The Supply Chain Word of 2014: Omnichannel

As we head into the last months of 2014 – and more importantly, the holiday season — I'm ready to make my nomination for the "word of the year." And no, it’s not “salmon cannon,” “bromance,” or others proposed by John Oliver or Stephen Colbert. The word supply chain and sustainability leaders should take away from 2014 is omnichannel.Omnichannel diagram

At its core, omnichannel is an approach to retail that aims to deliver a holistic shopping experience that integrates in-store and online platforms, combining the supply chain of brick-and-mortar stores and e-commerce. It recognizes the staying power of each, the expectation of the customer for consistent prices across platforms and the ability to choose how, when and where to receive his/her purchases.

Folks that make a living thinking about how to allocate and where to place inventory have been using the word for a few years. In 2014, though, omnichannel crossed the chasm from being wonky, industry-speak to being a mainstream business concept – covered recently in USA Today – and a core aspect of competing in the digital age.

Which brings us to an important question: what are the environmental implications of omnichannel retailing?

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Advancing on the Green Freight Journey: Discover Your Next Steps at RILA Sustainability

freightContainers-100x133Every product that ends up on a retail shelf or is sold online has a freight footprint. The annual impact of freight across U.S. retail and consumer goods supply chains is significant – over 160 million metrics tons of greenhouse emissions. Or, more than ten times Walmart’s 2010 scope 1 & 2 emissions in the United States.

There are ample opportunities for retailers and their suppliers to improve efficiency, reduce costs and emissions from their freight supply chain. These companies can get more products on each truckload, move more cargo by rail, and collaborate with other companies to find shipping efficiencies.

To capture the most savings opportunities, companies need a long-term plan of action with common key performance indicators (KPIs) and goals shared between logistics teams and corporate sustainability officers.

EDF created our Green Freight Journey model to be a framework that companies can use to manage supply chain freight emissions. The Green Freight Journey has five steps:

Green Freight Journey

  • Step One: Get Started, where a company assembles the right group of internal stakeholders and defines its objectives and key metrics.
  • Step Two: Create Momentum, where a company launches a pilot effort to improve performance in one key area. It leverages the results of the pilot to increase internal visibility about the strong value of green freight initiatives.
  • Step Three: Accelerate Performance, where a company expands the scope of its green freight efforts from one or two projects to a system-wide effort to reduce costs and emissions.
  • Step Four: Declare a Goal, where a company sets a multi-year goal to drive internal focus and resource allocation.
  • Step Five: Raise the Bar, having accomplished its first generation green freight goal, a company assess and sets a new longer term improvement target.

If you are attending RILA Sustainability later this month, visit the EDF booth (NP6) in the exhibit hall to learn more how your company can leverage the Green Freight Journey framework to identify and implement cost and emission reductions project. In addition to the EDF Green Freight Handbook, we will available at our booth have a benchmarking survey for companies to help them assess their next step on the Green Freight Journey.

Procter & Gamble, CVS, Colgate and Others Demonstrate “We” > “Me”

Mathers_Jason (1)When looking for ways to increase supply chain efficiencies, few strategies have the cost and emissions savings potential of collaborative distribution or shared shipping—where companies pool freight resources to reduce the amount of truck trips required to move supplies or products. As the Guardian noted in a recent article on Ocean Spray and Tropicana’s shared shipping collaboration, companies stand to annually save billions of dollars and cut over a hundred million tons of climate pollution by adopting this strategy.

A recent Logistics Management report–Getting From “Me” to “We”: Creating a Shared Infrastructure for Product Distribution–dug deeply into this topic too. It shared several examples of how leading companies are implementing this strategy. The example that stood out to me involved CVS, Kimberly-Clark and Colgate.

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The Benefits of Stringent Trucking Standards

by Kate Rack, marketing & communications intern

The Obama Administration is developing new fuel economy standards for trucks, and last week, Ceres and Environmental Defense Fund hosted a webinar outlining how implementing strong federal standards for medium- and heavy-duty trucks would be truly a win-win situation.

Our organizations, along with other leaders, are calling for strong standards that cut fuel consumption by 40%. A recent analysis of such standards shows that they would reduce both greenhouse gas emission levels and expenses to ship goods via freight.

