Transporting GREEN to Your Bottom Line

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Transporting GREEN to Your Bottom Line

  1. 1. Transporting GREEN to Your Bottom Line Justin M Hall – Director of Sales & Integration Logistics Planning Services – KeyFreight ®
  2. 2. Hi...Find me for helpful tips for attaining Sustainability Nirvana!
  3. 3. Transporting GREEN to Your Bottom Line <ul><li>More sustainable business model/ legacy </li></ul><ul><li>Motivated, engaged employees </li></ul><ul><li>Competitive advantage/ differentiation </li></ul><ul><li>Increased customer loyalty </li></ul><ul><li>Increased profitability </li></ul><ul><li>Enhanced reputation </li></ul><ul><li>Long-term benefits to the global environment </li></ul><ul><li>and your bottom-line </li></ul>Page  Logistics and Supply Chain Managers can innovate , comply , and benefit from going Green IF they believe in the ‘ Why’
  4. 4. Transporting GREEN to Your Bottom Line <ul><li>“ The old view that environmentally sound practices are the enemy of profit is outdated” </li></ul><ul><ul><li>Staples </li></ul></ul><ul><li>“ Shippers & Service Providers are embracing Sustainability” </li></ul><ul><ul><li>AMR Research </li></ul></ul><ul><li>“ Some of the world’s largest shippers are counting the savings in energy costs in the billions of dollars” </li></ul><ul><ul><li>Traffic World </li></ul></ul><ul><li>“ I don’t think this can afford to be a fad...going “green” has provided a pretty good financial return!” </li></ul><ul><ul><li>Dow Chemical </li></ul></ul>Page 
  5. 5. Transporting GREEN to Your Bottom Line Page  2009 Attendees Sustainable Supply Chain Summit
  6. 6. Transporting GREEN to Your Bottom Line <ul><li>Dow Chemical </li></ul><ul><ul><li>Between ’95 & ’05 the company saved $3 Billion by reformulating it’s packaging techniques </li></ul></ul><ul><li>Wal-Mart </li></ul><ul><ul><li>Estimates it will save $3.4 Billion by having Suppliers cut packaging materials by just 5% </li></ul></ul><ul><ul><li>It will reduce 667,000 metric tons of carbon dioxide...which is equivalent to taking 213,000 trucks off the road each year </li></ul></ul><ul><li>Staples </li></ul><ul><ul><li>Reduce carbon emissions by 7% from 2001 levels by 2010 </li></ul></ul><ul><ul><li>Installed governors to cap Truck speeds at 60mph thus cutting fuel costs by 25% or between 500,000-750,000 gallons </li></ul></ul>Page 
  7. 7. “ What gets MEASURED gets MANAGED” Page  What scorecards are you keeping on your Vendors packaging & Shipping processes? . Are you promoting both Carbon & Cost cutting initiatives across your enterprises? Look for ideas in today’s presentation What are your freight management partners doing to award & promote Eco-Friendly Carriers? Do your preferred Carriers have a corporate Green initiatives, are they a SmartWay carrier & are they showing proven results? VENDORS LLP/3PL YOUR FIRM CARRIERS AGENDA
  8. 8. Transporting GREEN to Your Bottom Line <ul><li>What do over 35 BILLION Gallons of Diesel Per Year equal? </li></ul><ul><li>= Current Combined U.S. Truck and Rail Freight Consumption </li></ul><ul><li>= 350 Million Metric Tons of CO2 Emissions Annually </li></ul><ul><li>= Emissions of Approximately 70 Million Cars </li></ul><ul><li>= Consumption by 2012 = 45 Billion Gallons Per Year ! </li></ul>Page 
  9. 9. Transporting GREEN to Your Bottom Line <ul><li>Carriers with strong commitment to Green fleet management ... </li></ul><ul><li>Combining operations and technology to save fuel by reducing loads and empty miles </li></ul><ul><li>Collaboration among suppliers and customers for backhauls & dwell time reductions </li></ul><ul><li>Developing new designs for more efficient trucks that include “bolt-ons” that can be added in the aftermarket to save up to 25% fuel (Wal-Mart) </li></ul><ul><li>Measuring energy use and emissions by ships, containers, ports, aircraft and warehouses </li></ul><ul><li>Improved waste reduction and disposal </li></ul><ul><li>Reporting on their actions in annual reports </li></ul><ul><li>Naming Chief Sustainability Officers </li></ul>Page 
  10. 10. Case Study: Small Changes Deliver Big Results <ul><li>In 2008, both Con-way Freight and Con-way Truckload turned back their fleets’ speed governors, lowering maximum speeds. </li></ul><ul><ul><li>Con-way Freight: 65 to 62 mph </li></ul></ul><ul><ul><li>Con-way Truckload: 70 to 65 mph </li></ul></ul><ul><li>Expected annual results from reduced speeds: </li></ul><ul><li>Fuel savings of 6 million gallons </li></ul><ul><li>Carbon emissions reduction of 134 million pounds </li></ul><ul><li>The equivalent of removing 13,600 passenger cars from America’s highways </li></ul><ul><li>Low profile tires improve rolling resistance and reduce weight </li></ul><ul><li>Idling monitors set to 3 minutes </li></ul><ul><li>Trailer weight reduced </li></ul>Page 
  11. 11. Case Study: FedEx names C.S.O! <ul><li>Chief Sustainability Officer – Mitch Jackson </li></ul><ul><ul><li>Key facts from ’08 Global citizen report in FedEx annual shareholder report </li></ul></ul><ul><ul><li>Key steps to reducing: fuel spend, CO2 emissions and reliance on foreign oil </li></ul></ul><ul><li>Became charter member of SmartWay </li></ul><ul><li>Improved route-plans by 15% = 45M gallons of fuel = 450K metric tons of CO 2 emissions </li></ul><ul><li>Convert 727s to 747s = Air CO 2 by 47% & Costs </li></ul><ul><li>Engaged customers to ‘air’ shipping and ‘ground’ shipping </li></ul>Page 
  12. 12. Transporting GREEN to Your Bottom Line Page  Most initiatives in transportation and logistics are based upon efficient operations, and should be done whether there are green benefits or not...
