Collaborative Logistics: Shipping Together to Save Together

Collaborative logistics – where multiple companies cooperate to share freight capacity – holds the key to dramatic reductions in freight emissions and costs. Unfortunately, most consumer packaged goods (CPG) companies continue to manage discrete lines of supply to retail customers, passing up these opportunities.

  • Partially full trucks today run side-by-side on the highway, even though they are travelling to the exact same retail distribution center (DC), and freight could have been combined.
  • Outbound deliveries of full trailers ride alongside empty trailers returning home to the same destination after a delivery, even though the outbound shipper could have leveraged the opportunity presented by the empty trailer for an aggressive backhaul rate.
  • Heavy and light products cause trucks to weigh out before they’re full and cube out below the truck’s weight capacity has been reached, even when the solution could have been as simple as combining shipments of cotton balls and hammers traveling along the same route.

Examples of collaborative logistics at work

ocean spray More and more companies are recognizing the value of collaboration in meeting their sustainability goals. It turns out that when shippers climb out of their silos, good things happen. These are just a few examples of solutions being employed by companies:

  • Ocean Spray and Tropicana.  Tropicana shipped orange juice north from Florida in refrigerated box cars, which often travelled back empty to Florida.  Ocean Spray trucked its juice products from New Jersey to Florida along the same route. By shifting most of this TL volume to utilize Tropicana’s rail backhauls (CSX), Ocean Spray cut freight costs 40% for this lane and reduced greenhouse gas emissions 65%.
  • Whirlpool and Daltile. Both of these large manufacturers have factories in Monterrey, Mexico and ship product into the U.S. via rail. Daltile’s heavy ceramic tile reach a rail box car’s 200,000 pound weight limit with enough room for a 53-foot trailer. Meanwhile, Whirlpool’s appliances were cubing out box cars at just 35,000 pounds.  The solution?  Put four truckloads of tile in each box car (160,000) and fill the rest with refrigerators.  Each company now pays just 50% of the cost for the trip, but gets 80 percent of the maximum cube or weight capacity. Daltile’s complete freight collaboration program, generates $3 million in annual freight savings and reduces diesel fuel usage by more than 600,000 gallons per year.

Here are some tips to help your company get started on collaborative logistics:

  • Leverage your 3PLs. They service many companies and are in a good position to identify collaborative logistics opportunities and partners.
  • Look to competitors. Your freight is likely going to the same customers and DCs.
  • Share cost information. When lo-loading freight, mutual trust is critical to determining an equitable cost-sharing arrangement. Both companies must be transparent about what they are paying now.
  • Dedicated the required resources. The right collaborative logistics projects can have a huge payoff, but they require significant time and resources to pull off. Don’t underestimate the time required to make these inter-company projects work.

Find more tips on collaborative logistics and other green freight initiatives in EDF’s comprehensive Green Freight Handbook – a free guide to helping you achieve your sustainability goals.


Companies Hail Triple-Bottom-Line Benefits of Cleaner Trucks

Ben and Jerry’s became the latest corporate voice calling for strong fuel-efficiency and greenhouse gas standards for heavy trucks. In a Guardian op-ed, CEO Jostein Solheim made a compelling triple-bottom-line case for protective standards for new trucks.

holycowinc_2265_2844729Mr. Solheim noted that seventeen percent of the company’s carbon footprint is associated with transporting products. This includes bringing ingredients to manufacturing facilities (three percent) and moving the finished products to distribution centers (fourteen percent).

Like packaging, transportation and distribution is a consistent, significant carbon footprint component of every product: six percent of H&M clothes; twenty-five percent of the carbon budget from Mars; and thirty five percent of Philips operations, for example. And, trucks are the largest single component of distribution emissions, accounting for 57% of the collective impact. Therefore, it is in the interest of every product manufacturer and brand in the U.S. to see these trucks use less fuel.

Freight-share-GHGsThe single most impactful thing we can do today to reduce emissions from product distribution is to build more efficient trucks. We have the technical know-how to cost-effectively double the efficiency of freight trucks. We also know that having well-designed standards in place is a necessary step to bringing these solutions to market at scale. Read more

Improve Freight Capacity Utilization to Reduce Truck Emissions

Whether it’s a trailer, a container or a boxcar, better capacity utilization reduces the number of required freight runs and reduces truck emissions.

Despite the fact that most logistic professionals understand the value of building fuller truck-loads, recent research showed that 15–25 percent of U.S. trucks on the road are empty and, for non-empty miles, trailers are 36 percent underutilized.

Source: Homayoun Taherian, Cnergistics, LLC

Source: Homayoun Taherian, Cnergistics, LLC

Capturing just half of this under-utilized capacity would cut freight truck emissions by 100 million

tons per year – about 20 percent of all U.S. freight emissions – and reduce expenditures on diesel fuel by more than $30 billion a year (CELDi Physical Internet Project).

