By Jason Mathers

"Kenworth truck" by Lisa M. Macias, U.S. Air Force via Wikipedia

A pair of critical analyses were just released that, together, make clear the need for a strong second generation heavy truck fuel efficiency and greenhouse gas standard.

The first piece is the U.S. Energy Information Agency’s (EIA) preliminary Annual Energy Outlook for 2015. I went right to the projection of fuel efficiency for new heavy trucks in 2020, which is 7.0 miles per gallon, and compared that to the projection for 2030, which is 7.2 miles per gallon. A three percent increase in efficiency for a decade is not too impressive.

As a result of this lack of projected progress on fuel efficiency and other factors, EIA expects that greenhouse gas emissions from heavy trucks will increase more than any other single end-use source by 2040 – an additional 120 million metric tons a year.

The other recent analysis is from The International Council on Clean Transportation, which released two papers on heavy truck fuel efficiency: one reviewing the potential of current and emerging efficiency technology, and the other examining the cost-effectiveness of these technologies. Among the group’s findings are:

• Already available tractor-trailer technologies can achieve 9 miles per gallon, deliver payback periods of less than a year, and be widely deployed in the 2020 to 2025 time frame.
• Advanced efficiency technologies, now emerging in the marketplace, can double fuel economy to 11 to 12 miles per gallon, with payback periods of 18 months or less in the 2025 to 2030 time frame.
• Diverse technology approaches – meaning technology packages with differing contributions from aerodynamic, engine, and other technologies – can achieve similar efficiency results.
• Even under very conservative assumptions — fuel prices remaining as low as $3.10 per gallon diesel, higher technology costs, and a high discount rate of 10 percent — the most advanced technology packages have payback periods of only 1.4 to 2.2 years.
• Typical first owners of tractor-trailers with efficiency technology packages up to 9 miles per gallon would see fuel savings 3 to 9 times greater than the upfront technology cost over the period of ownership.

ICCT’s findings demonstrate that we have the technology to cost-effectively cut truck fuel consumption in half compared to 2010 levels. EIA’s projections demonstrate that, without well designed performance-based standards, truck manufacturers are unlikely to deploy these highly cost-effective solutions.

There is good news in EIA’s report, too. The 7.0 miles per gallon in 2020 is up from 6.0 miles per gallon in 2012. The increase can be attributed to the first round of Heavy Truck Fuel Efficiency and Greenhouse Gas Standards set by President Obama in 2011.

We know that well-designed fuel efficiency standards work because we are seeing it in the market today. For the second-generation standards that will be announced this spring, we urge the administration to incentivize the full-scale deployment of the advanced technologies highlighted in the ICCT analysis.

Additional reading:

• Let There Be No Doubt: We Can Cut Truck Emissions & Fuel Use Today
• Consumer Goods Companies: Stand Up For Strong Truck Standards

By Jason Mathers

The can-do spirit of American automotive engineers has been on full display over the past few weeks, as truck manufacturers unveil innovation after innovation to boost the efficiency of heavy trucks that move companies' freight cross-country.

It is crystal clear that we possess— today— the know-how to dramatically cut fossil fuel consumption and greenhouse gas emissions from heavy trucks. Moreover, we can do this while saving consumers hundreds of dollars annually and giving trucking companies the high-quality, affordable equipment they require.

Some of the recently-announced advances include:

• Wabash National unveiled two new trailer add-on products that “when used together, can boost fuel economy 9 percent or more by improving aerodynamics.”
• Dana highlighted a tandem axle that, when combined with an optimized integration, can improve fuel efficiency by a 2 percent.
• Peterbilt introduced its new Model 579 truck that improves fuel efficiency by up to 14 percent.
• Kenworth announced that predictive cruise control was now standard on some models.

All of these fuel-saving solutions are available today thanks to the acumen of engineers at these leading manufacturers. The first round of well-designed federal fuel efficiency and greenhouse gas standards are also driving innovations like these to the market.

Even so, the strides we are making today should only be the beginning.

Daimler's Super Truck Doubles Efficiency

The team at Daimler Trucks North America provided the best example yet of our future potential with its entry in the Department of Energy Super Truck program. DTNA announced its team has “achieved 115 percent freight efficiency improvement, surpassing the Department of Energy program’s goal of 50 percent improvement.” Its truck registered 12.2 mpg recently – a leap above the 6 MPG typical of pre-2014 trucks.

Improvements where made across the platform, including electrified auxiliaries, controlled power steering and air systems, active aerodynamics, a long-haul hybrid system, and trailer solar panels. Engine efficiency advancements were particularly noteworthy – given the permanence of such solutions.  The Detroit Diesel engine reported a 50.2 percent engine brake thermal efficiency which was combined with further improvements from engine downspeeding and the use of a waste-heat recovery system.

Daimler’s fantastic results demonstrate that – when given a goal anchored in science, economics and innovation – our engineers can deliver phenomenal results.    Daimler should now lead the way in driving these solutions to national and global scale.

Setting the Bar Higher on Fuel Efficiency and Emissions

The time has come to give our engineers a new goal.

