Running vehicles, shifting stock, or maintaining storage conditions inevitably burns fuel at some point. But customers are increasingly concerned with the environmental impact of their supply chains, and the government has set aggressive targets in schemes such as the mandatory carbon reduction commitment energy efficiency scheme. So whether it’s motivated by targets, cost savings or the well being of the environment and your fellow man, cuts must be made.
Logistics operators, property developers and materials handling suppliers all agree that to reduce your carbon footprint you must first know your size.
“The first action is to have a measuring system in place so that you really know what your carbon footprint is,” says Daniel Berry, vice president of sustainability and general counsel, CHEP EMEA. “Once you know what that is, you can start to focus on areas where you can really make a difference. We have established weekly monitoring”
Whether you use your bills as a guide, or more elaborate software and telematics to assess your emissions it can be challenging to work out exactly what needs to be included, how far along the supply chain you should look, and how precise measurements need to be to assess your firm’s emissions.
Peter Harris, sustainability director for UPS Europe, Middle East and Africa says: “It is difficult to do accurately, but approximations are better than nothing. There’s no point going towards a solution without understanding the problem.”
Obviously solutions are the all-important next step. Analysing your particular operation and costs is key to finding the best strategy for cutting emissions intelligently.
Many will identify with the financial incentive associated with cutting emissions by saving fuel. “Right here, right now, it’s about fuel management: driver training, telematics, routeing, efficient use of vehicles,” says Jim York, head of DHL’s Go Green initiative across supply chain EMEA.
DHL has been working on aerodynamic trucks since the 1980s and recently invested £5.5 million in 250 teardrop trailers from Don Bur. Depending on driving style and road conditions the teardrop design has been reported to save some 16 per cent on fuel costs.
Wincanton also turned to Don Bur to design and manufacture a 15.65m long teardrop pillar-less tri-axle trailer for the trial of high volume trailers which the Department for Transport reckons could cut up to 180 million lorry miles a year.
UPS has some 2,500 vehicles running on new fuels globally including bio-methane trucks in the UK. It is using hybrid and electric, zero emissions vehicles to run its massive operation with the London 2012 Olympic games, which Harris says the firm is treating as “rolling laboratories” to inform its future investments.
Chilled logistics firm NFT runs its main fleet on a blend of ultra low sulphur diesel and ten per cent bio-fuel, and it has invested £1 million in ten dual fuel trucks trialling liquefied natural gas, with rollout for another 25 planned. It has also designed double deck trailers specifically for its work with Marks & Spencer which has reduced road miles on its contract to deliver sandwiches by 30 per cent.
Norbert Dentressangle has trialled hybrid 19 tonne Renault lorries in France, which combine a diesel engine with an electric motor. The electric motor powers the vehicle from 0 to 12 mph before the engine kicks in, a process which uses considerably less fuel.
Parliamentary under secretary of state for transport, Mike Penning visited Howard Tenens’ South Ockendon site last month to view one of its three gas refuelling sites. The firm is rolling out gas and diesel dual fuel vehicles across its HGV fleet, and has constructed stations to supply compressed natural gas at Andover, Boston and South Ockendon.
Perhaps in the spirit of collaboration Howard Tenens has opened the refuelling sites up to other hauliers. A tidy way of making money from supplying its competitors, at the same time as encouraging more environmentally friendly running throughout the industry.
Truck manufacturers are also exploring all options including collaboration. Scania and MAN are co-operating on research for hybrid components for heavy trucks.
Last year Volvo launched its FM Methane Diesel which is powered by up to 75 per cent gas. And Volvo’s FE Hybrid can cut fuel and carbon dioxide emissions by between 15 and 20 per cent for heavy trucks, with fuel savings of up to 30 per cent from using the electric compactor on its hybrid refuse trucks.
Iveco’s Eurocargo truck is also available as a hybrid, with 16-valve, four-cylinder EEV diesel engine working in combination with a 60 hp electric motor-generator.
Materials handling equipment has focused on fuel efficiency, but Jungheinrich has launched its lithium-ion powered pallet truck which was trialled and rolled out by Tesco last year, and Toyota is trialling a range of lithium ion equipment with Sainsbury’s.
