Taking Freight Efficiency to the Next Level: Boise’s Success Story

When it comes to logistics, strategies that reduce carbon emissions also reduce transportation costs. Boise, a leading manufacturer of packaging and paper products in the United States, launched two initiatives to do just that – shifting from road to rail transport and making more efficient use of rail transport.

Together, these initiatives have resulted in a combined 60 percent reduction in the company’s CO2 emissions from transportation related activities, as well as cost savings on the targeted shipments.

Carbon emissions from freight transportation are on pace to grow 40 percent by 2040 – the equivalent of carbon emissions produced by 39 million passenger vehicles on the road today.

Leading shippers, like Boise, are making changes to put us on a more sustainable path. Boise’s story is the third in a series of EDF and MIT case studies about carbon-efficient logistics.

In the Carload Direct Initiative, Boise switched from using a combination of rail and truck to send products to one of its customers, OfficeMax, to sending shipments exclusively by train.  Both Boise and OfficeMax facilities are directly accessible by rail, so the two companies collaborated to make the switch. More than 200 carloads were shipped via rail direct from Boise manufacturing facilities to OfficeMax distribution centers in 2011.

Taking efficiency to the next level, Boise launched a Three-Tier Pallet Initiative to increase the volume of products in each rail shipment. Prior to this project, railcars were loaded two pallets high, leaving a space from the top of the second pallet to the roof of the railcar.  The company introduced a half-pallet size to take advantage of the extra space in rail cars. This increased railcar utilization by 14 percent and also provided the customer greater order flexibility.

The two initiatives have yielded combined carbon emission reductions of more than 2,800 tonnes of CO2, the equivalent of saving over 313,000 gallons of fuel.

The Boise story is one of efficiency and collaboration. The Caterpillar case study describes how Caterpillar was able to collaborate with suppliers to consolidate inbound shipments and eliminate truck miles. The Ocean Spray case study described how Ocean Spray was able to collaborate with a competitor to make use of empty backhaul on rail.

Collaborative distribution presents a huge opportunity for companies to reduce costs and carbon emissions. Sure, collaboration has its challenges – coordinating schedules and order sizes, protecting data, adjustments to inventory, etc.

Still, leaders are finding solutions to these challenges.

Get started today – talk to your logistics team, your sustainability team, and your logistics service providers – thinking strategically about logistics will save you money and improve your environmental performance.

To read the full MIT version click here. To read the EDF summary version click here.

Caterpillar collaborates internally and externally to cut costs and carbon

All companies – from consumer products to manufacturers to retailers – can find significant cost and carbon emissions savings in their logistics network. The latest example is Caterpillar.  Its efforts were recently highlighted in Inbound Logistics – a leading industry publication.

Caterpillar, the world’s largest manufacturer of mining and construction equipment, cut carbon emissions and costs by switching to lighter-weight containers and consolidating inbound shipments of truck parts to its assembly facility. This Caterpillar story is the second in a series of EDF and MIT case studies about carbon-efficient logistics.

Caterpillar’s story is unique because it focuses on two key areas – inbound logistics and packaging. EDF has five principles for improving freight sustainability:

  1. Support “Hot Spot” Clean Up.
  2. Choose the most carbon-efficient mode possible.
  3. Collaborate with other shippers.
  4. Redesign your own network for efficiency.
  5. Get the most out of each move.

The Caterpillar case demonstrates three of the five, but with a twist.

Redesign your network for efficiency

Caterpillar redesigned its inbound logistics network for efficiency. Inbound logistics, in this case, refers to the movement of truck parts to Caterpillar’s assembly facility in Decatur, Illinois from suppliers. Because the parts are coming from many suppliers, relatively infrequently, and in low volumes to an area that is not heavily trafficked, it means the network consists of individual shipments of parts from suppliers on trucks carrying small loads. This presents an opportunity for Caterpillar to reduce truck miles by consolidating inbound shipments from multiple suppliers within close proximity to each other.

Collaborate with other shippers

Caterpillar collaborated with suppliers to consolidate inbound shipments from multiple suppliers. Also, in order to make the switch from heavy steel containers to lighter-weight plastic containers that the parts are shipped in, there was significant collaboration between the logistics team and other teams within the organization.

Get the most out of each move

In addition to consolidating shipments, Caterpillar also looked at the packaging that these parts were shipped in and realized that by switching from steel containers to lighter-weight plastic containers, they could reduce carbon emissions by 16.5 percent.

The combination of reducing the weight of packaging and consolidating shipments enabled Caterpillar to reduce overall truck miles and maximize the utilization of trucks. Caterpillar demonstrates how despite challenges of a unique network, companies can still find significant efficiencies with effective collaboration internally and externally. And that is Caterpillar’s goal:

“Internally, we are looking at ways to make our own operations more efficient. Externally, we are trying to find ways to make our customers more efficient.” -Terry Goff, Caterpillar’s director of emissions regulation and conformance.