EDF is calling on the Environmental Protection Agency and Department of Transportation to set new fuel efficiency and greenhouse gas standards for heavy trucks that cut fuel consumption by 40 percent in 2025 compared to 2010.  This equates to an average of 10.7 mpg for new tractor-trailer trucks.

President Obama has called for new standards. These are expected to be announced late spring and were sent to the White House Office of Management and Budget for review this past week.

The first generation standards have created a strong, industry-supported foundation on which the coming standards can be built. These standards push improvements in all aspects of trucks through complementary engine and vehicle standards.  In fact, Daimler – a leading manufacturer of heavy trucks with the engineering prowess to set the high bar of 12.2 mpg for the Super Truck program – has recognized these standards as “very good examples of regulations that work well.”

We Have The Technology

Let there be no doubt that if we set a bold goal for 2025 we will meet it:

• Technology solutions are available today to meet the goal, and our engineers, with a target presented to them, will further innovate truck designs.
• Using these technologies will save us all money:  Trucking fleets stand to see lower lifecycle costs and reasonable paybacks; consumer goods companies and other manufacturers stand to save money when shipping their products to market; and every U.S. household stands to save hundreds of dollars a year in lower priced goods.
• There is a proven regulatory structure for bringing these type of technologies to market:  The EPA-DOT fuel efficiency and greenhouse gas standards are proven, broadly supported and already delivering impressive results.
• We have an urgent need for deploying these technologies: Heavy trucks account for nearly six percent of U.S. global warming emissions and are the single fastest growing end-use source of emissions – on pace to add nearly 150 million more tons annually over the coming years.

Setting a bold goal will help us take these technologies from the test track to the highway over the next decade, helping companies reduce both their costs and carbon risks, while delivering benefits for communities' air quality and the climate.

Additional reading:

• Consumer Goods Companies: Stand Up For Strong Truck Standards
• To Drive Down CO2 Emissions, Focus on Freight

By Jason Mathers

When setting and monitoring several of the key environmental performance metrics for freight, you’ll need to know how to calculate greenhouse gas (GHG) emissions. This may sound complicated, but it’s actually quite simple.

Fuels contain carbon, which is released into the atmosphere as carbon dioxide when burned. If you know how much fuel you’ve used, you can determine most of your current GHG emissions.

You can derive fuel volume by looking at how much freight you transport, the distance that freight travels, and the specific mode of transport used. Each mode will have its own emissions factor, since some modes are more efficient than others.

Here's a simple formula for calculating greenhouse gas emissions from a truck move:

The distance and weight and/or volume information needed to calculate greenhouse gas emissions is most likely already captured in your transportation management software. Information on mode-specific emissions factors are generated by several sources, including the U.S. Environmental Protection Agency (EPA). A list of emission factors is included on page 10 and 11 of EDF’s Green Freight Handbook.

Example: greenhouse gas calculation for a truck move

Using the formula from above, I'll walk through a simple emissions calculation example for a truck that travels 1,000 miles with 20 short tons of cargo (a short ton is 2,000 lbs).

• Step 1: Determine the total amount of ton-miles. Multiply 1,000 miles times 20 tons, which gives us a total of 20,000 ton-miles.
• Step 2: Get the weight-based truck emissions factor for a freight truck. The average freight truck in the U.S. emits 161.8 grams of CO2 per ton-mile.
• Step 3: Multiply this emissions factor with the total ton-miles {161.8 X 20,000), which gives us a total of 3,236,000 grams of CO2.
• Step 4: Convert the total grams into metric tons. Metric tons are the standard measurement unit for corporate emissions of greenhouse gases. There are 1,000,000 grams in a metric ton. To convert our answer from step three we divide it by 1,000,000. This gives us 3.24 metric tons of CO2 for this one move.

Even  if don’t have access to the tonnage data, you can still achieve a meaningful calculation based on mileage alone.  You’ll find an example of mileage-based calculation on page 13 of the Green Freight Handbook.

Once you have the formula, this process of greenhouse gas calculations can be easily automated using data from your transportation management software.  The key is to get started.

To learn more about getting started with green freight projects, download the Green Freight Handbook from the link below:

When setting and monitoring several of the key environmental performance metrics for freight, you’ll need to know how to calculate greenhouse gas (GHG) emissions. This may sound complicated, but it’s actually quite simple. Fuels contain carbon, which is released into the atmosphere as carbon dioxide when burned. If you know how much fuel you’ve used, […]

By Jason Mathers

(Credit: Union of Concerned Scientists)

Three billion gallons of fuel:  That is what consumer goods companies stand to save annually from strong heavy truck fuel efficiency and greenhouse gas standards, according to a new report from the Union of Concerned Scientists.

$11.5 million dollars: That is how much a large consumer goods company would save annually in 2030 from strong truck efficiency standards.

Consumer goods companies should be at the front of the pack calling for new, protective, and affordable fuel efficiency and greenhouse gas standards for our largest trucks — protective of our air quality and the climate overall, and affordable because they will save companies money.

While they seldom directly own large delivery fleets, consumer goods companies are the largest single consumer of freight moves: accounting for nearly 30% of moves, according to an EDF-commissioned analysis from ICF International.

Most large consumer goods companies have robust environmental sustainability platforms. These increasingly include supply chain impacts. This makes sense, as nearly 90% of consumer goods impacts occur in companies' supply chains.