  13. 13. “ What gets MEASURED gets MANAGED” Page  What scorecards are you keeping on your Vendors packaging & Shipping processes? . Are you promoting both Carbon & Cost cutting initiatives across your enterprises? Look for ideas in today’s presentation What are your freight management partners doing to award & promote Eco-Friendly Carriers? Do your preferred Carriers have a corporate Green initiatives, are they a SmartWay carrier & are they showing proven results? VENDORS LLP/3PL YOUR FIRM CARRIERS AGENDA
  14. 14. Transporting GREEN to Your Bottom Line <ul><li>...a bill before Congress...to allow six- axle trailers capable of GVW of 97,600 lbs.  </li></ul><ul><li>This could take 400,000 trucks off the road in the gypsum industry alone each year.  </li></ul><ul><li>Canada has 110K Gross Vehicle Weight limits; Mexico has 106K GVW and Norway just approved 120K GVW .  </li></ul><ul><li>Its about improving productivity; less fuel consumption ; less congestion and one way of helping to deal with driver shortages another hot topic here at TIA.  </li></ul><ul><li>The industry is projecting driver shortage issues as soon as the economy swings in 2010 .  </li></ul>Page  Did you know?
  15. 15. Transporting GREEN to Your Bottom Line <ul><li>In 2004, EPA launched SmartWay </li></ul><ul><li>Any company that ships or receives items delivered by truck or rail transport is eligible to participate in SmartWay as a Shipper Partner. </li></ul><ul><li>What does the SmartWay brand identify? </li></ul><ul><ul><li>The SmartWay brand signifies a partnership among government, business and consumers to protect our environment, reduce fuel consumption, and improve our air quality for future generations.  </li></ul></ul>Page  Important site: www.epa.gov/smartway
  16. 16. Transporting GREEN to Your Bottom Line <ul><li>Contract and promote SmartWay approved carriers </li></ul><ul><ul><li>These carriers are committed to investing in clean burning engines </li></ul></ul><ul><ul><li>Driving 60mph to lower consumption </li></ul></ul><ul><ul><li>Add wind reduction flaring on trailers </li></ul></ul><ul><li>Flag SmartWay carriers on their TMS system or Vendor Routing guides </li></ul><ul><li>Commit to increasing their managed spend with SmartWay carriers by 10% annually </li></ul><ul><li>Add SmartWay requirements to your turnkey project RFPs </li></ul>Page  Set expectations for your LLP/3PL to...
  17. 17. Transporting GREEN to Your Bottom Line <ul><li>Predict and plan for environmental regulation compliance </li></ul><ul><li>Find the best way to measure and reduce your logistics carbon footprint </li></ul><ul><li>Reduce your supply chain’s vulnerability to the availability and price of oil </li></ul><ul><li>Work with carriers to increase fuel mileage dramatically and clean up truck emissions </li></ul><ul><li>Find the intermodal shipping solutions that are right for your distribution needs </li></ul><ul><li>Learn how to market yourself as green and avoid accusations of green-washing </li></ul><ul><li>Improve brand reputation and build investor interest </li></ul>Page  Your LLP/3PL can help to...
