Shippers showcase supply chain emission savings

Shippers are using new technology and smarter logistics to achieve previously unattainable financial and carbon savings, according to a major new report.

Decisions on where products are made and stored, how they are designed and packaged, and how much time is allotted for transit have a tremendous impact on carbon efficiency, concluded the study by US campaign group Environmental Defense Fund (EDF).

The report calculated that the global freight transportation and distribution system accounts for nearly three billion metric tons of carbon emissions each year, equivalent to more than 700 coal plants or the combined output of Japan, Germany, Canada and Mexico.

And this is forecast to rise: in the US, emissions from freight are projected to increase 74 per cent from 2005 to 2035, while China is expected to grow its use of freight transportation fuels by more than 320 per cent between 2008 and 2035.

However, the report found that environmental pressures, legislation and high oil prices are prompting many firms to take action to increase the efficiency of their logistics.

Examples highlighted by the Smart Moves report include a retailer moving goods from warehouse to stores by rail instead of trucks, saving hundreds of thousands of dollars per year and cutting carbon emissions by more than 40 per cent.

The report also said competing confectionary companies used a collaborative distribution model, slashing costs by more than 30 per cent and increasing carbon efficiency by 25 per cent.

Meanwhile, smarter load management strategies enabled a major dairy company to save $7.5m (£4.7m) a year and a national food company eliminated 6.2 million miles' worth of truck trips.

The report kicks off a new collaborative initiative between the EDF, logistics providers, shippers and other supply chain experts, which is designed to accelerate the adoption of green best practices.

"At any given moment, there are more than 50 million tons of freight moving on America's roads, rails, rivers and airways, and nearly all of it could be moving on less fuel and fewer emissions," said Jason Mathers, who leads the EDF initiative.

"Streamlining is a continuous opportunity, not a one-time deal. The key is breaking down old walls and embracing new ways of getting all that stuff from A to B."