics. As carriers begin to adopt procedures to enhance sustainability, CaseStack is rewarding those steps by identifying SmartWay providers and carriers with emission reduction policies and recommending them to those customers opting for greener choices.
CaseStack refocused on developing new sustainable solutions to give its clients a leg up on the competition back in 2006 with the introduction of its "Delivered Green" Program to promote biodiesel usage. CaseStack currently works with two carriers that provide the option to fuel with biodiesel and says it is always looking to add new providers.
Finally, CaseStack says its sustainability goals extend beyond providing green supply chain solutions for its clients. They also aim to make the company green from the inside out. An example of this is the company's newest office, located in Fayetteville, Ark. In the heart of the Green Valley region of Northwest Arkansas, the office is furnished with recycled and all-natural, ecologically friendly material. The cubical panels are insulated with Roxul, a mineral wool insulation mix made from slag and basalt rock, which reduces noise in the office. The fabrics are made from 100 percent recycled polyester and the panel interior is made from 100 percent recycled wood and polypropylene. Lastly, the epoxy powder coating process used for the office products does not contain harmful VOCs or lead. In addition, in February 2008 CaseStack's corporate headquarters achieved Green Business Certification through the city of Santa Monica. This certification signifies that CaseStack's green business operations align with their strategy as a growing business offering green supply chain and outsourced logistics solutions.
San Mateo, Calif., www.con-way.com
Because of the impact that environmental issues began to have on corporations' bottom lines, Con-way Inc. says it decided to proactively launch a formal sustainability program enterprise-wide. The program, which was implemented in 2008, spanned the company's administrative and corporate offices; trailer manufacturing operation, Road Systems Inc; and its three primary business units: Con-way Freight, Menlo Worldwide Logistics and Con-way Truckload. The company says it is committed to two parallel goals: operating its business units in ways that help the company to become a better steward of the environment, and improving the bottom line to maintain and strengthen the company's competitive advantage.
As part of its commitment to adopting more sustainable business practices throughout its operations, the company aligned its sustainability goals to support the three "Ps" — people, planet and profit — by concentrating on four major areas: energy conservation, waste reduction, recycling and procurement. To direct the program, Con-way formed a sustainability steering committee led by the company's vice president for government relations and public affairs, with the company's president and CEO serving as its executive sponsor. Representatives from each business unit form the committee, which aims to incorporate sustainability practices into everyday operations by:
1. Examining and analyzing Con-way's existing carbon footprint.
2. Determining initiatives most beneficial to the three "Ps."
3. Adopting process changes that enable reduction of carbon emissions/waste.
4. Providing regular updates and seeking feedback from employees.
Two executive-level resources oversee the sustainability platform at the company. The first is the enterprise sustainability senior manager, who benchmarks, develops and manages the company's ongoing sustainability initiatives. Con-way also appointed one of its veteran freight transportation executives to the position of vice president for global policy and economic sustainability. This individual directs all of Con-way's strategies and programs related to legislative, regulatory, public policy and corporate sustainability affairs at the local, state, national and international levels.
This year the company took steps to benchmark current operations, and research methods and best practices that could contribute to meeting its sustainability goals. Con-way's objective with the program is to instill awareness in its workforce of the importance of sustainability as a fundamental corporate process — one that is focused on continuous improvement and the adoption of business practices that remove costs and reduce waste, while minimizing the impact on the environment.
Con-way's business units — Con-way Freight, Con-way Truckload and Menlo Worldwide Logistics — are members of EPA's SmartWay Transport program. As part of this program, trucking and logistics companies commit to measuring and improving the efficiency of their freight operations using the EPA-developed Fleet Logistics Energy and Environmental Tracking (FLEET) Performance Model. Carriers and logistics companies must agree to improve their performance within three years and must also sign the SmartWay Transport Partnership Agreement.
Looking forward, Con-way said it is considering initiatives such as solar energy, re-lamping, hybrid tractors, electric forklifts, increased recycling and new purchasing procedures emphasizing "green" suppliers.
Results: To date, Con-way says it already has achieved measurable results in its existing business practices. For example, Con-way Freight, with its fleet of 8,400 tractors, has been a SmartWay partner since 2006. The company says it has implemented and/or delivered the following sustainable programs/results:
1. A highly engineered line-haul network that ensures efficient utilization of people, equipment, facilities and fuel, reducing the company's carbon footprint from LTL operations to the minimum.