Product distribution is a meaningful contributor to this impact: around five percent for a pair of Timberland shoes, 8 percent for a six pack of Fat Tire craft beer, and 10 percent for an iPad. Freight moved via truck accounts for the majority of logistics-related emissions. By increasing the efficiency of heavy trucks by 46% compared to 2010, consumer goods companies will meaningfully reduce supply chain climate emissions.

Increases to fuel efficiency are good for the bottom line too. Fuel has long been a top cost for trucking, accounting for nearly 40% of per-mile cost. More efficient trucks lower lifecycle costs significantly, and reduce per-mile freight costs by 21 cents a mile, as an analysis by EDF and Ceres demonstrated last year.

President Obama pledged last year to issue new truck efficiency standards this spring. As the U.S. Environmental Protection Agency and National Highway and Transportation Safety Administration ready the proposed standards for release, consumer goods companies should be leading the call for the administration to set bold standards. These companies stand the benefit the most from lower supply chain emissions and reduce shipping costs. As the largest single consumer of trucking services, calling for protective standards is the responsible course of action.

Do your freight transportation metrics include measures for sustainability?

With freight accounting for 16 percent of corporate greenhouse gas emissions, establishing green freight practices is becoming a greater priority for large shippers.

To learn more about how to establish freight sustainability metrics, check out Chapter 2 in EDF’s Green Freight Handbook – a practical guide to the strategies companies are using to reduce their freight operations’ impact on overall greenhouse gas emissions.

Establishing baseline metrics is the logical starting point for your green freight efforts. Freight sustainability metrics provide clarity, and keep transportation teams focused on the goal of achieving emissions reductions that are measurable, and therefore meaningful.

Your baseline will include both broad corporate freight sustainability metrics and more specific freight efficiency metrics.

At a corporate level, the three most popular metrics to gauge freight sustainability , are:

1. Emissions per ton-mile – the average emissions associated with moving one ton of freight for one mile.
2. Absolute freight emissions – the total greenhouse gas emissions generated by transporting freight.
3. Total fuel consumption – the fuel used by direct freight operations and by third-partly logistics companies (3pl) and carriers in the transport of products.

Our Green Freight Handbook offers advice and formulas to determine all these numbers.

At a specific level, other freight efficiency metrics –such as average emissions per shipment, percentage of ton-miles by mode, and average miles traveled per shipment – link to specific strategies that, taken together, will ultimately drive the results you see in your corporate freight sustainability metrics.

In Emissions Reduction, Activity Doesn’t Always Equal Achievement

Real progress in freight sustainability can only be measured in numbers. That’s why starting with a baseline is so crucial. If your strategies don’t shift the numbers in a positive direction, they are clearly not the right strategies.

For instance, switching to a carrier with a new fleet of advanced trucks seems like a sound strategy, but if your empty miles double, is that progress?

Just as a gym membership doesn’t guarantee your ability to get fit, joining green clubs or purchasing green equipment doesn’t guarantee greenhouse gas reductions. Success in freight sustainability is about outcomes, and outcomes can only be measured by deploying objective freight transportation metrics to measure sustainability.

Don’t Let Perfect be the Enemy of Good

If you are at the beginning stages of your Green Freight journey, it’s best to chase progress, not perfection. Highly detailed data gathering and measurement may require time and resources you simply don’t have. In that case, scale down your program and think about focusing on a specific trade lane or region, business unit or transport mode.

Did you know that, as the energy demand for passenger vehicles declines steadily over the next 25 years, the fuel demand for commercial transportation is predicted to increase 40 percent over current levels?

That’s a difference of well over 10 million oil-equivalent barrels per day.

Most of that demand will come from heavy-duty trucks, which account for 57 percent of all logistics-related greenhouse gas (GHG) emissions, and 16 percent of total corporate GHGs.

As a society, our appetite for goods of all kinds—food, electronics, apparel, housewares – is growing. As the population grows, demand grows, and so does the number of trucks on the road.

But the predicted rise in CO2 emissions from Class-8 trucks is just that.  A prediction.  One that assumes the logistics community will not take aggressive action to adopt more sustainable freight management practices.

The fact is progress can be made, and is being made.  Companies are recognizing the enormous potential of greener freight strategies to reduce GHGs and, at the same time, drive down costs.  And it’s this marriage of business and environmental benefits that’s driving even the most bottom-line oriented companies to think green when it comes to shipping their products to market.

What are these companies doing to become greener, AND more profitable?  Many of these success stories are documented in EDF’s Green Freight Handbook.  Download the Handbook for a practical guide to the strategies companies are using to cinch their GHG waistline, and their freight budget. The handbook includes some practical tools for assessing strategies and calculating freight emissions, as well as advice from some of the world’s top green freight practitioners.

Compelling scientific assessments of climate change make it clear that society must dramatically cut greenhouse gases.  Logistics and transportation professionals can play a critical role in addressing this global imperative and reducing freight’s impact on greenhouse gas emissions.

Has your company’s logistics operation made greener freight practices and CO2 emissions reduction a priority? If not, there’s a good chance your competitors have, and are reaping the financial benefits as a result.

