Shipping Gains

For transportation carriers, questions over emissions and environmental impact usually begin and end when vehicle engines shut down. That’s at the heart, in fact, of this week’s cover story, which focuses on the question of how vessels can meet their need for power at terminals while limiting their impact on surrounding communities.

For shippers, things aren’t as clear-cut as turning a switch on an off.

For them, the environmental impact cuts across the supply chain, taking in myriad decisions and actions aimed at getting goods to markets. And although the transportation share of the impact is the greatest, their concerns go beyond the basics of moving goods from here to there, and the issues raise major environmental and financial questions.

That’s why the report the Environmental Defense Fund issued last week, “Smart Moves,” was so significant: It focused on the efforts of shippers to reduce their environmental impact, and it smartly tied the actions up and down the supply chain to the financials that so many argue are critical to the success of carbon-reduction efforts.

The EDF stands out in that regard. It’s easy enough for transportation operators to shake their fists at some groups they believe would simply like to eliminate commercial transportation (and they may have a point, at least about some members of environmental groups). As EDF Health Scientist Elena Craft explained at the Retail Industry Leaders Association’s annual meeting in Dallas last week, however, the Fund prefers to work with industry participants to achieve its goals.

Now, that can make for some uncomfortable relationships, but it also can bring the EDF closer to supply chain decisions where it can find the biggest gains.

The EDF is hardly making excuses for shipping. “All told,” the report said, “the global freight transportation and distribution system accounts for nearly 3 billion metric tons of heat-trapping carbon emissions each year … Transportation accounts for 89 percent of the environmental footprint of supply chain logistics; warehousing and distribution take up the remaining 11 percent.”

The group said emissions from freight are projected to increase 74 percent from 2005 to 2035. China, meanwhile, will increase its use of freight transportation fuels by more than 320 percent from 2008 to 2035.

But shippers are taking action, and they’re getting financial wins from their efforts.

The EDF notes several success stories in its report. Stonyfield Farm, for instance, “has cut costs by $7.5 million and reduced its net emissions 46 percent while still growing its business. Network changes, mode shifts and asset utilization are all part of the comprehensive strategy,” the EDF said.

SC Johnson cut its annual fuel consumption by more than 160,000 gallons, according to the report, in part because of better fleet utilization. That’s a fairly broad description, but supply chain managers will find the tactics behind that utilization improvement keenly interesting — a more sophisticated mix of products by weight, size and density is behind it.

Those kind of gains are out there, and shippers are looking for ways to translate the broad goals of environmental efforts into real operational results. Cooperation between those seeking the environmental gains and those who need the financial results makes great sense.

Paul Page is executive director of The Journal of Commerce. He can be contacted at 202-355-1170, or at ppage@joc.com. Follow Paul Page on Twitter, www.twitter.com/paulpage.

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