2. Speed reduction — 65 to 62 mph in 2008.
3. Low profile tires improve rolling resistance and reduce weight.
4. Engines/drive train specs tuned for optimal fuel economy.
5. Idling monitors set to three minutes.
6. Trailer weight reduced.
7. Diesel fuel savings: 3,594,377 gallons (3.8 percent).
8. Carbon dioxide emissions reduction: 601,928 tons.
9. Particulate matter emissions reduction: 32.09 tons.
10. Nitrogen oxide emissions reduction: 1,184 tons.
11. SmartWay Shipper Index Factor: 1.25 — highest attainable score.
Con-way Truckload, with its fleet of 2,700 tractors, has been a SmartWay partner since 2005. To date, the company says it has implemented and/or delivered the following sustainable programs/results:
1. Speed reduction — 70 to 65 mph in 2008.
2. 100 percent of tractors converted to single wide-base tires (40 percent of trailers by end of 2008).
3. Purchase of 140 new Kenworth tractors with SmartWay-approved Cummins engines, 300 Freightliners with CARB-certifiable engines.
4. Truck spec weight lowered by 670 pounds, saving 11,400 gallons of diesel fuel each year.
5. No-idle designated parking at selected terminals.
6. Aerodynamic considerations in tractor and trailer purchases.
7. Diesel fuel savings: 2,575,475 gallons.
8. Carbon dioxide emissions reduction: 295,712 tons.
9. Particulate matter emissions reduction: 17.9 tons.
10. Nitrogen oxide emissions reduction: 670 tons.
11. SmartWay Shipper Index Factor: 1.25 — highest attainable score.
12. SmartWay Excellence Award winner — 2006 and 2007.
Menlo Worldwide Logistics, the company's third-party logistics provider and a SmartWay partner since 2007, says it has implemented and/or delivered the following programs/results:
1. SmartWay compliance — key evaluation criteria for carrier selection.
2. Encourages SmartWay compliance in existing carriers.
3. 85 percent of network miles run by SmartWay-approved carriers.
4. Implementing no-idling policy at distribution centers.
5. Installations of more efficient lighting and motion detection systems, which turn off lights when workers are not present, to reduce energy consumption.
Con-way's Road Systems Inc. — the industry's only full-service trailer "refurbisher" — says it has implemented and/or delivered the following sustainable programs/results:
1. Recycles 80 percent of old trailers, eliminating 7,424 pounds of waste, per 28-foot trailer.
2. Recycles all aluminum components, suspension and wheel end components, tires and wheels.
3. Reduced weight of Con-way Freight 28-foot trailers by 581 pounds.
4. Introduced first mass-produced, full-trailer aerodynamic fairing system.
5. Involved in research and development of trailer sidewall system that will reduce 53-foot trailer weight by 1,400 pounds.
Finally, Con-way's administrative and IT campus, located in Portland, Ore., recycles heat energy generated from computer operations to warm the buildings and reduce overall energy use.
Freight Management, Inc.
Anaheim, Calif., www.freightmgmt.com
Freight Management, Inc. has developed two programs designed to help its clients reduce their environmental footprint and still improve their bottom line. They call the Program FMI Green.
The first of the two plans, Opti-Green, provides an analysis of a company's current shipping practices, followed by a presentation from FMI with options for streamlining their present practices to reduce carbon emission, lower the freight cost and present fast transit times. The second plan is the Distribution Pollution Solution, or DPS Calculator for short, which is a calculator that lets users determine the mode of transportation and choose a shipping point for a specific freight movement to emit less carbon emissions.
FMI estimates that Opti-Green and its practices in general bring 10-12 percent savings to the clients' logistics bottom line. The reduction of carbon emission varies based upon the clients' previous practices, but the company says it has seen anywhere from a 20 percent to 30 percent emission reduction.
A supplier of voice and data communication products and services, MDSi Green activities include helping its clients consider environmentally conscious alternatives for handling their products and materials, as well as increasing their use of technology assets and maximizing the use of environmentally preferable products and using recovered materials and reducing waste.
MDSi accomplishes these objectives through its reverse logistics services for technology products under a Green supply chain program called "Think Green, Think MDSi." The company has been assisting its large clients in managing the back-end of the supply chain and prioritizing redeployment, repair, resale and disposal prior to purchasing new acquisitions. Using reconditioned or refurbished IT and central office equipment offers a viable means of waste prevention and reduction, and it extends the useful lives of existing products leads to reuse and reduces the solid waste stream.