In the shorter term, UPS reckons carbon offsetting is difficult to beat on value for money. “To take a similar amount of carbon out of the atmosphere through alternatives costs a lot more,” says Harris. Its corporate treasury group in the US investigates projects around the world with “additionality” where investment will genuinely cut net emission beyond anything that could have been enacted without the investment.
UPS uses two independent auditing companies to validate its offsetting programmes, because Harris says “offsetting has lost credibility in the past so we’re very keen to support reliable and audited mitigation.”
But some of the most lucrative initiatives can be the most basic. Carl Muir, general manager at Clipper’s Leeds and Darlington sites is an advocate of staff engagement, citing it as bringing about the biggest benefits for its emissions levels.
At CHEP investment in infrastructure has gone hand in hand with involving its staff by using newsletters, shift briefings, notice boards, induction sheets and training. “One important step was to make individuals responsible for measuring and targeting improvements,” says Berry.
York points out that DHL’s focus on fuel savings just wouldn’t work if the people didn’t engage with its goals. For example its driver training scheme has been at the heart of its fuel economy drive. “Employee engagement is absolutely crucial for affecting targets, and is absolutely priceless in its own right,” he said.
Being “priceless” is significant if not vital for DHL where all schemes must make a convincing business case. It is not investing heavily in new fuels and alternative power sources because of the expense. York says: “We don’t get satisfactory pay back as yet.. Everything we’ve implemented so far has been cost neutral or better.”
Harris agrees that at UPS it is not the right time for alternative technologies, but gives a very strategic view: “It is fundamentally wrong to go to alternative technologies before you’ve addressed modes and efficiency.”
He is adamant that a tactical evaluation of the whole supply chain is necessary for the best reductions of road miles and emissions. Comparing the carbon outputs from road, air, rail and sea has been revealing and instructive for UPS: “Modal shift is our number one priority for the future.”
Barloworld provides supply chain software to calculate and consult on carbon footprints, reducing emissions by 28 per cent in some operations. But it also reckons that 80 per cent of possible savings are only achievable at the design stage.
Jane Gorick, managing director of LPR also advocates a more strategic approach, particularly for collaboration. LPR’s project with Norbert Dentressangle has cut back on empty running by sharing responsibility for maintaining and returning pallets which are collected on the back of vehicles delivering goods in. She says: “Brands and suppliers must start working together far more closely if we are to take advantage of benefits such as cost savings, reduced transport movements, carbon emissions and fuel consumption.”
The range and combinations of initiatives being taken up show that for diverse businesses there is a common focus on the environmental and financial savings to be made. The logistics industry is finding that effective investments don’t have to cost the earth, but ignoring your carbon footprint certainly will.
Case Study: The rail way to cutting emissions
The Birmingham Intermodal Freight Terminal at IM Properties’ Birch Coppice business park is reducing carbon footprints by tackling road miles.
The terminal is operated by Roadways Containers Logistics, which has found that usage of BIFT has increased steadily since it opened in 2007. It says that now nearly every Birch Coppice occupier taking advantage of the service.
Five train services now run per day compared with two in 2007, and an estimated 100,000 containers will pass through the terminal this year compared with 26,000 in 2007. The 30-wagon trains currently used will soon be increased to 35 wagon trains, in line with growth of the scheme.
David Turner, terminal operations manager at BIFT, said demand was soaring as clients recognised the benefits of rail freight. “Our largest revenue stream is from haulage but we add value and service for our customers by use the benefits of rail and inland operations.
“Rail freight is not only more cost effective and efficient for the distance trunk move from the port, it also delivers environmental benefits to the supply chain, including reducing congestion on roads, conserving energy and reducing carbon footprint – department for transport research shows that rail produces 70 per cent less carbon dioxide than road transport.”
Birch Coppice tenant Euro Car Parts is the site’s most frequent BIFT user. Logistics and business development director Stephen Horne said: “We currently receive an average of three to five deliveries per day from the rail head and next year this will increase to five to seven per day six days per week.
“Given the vast quantities of stock being delivered from our European suppliers, which is set to increase in 2012 and beyond, BIFT has proved extremely beneficial and efficient to all. Given current fuel costs and the uncertainty about energy sources, rail is certainly efficient and is vital to the future economic well-being.”
