Supply Chain
Green Freight for a More Sustainable Supply Chain:
Accelerate Performance and Declare a Goal

For great sports teams, the big win marks a beginning, not an end. It whets their appetite for excellence, and more wins.

So it is with companies who’ve had success in meeting sustainability targets through greener freight transportation strategies. Early wins trigger a planned effort, with dedicated resources, to uncover more opportunities. It’s a pattern we’ve seen time and again at brands that have made green freight a linchpin of CSR efforts – the green freight heroes.

Freight accounts for 16 percent of corporate-driven climate pollution, so there’s no shortage of impactful opportunities. The challenge comes in assessing the priority projects and maintaining a focus on continuous improvement.

Accelerate Performance

Once brands have defined their freight sustainability objective and completed a successful pilot project, the next step in the Green Freight Journey is to accelerate performance. Three actions help here.

First, you need to give your company’s green freight efforts a clear structure. Assign team members and recognize their efforts as part of their performance evaluations. Procedures should be established for sharing green freight results throughout the organization and soliciting new ideas.

Next, it’s time to scale the strategies demonstrated in your successful pilot projects. For example, Ocean Spray increased its use of intermodal after demonstrating the cost and emissions savings of switching from truck to rail in one freight lane.

Finally, accelerating performance requires identification of new opportunities. Given the complexity of corporate logistics, focusing in on the next round of projects can be daunting, but it doesn’t have to be. By answering a series of simple questions about your own freight program, you can zero in on the prime causes of freight inefficiency and excess emissions. Sort of like a Web MD for freight. One example: “What percent of long-haul truck runs are over 500 miles?” The answer may signal an opportunity to shift from truck to rail transport, which is 3.5 times more fuel-efficient.

The EDF Green Freight Handbook includes a self-diagnosis tool that provides a good starting point for selecting the projects that will achieve the greatest environmental benefit in the least amount of time. The tool is based on five core strategies, which form the foundation of most successful green freight programs.

1. Get the most out of every movePut simply, loading more products into a trailer, box car or ocean container reduces the number of required freight runs. Transportation pros refer to this as the “freight load factor.” Every company has an opportunity to do better here.

SC Johnson found it could improve truck utilization by combining different weights and sizes of various products. For example, the company combined its Ziploc brand products, which are light but require a significant among of truck space, with its heavier Windex glass cleaner to better utilize all the space in the trailer. 2. Choose the most cost-efficient modeIf your goal is to reduce freight-related emissions, then mode choice matters – a lot (Check out the accompanying graphic on the carbon efficiency of various freight modes). Typically, the most carbon-intensive modes are the most expensive, so mode-switching can drive eye-opening savings.

Colgate and Kimberly-Clark worked with CVS to combine loads shipping to the drug store chain. Before the pilot, both companies shipped independently to CVS and each had excess trailer capacity. By co-loading their inbound freight, Colgate and Kimberly-Clark were able to reduce overall truck trips, lower emissions, improve forecasting, and increase business value to the tune of 7 percent lower inventory and 2 percent fewer out-of-stocks. 2. Redesign your logistics networkAt some point, companies analyze their customers and shipment volumes to determine where distribution warehouses should be in order to minimize freight costs and truck miles. But customers change a whole lot faster than distribution networks, so these networks become dated and highly inefficient. For these older networks, optimization studies can lead to a dramatic decrease in freight miles and costs. 3. Demand cleaner equipmentMost brands do not have their own fleet of trucks, but these companies still have a vital role to play in getting more efficient, cleaner-burning trucks on the road. Doing so is crucial to the long-term ability of brands to reduce freight emissions.

One way brands can send a market signal for cleaner trucks is by joining the EPA SmartWay program and setting a purchasing preference for SmartWay-member carriers. Another way is to work with carriers on creative business arrangements that enable the purchase of cleaner equipment. For instance, Lowes, Target, Home Depot and several other companies worked with EDF and the U.S. EPA to create the EPA SmartWay Drayage program, through which private sector investment is generated to deploy clean technology and improve the environmental quality around our nation’s port communities.

Declare a Goal

Once brands have accelerated green freight efforts beyond initial pilots, they can lay the foundation for long-term success by declaring an aggressive, multi-year environmental improvement goal. Set your goal beyond currently defined areas of improvement to spark innovation and create new paths to progress. Setting goals encourages a long-term focus on improvement, leading to buy-in for more impactful projects that require upfront investments.

A growing number of leading companies are setting performance-based climate reduction goals for logistics. In addition to HP and Cummins, which we profiled earlier in this series, Anheuser-Busch recently set a goal to reduce greenhouse gases from its global logistics operations by 15 percent per hectoliter sold. The broad-scope goal embraces inbound and outbound transportation, as well as warehousing. These companies, and others who have made visible, public commitments, are leading the way in green freight.

Tapping the Full Potential of Green Freight

For brands that have not yet focused on freight operations as a key component of sustainability programs, green freight strategies may be among the ripest fruit in the orchard. CSR teams are waking up to the potential of green freight to move the needle on sustainability objectives with relatively little capital investment. The most successful brands have made freight operations a pillar of their sustainability platforms with publicly stated goals and regular reporting.