Ryder System, Inc.
Ryder's Environmental Management System (EMS) has four main objectives: 1) Ensure compliance; 2) Manage risk; 3) Promote business opportunity and growth; and 4) Create a competitive advantage with environmental programs that are consistent with the company's long-term business strategy.
Ryder says that it has adopted proactive environmental strategies that advance business growth and improve its performance in ways that reduce emission outputs and environmental impacts. Key among these efforts are reducing energy and fuel use from stationary and mobile sources, improving fuel efficiency in vehicles, implementing efficient transportation solutions for its customers, providing network optimization, thereby reducing miles traveled, reducing waste generated at Ryder maintenance facilities, and increasing waste stream recycling.
The EPA estimates that freight vehicles consume approximately 20 percent of energy consumed by the U.S. transportation sector. By implementing and promoting fuel conservation strategies, Ryder is not only reducing fuel costs for its customers, but reducing energy consumption and emissions.
One example of how Ryder is tracking and measuring vehicle emissions is Ryder's participation with EPA's SmartWay Transportation Partnership. Ryder is a SmartWay Carrier partner for Ryder-owned vehicles and has recently enrolled as a Logistics Partner (January 2008) for its supply chain operations. Through the company's association with SmartWay, Ryder is exploring the most appropriate and best way to track, manage and report direct emissions from Ryder-owned and operated fleets. Additionally, Ryder is also exploring opportunities to identify, track and manage indirect emissions resulting from services provided to lease, rental and supply chain management customers.
The SmartWay Carrier model tracks and measures vehicle performance for Ryder-operated and leased fleets based on miles traveled, weight transported and fuel consumed by vehicle class and model year. The SmartWay Logistics model tracks and measures the performance of Ryder carrier management and freight brokerage services based on a number of alternative metrics, including total miles traveled, total weight transported, total ton miles or total spend.
For those customer vehicles not under its direct control, there are many ways to manage fuel efficiency, and Ryder says that it is proactive in advancing these to their customers. For example, to make it easier for lease customers of all sizes to comply with higher EPA '07 emissions standards and improve the fuel efficiency of their fleets, the company introduced RydeGreen, a line of tractors and trailers designed to reduce fuel consumption and GHG emissions. The tractors are equipped with special features that have earned them the eco-friendly SmartWay designation. Specifically configured trailer packages from Great Dane and Utility offer aerodynamic features and weight-saving options that further enhance fuel efficiency. Ryder says that it is looking into making RydeGreen vehicles available to rental and dedicated contract carriage customers in the future.
Elsewhere, Ryder says its preventive maintenance program helps to improve vehicle performance and efficiencies, thereby reducing emissions. For example, to deliver superior tire performance necessary to keep customer vehicles running optimally and to maximize fuel efficiency, Ryder employs a "Total Tire Management" program, which focuses on determining the appropriate tire for a particular application and maintaining proper tire inflation. Because of the impact trailer tires have on vehicle uptime and fuel efficiency, the program requires Ryder's maintenance organization to perform an extensive review of trailer tire inflation and tire conditions on all of Ryder's 46,000 trailers. In addition, Ryder checks tire conditions and inflation rates every time a vehicle enters one of its service facilities for fueling, or any other reason, and even arranges inspections at customer locations if necessary.
In addition, Ryder customers also have access to its proprietary fleet management and diagnostic technologies, such as FleetCare and RydeSmart, which provide fleet operators with real-time visibility to a fleet's performance so they can monitor and make improvements in vehicle routing, fuel usage or driver shifting patterns. FleetCare provides customers with Web-based access to fleet data to help transportation managers analyze trends and recognize opportunities for increased efficiencies. The RydeSmart telematics system is a GPS vehicle-tracking and performance-management system. With improved routing and detailed reports on idle time, speed performance and driver behavior indicators, RydeSmart can reduce fuel consumption up to 10-15 percent per truck per day, according to Ryder.
In addition, for customers who employ their own drivers, Ryder provides online driver training programs through Ryder Pro-TREAD, which includes courses that improve driving skills and performance, and which teaches drivers simple techniques to reduce fuel consumption.
