Two of today’s greatest supply chain challenges are cost savings and sustainability. Greater fuel efficiency contributes to both. While the benefits of greater fuel efficiency are well-known, perhaps less known are some of the more basic ways to achieve these elusive savings while managing carbon emissions as well. Here are 10 of them:
1. Measure twice, order once.
Professional tailors and carpenters look to “measure twice, cut once.” This is all about order accuracy. Uncertainty causes excessive ordering and leads to unnecessary shipping, restaging and wasted fuel and transportation spending. Supply chain visibility and practiced demand planning can reduce this risk.
2. Optimize your shipment size.
It’s critical to manage inventory levels, and ship only what is needed. That said, one of the most effective ways to get the most out of each transportation dollar is to get the maximum weight and/or cubes on each shipment, within legal limits, of course. Increased weight on a shipment increases the fuel consumption for that shipment in absolute terms, but it also reduces the number of shipments in aggregate. Many shippers also increase their minimum order size.
3. Review your parcel/LTL/TL stop-off/TL criteria.
Regular review of the criteria you use to determine transportation mode often will yield savings, reduce fuel consumption and can improve service. The weight distinctions between parcel and less-than-truckload, for instance, are often more defined by your transportation provider than by specific weight guidelines. Many of the traditional assumptions about cost and efficiency need to be updated.
4. Increase your use of intermodal.
Taking shipments off the road and putting them on rail is fuel-efficient. Greater lead times facilitate the effective use of more efficient modes. Increasing your lead times also can provide a greater array of options for order consolidation, and prevents formal and informal expediting of shipments in the same mode. It also contributes to greater order accuracy, because production benefits from the extra time by meeting order, quantity and quality requirements more consistently.
5. Update your Transportation Management System/Practices.
Many of the steps listed above are routinely accomplished through an effective transportation management system. An effective transportation management system methodically drives out waste and improves efficiencies. With route optimization and yard management tools to reduce utilizing the nearest piece of equipment, you cut down on wasted miles and costly idle time.
6. Combine your inbound and outbound transportation.
This is one of the most effective ways to increase equipment utilization and eliminate empty miles. It allows you to use the closest available capacity and reduces miles in aggregate. It also facilitates the management of dock traffic, reducing dwell and idle time, and increases productivity. Further, it often allows customers to save money just by virtue of balancing demand and consolidating network purchasing power.
7. Reward carriers and drivers for fuel efficiency.
Many shippers would like to be able to use “fuel efficiency” as a criterion for awarding and tendering freight. Some also use SmartWay certification as a criterion with the same intent. A skilled and knowledgeable driver can make up to a 15 percent improvement in fuel economy just by monitoring speed, avoiding congestion and conserving fuel through judicious use of the equipment. Great technology also is available for improving fuel efficiency. Rewarding drivers and their companies through additional business or financial incentives can make a big impact on those people who have direct impact on fuel consumption.
8. Perform a comprehensive network analysis, including procurement sources.
Many companies are surprised when they first get their hands around the sources for procurement, especially when their vendors had been responsible for transportation. Inefficiencies seem inevitable when suppliers act independently or do not see the impact of their decisions. Further, the waste caused by sub-optimization can be staggering when network decisions are made on a decentralized basis or without a common information system. A network analysis “rakes all the leaves into one pile,” allowing a company to take a comprehensive view of its overall situation, then facilitates a strategic redesign to achieve efficiency, and establishes common metrics.
9. Become an U.S. EPA SmartWay® Transport partner.
The SmartWay® program is an easy way to distinguish who is serious about fuel conservation and emissions management. Becoming a SmartWay Transport Partner is the best way to support the program. Many companies use the SmartWay certification as a cornerstone of their transportation strategy because of its ability to create efficiencies in fuel usage, reduce carbon emissions and reinforce the wise use and care of our resources.
10. Remember the basics.
Tighten the connection between loading, unloading and appointment times to decrease dwell time, and improve signage and directions.
Idle trucks waste fuel. Adhering to appointment times and facilitating the use of spotted equipment reduces fuel consumption. Many companies have initiated “no idle” policies. This helps, but reducing the circumstances that lead to idle equipment is more effective. In addition, poorly marked lots and docks can be confusing to drivers, and once a truck gets into the wrong place, it takes awhile to get out. When you have efficient processes and driver-friendly practices for your shipping and receiving, it reduces fuel consumption and everyone benefits.