Warehouse: Opportunities in the warehouse
Fuel from the pump is not the only power source that costs. The electricity that runs equipment and warehouses is all ultimately costing money and producing pollution somewhere.
Re-cladding or re-glazing a warehouse may seem expensive, but with rental periods increasing – some sheds going for 25 years – even slower ROIs can make a real difference.
Dale Fiddy, sales and marketing director of NFT says: “Simply switching to energy efficient lighting is a long-term cost effective measure and there is really no excuse not to make the change.
“Granted there are significant set-up costs, but over the past year we have saved around £60,000 by switching to energy efficient lighting,” he says.
NFT has installed T5 fluorescent lights at its St Albans, Daventry and Middleton facilities. These are fitted with motion sensors which dim lights when there’s no activity nearby, and reduce energy consumption by some 75 per cent.
Switching to an automated warehouse can also be a route to energy savings, with active power management systems, and modules that recover energy from braking and acceleration of automated storage a retrieval machines.
TGW reckons this can recoup 20 per cent of spent energy, and that its Mustang Evolution series uses less energy because it’s around 25 per cent lighter than other retrieval machines.
Phil Steeds, sales director of TGW, also points out the other energy dividend of an automated warehouse: “Unlike people, machines don’t mind working in the cold and dark.”
The shortage of prime warehouse space also has a knock on effect on emissions, and the energy inefficiency of some older stock is a real turn off for occupiers.
Jason Jasper, project manager at IM Properties says: “Many businesses continue to operate in buildings that simply do not suit their needs, leading to inefficient methods of working.
“ As a developer, the best way to reduce a property’s carbon footprint is to create a bespoke scheme. From design through to construction our teams work closely with the occupiers to understand their fit out and operational requirements,” says Jasper.
Developers are now able to measure, reduce and mitigate the carbon emissions embodied in the materials and construction of new buildings.
New build schemes can also include zero and low carbon technology such as solar panels, biomass boilers, rainwater harvesting, low energy lighting and CHP that ProLogis used at Sainsbury’s food distribution centre at ProLogis Park Pineham, which uses heat generated from producing electricity.
Gazeley has fitted “solar walls” in buildings across Europe and China, and used ETFE roof lights on its building at Chatterley Valley.
These are designed to prevent night time light pollution from the building, while reducing air leakage and increasing insulation. The material is also completely recyclable at the end of the building’s life.
Case Study: Building bodies around carbon reduction
Bullwell Trailer Solutions, which maintains and repairs trailers, has invested nearly £1.5 million in its environmental agenda in the past 12 months, and has organised the way it does business around carbon emissions.
Managing director Gary Bulley says: “Bullwell has looked at the way in which we manage our supply chains, the way we travel, and finding alternatives to needing to travel at all,” he says.
“A difficult task you might say when we operate in the transport and freight industry so the alternative is ensuring those vehicles which emit the lowest CO2 emissions cover the most miles.”
A key method by which it avoids emissions, is that it doesn’t require all trailers to come to its site. It has 50 mobile engineers across the UK, which reduces the carbon emissions incurred from a typical trailer service journey by 95 per cent.
Compared to how many miles it takes HGVs to use 100 litres of fuel, and produce 266kg of carbon dioxide, its mobile service uses around five litres, creating only 13kg of carbon dioxide.
The firm also opened an authorised testing facility at its Lichfield headquarters.
This has eradicated the need for vehicles to travel to the VOSA centre at Garrets Green, an 80 mile round trip away, which the firm estimates saves 33 litres of fuel, and around 88 kilos of carbon dioxide emissions per HGV.
Bullwell reckons this move will eliminate some 1,776,000kgs of carbon emissions from the atmosphere per year.
Bullwell has also invested in PDAs for all its engineers, in a bid to cut paper waste, and £15,000 on making its vehicles energy and carbon-efficient.
“Reducing movement of the HGV trailers we maintain creates the most practical and economical solution for trailer repairs, maintenance and testing, while vastly reducing our carbon footprint and that of our customers.”
Logistics Manager, January 2012