An interview with Jason Mathers, director of on-road vehicles for Environmental Defense Fund. EDF is a non-profit agency whose EDF+Business arm aims to align business success with environmental gains, helping implement best practices across industries.
Q: Jason, EDF’s overall mission is to drive beneficial behavior that will reduce and reverse damage to the earth’s climate, ocean, and to protect species, including humans. Please tell us why efficiency in truck delivery operations is important in this effort.
A: If you look at the big picture, as citizens and as individuals who breathe the air, efforts that we take today to improve air quality and reduce greenhouse gases help make our lives better. Further, savings on healthcare treatment and costs will help us all lead more productive, prosperous lives as well.
As far as freight transportation is concerned in particular, freight is a pretty significant source of greenhouse gas emissions – currently 7% of the total. It’s also responsible for a significant proportion of unhealthy particulate matter and noxious gases. Freight emissions have a disproportionate impact around railyards, ports, and highways, contributing to asthma, some types of cancer and thousands of premature deaths per year. And trucks account for the dominant share of all logistics-related greenhouse gas emissions — 57% compared to all other modes. Reducing truck emissions needs to be the priority for the industry.
But the good news is that there are things we can do about it! There are workable, cost-effective solutions to these problems.
Q: EDF launched a Green Freight initiative some years ago that really dug into how the freight industry could take practical, achievable, measurable steps towards improving its performance in this regard. Can you tell us about those?
A: Working with some major beneficial cargo owners, we came up with 5 Principles for Greener Freight. We took a really good look at practices that are effective for business strategy today. The first Principle is to get the most out of every move. Every stakeholder in freight services can benefit from that. We see strategies that make sure trucks are as productive as possible, as full as possible, and are routed as efficiently as possible as the starting point for making on-road freight as sustainable as possible. You achieve significant emissions reductions when you need fewer trucks to move the same amount of goods. That’s really the place to begin.
Another important item on the list is to demand cleaner trucks and equipment. This is only growing in importance as we start to see a whole new generation of equipment solutions emerging — electrification in particular. Regardless of where you are in the freight food chain, we’re encouraging folks to send a market signal that they support moving goods on the cleanest trucks available. What we hope that means for fleet owners is that you’re buying the most current, most fuel efficient vehicles, that are meeting or exceeding emissions standards for local air pollution. And you’re doing it because your customers prefer it. We’re seeing this with 3PLs. They’re touting their fuel-efficient, cleaner equipment as a competitive differentiator. Buyers of trucks and other delivery vehicles can get a ton of information about equipment from the EPA’s SmartWay program, for example.
Q: If I’m a private fleet operator, what can I do to make my truck delivery operations as clean and green as possible?
Design your network for efficiency! The way we see it, routing has two components. On the one hand, at the micro level, you have daily routing, where you’re asking: What’s the best route for this one load? But then there’s the really important macro level, where you’re looking at how goods are flowing in and out of your system, as well as where you’re placing your DCs and other critical infrastructure in ways that will minimize traffic miles and maximize productive moves. We’ve seen a lot of potential there to reduce costs and emissions.
Q: Are fleet owners really doing that?
A: Yes. A Great example is Walmart, which reduced its carbon footprint via fleet efficiency efforts. Between 2005 and 2015, they managed to double their fleet efficiency, measured by gallons burned per case move. Some of this was achieved by making the trucks themselves more efficient, but the majority of progress was done by better routing and loading, including at UK subsidiary Asda. They just get more product delivered per truck-mile. This is a crystal-clear example of the importance of routing efficiency. It’s about how Walmart is running the trucks and, in many ways, that’s more important today than what is on the trucks.
Q: Another of the 5 Principles is about seeking opportunities to collaborate. Where does better routing come into that?
A: We see lots of opportunities for collaborative freight, whether it’s shippers co-loading freight with freight heading for other destinations, or filling empty back hauls. All of those require good route planning to make them possible, and to deliver the best result for everyone involved. Sometimes, you can create an opportunity to pick up a back haul load just by diverting a truck a few miles. It’s harder to make that work without sophisticated routing.
Q: So going green is actually pretty easy! What are the barriers that stop fleet owners from doing so?
A: One key barrier is companies either not knowing where to start, or thinking they need to start with something that’s really hard. I think a lot of folks believe they’ll have to switch to trucks that use renewable fuel, for example. We do see those as important in the long-term, but that’s a hard place to start. Just embarking on the Green Freight journey by getting the most goods you can on one truck gives you a sense of accomplishment and momentum, and you start moving forward from there.
Q: Making routes as efficient as possible will achieve the same goal?
A: Yes, starting with optimizing routing and loads is what you can today, and you can do it with today’s equipment. You can also track it and see immediate benefits. That’s really important for building internal support and leadership for when you come to tackle more complex problems, around collaboration, for example. You can say: “Look, we already made improvements.” You can really get people excited about what you’re doing.
Q: Do you see a tendency for paying lip-service to sustainability in truck delivery operations without really making meaningful changes – what’s sometimes called greenwashing?
A: The push for service providers, include movers of freight, to tout their green credentials changes, depending on factors like the economy, job security and the price of gas. What we’re seeing play out is a progression toward more of a data-driven approach. In both the US and Europe, a lot of large companies are setting very specific, long-term greenhouse gas emissions reduction goals, even if they are ten or 15 years away. This includes some of the biggest US firms out there. They’re looking at how to find those reductions in supply chain operations. As this trend picks up momentum, I think we’ll start to see fleet owners being asked to demonstrate how they are going to help their customer achieve its publicly-stated goals. This data-driven approach is going to give a leg up to the service providers that are able to deliver the biggest real-world results for the greatest savings or least cost.
To be successful in helping their customers achieve emissions reductions, service providers need to invest in understanding their customers’ goals and challenges. The more you know your customers, the better you can help push them up to the next level of sustainability. Ideally, it’s about longer-term business value. If you move into a more efficient routing, that’s going to make your business relationships much more valuable. You’re also set to save millions of dollars, depending on size, over time.
Q: Oh that.
A: Yes, let’s not forget that fuel is money.
Paragon Software Systems has won several awards for its contributions to a more sustainable supply chain, including Food Logistics’ Top Green Providers five years in a row. Paragon recently enhanced its routing and scheduling software to address the potential challenges of planning routes for sustainable vehicles. EDF has put together a package of resources you can use to begin your Green Freight Journey, including a Green Freight Handbook.
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