Go ahead, make a resolution.  Start your green freight journey today.

The Green Freight Journey is a five-step framework for freight optimization projects. In this blog series, EDF is taking a brief look at each step of the Journey.

Photo from Flickr user eggrole

We’ve all heard the saying, “Life’s a journey, not the destination.” Your Green Freight efforts are no exception.

The Green Freight Journey is about setting long-term goals and continuously learning.  Each time you reach a “destination,” remember to celebrate your success and share your learnings broadly within your organization and network.

Once you’ve acknowledged your success, challenge your department to take on new and more complex projects. As emissions from global goods movement continue to increase, the changes you make will make a difference and influence others to do the same.

To learn more about the Green Freight Journey, watch our recorded webinar, where we go into more detail about the Green Freight Journey framework, review real-world case examples and highlight tools EDF is making available to help companies progress on their journey.

During the webinar, participants will:

• Be introduced to the steps of a Green Freight Journey and receive tips for success on each;
• Hear real-world examples of companies that have cut emissions and costs by optimizing freight moves;
• Review existing tools, including a green freight benchmarking survey and the EDF Green Freight Handbook; and
• Learn how an EDF Climate Corps fellow helped Ocean Spray Cranberries identify new green freight opportunities

Steps on the Green Freight Journey:

• Get Started
• Create Momentum
• Accelerate Performance
• Declare a Goal
• Raise the Bar

Be a Green Freight Superhero

Also, watch our EDF Supply Chain Heroes video to learn how logistics managers can channel their “superpowers” to drive their companies’ sustainability efforts. The choices they make, such as moving cargo via rail or participating in a truckload consolidation network, have the power to slash costs and cut greenhouse gas emissions. Become a green freight superhero at your organization today!

The Green Freight Journey is a five-step framework for freight optimization projects. In this blog series, EDF is taking a brief look at each step of the Journey.

These first three steps of the Green Freight Journey are fundamentally about getting “up to speed” on your journey. You start with your objective and metrics; launch a pilot or two; and then embrace the approach with wider adoption and a formal recognition. Now it’s time to invest in progress over the long term.

Companies set themselves up for longer-term success and spur innovation by declaring a goal, which is step 4 of the journey.

To do this, companies need to:

• Assess long-term opportunities – More than just looking at what they can move forward on today, companies need to be thinking along the lines of what  they can build towards over the next 3-5 years.
• Focus on continuous improvement – The metrics-driven approach we discuss throughout the Green Freight Journey will be key here. A long-term goal backed by objective metrics inoculates your effort from the threat of “big shiny object” projects – for example, that pet project of an executive that might be great for a press release, but won’t move the needle forward on the metrics.
• Choose an actionable timeframe – The goal should be far enough on the horizon that you will be able to make some significant network changes over the time frame. It should be close enough, though, to be actionable.
• Set specific targets – Your goal should be framed clearly so that all team members will understand when the project can be deemed a success.

Many companies are already setting goals for their freight operations; here are some examples to get you thinking:

• Procter & Gamble: By 2020, reduce truck transportation kilometers by 20% per unit of production compared to 2010 baseline.
• Heinz: Reduce fossil fuel consumption by 10% reduction per unit of production by April 2015 through improved efficiency of its product distribution network.
• IKEA: Reduce CO2 emissions per cubic meter of products transported by 20 percent by the end of FY16, from FY11 levels.

To learn more about the Green Freight Journey, watch our recorded webinar, where we go into more detail about the Green Freight Journey framework, review real-world case examples and highlight tools EDF is making available to help companies progress on their journey.

Steps on the Green Freight Journey:

• Get Started
• Create Momentum
• Accelerate Performance
• Declare a Goal
• Raise the Bar

The Green Freight Journey is a five-step framework for freight optimization projects. Leading up to our January 14th webinar, EDF is taking a brief look at each step of the Journey.

Once you have completed your green freight pilot project(s), it’s time to start applying your learnings at scale. Build off the success of your pilot—from one or two projects, can you now expand your program to five or ten? Below are some useful tips to help your company take the next step in the Green Freight Journey.

• Formalize the team – It’s critical that your company’s Green Freight efforts are given a clear structure. Recognize team members for their sustainability efforts as part of the evaluation process. Put in place procedures for sharing results and bringing forward new ideas.
• Scale successful pilots – Make sure you get the most return for your effort. Scope out opportunities where you can scale up your impact and look for additional lanes where you can deploy your learnings.
• Identify new opportunities – Be on the lookout for new challenges to take on. Are there slightly higher-hanging fruit to reach for? What projects have a bit more complexity but could deliver significant return? For ideas, be sure to check out the Green Freight Handbook.

This is the stage where you really start to leverage the power of EDF’s Virtuous Cycle of Strategic Energy Management. It is a model of change we’ve discovered that applies to energy performance – including in freight applications – across even radically different organizations with five powerful, interdependent components.

1. Executive Engagement
2. Resource Investment
3. People
4. Identification, Implementation and Results Measurement and Verification (M&V)
5. Stories and Sharing

The five components of this machine affect one another, for better or for worse. If the performance of one improves, it often improves the performance of all in a “virtuous cycle” of positive feedback. When all components function at full capacity, the cycle will run smoothly to improve energy performance, maximizing financial and environmental returns.