The first case study in the MIT-EDF series described how Ocean Spray Cranberries cut their emissions by 20 percent  in their northeast distribution system by collaborating with a competitor and switching from road to rail transport.

The Caterpillar case study tells a story of quite a different challenge – collaborating with suppliers as opposed to competitors and making packaging changes as opposed to switching modes.

But, both companies were both able to bring carbon emissions down, while saving money.

Carbon emissions from freight transportation are on track to increase by 40 percent over the coming decades. The good news is that we can work together through a combination of strategies – stronger policies that allow for the manufacture of more efficient trucks, trains and ships, and smarter operational logistics practices that allow companies to see lower transportation costs and sustainability benefits – to bring the curve down.

All companies can find significant cost and carbon emissions savings in their logistics network. All you have to do is look. You can start with EDF’s five rules.

To read the full MIT case study click here. To read the EDF summary version click here.

Sustainable Freight: Just the Facts

Freight is an essential part of a globalized, modern economy. It is also responsible for eight percent of all U.S. greenhouse gas emissions. This is significant in itself, but even more concerning is that emissions from freight transportation are also growing. And fast.

The good news is that there are actions we can take today to reduce this growth in freight emissions and actually achieve significant absolute reductions in carbon pollution. These actions can be cost-effective and will enable freight to be moved more efficiently and responsibly.

The sustainable freight infographic below brings to life facts and figures that illustrate the challenge and opportunity freight presents us today. We need both strong new policies and bold corporate leadership to reduce freight emissions.

The most import fact of all that are presented below is this: it is in our power today to choose a future that embraces a strong freight transport sector that also dramatically cuts carbon pollution.

EDF on the road to share strategies for innovative Sustainable Logistics

Freight transportation’s contribution to greenhouse gas emissions and carbon fuel consumption is set to rise significantly in the coming decades unless we do something to halt the trend now.

The good news is there’s plenty that can be done, simply and effectively, with minimal capital outlay and rapid results. And a lot of companies are already taking advantage of a wide range of operational strategies that improve environmental performance and cut costs.

Our role at Environmental Defense Fund (EDF) is to raise the bar for environmental performance in logistics operations in the private sector. One of the ways we do this is by sharing success stories of leading companies that are choosing cost- and carbon-saving transportation strategies.

Last month EDF held a workshop at the GreenBiz Forum in New York titled “Smarter Moves: Practical Supply Chain Strategies.” Jason Mathers was joined by Kristine Young of Ocean Spray and Edgar Blanco of MIT’s Center for Transportation and Logistics to discuss the case study we released in February.

On April 2, 2013 EDF will be participating in another panel discussion with some of our valued partners. This time we’ll be in Newport, RI at the CONECT (Coalition of New England Companies for Trade) Trade & Transportation Conference.

CONECT is a non-profit, membership-based association for businesses involved in international trade and/or transportation.  CONECT’s 750+ members consist of importers, exporters, customs brokers & freight forwarders, 3PLs, ports, air/ocean/ground cargo transportation providers, banks, law firms, colleges, insurance companies and other related service providers active in international trade. CONECT’s members represent a range of significant stakeholders in the freight industry so this event is a prime opportunity for EDF to share practical advice on how to reduce carbon emissions throughout the entire freight system.

The “Innovative Sustainable Logistics: Operationalizing Carbon Reductions in Your Supply Chain” panel will feature Peter Diehm of nora, Edgar Blanco of MIT, Cynthia Wilkinson of Staples, Ed Poloway of Ocean Spray and Jason Mathers of EDF. The focus of the panel discussion will be on providing practical examples of how Staples and Ocean Spray have improved the carbon-efficiency of their supply chain.

To learn more about what your company can do today to reduce transportation costs and freight emissions, join us at CONECT’s Trade & Transportation Conference. The conference will be in Newport, RI. If you are able to attend, mention that you heard about the event through this blog from EDF and you will receive the discounted member rate for the conference.

Sustainable Logistics Webcast: Join us on DC Velocity

Each year, emissions from corporate freight logistics in the United States amount to nearly 500 megatons of carbon dioxide. If U.S. freight was a country, it would be the 11th largest carbon emitter in the world.

However, logistics is an area of tremendous opportunity for companies to reduce carbon emissions. There are many operational strategies that can help companies reduce their carbon emissions and reduce their costs.

Join us for a webcast hosted by DC Velocity on Thursday, December 13 at 2pm EST to learn more about sustainable logistics.

EDF’s Jason Mathers will explain why sustainability should part of corporation’s long-term logistics strategies, outline EDF’s five rules for cleaner freight and provide examples of how companies are already making logistics choices that reduce both their costs and carbon footprint.