EDF helps freight logistics professionals on the journey to greener freight

Why make truck efficiency a priority?

Currently in the U.S., the trucking sector is the fastest growing single source of greenhouse gas emissions. U.S. businesses spend $650 billion a year on freight trucking services, which equates to over half a billion tons of GHG emissions. It is essential that as fuel efficiency standards for cars becomes more stringent, trucks follow suit, especially since 70% of tonnage shipped within the U.S is by truck. In particular, retail and consumer products are the largest consumers of trucking in the United States. Chances are, the computer screen that you are using right now to read this blog post was brought to you on a truck!

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Join EDF and Ceres Experts for “Truck Talk”

As July 4th fades away, grills cool down and the remains of fireworks are swept away, it’s time to roll up our sleeves and get back to work. In my case, I’m preparing for a webinar Ceres’ Carol Lee Rawn and I are holding this Wednesday, sharing the findings of our recent report on how strong medium- and heavy-duty truck standards would cut freight costs and emissions.

It’s a topic we’re both passionate about – and think you should be too —  and with good reason: U.S. businesses spend $650 billion a year on freight trucking services, which account for over half a billion tons of greenhouse gas (GHG) emissions a year, the fastest growing single source of GHG emissions. Fuel is the single largest cost of owning and operating a heavy-truck, accounting for 39% of total costs.

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Our report finds that new, bold fuel-efficiency and greenhouse gas standards for heavy-duty trucks could end up reducing the cost of moving freight by 7% and owners of tractor-trailer units could save $0.21/mile, an annual savings potential in excess of $25 billion given that class 8 trucks in the US logged 120 billion miles in 2013.

The Obama Administration is in the process of developing new fuel economy and GHG standards for medium- and heavy-duty trucks, and its determination will affect both your company’s freight costs and GHG emissions.  Join us on July 9th for this webinar, where we’ll walk through the savings associated with strong standards and how you can help ensure that stringent standards are adopted.

Register now for the webinar!

Save Your Company Costs: Support Stronger Truck Efficiency Standards!

New, bold fuel-efficiency and greenhouse gas standards for heavy-duty trucks could end up reducing the cost of moving freight by 7% and owners of tractor-trailer units could save $0.21/mile. These are among the key findings of a new report from EDF and Ceres.

The report, which is based on analysis by MJ Bradley and Associates, examines one potential technology pathway to achieve the stringency target of 40% over 2010 set forth by our groups and other advocates.

PrintFuel is the single largest cost of owning and operating a heavy-truck, accounts for 39% of total costs. Strong fuel efficiency standards will target these costs largely by requiring the use of cost-effective, fuel saving technologies. As the new analysis demonstrates, fuel savings will be significantly greater than increases in equipment costs.

A $0.21 per mile savings, for example, has an annual savings potential in excess of $25 billion given that class 8 trucks in the US logged 120 billion miles in 2013.

Our finding of significant financial benefits of strong fuel efficiency and GHG standards is consistent in magnitude with previous analysis. A recent report by the Consumer Federation of America looked at similar Phase 2 standards and found net savings of $250 to consumers, rising to $400 per household in 2035 as fuel prices and transportation services increase.

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6 MPG? We Can Do Much Better

Here’s something to think about next time you are stuck in traffic next to an 18-wheeler.

The average tractor-trailer can travel only six miles per gallon of diesel.

These heavy trucks travel a lot too; averaging more than 120,000 miles a year or 20 round trip drives between Boston and San Francisco.

Freight trucks are on the road for one primary purpose: to get goods to all of us. In fact 70% of U.S. freight tonnage is moved by tractor-trailer trucks. Over the coming years, demand for freight services is expected to grow even more. And this is driving up fuel consumption and greenhouse gas emissions.

Strong, new fuel efficiency and greenhouse gas standards for our nation’s heavy trucks are achievable, cost-effective and critical to cutting greenhouse emissions and fuel consumption – all while we continue to depend on trucks to deliver the goods we need and want.

It is possible and affordable for tractor trailer trucks to get nearly 11mpg by 2025.

EDF is calling on the Obama Administration to set new fuel efficiency and greenhouse gas standards for heavy trucks that cut fuel consumption by 40% compared to 2010 levels.

