In the previous post in the series, we talked about measuring a supply chain’s carbon footprint and a few ways to reduce it. Today, I’d like to expand upon that, and discuss the importance of logistics in achieving substantially reduced greenhouse gas emissions while saving money at the same time.
“Delivering Tomorrow: Towards Sustainable Logistics”, a study released in October 2010, suggests that sustainability is key for the future success of the logistics industry. According to the study, logistics plays a key role in comprehensive carbon reduction efforts because of its expertise and positioning along the supply chain. The study also points out a number of interesting facts, including:
- 63% of business customers believe that logistics will become a strategic lever for CO2 abatement.
- 38% of risk managers consider the availability and price of fuel and power as one of the top future risks for companies.
- Out of 1.62 billion tons of truck emissions in Europe, roughly one quarter are caused by trucks running empty – often due to legal requirements.
- Aerodynamic drag is responsible for 40% of the fuel consumption of heavy trucks at highway speeds.
- 253 million tons of packaging is used annually in the consumer industry — half paper, half plastic. The paper requires 7 million trees to be felled.
- 84% of consumers in China, India, Malaysia and Singapore say they would accept a higher price for green products. By comparison, only 50% of consumers in Western countries are willing to pay more.
Just the one item about the number of trucks running empty gives some inkling of the kind of difference logistics can make.
UPS, which recently received the highest score in the Carbon Disclosure Project’s Global 500 Leadership Index, also knows a thing or two about logistics and its relationship to sustainability. For example, working with Toto USA, a plumbing supply company, UPS was able utilize offsets to provide carbon neutral shipping as part of that company’s overall sustainability strategy. UPS uses its proprietary Carbon Emissions Calculator V3.1, which includes the GHG Protocol Scopes 1, 2 and 3 in its calculations.
In the first year, they achieved 75,000 carbon neutral shipments. That translates into a lot of positive work being done through the offsets that are verified by SGS Group and implemented by myclimate.org andCarbonneutral.com.
According to the study mentioned earlier, logistics generates around 10% of the EU’s GDP. Meanwhile the 2009 World Economic Forum found out that the logistics industry is responsible for around 2.8 m metric tons of GHG emissions per year, which is around 5.5% of global GHG emissions. It is clear that improving logistics efficiency is essential. Around 60% of this burden comes from road freight.
Logistics companies are clearly motivated to do something about this since it directly impacts both their competitiveness and their bottom line. Options today are limited but growing. Moving to a less energy-intensive mode of transport such as rail, for example, is not always an option. But as new technologies are becoming available, logistics companies are quickly incorporating them.
Meanwhile, UPS announced last year that it was adding 130 hybrid electric trucks to its existing fleet of 250 hybrids. The trucks are made by Freightliner with drive systems from Eaton.
All told, UPS utilizes over 2,400 alternative vehicles including all-electric, CNG, LNG, hydraulic hybrids and propane powered drive trains. UPS also is one of the largest users of rail transportation in the U.S.
Other measures they take include:
- Preventive Maintenance Inspections (PMIs): The PMI process ensures peak performance and results in better fuel economy and lower emissions.
- Package Flow Technologies (PFT): Effectively and efficiently delivering more than 15 million packages and documents a day. UPS has implemented several tools and procedures, called Package Flow Technologies, to optimize delivery routes.
- Routing technology: Since 2001, UPS has optimized its processes of allocating pickups and deliveries to the most efficient number of vehicles. Through this optimization, UPS has avoided driving 183 million miles, resulting in reduced fuel use and less emissions.
- Idling: UPS drivers are trained to always turn off their package cars when they stop for a delivery, never idling at the curb or in a driveway. Even if the driver is out of the truck for a few seconds, the vehicle is always turned off.
- Lido: UPS uses a special program to calculate the most efficient air travel routes based on weather, winds, terrain and other factors. Through various strategies, including the re-dispatch of international flights, the program has managed to save more than one million gallons of fuel.
- Continuous Decent Approach (CDA): Working to conserve fuel, limit emissions and reduce noise, UPS has tested CDA, which uses the jet’s idle power to glide toward the airport. At 1,000 feet, the aircraft’s power is again engaged to land the craft. UPS is currently awaiting FAA approval to implement this procedure on a broader basis.
As our society continues to evolve in a more sustainable direction, there will be many changes, but sustainable logistics, as we have seen here, can clearly make a difference.