  18. 18. “ What gets MEASURED gets MANAGED” Page  What scorecards are you keeping on your Vendors packaging & Shipping processes? . Are you promoting both Carbon & Cost cutting initiatives across your enterprises? Look for ideas in today’s presentation What are your freight management partners doing to award & promote Eco-Friendly Carriers? Do your preferred Carriers have a corporate Green initiatives, are they a SmartWay carrier & are they showing proven results? VENDORS LLP/3PL YOUR FIRM CARRIERS AGENDA
  19. 19. Transporting GREEN to Your Bottom Line Page  A.T. Kearney/ISM Study <ul><li>Survey of Companies that will change supplier sustainability requirements </li></ul>
  20. 20. Transporting GREEN to Your Bottom Line <ul><li>Are your Vendors ‘SmartWay’ members ? </li></ul><ul><li>Will they commit to ship and receive your purchased goods using SmartWay certified Carriers, Logistics Providers & Brokers ? </li></ul><ul><li>Enforcing No-idling policies at docks? </li></ul><ul><li>Use a combination of truck and locomotive transport to ship your goods? </li></ul><ul><li>Commit to improve your environmental scores over a period of three years? </li></ul>Page 
  21. 21. “ What gets MEASURED gets MANAGED” Page  What scorecards are you keeping on your Vendors packaging & Shipping processes? . Are you promoting both Carbon & Cost cutting initiatives across your enterprises? Look for ideas in today’s presentation What are your freight management partners doing to award & promote Eco-Friendly Carriers? Do your preferred Carriers have a corporate Green initiatives, are they a SmartWay carrier & are they showing proven results? VENDORS LLP/3PL YOUR FIRM CARRIERS AGENDA
  22. 22. 13 Strategies to reduce Contamination, Congestion & Costs! <ul><li>Better purchase planning amongst Buyers = consolidate non-regional supplier LTL into full TL </li></ul><ul><li>Utilize Partial Truckload options to consolidate with half-empty carriers vs. buying a full trailer </li></ul><ul><li>Leverage NA Rail & Barge network for Poles/Cable/Steel/Blades... </li></ul><ul><li>Leverage Rail & Barge network for Bulk product : Coal, Limestone & Chemicals </li></ul><ul><li>Utilize Intermodal for supplier freight over 1000 miles away </li></ul><ul><li>Save Trees and Time by paying invoices via EDI </li></ul>Page 
  23. 23. 13 Strategies to reduce Contamination, Congestion & Costs! <ul><li>Look at your internal fleet ! How well are you maximizing load plans on your assets...do you have flatbeds driving down the road with 2 skids on back? </li></ul><ul><li>Create a cross-dock operation that allows for more predictable deliveries to eliminate Tractor idling at congested delivery sites. </li></ul><ul><li>Does your LLP/3PL have any Nursery customers ?? </li></ul><ul><ul><li>ComEd netted $2 million annually by making and selling tree mulch instead of sending the tree limbs to landfills </li></ul></ul>Page 
  24. 24. 13 Strategies to reduce Contamination, Congestion & Costs! <ul><li>Supplement internal fleet with a dedicated operation performed by 'For Hire' carriers.  </li></ul><ul><ul><li>AAA Cooper deploys their P&D Fleet to run resupply routes for Alabama Power after these trucks come in off the streets in late afternoon.  This effectively allows that asset to be used much more productively and allocates the operating costs over double the activity.  Cuts costs; reduces congestion </li></ul></ul><ul><li>Run cross dock operations to Consolidate multiple carrier deliveries at one carrier dock and deliver out to plants to eliminate multiple receiving operations; reduces gate activity; reduces security risks ; etc </li></ul><ul><li>The LPS display in the exhibit hall with Dibble tractor: 2009 bio-diesel and new redesigned CRDM delivery trailer that has 25% greater capacity for greater productivity; new safety features on radio-active contamination;  reduced delivery costs and reduced emissions </li></ul><ul><li>See next page... </li></ul>Page 
  25. 25. 13. How many sheets of paper = 1 Tree? <ul><li>  Conservatree.com puts the value at 16.67 reams/tree or 8,333 sheets. </li></ul><ul><li>Using our 2008 Utility freight figures LPS processed: </li></ul><ul><ul><li>EDI = 1,105,892 </li></ul></ul><ul><ul><li>Paper = 264,907 </li></ul></ul><ul><ul><li>Total = 1,370,799 </li></ul></ul><ul><li>As we move to our new data entry processor with an estimated 95% of our shipments to process via EDI, this breakdown would be: </li></ul><ul><ul><li>EDI = 1,247,409 </li></ul></ul><ul><ul><li>Paper = 60,390 </li></ul></ul><ul><ul><li>Total = 1,370,799 </li></ul></ul><ul><li>At our current EDI volumes for 2008, LPS saved 265 trees. </li></ul><ul><ul><li>(1,105,892 x 2) / 8333 </li></ul></ul>Page 
  26. 26. Page  We would be happy to help. Do You Have Any Questions? ? ? ?

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