Join me on January 14 at 12PM ET for a webinar that will introduce you to the full Green Freight Journey framework, review real-world case examples and highlight tools EDF is making available to help companies progress on their journey.

Register here today for this informative webinar.

Steps on the Green Freight Journey:

• Get Started
• Create Momentum
• Accelerate Performance
• Declare a Goal
• Raise the Bar

The Green Freight Journey is a five-step framework for freight optimization projects. In this blog series, EDF is taking a brief look at each step of the Journey.

Once you have established a Green Freight goal and defined metrics for tracking your progress, it’s time to start putting the wheels in motion. Below are some tips for taking the next step, creating momentum, in your Green Freight Journey:

• Choose a pilot project – Select pilot projects that can be scaled up and replicated elsewhere in the organization, if successful. See our Green Freight case studies for examples of replicable pilot projects.
• Focus on what you control – Choose a pilot project where you have direct control over the outcome. Examples here are increasing load factors or moving to intermodal from truckload. Projects that rely on the actions of suppliers, such as alternative fuel use by your contract carrier, are more difficult to execute.
• Track results – Be sure to capture good data and use the metrics you created in step one. The data you produce will be a powerful tool in communicating the results of your pilot to employees, customers, and key stakeholders. The data will also help you identify new opportunities.

Below is an example from our Green Freight Handbook, which can help you determine which pilot project would be most impactful for your organization.

To learn more about the Green Freight Journey, watch our recorded webinar, where we go into more detail about the Green Freight Journey framework, review real-world case examples and highlight tools EDF is making available to help companies progress on their journey.

Steps on the Green Freight Journey:

• Get Started
• Create Momentum
• Accelerate Performance
• Declare a Goal
• Raise the Bar

By Jason Mathers

The Green Freight Journey is a five-step framework for freight optimization projects. Leading up to our January 14th webinar, EDF is taking a brief look at each of the steps along the Journey.

The first step, Getting Started, is about deciding where you want to go. To do this, companies:

• Gather internal stakeholders — such as supply chain or transportation executives, sustainability officers or EHS professionals, and an executive sponsor.
• Define their green freight objective — such as reducing climate warming emissions or cutting fossil fuel consumption.
• Determine key metrics – by reaching each agreement on how to objectively measure progress. A metrics-driven approach helps to keep you focused on the actions that will deliver the biggest results for the best returns.

When determining your metrics, consider these examples from the EDF Green Freight Handbook:

Join me on January 14 at 12PM ET for a webinar that will introduce you to the full Green Freight Journey framework, review real-world case examples and highlight tools EDF is making available to help companies progress on their journey.

Register here today for this informative webinar.

By Jason Mathers

Many leading companies are creating business value today by cutting carbon emissions from freight moves. These companies, such as Walmart, Ikea, Unilever and Ocean Spray, are following a similar path, one we at EDF are calling the Green Freight Journey, a five-step framework for freight optimization projects.

Sign up to learn more about the Journey.

Define the path. Then take a step. Then take another.

Companies start by taking the nebulous concept of sustainability and making it mean something specific and material to their company, for example, “we are going to use fuel more efficiently." They create specific metrics to track this objective, such as product moved per gallon of fuel consumed, or emissions per ton-mile.

Next, these companies develop pilot green freight projects to test out that objective, using the metrics they chose to evaluate the projects’ efficacy. The projects that deliver financial and environmental returns are scaled up and those that don't are redesigned or scrapped.

Leaders have a critical role to play in this process as well: they create long-term improvement goals for their company’s key metrics. This enables them to focus day-to-day on continuous improvement, and it inoculates them against the siren call of “big shiny object” projects – ones that might be good for a press release but won’t move the needle on their metrics.

By taking these steps, companies advance along their Green Freight Journey, and along the way, cut costs and emissions.

Now it’s your turn.

Every company that uses the freight system to move products to market has opportunities to reduce operating costs and greenhouse gas emissions by taking a Green Freight Journey. Join me on January 14 at 12PM ET for a webinar that will introduce you to the Green Freight Journey framework, review real-world case examples and highlight tools EDF is making available to help companies progress on their journey.

During the webinar, participants will:

• Be introduced to the steps of a Green Freight Journey and receive tips for success on each;
• Hear real-world examples of companies that have cut emissions and costs by optimizing freight moves;
• Review existing tools, including a green freight benchmarking survey and the EDF Green Freight Handbook; and
• Learn how an EDF Climate Corps fellow helped Ocean Spray Cranberries identify new green freight opportunities.

Register here today for this informative webinar.

By Jason Mathers

2014 is shaping up to be a great year for truck equipment manufacturers. Sales through October are running 20% higher than their 2013 levels. It’s a banner year that continues to pick-up steam. 2015 is looking even stronger, with forecasts suggesting it will be the 3rd strongest year ever for truck sales. There are several factors driving this market. Higher fuel efficiency is top among them.

This point was brought home recently by the lead transportation analyst for investment firm Stifel, who noted that “the superior fuel efficiency of the newer engines” was a key in getting fleets to buy new trucks now.

