Sustaining

Sustaining

Copyright 2007, Traffic World, Inc.

The trucking executive across from us looked concerned and that''s understandable given that the topic was the environment and the trucking executive operates, well, trucks.

The environment isn''t high up on the list of top conversation topics for most business executives, and it''s certainly not a favorite for most transportation officials.

But this executive had brought up the country''s growing environmental concern along with the basic question that it posed for his company: Yes, he could cut back on carbon emissions, but he really could only go so far without taking trucks off the road. And it was very unlikely that he could recover the costs of greater energy efficiency in any case.

This executive is under pressure to get more environmentally friendly, he said in an off-the-record chat, but is that going to come at the cost of his livelihood?

It''s a question central to the growing attention to the supply chain and the environment.

Called sustainability in today''s business circles, the attention to the environment in industry in 2007 is built around the goal of keeping business carbon neutral. For shippers, as this week''s cover story by Associate Editor William Hoffman points out, the savings on carbon often come along with savings on basic costs.

Dow Chemical, for instance, can count energy savings in the billions of dollars when it adds savings on transportation to the savings from improved, stingier packaging. Dow''s effort shows how energy costs come at shippers from many directions. Beyond the basic use of fuel in transportation, the rising costs of oil have made clear that the plastics and packaging that are part and, well, parcel of shipping consume huge amounts of oil.

Wal-Mart will take 213,000 trucks off the road next year if its goal of cutting back packaging 5 percent is successful, and it already suggests enormous savings in ocean transport.

As Larry Lapide, research director at MIT''s logistics program, told last year''s Council of Supply Chain Management Professionals annual meeting, "Cheap oil has permeated all aspects of supply chains."

While shippers are saving, however, the savings may come at a cost to carriers.

Many are looking at operating changes such as limitations on idling for trucks and trains and better use of air navigation systems for airlines. Those aren''t easy gains, however - the United States and the European Union remain locked in a dispute over Europe''s demands for airline industry carbon limitations.

And many shippers and carriers are working together on route optimization strategies and using new generations of software transportation management software that incorporate energy efficiency into calculations.

But if you are a transportation executive, it''s hard to set aside the idea that Wal-Mart is going to take many thousands of trucks off the road. For carriers to make real gains on emissions, they''ll have to work closely with shippers and look at ways both can share in the savings so that both, at least, can breathe a little easier.