Green Freight

1. BART DE MUYNCK
R
egulators, consumers and
investors increasingly expect
organisations to reduce their
carbon footprint, leading many
companies to seek greener freight
methods. There are numerous ways
to achieve this, but limiting harmful
emissions from diesel trucks provides
the most immediate opportunity.
Growing global sentiment to reduce
the use of trucks that run on diesel
fuel puts a stronger focus on the use
of alternative-fuel vehicles. Volvo
introduced its first electric truck in
April of 2018 and Mitsubishi Fuso
Trucks launched its first series-
production electric truck in September
of the same year. Tesla is also working
on battery-electric vehicles that can
haul heavy loads.
Trucks aren’t the only focus. In
the absence of national standards for
non-road diesel emissions in Australia,
despite non-road plant and equipment
being the fourth largest human-made
source of fine particle pollution in
Sydney’s Greater Metropolitan Region,
the NSW EPA has initiated state-based
actions to reduce these emissions. This
applies to construction and mining
equipment, rail locomotives, ports
equipment and ships.
There are a few ways to stay on top
of the regulatory climate and to turn
tougher standards into competitive
advantage. Start by collaborating with
your regulatory compliance, risk and
legal teams to track pending diesel bans
around the globe and how they might
impact your market area.
Also investigate the ROI of converting
part of your fleet to electric and/or
other alternative fuels by taking into
consideration total cost of ownership
factors, in addition to lower fuel costs.
Although reducing kilometres and
emissions are becoming major parts
of most corporate social responsibility
(CSR) initiatives, the challenge is
examining trade-offs between capital
investment to obtain operational savings.
Another option is to introduce
alternative fuels as a talking point within
your company’s CSR strategy. It’s easier
for supply chain leaders to drive CSR
measures proactively, as opposed to
responding to mandates and regulations.
REDUCING CARBON
FOOTPRINTS
Many shippers are beginning to rank
carbon reduction from freight on equal
ground with pricing and quality metrics
when it comes to dealing with third-
party haulers. For those shippers, it’s
important to enquire about the overall
sustainability culture with the carriers
you partner with — some have invested
very little in technology to make fleets
more efficient.
When conducting due diligence,
consider checking if the freight provider
is a member of any government
environmental programs. This provides
an early indicator of their sustainability
commitment, although dig deeper and
request actual proof of sustainability
measures in place.
Alternative fuel trucks are becoming
a viable solution for organisations
looking to reduce their carbon footprint
in freight. There’s already lots of
activity in this area, such as electric and
hydrogen-electric.
While reducing carbon footprints and
saving money on fuel are the primary
drivers for alternative fuel fleets,
organisations have varying goals. In the
UK, for example, UPS can avoid the fees
that London levies on diesel vehicles
that enter the city for deliveries. In the
US, electric trucks enable Walmart to do
night time deliveries when there’s less
traffic. Currently, government noise
regulations prohibit the retailer from
doing so in most regions.
Aside from investing in new trucks,
there are retrofits that private fleets and
3PL can take advantage of. Add-ons like
trailer skirts, automatic tyre inflation
and low-rolling resistance tyres, for
example, can deliver valuable increases
in mileage, often adding a few kilometres
per hour or more to fuel efficiency.
Across a big fleet, that adds up.
Research continues on truck
platooning, where trucks drive closely
together to reduce the drag for the
trucks behind the lead truck. As a result,
GREEN FREIGHTHow to pursue green freight options
10 | MHD MARCH / APRIL 2019
MHD COMMENT

2. fuel consumption can be reduced by up to 10
percent. The networked vehicles can function
without driver reaction times.
When it comes to fully autonomous trucks,
the fuel savings can be enormous. Aside from
the gains in safety, removing drivers from
behind the wheel, even partially, can save
billions. Morgan Stanley says the industry
could save US$168 billion, with US$36 billion
in improved fuel efficiency alone.
REVISIT FREIGHT STRATEGIES
As a supply chain leader, you need to revisit
your freight strategies to become more
efficient. There are several simple steps to
take to ensure that your freight network is
operating at high efficiency, thereby saving on
fuel costs and reducing your carbon footprint.
First, research the adoption or improved
usage of freight management systems and
vehicle routing and scheduling to improve
routing. This increases load factors and
decreases kilometres driven.
Next step is to model the freight networks
and look into using other modes or changing
the location of plants or distribution centres. In
some cases, companies collaborate with other
shippers to share third-party carrier assets,
which improves their available capacity, truck
loading factors and freight costs.
The more optimised assets are within
the freight network, the lower the overall
emissions for the same volume of cargo.
Collaboration with other shippers can
decrease empty mileage and increase load fill
rates. A few shippers already do so, mainly to
increase capacity use and reduce freight costs
in markets where freight capacity is limited
and expensive
WHAT INDUSTRIES ARE
DOING TO HELP
The warehousing and logistics sector is also
ripe for improvements in freight. Organisations
with many DC should research the ROI for
automation and robotics for reducing carbon
footprint within their DC network.
When it comes to the retail industry, many
retailers look for ways to offset the carbon
footprint from online order deliveries.
Many shipping options contain excessive
packaging, for example, which is not
recyclable. Often, a small order arrives in a
large package, which creates waste during the
shipping process, as more packages could be
included on a truck when sized correctly.
Some retailers are experimenting with
unmanned delivery trucks for last-mile
delivery. In the future, this has the potential
to not only cut the cost of last mile delivery,
but to make it more sustainable.
Autonomous delivery robots, for example,
represent a new class of device that could
provide a combination of low cost and
convenience with less congested streets and
zero emissions. Consumers can track the
progress of the machines through an app
and unlock them to retrieve their package
when it arrives via a password sent to their
mobile device.
It’s important to remain current on rapidly
developing autonomous delivery options,
even though most autonomous offerings
are in their infancy and delivery options
like drones are expected to see even more
regulations going forward.
In addition, identify opportunities that
embrace the power of automation while
maximising the value of human-based
intelligence and activity as supply chains
continue to automate.
Bart De Muynck is a VP analyst at Gartner,
specialising in supply chain delivery processes
such as freight planning and execution,
freight payment, analytics, visibility, yard
management, vehicle routing and scheduling.
Visit www.gartner.com/supplychain. ■
“Identify opportunities
that embrace
the power of
automation while
maximising the value
of human-based
intelligence and
activity as supply
chains continue to
automate.
”
MHD MARCH / APRIL 2019 | 11