The CEO of Daimler Trucks, the leading producer of class 8 trucks for the U.S. market, acknowledged recently that their most efficient engine and transmission combination was “already sold out for 2014” and that the “demand is beyond their expectations.”

It’s not just Daimler that is having a good year.

• Cummins posted higher-than-expected quarterly profits recently “lifted by strong sales of its vehicle components in North America.”
• PACCAR announced strong quarterly earnings that, according to CEO Ron Armstrong, “reflect the benefits of strong truck sales in the U.S.”
• Navistar also “had a good month in October,” according to its CEO Troy Clarke. He noted that the demand for new trucks is being driven by the fact that “new trucks have lower operating costs” –which is of course due to increased fuel efficiency.

2014 is a banner year for truck sales; and 2014 trucks are the most efficient ever.  2014 trucks are the most efficient ever because of smart, well-design federal policy.  This is the first year of the 2014-2018 heavy truck efficiency standards that will:

• reduce CO2 emissions by about 270million metric tons,
• save about 530 million barrels of oil over the life of vehicles built between 2014 – 2018,
• provide $49 billion in net program benefits.

The 2014-2018 heavy truck fuel efficiency and greenhouse gas program demonstrates that climate policy benefits businesses, our economy, and human health, while also cutting harmful climate pollution.

Or, as Martin Daum, president and CEO of Daimler Trucks North America noted, these standards “are very good examples of regulations that work well.”

In its first year of existence, the 2014-2018 fuel efficiency and greenhouse gas program is boosting sales for manufacturers, reducing operating costs for fleets, and cutting climate pollution for all of us. It is clear that well-designed federal standards can foster the innovation necessary to bring more efficient and lower emitting trucks to market.   That is very good news, because we have an opportunity to further improve and strengthen these standards – creating more economic and environmental benefits in the process.  For this, we all can be thankful.

By Jason Mathers

As we head into the last months of 2014 – and more importantly, the holiday season — I'm ready to make my nomination for the "word of the year." And no, it’s not “salmon cannon,” “bromance,” or others proposed by John Oliver or Stephen Colbert. The word supply chain and sustainability leaders should take away from 2014 is omnichannel.

At its core, omnichannel is an approach to retail that aims to deliver a holistic shopping experience that integrates in-store and online platforms, combining the supply chain of brick-and-mortar stores and e-commerce. It recognizes the staying power of each, the expectation of the customer for consistent prices across platforms and the ability to choose how, when and where to receive his/her purchases.

Folks that make a living thinking about how to allocate and where to place inventory have been using the word for a few years. In 2014, though, omnichannel crossed the chasm from being wonky, industry-speak to being a mainstream business concept – covered recently in USA Today – and a core aspect of competing in the digital age.

Which brings us to an important question: what are the environmental implications of omnichannel retailing?

As omnichannel is an integration of the brick-and-mortar and ecommerce worlds, it moves past the old debate about which is lower impact: in-store or online shopping? As with that question, the answer for omnichannel is largely, "it depends." There are aspects of omnichannel retailing that have likely environmental benefits and some aspects that could result in less efficient use of transportation resources.

An effective omnichannel strategy requires retailers to have real-time visibility into their inventory regardless of its location — on shelves, in warehouses, or in a truck trailer. Retailers need to place this inventory close to the likely customer in order to provide quick access to the product, whether in-store or for home delivery. Getting the necessary level of inventory visibility is hard work and requires significant investment into data systems. The retailer also needs to accurately forecast where demand will be strongest in order to best position its inventory.

The greatest potential environmental benefit of omnichannel likely is in enabling better long-term forecasting and reducing excess inventory. Materials and manufacturing, after all, typically are the largest contributor to the environmental footprint of most products. Better matching inventory levels with demand leads to less waste.

Omnichannel also has clear and significant ramifications for product distribution. Holding inventory at more locations leads to more inbound transportation miles. Having multiple locations for inventory will result occasionally in having to shift inventory from low-demand areas to higher-demand areas. By holding inventory closer to the customer, companies can reduce outbound miles and decrease the likelihood that rush deliveries will be sent by air freight. In turn, this will save a lot of fuel and emissions..

What will all of these variables mean in the end in terms of environmental performance? I think, on balance, omnichannel will more likely reduce environmental impacts.

The data and computing power revolution that is driving customer expectations and demand for omnichannel can also is being leveraged to improve forecasting and identify opportunities for multi-company collaborations. Better forecasting means more inbound product can be sent via intermodal transport. The potential for lower productivity of inbound transport can be offset by collaboration among consumer goods companies to co-load and/or co-locate freight.

Ultimately, embracing an omnichannel strategy and improving environmental performance can go hand-and-hand. At the heart of each is efficiency and good data. Capturing and leveraging these synergies, though, requires a deliberate, metrics-driven approach.

This metrics driven-approach is at the heart of the tools EDF has developed to assist companies in their efforts to improve the efficiency of product distribution. The Green Freight Journey framework highlights the importance of core key performance indicators and long-term goals. The EDF Green Freight Handbook provides guidance on choosing and calculating these key metrics, as well as identifying and implementing improvement projects. Our EDF Climate Corps fellows can help companies identify opportunities to reduce costs and greenhouse gas emissions from product distribution.

