Performance: Transportation and Logistics
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In the U.S., transportation accounts for nearly 30% of total GHG emissions, placing that activity second only to electric power generation as a contributor to climate change.1 Globally, GHG transport-related emissions rose more rapidly than any other source between 1970 and 2004—up 120%.2 In some sectors, transportation can account for as much as 70% of a company’s overall carbon footprint.3
McKinsey estimates that changes in transportation modes alone could cut supply chain energy use by 4% by 2020.4 Logistics is therefore one of the most important areas of opportunity for improving sustainability performance and reducing costs. Creating a sustainable transportation network requires that a company focus on the architecture of the network, including tracking and minimizing distances travelled, adopting low-carbon transportation modes and fuel sources and setting long-term, quantitative reduction targets. Many major companies are already achieving dramatic energy savings by greening their logistics programs.
Outsourcing transportation to a carrier does not absolve a company of responsibility for its sustainability impacts. When logistics are sub-contracted to a third party supplier, the company should ensure that its supplier is minimizing and managing sustainability issues. Many companies such as Best Buy, HP and Stonyfield Farm Inc., have joined the U.S. Environmental Protection Agency’s SmartWay Transport Partnership. To date, the partnership includes nearly 2,900 companies and associations committed to improving fuel efficiency. Since 2004, SmartWay Partners report having saved 65 million barrels of fuel, amounting to $8.1 billion in fuel costs, and eliminating 28 million metric tons of carbon dioxide.
Marine shipping also merits strong consideration. Although ocean-going vessels are among the most efficient modes of freight transport, they generate substantial quantities of GHG emissions. According to the International Maritime Organization’s last comprehensive assessment, international shipping accounted for nearly 3% of global man-made emissions and could increase between 200 to 300 percent by 2050 due to the projected growth of the industry.5 Accelerated adoption of cleaner marine fuels and use of existing pollution control technologies would significantly reduce air pollution from this mode of transport.6
The themes of this section for reducing transportation impacts are focused on the architecture of the transportation network, including distances traveled; and specific transportation modes, including the sustainability credentials of the energy sources used. This section also looks at business travel and commuting practices and the role that companies can take in shaping employee behavior.
1. U.S. Environmental Protection Agency. Draft Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2011. February 2013. http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2011.pdf.
2. Sperling, Daniel. “Biofuels and the LCFS.” 12 May 2009. Retrieved from http://biomass.ucdavis.edu/materials/forums%20and%20 workshops/f2009/0.2_Dan%20Sperling.pdf.
3. Varmazis, Maria. “‘Green’ Procurement Goes into the Black.” Purchasing.com. 8 May 2008. http://www.purchasing.com/ article/220103-_Green_procurement_goes_into_the_black.php.
4. Meyer, Tobias A. Energy Efficient Supply Chains. McKinsey Quarterly. August 2009. Retrieved from http://www.mckinseyquarterly.com/ Increasing_the_energy_efficiency_of_supply_chains_2414?pagenum =1#interactive.
5. International Maritime Organization. "Greenhouse Gas Emissions." Retrieved from http://www.imo.org/OurWork/Environment/pollutionprevention/airpollution/pages/ghg-emissions.aspx 10 April 2013.
6. The International Council on Clean Transportation. Air Pollution and Greenhouse Gas Emissions from Ocean-Going Ships: Impacts, Mitigation Options and Opportunities for Managing Growth. 2007. Retrieved from http://www.theicct.org/.