In our ever-shrinking world, I can, with just a few quick clicks on my computer, order fresh -- or even live -- lobster from Maine and receive it in San Francisco the next day. Or I can have pints of custard shipped from my favorite Milwaukee hamburger joint straight to my Aunt Florence in Tucson. But I can't do these things without realizing that they have a bigger environmental impact than if I were to suffice with eating from the bounty of Pacific Ocean seafood right out my front door, or just send Aunt Flo a gift certificate for some tasty dessert closer to her home.
Consumers began thinking about the impact of product transport a few years ago, and perhaps one of the poster children was the ubiquitous Fiji bottled water. Given the seriously long haul of shipping Fiji water around the world from the South Pacific, it stood out among other bottled water companies that environmentalists noted are selling us something that we can also get free from our kitchen taps, and that sellers of bottled water are using up a tremendous amount of oil and emitted greenhouse gases in the process.
In response to the growing concern over the environmental impacts of bottled water, Fiji Water
made sweeping changes to its business after releasing the results of an audit of its operations, which showed that 40 percent of the company's carbon footprint comes from ocean freight and distribution.
By 2010, Fiji Water aims to reduce its greenhouse gas emissions by 25 percent and it has reduced trucking miles by an average of 26 percent, cut fuel use by its trucks in Fiji in half and will be testing bottles made from 100 recycled materials.
In making these changes, the company indicates that reducing the environmental impact of its shipping operations is not just good for business, but also key to strengthening -- or saving -- its customer relationships. But as fuel has reached, and then broken, long-standing price records, the greening of shipping has become not just a good business idea, but a necessity.
According to the Environmental Protection Agency, rail and truck transport consume more 35 billion gallons of diesel fuel in the U.S. per year. That represents more than 350 million metric tons of carbon dioxide annually, and based on current trends, this could reach 450 million metric tons by 2012.
So what are the public and private sectors doing to reduce the environmental impacts of shipping and logistics activities? Governmental organization from city to national levels are enacting laws that will lighten the carbon footprint imposed by our need for fuel and our transportation practices, while companies are making changes to their businesses that make every element of the supply chain -- from packaging, to transport mode, to sourcing decisions -- more efficient.
Legislation and Policy
Starting at the point of purchase and working our way back through the supply chain, a number of legislative and policy developments are shaping up to lessen resource consumption linked to packaging and shipping consumer goods.
On June 1, China's government banned the free distribution of disposable plastic bags by retailers. While this is related to transportation only insomuch as it should reduce the amount of plastic bags shipped to merchants, it will likely have a big impact in terms of fuel savings. China refines nearly 5 million tons (37 million barrels) of crude oil each year to make plastics used for packaging -- and the rampant littering of the bags across the country has come to be known as white pollution. And China is not alone; in the U.S., California cities San Francisco and
Malibu have enacted bans on the bags, and many other cities are considering banning them, as well.
The European Union first created legislation to minimize the amount of packaging created and used in the E.U., as well as to promote energy recovery, re-use and recycling of packaging, when it passed the Packaging & Packaging Waste Directive (
94/62/EC) IN 1994. In 2004, this directive was revised to increase the recycling targets that member states were to meet by 2008. The Packaging Directive covers all packaging placed on the market within the E.U., and all packaging waste that is disposed of at industrial or commercial sites, or from private homes.
When it comes to transporting goods -- be they consumer packaged goods that the E.U. is targeting with its packaging legislation, or larger items such as construction materials, or packages and parcels sent via courier services -- the U.S. EPA is helping the freight industry reduce fuel consumption through its
SmartWay Transport program. The program helps
offset the costs of installing systems for lowering truck emissions, such as more efficient tires, diesel particulate filters and auxiliary power units that provide heating and cooling systems inside truck trailers. These power units keep the cabs of large trucks powered and temperature-controlled during extended or overnight stops, so that drivers can switch off their engines instead of keeping them idling. (A number of States have also passed anti-idling laws.)
Nearly 800 shippers, carriers (private fleets and fleets-for-hire) and logistics providers have become SmartWay members so far and many have already realized a strong return on their investments in fuel-efficient technologies, through reduced fuel costs.
Companies that employ 100 percent SmartWay compliant carriers can qualify to include a SmartWay logo on consumer packaging. HP became the first to qualify for the logo earlier this year.
Innovation and Transportation Tools
Outside of legislation and government-supported programs such as SmartWay, companies are starting to enact new business practices aimed at reducing transportation costs. For example, Wal-Mart recently announced its intentions to begin
sourcing produce from farms closer to its stores, thereby reducing fuel costs associated with shipping the produce across the country.
