Companies are already decarbonizing shipping without electric fleets — here's how
This article is adapted from GreeBiz's newsletter, Transport Weekly. Subscribe here.
Electric vehicle fleets might be the future, but for most fleet managers, the present is focused on lower hanging fruit: fuel efficiency; mode-switching; and route optimization.
Why? Companies and organizations can use these three tools to save serious money and reduce basic carbon emissions without investing in entirely new vehicles and fueling infrastructure.
Don't get me wrong. Vehicle fleets need to transition to zero emission technologies as soon as possible. Unfortunately, that's not always the reality for companies and organizations that are under-funded, slower-moving or based in regions that lack policies and incentives to help the transformation.
And the aggressive fleet managers and companies that are moving quickly to electric no doubt already have been using these three tactics to cut costs and decarbonize.
Fuel efficiency: All big companies focus on tracking fuel use and using software and driving methods to reduce fuel consumption. That's because fuel is a major expense. Walmart, the company most well-known for using its huge scale to slash costs, doubled the fuel efficiency of its 6,500 semi-truck fleet in 2015, and saved $1 billion in fuel costs. Since 2015, Walmart has improved truck fuel efficiency by 11 percent more, saved $140 million and avoided releasing 87,000 more metric tons of CO2 into the atmosphere.
Mode switching: This is a tactic specifically for companies that ship goods. Last month I chatted with Ingrid De Ryck, vice president of procurement and sustainability for beer giant Anheuser-Busch, and she said switching beer shipments between trucking and rail substantially can reduce carbon emissions. De Ryck said: "We want to ensure that at every single point in time, we are utilizing the most efficient mode of transportation that is available to us in our network. If that’s not the case, we switch it. "
Oracle makes software that enables companies to manage their shipments and mode-switch between options (among many other things). Oracle Chief Sustainability Officer Jon Chorley explained to me: "One of the things that we believe in is that if you can plan more effectively, and have a supply plan, then you can mode-switch to slower options, but use more cost-effective and also more sustainable modes of transport."
Route optimization: Planning and running the most efficient fleet route is generally all about software. Anheuser-Busch's De Ryck says the beer maker has worked with software companies such as Uber, Transfix, Convoy and SmartHop to optimize the most efficient routes, but also to make sure that trucks aren't running routes empty or underfilled.
Oracle's Chorley says: "The No. 1 thing if you're driving a truck somewhere is you want the truck to be full, and full in both directions." Oracle's software offers route optimization but also "cooperative routing," which engages companies, even competitors, to collectively use their truck loads more efficiently.
Pallet maker giant CHEP, the shipping and logistics arm of Australian giant Brambles, has started working with companies to use their empty fleets to transport its pallets — cutting down on empty trucks (and emissions). The company also plans to work with rival companies to help them share transport miles. For example, CHEP has been working with beer giant Mahou San Miguel to cut emissions from transport emissions and under the partnership, San Miguel's transport-related CO2 emissions fell 12.4 percent in 2018 compared to a year earlier.
If you're managing a public or private fleet, make sure you're utilizing all of the digital options available to use data to help make your operations run more efficiently, and thus more environmentally friendly.
[We'll cover things such as fleet efficiency, but also sustainability metrics, financing options, policies, Clean Transit Regulation, circular fleet fueling and more at a special "low carbon and electric fleet workshop" at VERGE 19 (access to just the workshop is $95 exclusively for fleet managers). Confirmed speakers (so far) at the workshop include PepsiCo's VP Supply Chain Mike O'Connell, City of Oakland Public Work's Richard Battersby, Volvo Group of North America's Dawn Fenton and Nikola Motors' Elizabeth Freithem. Many more to come.]