By Jason Mathers

Every product that ends up on a retail shelf or is sold online has a freight footprint. The annual impact of freight across U.S. retail and consumer goods supply chains is significant – over 160 million metrics tons of greenhouse emissions. Or, more than ten times Walmart’s 2010 scope 1 & 2 emissions in the United States.

There are ample opportunities for retailers and their suppliers to improve efficiency, reduce costs and emissions from their freight supply chain. These companies can get more products on each truckload, move more cargo by rail, and collaborate with other companies to find shipping efficiencies.

To capture the most savings opportunities, companies need a long-term plan of action with common key performance indicators (KPIs) and goals shared between logistics teams and corporate sustainability officers.

EDF created our Green Freight Journey model to be a framework that companies can use to manage supply chain freight emissions. The Green Freight Journey has five steps:

• Step One: Get Started, where a company assembles the right group of internal stakeholders and defines its objectives and key metrics.
• Step Two: Create Momentum, where a company launches a pilot effort to improve performance in one key area. It leverages the results of the pilot to increase internal visibility about the strong value of green freight initiatives.
• Step Three: Accelerate Performance, where a company expands the scope of its green freight efforts from one or two projects to a system-wide effort to reduce costs and emissions.
• Step Four: Declare a Goal, where a company sets a multi-year goal to drive internal focus and resource allocation.
• Step Five: Raise the Bar, having accomplished its first generation green freight goal, a company assess and sets a new longer term improvement target.

If you are attending RILA Sustainability later this month, visit the EDF booth (NP6) in the exhibit hall to learn more how your company can leverage the Green Freight Journey framework to identify and implement cost and emission reductions project. In addition to the EDF Green Freight Handbook, we will available at our booth have a benchmarking survey for companies to help them assess their next step on the Green Freight Journey.

By Jason Mathers

When looking for ways to increase supply chain efficiencies, few strategies have the cost and emissions savings potential of collaborative distribution or shared shipping—where companies pool freight resources to reduce the amount of truck trips required to move supplies or products. As the Guardian noted in a recent article on Ocean Spray and Tropicana’s shared shipping collaboration, companies stand to annually save billions of dollars and cut over a hundred million tons of climate pollution by adopting this strategy.

A recent Logistics Management report–Getting From “Me” to “We”: Creating a Shared Infrastructure for Product Distribution–dug deeply into this topic too. It shared several examples of how leading companies are implementing this strategy. The example that stood out to me involved CVS, Kimberly-Clark and Colgate.

Finding the right supply chain partners

Suppliers had approached CVS about the opportunities available through collaborative shipping. CVS agreed to undertake a pilot to see how it could help foster this type of arrangement for goods flowing into its network.

The retailer set criteria to identify companies to pilot the concept. The criteria included product compatibility, proximity of supplier distribution centers, complementary order patterns, overlapping customer network and culture fit. CVS chose to run the pilot with Kimberly-Clark and Colgate.

(Source: Logistics Management Institute)

Before the pilot, Colgate and Kimberly-Clark both shipped directly to CVS. Each company had excess trailer capacity. As the image below demonstrates, by collaborating, the inbound trucks to CVS became better utilized. This resulted in fewer overall truck trips (109 less), lower emissions (28 tons avoided) and increased business value for all parties (7% lower inventory, 2% fewer out-of-stocks and better forecasting).

According to the Logistics Management report, the three companies now follow a four-step process:

1. CVS analyzes replenishment needs and combines orders that optimize trailer weight and cube.
2. Colgate shuttles product from its distribution center to a nearby Kimberly Clark DC and unloads the tail of the Colgate trailer.
3. Kimberly-Clark then fills that trailer with its products and ships to CVS.
4. The dedicated carrier invoices both Kimberly-Clark and Colgate based on the percentage of total pallets shipped by each company.

This and other examples highlighted in the Logistics Management report are compelling, but the best evidence to me about the growing interest in collaborative distribution is that I’m learning about other projects from publications outside the logistics/shipping field, including the academic journal Science.

Similar shipping needs = big opportunity

Proctor & Gamble was highlighted in a recent Science article about the “physical internet”–an advanced form of collaborative distribution practices. Through a physical internet, companies move goods through an open global logistics system that is significantly more efficient, sustainable, adaptable and resilient than today’s logistics system. The management systems needed to enable a mature physical internet are being developed at leading research institutions and in cross-company collaborations, such as between P&G and Tupperware.

Both companies have manufacturing facilities and distribution centers (DC) in Belgium. Both were also sending products to Greece from their Belgium DCs. The distances and routes in these moves were well-aligned for co-loading their shipments.

The products matched well too. P&G had heavier products that were using 95% of the weight capacity of each move, but only 50% of the volume capacity. Tupperware, however, had lighter product that was using 85% of the volume capacity, but only 30% of the weight capacity.

By co-loading this freight, Tupperware and P&G were able to avoid 200 tons of climate pollution, increased asset utilization and save 17% on total lane costs.

With big players like CVS and P&G embracing collaboration, it is clear that there are significant, near-term cost savings and emission reductions benefits to be gained by looking for opportunities to collaborate on shipping. If your company isn’t yet embracing these strategies, it is leaving money on the table.