On the fuel front, Ryder – which pumps approximately 30 million gallons of fuel a month – believes that managing fuel use and supplies presents a valuable business opportunity that can have a positive impact on the environment. Ryder performs remote monitoring and compliance management for more than 1,800 storage tanks through a wholly owned subsidiary, Ryder Fuel Compliance Services. In 2006, despite the fact the regulatory mandates required use of ultra low sulfur diesel (ULSD) in only a small percentage of its vehicles, Ryder committed to a "one-fuel" policy and converted all fueling locations to ULSD. The company is currently delivering 100 percent ULSD at all 670 fueling locations in the U.S. Ryder is also delivering biodiesel where mandated.
Additional examples of strategic emission reduction solutions include:
• Engine Technology Improvements – As older engines are retired or new vehicles are added to its fleet, they are replaced with lower emission 2007 engines. In 2006 Ryder implemented a program to introduce cleaner 2007 engines into its, and its customers', fleets. The program addressed fuel use, vehicle maintenance, technician training and exhaust after-treatment device cleaning and re-use.
• Automotive Waste Reduction and Recycling – Ryder, which operates more than 900 vehicle maintenance facilities throughout the U.S. and Canada, says it has been committed to pursuing its goal of zero land filling for more than a decade through the use of onsite and offsite recycling and reuse technologies. Through partnerships with vendors and the implementation of technologies designed to minimize waste generation and achieve a reduction in emissions, Ryder says it has reduced operating costs, improved performance and gained advantage in the marketplace.
On the energy conservation front, Ryder has been tracking energy use and measuring GHG emissions from select Ryder and customer-owned/operated stationary sources in the U.S. and Canada using an external utility specialist. Electricity use, a significant contributor of GHG building emissions, is being tracked within each business unit. The tracking model is a weather-compensated platform that can compute energy demands at each facility and calculate various metrics, including per square foot usage, as a benchmark. Ryder believes that this detailed analysis will allow it to then decide how to incorporate recommended facility upgrades to provide the best payback and return on investment. The company planned to expand this program in 2008 to include all Ryder-owned/operated U.S. facilities.
Ryder's first ENERGY STAR building is now complete in Novi, Mich. ENERGY STAR is a performance rating tool established by the EPA and the Department of Energy for assessing and tracking the energy efficiency of buildings. The minimum target score to obtain an ENERGY STAR certification is 75 (ENERGY STAR estimates that an average office building without efficiency improvements is rated 50). Ryder's Novi building achieved a designation of 85. The 150,000 square foot, three-story office building will, on an annualized basis, consume 6.7 million fewer kBtu's; cost $139,800 less to operate; and result in 1,450 fewer tons of CO2 when compared with an average unimproved office building.
Schneider National, Inc.
Green Bay, Wis., www.schneider.com
Schneider National, a provider of transportation, intermodal and logistics services and one of North America's largest truckload carriers, says it has been "going green" since 1978, reducing greenhouse gas emissions, improving fuel efficiency and changing global operational policies to reduce its carbon footprint. Schneider National is a charter member of the 2004 SmartWay Transport Partnership, and the EPA has awarded Schneider National SmartWay Excellence Awards for environmental leadership since the award's inception.
The company's Schneider Logistics division recently received the SmartWay Partner designation on its own merits for its sustainability achievements. Both the Schneider Bulk and Schneider Logistics divisions have received Responsible Care partner status that includes a distinct requirement for moving chemicals and products through the supply chain in an environmentally responsible manner, with a goal of constant improvement.
Schneider believes it is a truckload industry leader in specifying and developing its equipment to maximize fuel efficiency and control emissions. The company's initiatives include aerodynamic design, fuel efficient tires, lower-engine horsepower ranges, drivelines, matching engine fuel efficiency curves and road speed limits on tractors, all factors contributing to a more efficient, green supply chain through lower emissions. Schneider has gone so far as to reduce its fleet speed to 60 mph as of May 2008.
The company also has taken an aggressive stance on idling. Its trucks idle at less than half the industry standard, and Schneider was the first carrier to specify no-idle cab heaters in its trucks (reducing winter idling). The company believes that it leads the industry in testing engine-off cooling solutions to finding a cooling solution that is electronically operated with zero emissions. In addition, Schneider National says it proactively reduces idle time with driver incentive programs/bonus pay and the use of zero-emissions heaters in all tractors to further reduce idle and save fuel. The company's use of simulation technology in driver training has a significant impact on annual fuel savings, according to Schneider, and the company specifies components on all equipment to maximize fuel efficiency, including drive train/engine matching, roof and side farings, cab extenders and cab trailer match for aerodynamics, fuel-efficient tires and aerodynamic bumpers.