Other companies are taking a whole new look at our existing transportation infrastructure in order to innovate the ways goods are shipped. A startup in Cambridge, Mass., called the
New Amsterdam Project offers companies an alternative to inner-city trucking; its "drivers" transport their clients' goods using pedal power instead of fossil fuels. The company has specially designed rugged tricycles with large cargo holds in which product is placed. And on the West Coast, a cooperative collection of similar bike cargo carrier firms known as
Pedal Express offers courier services in California (Berkeley, Davis, Humboldt, San Luis Obispo and Santa Cruz) and Oregon (Eugene and Portland). (The collective also includes a chapter in Chapel Hill, N.C.)
In addition to working with SmartWay carriers, HP has begun using plastic pallets made by
AIRDEX International Inc. to transport its notebook laptop computers to Europe, the Middle East, Africa, Latin America and North America. Doing so decreases the environmental impact of shipping them because AIRDEX pallets are made of recyclable plastic rather than wood and, according to HP, the pallets are stronger, lighter and more durable than the wooden pallets it previously used.
HP estimates that through all its fuel-saving measures, it has reduced its CO2 output by more than 22,350 metric tons -- the equivalent of removing 4.300 cars from the road for one year.
Another pallet provider,
Intelligent Global Pooling System (iGPS) also makes plastic pallets, which share the weight and durability benefits of the AIRDEX pallets and also include an added feature that can help companies boost transportation efficiency: passive, integrated RFID transponders. These embedded devices do not require batteries and are encoded with a unique identification number that is captured by RFID readers stationed in warehouses or distribution centers, or by handheld readers that shipping personnel carry.
These IDs are associated in backend software with the products being carried on the pallets and with the shipment manifests and orders associated with the products, which can translate into fewer shipping errors and less transportation waste.
When it comes to addressing shipping inefficiencies and making strategic changes to business processes toward reducing fuel consumption, packaging companies, manufacturers and shippers need to work in tandem. Industrial and consumer packaging company Sonoco has worked with many of its consumer goods customers in order to evaluate and change the types of Sonoco packaging materials used for consumer goods.
"A key element and trend in packaging overall," says Roger Shrum, Sonoco staff vice president of Investor Relations and Corporate Affairs, "is using less material, less weight, and better design to allow more of the packaging in a load that is going to our customers, which gives them more packaging materials with fewer shipments."
A prime example of this rethinking is baby formula, he says. "In the last year, I would estimate 75 to 80 percent of the companies that sell formula -- Mead Johnson, Abbot, Nestlé, all the majors -- have converted from all-metal cans to composite cans [paperboard with metal end-caps]. A lot of this is driven around the rising cost of steel, but it's also part of company sustainability programs, because the lighter packaging uses less fuel in transit."
Because of the energy intensity required to keep products within their safe temperature and humidity parameters during transport, the perishables supply chains create an exceptionally large carbon footprint. But Minneapolis-based firm Entropy Solutions believes it has a shipping tool that will drastically lessen the waste and energy-consumption associated with shipping perishable products, such as extremely valuable and temperature-sensitive biologic agents such as pharmaceuticals or blood.
Traditionally, these goods are shipped in Styrofoam-lined cardboard boxes that are disposed or recycled after each shipment. Entropy Solutions'
Green Box is comprised of a plastic outer layer, followed by insulated layers made of nanotechnology-based carbon silica that is enclosed in vinyl and vacuum sealed, and a second inner layer made of a polymer that can keep items inside the box as cold as -20 degrees C or as hot as +50 degrees C for up to 120 hours -- without requiring a temperature-controlled environment. This means using temperature-controlled shipping containers could become a thing of the past.
According to Steve Skallerud, Entropy's vice president of marketing, Wal-Mart has been testing the Green Box for shipping pharmaceutical products to a central distribution center in Florida for nearly a year. The box has 65 percent more room for product than Styrofoam-lined perishable shipping boxes of the same dimensions, and therefore a great payload capacity and a greater quantity of a temperature-sensitive product can be transported in each truckload. And because the temperature of the products can be maintained for so long, users can opt for shipping the goods via ground rather than air, which can save them money while lessening fuel consumption, says Skallerud.
And while innovations in packaging and transportation modes are vital to lowering transportation's impacts on the environment, so are changes to the business tools that drive the supply chain. Many providers of transportation management software -- the analytical tools that companies use to coordinate shipping activities -- are adding features such as calculators that determine the carbon output linked to various shipment modes and delivery schedules, or routing tools that determine the best trucking routes for making multiple delivery and pick-up stops.
Shippers or customers, such as green-minded retail customers making online purchase -- can use tools such as these to determine how to ship product while minimizing fuel consumption -- and lower-impact choices. While they often take more time in transit, fuel-saving shipping options often cost less than faster ones, which benefits the shipper's bottom line, as well as that of the customer.