Additional reading:

• EDF's Green Freight Handbook
• 6 MPG? We Can Do Much Better
• Co-Loading Your Way to Green

By Jason Mathers

As July 4th fades away, grills cool down and the remains of fireworks are swept away, it’s time to roll up our sleeves and get back to work. In my case, I’m preparing for a webinar Ceres’ Carol Lee Rawn and I are holding this Wednesday, sharing the findings of our recent report on how strong medium- and heavy-duty truck standards would cut freight costs and emissions.

It’s a topic we’re both passionate about – and think you should be too —  and with good reason: U.S. businesses spend $650 billion a year on freight trucking services, which account for over half a billion tons of greenhouse gas (GHG) emissions a year, the fastest growing single source of GHG emissions. Fuel is the single largest cost of owning and operating a heavy-truck, accounting for 39% of total costs.

Our report finds that new, bold fuel-efficiency and greenhouse gas standards for heavy-duty trucks could end up reducing the cost of moving freight by 7% and owners of tractor-trailer units could save $0.21/mile, an annual savings potential in excess of $25 billion given that class 8 trucks in the US logged 120 billion miles in 2013.

The Obama Administration is in the process of developing new fuel economy and GHG standards for medium- and heavy-duty trucks, and its determination will affect both your company’s freight costs and GHG emissions.  Join us on July 9th for this webinar, where we’ll walk through the savings associated with strong standards and how you can help ensure that stringent standards are adopted.

Register now for the webinar!

By Jason Mathers

New, bold fuel-efficiency and greenhouse gas standards for heavy-duty trucks could end up reducing the cost of moving freight by 7% and owners of tractor-trailer units could save $0.21/mile. These are among the key findings of a new report from EDF and Ceres.

The report, which is based on analysis by MJ Bradley and Associates, examines one potential technology pathway to achieve the stringency target of 40% over 2010 set forth by our groups and other advocates.

Fuel is the single largest cost of owning and operating a heavy-truck, accounts for 39% of total costs. Strong fuel efficiency standards will target these costs largely by requiring the use of cost-effective, fuel saving technologies. As the new analysis demonstrates, fuel savings will be significantly greater than increases in equipment costs.

A $0.21 per mile savings, for example, has an annual savings potential in excess of $25 billion given that class 8 trucks in the US logged 120 billion miles in 2013.

Our finding of significant financial benefits of strong fuel efficiency and GHG standards is consistent in magnitude with previous analysis. A recent report by the Consumer Federation of America looked at similar Phase 2 standards and found net savings of $250 to consumers, rising to $400 per household in 2035 as fuel prices and transportation services increase.

Retailers, manufacturers and other suppliers should take particular note of these results. Some of the cost-per-mile savings of strong standards would likely be passed along to them as major consumers of trucking services. Thus, the total cost of moving freight (including fuel-surcharges) could be reduced significantly over the coming years.

In order to realize gains of this magnitude, large corporate consumers of trucking services need to join the call for bold, truck efficiency and greenhouse gas standards. Companies can do this is by issuing public statements of support for a truck efficiency stringency target of 40% over 2010 by 2025.

Detailed information about the 40% stringency target is available in a fact-sheet issued by EDF and other advocates.

To learn more about how your company can support a strong truck rule and/or request a briefing about the cost-per mile implications of a bold standard and the technology pathways available to achieve the bold target, please contact me.

By Jason Mathers

Here’s something to think about next time you are stuck in traffic next to an 18-wheeler.

The average tractor-trailer can travel only six miles per gallon of diesel.

These heavy trucks travel a lot too; averaging more than 120,000 miles a year or 20 round trip drives between Boston and San Francisco.

Freight trucks are on the road for one primary purpose: to get goods to all of us. In fact 70% of U.S. freight tonnage is moved by tractor-trailer trucks. Over the coming years, demand for freight services is expected to grow even more. And this is driving up fuel consumption and greenhouse gas emissions.

Strong, new fuel efficiency and greenhouse gas standards for our nation’s heavy trucks are achievable, cost-effective and critical to cutting greenhouse emissions and fuel consumption – all while we continue to depend on trucks to deliver the goods we need and want.

It is possible and affordable for tractor trailer trucks to get nearly 11mpg by 2025.

EDF is calling on the Obama Administration to set new fuel efficiency and greenhouse gas standards for heavy trucks that cut fuel consumption by 40% compared to 2010 levels.

These standards would also apply for heavy-duty work trucks, such as box delivery trucks, bucket trucks, beverage delivery trucks and refuse trucks.

The infographic below highlights some of the technology available to meet bold standards as well as the significant cost, oil and emissions savings from such standards.

One fact that just jumps out at me is this: These standards will cut our oil consumption by 1.4 million barrels a day.

That sounds like a big number and it is. It’s a bit higher than the amount of oil we import daily from Saudi Arabia.

Bold fuel efficiency standards are good for our economy, environment and energy security.

They will also be good for trucking fleets too. These trucks will cost $30,000 less to fuel a year.

Strong fuel efficiency and greenhouse gas standards for heavy trucks are an important part of the President’s Climate Action Plan. EDF will continue to work towards strong standards through our unique combination of industry engagement, regulatory design expertise and technical know-how.