Elsewhere, Schneider National partners with energy-efficient railroads, promoting and utilizing intermodal transportation as a critical component of a sustainable supply chain transportation strategy. Freight train transport is, on average, three times more energy-efficient than truck transport, according to some estimates, and Schneider National is among the top three intermodal carriers in the industry.
Results: Since 1978 Schneider National estimates it has reduced carbon dioxide emissions by 1.2 billion pounds and diesel fuel consumption by 48.8 million gallons each year. Since 1988, the company believes it has reduced particulate matter emissions by 352.61 tons and nitrous oxide emissions by 10,266 tons each year.
Reducing its fleet speed to 60 mph in 2008 conservatively saves 3.74 million gallons of diesel fuel per year and reduces truck CO2 emissions by 83.25 million pounds per year – the equivalent of taking 7,259 cars off the nation's highways, according to the company's estimates.
Simulation-based training also delivers energy savings: On average, Schneider saves 335,000 gallons of fuel per year due to its use of simulator technology in training its drivers.
The company's railroad partners are also helping Schneider reduce its carbon footprint. Since 1980, railroads have reduced fuel consumption by 48 billion gallons and carbon dioxide emissions by 538 million tons, according to the company's estimates.
Frisco, Texas, www.transplace.com
Transplace, a non-asset based third-party logistics (3PL) provider, offers manufacturers and retailers a blend of logistics technology and transportation management services to streamline supply chain operations. Through its TMS platform, Transplace says it works with its customers to develop logistics solutions that optimize the supply chain to reduce waste and total logistics cost while being environmentally conscious. Transplace says it practices environmental consciousness and conservation on a daily basis to achieve efficient shipment routing, thus lessening the environmental impact of fossil fuels and air pollutant emissions.
As a non-asset based third-party logistics company, Transplace does not own tractors or trailers, and its primary means to reduce emissions and save fuel are determined by the transportation service providers it chooses to work with and the transportation modes selected to ship its customers' freight. Utilizing route optimization software allows companies to select the quickest, and therefore the most fuel-efficient, route. In addition, Transplace says it assists shippers with the selection of the most efficient mode.
Recently, Transplace has begun aggressively pursuing the use of intermodal as a mode shift from over-the-road trucking, as it is one of the most fuel efficient modes of moving large quantities of products over land. Increased intermodal utilization, many believe, has the potential to reduce greenhouse gases and traffic congestion. The company continues to target key intermodal carriers for growth, identifying additional lanes of opportunity that meet the performance and delivery needs of its customers while keeping freight costs competitive.
Another key offering Transplace provides its customers is the ability to convert numerous less-than-truckload (LTL) shipments to full and multi-stop truckloads. This significantly reduces the need for more trucks on the road, reducing fuel consumption and diesel emissions as well as decreased traffic congestion on the nation's already overburdened road and highway system.
A significant part of Transplace's sustainability initiative is its collaborative partnership with SmartWay, a key component of Transplace's Carrier Merit Program, which classifies carriers into specific tiers based on performance. Transplace continues to introduce the Transplace/SmartWay Partnership to all contracted carriers in the Carrier Merit Program and encourages all non-participating carriers to obtain their SmartWay certification. In 2008, Transplace made participation in the SmartWay program a requirement for selection in its Platinum Carrier Group, the highest tier in the program.
Results: Transplace says its focus on driving opportunities to SmartWay Partners has allowed it to achieve a reduction in greenhouse gases and significant diesel fuel savings. Its overall increase in SmartWay carrier usage was 28 percent (30,210 loads) for 2007 over 2006. Transplace's fleet model score, the measurement tool used by the EPA to demonstrate the actions that companies are taking to save fuel and reduce emissions, increased from .29 in 2006 to .64 in 2007 because of its commitment to working with SmartWay Carriers.
Mode conversion from truck to intermodal grew 17.3 percent (8,114 shipments), and rail increased 15.5 percent (1,395 shipments). By making this shift, Transplace estimates it was able to remove 12,569.45 tons of CO2 by converting from over-the-road truckload to intermodal, and 2,990.33 tons of CO2 converting from over-the-road truckload to rail car.