Register here.

Four Factors Driving Focus on Freight

As a new member of EDF’s team focusing on reducing emissions from freight transportation, one of the ways that I have been learning about the transportation and supply chain industry has been by attending conferences. Over the past couple months I have attended four events including: Retail Industry Leaders Association (RILA) Sustainability Conference, Council for Supply Chain Management Professionals (CSCMP) Annual Global Conference, National Association of Energy Managers (NAEM) EHS Management Forum and a workshop on the future of U.S. trucking policy at Resources for the Future.

Even though the focus of the conferences ranged from retail to trucking, these events made it clear to me that sustainability is getting increasing attention in the freight transportation and supply chain discussion. This is good news. Freight transportation – which makes up eight percent of U.S. greenhouse gas emissions – is an area of tremendous opportunity for reducing carbon emissions.

So why is freight sustainability getting attention? I have a few ideas.

  • From a climate change perspective, emissions from freight are significant. Freight emissions will make up the largest part of growth in transportation CO2 emissions over the coming years.
  • From an environmental health perspective, freight transportation has significant air quality impacts. Trucks, trains and ships are among the leading emitters of pollutants such as particulate matter, nitrogen oxides and other toxics that are extremely dangerous to human health.
  • From a corporate sustainability perspective, companies are thinking more and more about their supply chain. One reason is that the supply chain is now very visible. Companies are under pressure from multiple stakeholders for increased transparency. Another reason is that when it comes to corporate responsibility, companies are thinking beyond recycling and energy efficiency to meet their corporate sustainability goals. As supply chains account for the largest segment of many corporate footprints, it is a priority area for improvement.
  • Most importantly, it’s not just about mitigating negative impacts. Freight transportation presents an area of opportunity. There are freight strategies that can help companies meet their sustainability goals. This is because cost savings and carbon reductions are very much aligned in goods movement – operational changes that reduce carbon emissions also reduce costs. So it’s easy to make the business case.

Companies are adopting many of these carbon-reducing and cost-saving strategies. And even better – they are talking about it. At this fall’s conferences, I noticed several trends in what people are talking about when it comes to increasing sustainability of transportation.

  • Increasing use of intermodal transport
  • Minimizing empty miles
  • Reducing packaging
  • Collaborating with other companies

And there are many more. I’ll delve into examples of some of these strategies in future posts.

Freight sustainability is getting increasing attention for good reason – it’s a huge area of opportunity for both cost savings and carbon emissions savings. But what’s next?

Companies need to start by thinking about freight transportation as not just a cost center, but a key part of their sustainability strategy. While the best freight efficiency strategies for each company may be unique, there are clear financial and environmental wins for shippers when it comes to goods movement – don’t miss the boat.

EDF Business heads to RILA

While retailers have a significant impact on climate, they also have a significant opportunity to reduce carbon emissions within their business and throughout their supply chain. This is why a team from EDF Business will be attending the Retail Industry Leaders Association (RILA) Sustainability Conference in Phoenix, AZ from September 19-21.

The conference provides an opportunity for EDF to continue engaging with leading retailers in the US. Retailers have been an important part of our corporate partnerships from our early days of working with McDonald’s and our ongoing work with Walmart.

EDF staff members Jason Mathers and Scott Wood will be at the conference to engage with retailers about our freight and supply chain logistics work and our energy efficiency program EDF Climate Corps, for which we’re currently accepting company applications for 2013.

Climate Corps is EDF’s proven summer fellowship program that places specially-trained MBA and MPA students from top-ranking schools in leading organizations to build the business case for energy efficiency. Since the program began in 2008, EDF Climate Corps fellows have found $1 billion in energy savings at their host organizations, enough to avoid 1 million metric tons of CO2 emissions annually.

Here are few recent examples of the cost and energy savings realized by participating retailers:

  • At Target, EDF Climate Corps consulted with the retailer to develop enhancements to Target’s plan to earn the ENERGY STAR for 75 percent of its U.S. buildings and improve energy efficiency in Target stores. These projects have the potential to avoid 50,000 metric tons of CO2 emissions each year and generate several million dollars in annual energy savings.
  • At jcpenney, EDF Climate Corps developed a plan to adapt the existing employee program for energy awareness in its retail stores to fit the culture of its headquarter offices. The plan could potentially save $880,000 by the end of 2015, and curb 6,000 metric tons of CO2 emissions each year.
  • At REI, EDF Climate Corps proposed lighting solutions and equipment upgrades at the company’s distribution center and headquarters that could save $53,000 and 490 metric tons of CO2 emissions each year.

If you’ll be there, stop by our booth in the exhibition hall to learn more about EDF and our work with leading retailers on sustainability.