Nearly every company can improve trailer capacity utilization. Here are some real-life examples:

Kraft Foods: Because of the variety of products either cubing-out trailers (reaching the volume limit) or weighing-out trailers (reaching the truck weight limit), Kraft’s refrigerated outbound shipments were averaging only 82 percent of weight capacity. Kraft used specialized software to convert demand into optimized orders to maximize truck usage without damaging products. As a result, Kraft cut 6.2 million truck miles and reduced truck-load costs by 4 percent.

Trailer Orientation

Walmart: The world’s largest retailer was able to increase the number of pallets shipped in a truck from 26 to 30 simply by side loading pallets.

Stonyfield Farms: This dairy product manufacturer worked with its clients to help them decrease the use of dunnage (inexpensive or waste material used to protect cargo during transportation), allowing the company to maximize the available space per trailer.

What’s your load factor on outbound trailers?

To improve trailer capacity utilization as well as source other ideas to create a more sustainable freight operation, download EDF’s free Green Freight Handbook.



More Efficient Trucks Will Improve the Bottom Line

Here in the United States, the Environmental Protection Agency and the Department of Transportation will unveil new fuel efficiency and greenhouse gas standards for big trucks soon, according to the New York Times. At first glance, many companies might conclude that these new polices do not impact them. They’d be mistaken. In fact, they would be overlooking an enormous opportunity to cut costs while delivering real-world progress on sustainability.

Impact-of-fuel-efficiency-updated-5-15-low-rezThe fact is that nearly every company in the United States is reliant on heavy trucks, which move 70% of U.S. freight. Brands and manufacturers use trucks to bring in supplies and ship out final products. Retailers and grocers count on trucks to keep the shelves stocked. Technology companies need trucks to deliver the hardware that powers their online services. Even Major League Baseball has turned its dependence on trucking into a quasi-holiday.

More efficient trucks matter to all business because they will cut supply chain costs. Last year, American businesses spent $657 billion dollars on trucking services. A lot of that money went to pay for fuel – the top cost for trucking, accounting for nearly 40% of all costs. Read more

Freight Sustainability Strategies: How to Get the Most From Every Truck Move

It’s no secret that better trailer utilization reduces the number of required freight runs. Fewer trucks on the road means lower freight costs and reduced greenhouse gas emissions – an excellent freight sustainability strategy.

Despite the obvious benefits, recent research from Cnergistics has determined that 15 to 25 percent of the trailers on U.S. roads are empty. For the non-empty miles, these trailers are 36 percent under-utilized. Capturing just half of this underutilized capacity would cut emissions from freight trucks by 100 million tons per year – about 20 percent of all U.S. freight emissions – and reduce expenditures on diesel fuel by more than $30 billion a year.

Source: Homayoun Taherian, Cnergistics, LLC

Source: Homayoun Taherian, Cnergistics, LLC

If you’re serious about pursuing freight sustainability strategies, load optimization is a good place to start.

Following are just a few examples of load optimization strategies in action. More can be found in EDF’s Green Freight Handbook – a practical guide for developing freight sustainability strategies for business. Read more

How to Use EDF's Green Freight Diagnostic Tool

There are many ways to reduce freight-related greenhouse gas (GHG) emissions. But which strategies make the most sense for you?

EDF’s Green Freight Handbook provides a framework to help you answer this question based on what initiatives will achieve the greatest environmental benefit in the least amount of time. The key is our Green Freight Diagnostic Tool.

Here’s how it works.  We focus on EDF’s five key principles for greener freight:

  1. Get the most out of every move
  2. Choose the most carbon-efficient mode
  3. Collaborate
  4. Redesign your logistics network
  5. Demand cleaner equipment and practices

For each key area of potential, we list a series of simple questions designed to help you determine which strategies are the low-effort, high-return opportunities. You’ll need some data in order to answer the questions, but it’s a pretty easy exercise to start moving down the path toward a cleaner, lower-cost freight program.

Here’s a small sample from just one of the green freight diagnostic sections, "Get the most out of every move." As you can see, it explains the opportunity and allows you to measure the potential impact at a high level.

QuestionOpportunityPotential Benefit
Can your customers be flexible about arrival dates to enable freight consolidation?With a transportation management system or TMS, companies can identify opportunities to hold orders for consolidation. Where feasible, and with the right incentives, companies can then send one larger shipment to customers instead of sending two smaller ones.Reduction of product shipping volume by up to 30 percent.
Have you recently analyzed opportunities for balancing high density and low density products?If no, explore how you might be able to better balance weight and cube constraints. Options include matching internal freight or co-loading with a company with a similar need and transportation lanes.20-30 percent net reduction in process and resource costs.
Can you side load your pallets 90 degrees when loading them on the truck?Explore the feasibility of side loading pallets to enable the loading of more cargo per truck. This will be feasible only for fleets that cube out, but do not weigh-out. This approach will require changes to pallet construction and loading.8-15 percent increase in truck productivity.

That’s just a small sampling.  Each of the five sections provides a comprehensive diagnostic assessment tool. Download the Green Freight Handbook to access the tool.