These standards would also apply for heavy-duty work trucks, such as box delivery trucks, bucket trucks, beverage delivery trucks and refuse trucks.

The infographic below highlights some of the technology available to meet bold standards as well as the significant cost, oil and emissions savings from such standards.

One fact that just jumps out at me is this: These standards will cut our oil consumption by 1.4 million barrels a day.

That sounds like a big number and it is. It’s a bit higher than the amount of oil we import daily from Saudi Arabia.

Bold fuel efficiency standards are good for our economy, environment and energy security.

They will also be good for trucking fleets too. These trucks will cost $30,000 less to fuel a year.

Strong fuel efficiency and greenhouse gas standards for heavy trucks are an important part of the President’s Climate Action Plan. EDF will continue to work towards strong standards through our unique combination of industry engagement, regulatory design expertise and technical know-how.

EDF Honored to Receive EPA SmartWay Affiliate Challenge Award

EDF has been a long-time supporter of the U.S. Environmental Protection Agency’s (EPA’s) SmartWay Program and we are proud to announce that tomorrow EPA will honor EDF with an Affiliate Challenge Award. This award not only recognizes our commitment to the program, but also our significant efforts to promote, advance, and strengthen SmartWay. The voluntary program is a public-private initiative that promotes freight sustainability through efficiency and fuel reductions. The program first began with a focus on reducing fuel consumption from long-haul trucks, and in 2011 was expanded to increase sustainability from the trucking sector operating around marine ports.

Over the course of its 10-year history, SmartWay Partners have saved 120.7 million barrels of oil. This is equivalent to taking over 10 million cars off the road for an entire year and has helped to protect the health and well-being of locals residing close to transportation hubs. Additionally, the SmartWay Program has reduced 51.6 million metric tons of carbon dioxide so far, which contributes to our nation’s economic and energy security. EDF is excited about these achievements and proud to support these clean air efforts.

Talking Green Freight

I recently had the opportunity to speak about leading corporate green freight practices on Talking Logistics—an online weekly talk show and blog. Talking Logistics is hosted by industry expert Adrian Gonzalez and is a venue for thought leaders and newsmakers to discuss the supply chain and logistics industry.

During this discussion, we spoke about the EDF 5 Principles for Greener Freight, the actions of large freight shippers, including Ocean Spray, Caterpillar, and Boise; and the importance of freight shippers adding their voice in support of strong truck efficiency standards.

You can watch the episode here:

Freight Sustainability Forum in Dallas Engages Leaders on Supply Chain Solutions

Developing tomorrow’s innovative sustainable supply chain strategies requires knowledge, collaborative spirit, and creative thinking. EDF is helping to integrate these elements into the transportation network by highlighting successful sustainability practices already employed by industry leaders.

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At a recent freight forum co-hosted by EDF, the Las Colinas Chamber of Commerce, and the U.S.-Mexico Chamber of Commerce, we learned about best practices for co-loading heavy and lightweight freight in a single container, funding opportunities available through the Diesel Emissions Reduction Act (DERA), and intermodal strategies in key corridors. The freight transportation stakeholders in attendance ranged from cargo owners with global supply chains to international logistics providers to regional business associations.

The overarching theme of the forum was that securing emissions reductions from freight transportation is achievable through operational changes, partnerships, funding availability, and technology improvements. While many within the freight transportation community know that opportunities exist to increase sustainability and efficiency within the supply chain, not everyone implements these best management practices. Whether you are a logistics provider in Mexico, a shipper based in Texas, a global carrier or another transportation stakeholder, you play an important role in greening our logistics.

EDF also plays an important role, with a long history of working with companies to help them find ways they can improve their supply chain sustainability and efficiency, with new partnerships kicking off in the coming months. This year, we are beginning a supply chain logistics pilot as part of our highly successful Climate Corps program. We are also working on a marine port environmental performance metrics program that will help recognize top performers and share best management practices to reduce emissions. Together, all of our efforts are helping improve efficiency, reduce emissions, save costs, and protect public health.

This forum served as a launchpad for great ideas and new programs and partnerships like Climate Corps logistics and port metrics. Next time, we can share your success story!