Transplace's focus on load consolidation has increased the number of multi-stop shipments by 24.9 percent for 2007 over the same reporting period in 2006. Transplace estimates 2 million highway miles were reduced by consolidating in excess of 6,000 shipments (factoring the average length of haul in the calculation). Load consolidation removed 7,300 trucks from the road and approximately 2.8 million miles driven by trucks. Based on truck efficiency of 5.1 mpg, 549,480 gallons of diesel fuel were saved along with 54,948 metric tons of carbon dioxide eliminated. This contributes to a reduction in fuel consumption, as well as decreased traffic congestion on the nation's over-burdened road and highway system.
UPS is the world's largest package delivery company: the number of packages it moves around the world each day – 15.8 million, to be exact – requires operating one of the world's largest ground and air fleets. With fossil-fuel dependence and carbon emissions posing a major long-term threat the environment, UPS says that reducing fuel use and emissions is a centerpiece of the company's long-term sustainability strategy.
The company's long-term goal is to reduce dependence on fossil fuels by improving operational efficiencies and deploying new technologies. To meet these goals, UPS says it is looking to employ best practices in a range of activities, including construction, maintenance and operation of its facilities; maintaining its vehicles and aircraft; and conserving resources.
The delivery company has developed a threefold strategy to achieve these goals and, in effect, green the supply chains of its partners. The strategy includes optimizing its transportation network to minimize miles driven/flown; investing in fuel-saving technologies to reduce dependency on fossil-based fuels; and conserving energy with smart facility design and operational practices.
Regarding its ground fleet, UPS is looking to advance the development of future generations of its vehicles to reduce fossil fuel consumption and emissions. Part of this strategy involves replacing retired vehicles with fuel-efficient vehicles. In fact, UPS has invested $20 million to deploy alternative-fuel vehicles (AFVs) into its fleet and continues to explore ways to build out its "green" fleet, including working with manufacturers, government agencies and non-profit organizations to advance new fuel technologies.
The company also uses telematics to collect and analyze data from its delivery trucks and to identify ways to reduce energy and emissions. Telematics provides wireless insight into a vehicle's performance and condition, capturing data on more than 200 vehicle-related elements from speed, RPMs and oil pressure to seatbelt use, the number of times the truck is placed in reverse, and the amount of time spent idling. That information can be used to improve efficiency by, for example, tying maintenance schedules more closely to a vehicle's actual performance and usage, and helping drivers reduce time spent idling.
Many customers' supply chains depend on UPS efficiently and effectively delivering millions of packages daily, so it has implemented package flow technologies, a suite of tools to optimize delivery routes. These tools help plan delivery routes with an eye toward efficiency and driving fewer miles. A key aspect of package flow technologies is eliminating, to the extent possible, left turns, reducing the time UPS vehicles idle in traffic.
Elsewhere, UPS has helped green the supply chain of its customers with UPS Paperless Invoice and international UPS Returns, reducing paper use by businesses as they extend their supply chains into the global marketplace by storing Customs and commercial invoice data electronically and eliminating the need for paper labels.
Results: Today UPS operates the world's largest private fleet of "green," low-emission vehicles in the world. As it continues its practice of replacing retired vehicles with new, more fuel-efficient delivery vehicles, that number will increase. As of year-end 2007, the fleet included 1,629 AFV vehicles, including hybrid electric, electric, compressed natural gas, liquefied natural gas and propane vehicles. Last year alone, the company deployed 50 hybrid electric vehicles, tested a hydraulic hybrid delivery vehicle in partnership with the Environmental Protection Agency (EPA) and others, and purchased 139 propane vehicles and 167 compressed natural gas vehicles. Its AFV fleet has traveled more than 144 million miles since 2000.
In addition, UPS estimates that package flow technologies have helped shave nearly 30 million miles off an already streamlined system of delivery routes and saved 3 million gallons of gas. These technologies also have reduced emissions by 32,000 metric tons of CO2 – the equivalent of taking 5,300 passenger cars off the road for an entire year.
UPS says it also has seen positive results from its telematics initiative, which it tested on 334 delivery trucks in 2007. In two Georgia test sites last year, telematics helped to reduce the amount of time spent idling by 24 minutes per driver per day. When you consider that an hour of idling uses a gallon of fuel, and that UPS has more than 112,000 drivers worldwide, the potential is significant. It is also using telematics to optimize driver routine to reduce overall driver miles, monitoring tire pressure and optimizing vehicle performance.