Walmart, General Mills and Anheuser-Busch Make Greening Freight a Priority

green freightSpring is high season for corporate responsibility reports, with some of the world’s most recognizable brands — including Kellogg’s, Walmart, Anheuser-Busch, Apple, Adidas, General Mills, H&M, Lowes, CVS and Hershey’s — releasing their latest updates. While each company has its own unique sustainability challenges and priorities, every one of them has a global supply chain that requires an extensive logistics network to move goods from manufacturing facilities to end customers.

What reading these reports told me is that greening freight operations is becoming a key priority for these companies, with three trends in particular standing out to me:

1. Tracking logistics emissions is a standard practice. Seven out of the ten recently released reports included data on fuel use or greenhouse gas emissions associated with freight transportation. Several companies were tracking only emissions from outbound freight transportation, presumably because of a lack of visibility into inbound moves. Adidas, one of the three that did not include information on emissions or fuel use from freight movement, did include a detailed breakdown of moves by transport modes and emissions from distribution centers and other facilities.

2. Setting performance goals is a well-accepted practice. Four of the ten companies have performance-based goals to improve environmental impact associated with freight transportation. For example:

  • Walmart is seeking to double its fleet efficiency compared to 2005, and is currently 87% of the way to meeting this impressive goal.
  • General Mills has a goal to reduce fuel use for its outbound moves by 35% compared to its 2005 consumption. The company has made considerable progress too, reducing fuel use by 22% compared to 2005.
  • Anheuser-Busch set a goal in 2014 to reduce greenhouse gases from its global logistics operations by 15% per hectoliter sold. Its goal has a broad scope too, including inbound and outbound transportation as well as warehousing.

3. Seeking to shape external factors is a leadership practice. Much of the impact of moving freight is beyond the operational control of these companies. They have limited influence on the availability of low-impact fuels, the efficiency of freight equipment or the capacity of intermodal systems. In addition to focusing on the factors freight shippers can control, leading companies are trying to shape the overall system to provide more low-impact choices. Read more

Better Fuel Efficiency for Heavy Duty Trucks — A Target Worth Setting

"Kenworth truck" by Lisa M. Macias, U.S. Air Force via Wikipedia

"Kenworth truck" by Lisa M. Macias, U.S. Air Force via Wikipedia

A pair of critical analyses were just released that, together, make clear the need for a strong second generation heavy truck fuel efficiency and greenhouse gas standard.

The first piece is the U.S. Energy Information Agency’s (EIA) preliminary Annual Energy Outlook for 2015. I went right to the projection of fuel efficiency for new heavy trucks in 2020, which is 7.0 miles per gallon, and compared that to the projection for 2030, which is 7.2 miles per gallon. A three percent increase in efficiency for a decade is not too impressive.

As a result of this lack of projected progress on fuel efficiency and other factors, EIA expects that greenhouse gas emissions from heavy trucks will increase more than any other single end-use source by 2040 – an additional 120 million metric tons a year.

The other recent analysis is from The International Council on Clean Transportation, which released two papers on heavy truck fuel efficiency: one reviewing the potential of current and emerging efficiency technology, and the other examining the cost-effectiveness of these technologies.

Read more

Let There Be No Doubt: We Can Cut Truck Emissions & Fuel Use Today

The can-do spirit of American automotive engineers has been on full display over the past few weeks, as truck manufacturers unveil innovation after innovation to boost the efficiency of heavy trucks that move companies' freight cross-country.

It is crystal clear that we possess— today— the know-how to dramatically cut fossil fuel consumption and greenhouse gas emissions from heavy trucks. Moreover, we can do this while saving consumers hundreds of dollars annually and giving trucking companies the high-quality, affordable equipment they require.

DTNA Super Truck HighSome of the recently-announced advances include:

All of these fuel-saving solutions are available today thanks to the acumen of engineers at these leading manufacturers. The first round of well-designed federal fuel efficiency and greenhouse gas standards are also driving innovations like these to the market.

Even so, the strides we are making today should only be the beginning.

Read more

Green Freight Math: How to Calculate Emissions for a Truck Move

When setting and monitoring several of the key environmental performance metrics for freight, you’ll need to know how to calculate greenhouse gas (GHG) emissions. This may sound complicated, but it’s actually quite simple.

Fuels contain carbon, which is released into the atmosphere as carbon dioxide when burned. If you know how much fuel you’ve used, you can determine most of your current GHG emissions.

You can derive fuel volume by looking at how much freight you transport, the distance that freight travels, and the specific mode of transport used. Each mode will have its own emissions factor, since some modes are more efficient than others.

Here's a simple formula for calculating greenhouse gas emissions from a truck move:

GHG Calculation

The distance and weight and/or volume information needed to calculate greenhouse gas emissions is most likely already captured in your transportation management software. Information on mode-specific emissions factors are generated by several sources, including the U.S. Environmental Protection Agency (EPA). A list of emission factors is included on page 10 and 11 of EDF’s Green Freight Handbook. Read more