The

Green Freight
Handbook A Practical Guide for Developing a Sustainable
Freight Transportation Strategy for Business

Authors: Jason Mathers Elena Craft, Ph.D. Marcelo Norsworthy Christina Wolfe
Senior Manager, Senior Health Scientist Transportation Research Analyst Ports & Transportation Analyst
Supply Chain Logistics
 The Green Freight Handbook
A Practical Guide for Developing a Sustainable
Freight Transportation Strategy for Business

Acknowledgments The Green Freight Handbook was created by Environmental Defense Fund (EDF) to assist companies in developing
strategies to reduce greenhouse gas emissions and overall costs linked to freight transportation. The Handbook
benefited from valuable insights from many leading researchers, service providers and logistics practitioners from
globally recognized brands. Extensive interviews with these industry experts provided an insider perspective on
how the largest brands plan, develop and execute greenhouse gas-efficient freight moves. EDF would like to thank
the following for their commitment to greener freight practices and for generously donating their time: Dr. Edgar E.
Blanco, Research Director, MIT Center for Transportation and Logistics; Peter Diehm, Manager of Purchasing and
Material Planning, Nora Systems, Inc.; Elizabeth Fretheim, Director Business Strategy and Sustainability, Logistics,
Walmart; Sonney Jones, Division Director, Transportation, Mohawk Industries, Bill Loftis, Senior Principal, Tompkins
International, Ana Lucia Lonzo, Director Continuous Improvement & Sustainability, Chiquita Brands International,
Bill Michalski, Vice President Sales and Marketing, ArrowStream; Tom Moore, Logistics/Transportation Manager,
Transportation | Warehouse Optimization; Kevin O’Meara, Senior Vice President, Supply Chain Effectiveness,
Breakthrough Fuels; Lorin Seeks, Global Transportation, Carrier Development Group, Starbucks Corporation,
Stephen Silva, Freight Transportation Specialist; and Ashton Shaw, Senior Sustainability Engineer / Lean
Coordinator, Menlo Worldwide.
The authors would also like to thank Jim Bierfeldt and Helen Atkinson with Logistics Marketing Advisors. The
handbook benefited greatly from their guidance, writing and editorial eye. Jenn Silva and Kate Hanley were critical
in the development and execution of the handbook. While many individuals helped us build a collective picture of
freight actions, the opinions expressed in this report are solely those of the authors.

Environmental Defense Fund Environmental Defense Fund (edf.org), a leading national nonprofit organization, creates transformational
solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-
sector partnerships.

1 The green freight handbook

 the
GREEN FREIGHT Chapter 1: Introduction. . . . . . . . . . . . . . . . . . . . . . . . . 4
HANDBOOK EDF’s 5 Principles for Greener Freight

Chapter 2: Establish Metrics. . . . . . . . . . . . . . . . . . . . . 6

Table of Tips from the experts: Establishing a freight sustainability metrics baseline
What should you measure?

Contents
»» High-level freight sustainability metrics (table)
»» Freight efficiency metrics
CO2 vs GHGs
E OF CONTENTS

How to calculate metrics and determine your baseline

»» North American Freight Emissions Factors (table)
»» Example: Calculating emissions from a truck-load move
»» Example: Calculating emissions from a truck-load with mileage-only data
»» Example: Calculating emissions from an ocean-truck, multi-leg move
Key considerations when calculating emissions
»» Scope of the calculations
»» Best emissions factors to use
»» Allocating emissions when co-loading freight
Tips from the experts: Choosing and using emissions factors
Additional resources

Chapter 3: Assess Opportunities. . . . . . . . . . . . . . . . 20

Principle #1: Get the most out of every move
»» Tips from the experts: How packaging changes can make freight operations more efficient
»» Green Freight diagnostic: Get the most out of every move
Principle #2: Choose the most carbon-efficient mode
»» Tips from the experts: Rail intermodal
»» Green Freight diagnostic: Choose the most carbon-efficient mode
Principle #3: Collaborate
»» Tips from the experts: Making greater use of collaboration in freight transport
»» Green Freight diagnostic: Collaborate
Principle #4: Redesign your logistics network
»» Tips from the experts: Keys to Successful Network Optimization
»» Green Freight Diagnostic: Redesign your logistics network
Principle #5: Demand cleaner equipment and practices
»» Tips from the Experts: Cleaning up equipment and practices
»» Green Freight diagnostic: Cleaner equipment and practices

2 TABLE OF CONTENTS
 Chapter 4: Choose and Implement Strategies. . . . . . 51
Key Questions:
»» What is the predicted greenhouse gas reduction impact?
»» What are the incremental costs involved in implementing the initiative?
»» What will be the annual financial savings?
»» What financial metrics should be used for evaluating each potential project?
Financial Analysis
»» Example: Financial analysis: Freight sustainability initiatives (table)
Driving Organizational Alignment
»» Implementation guidelines (table)
Tips from the experts: Choosing and implementing sustainable freight strategies

Chapter 5: Set Goals and Report Results. . . . . . . . . . 60

Model corporate greenhouse gas goals (table)
Reporting results
»» Who does the reporting?
»» What should you report?
»» Examples of corporate reports

Chapter 6: Conclusion . . . . . . . . . . . . . . . . . . . . . . . . 63
Chapter 7: EDF’s Work on Freight . . . . . . . . . . . . . . . 64
EDF Green Freight initiative
EDF Clean Ports project
How to Work with the EDF Green Freight team
EDF experts

3 TABLE OF CONTENTS
1
Chapter 1 INTRODUCTION

O
ur appetite for goods of all kinds—food, electronics, apparel, housewares – is growing. And the supply
chains that make and deliver these goods are increasingly global. As a result, products travel farther to
reach us than ever before, and that means greater fuel consumption, more greenhouse gas emissions (GHGs),
and continued local air pollution challenges. In the U.S., freight transport accounts for 16 percent of corporate
greenhouse gas emissions, making it one of the largest carbon footprint contributors.1 Worse, freight’s contribution
is set to grow. By 2040, U.S. freight emissions are on track to increase nearly 40 percent above current levels.2
Meanwhile, compelling scientific assessments of climate change make it clear that society must dramatically cut
greenhouse gas from all sources over this time. Reducing freight’s impact on greenhouse gas emissions is a major,
long-term challenge for logistics professionals. Critical progress can be made, though, starting today.
On the broad issue of climate change, the world’s largest companies are stepping up to the challenge with real,
committed action. In fact, more than 60 percent of
the combined Fortune 100 and Global 100 have
established public, GHG reduction goals.3 Freight
has not yet reached center-stage status in corporate
sustainability efforts, but that’s beginning to change,
and for good reasons. Companies are recognizing
the enormous potential of Green Freight strategies
to reduce greenhouse gases and, at the same time,
drive down costs and increase profitability. With
Green Freight, there is a direct correlation between profitable business and environmental goals.
Through its work with shippers, EDF has identified five over-arching strategies that companies can employ
today to significantly cut greenhouse gases and local air pollution, while driving business value.

4 Chapter 1 INTRODUCTION
 EDF’s 5 Principles for 1. Get the most out of every move. Combine freight and adapt packaging to maximize cube utilization. A fuller
Greener Freight move is a greener move.
2. Choose the most carbon-efficient transport mode. Favor ocean over air, and rail over truck.
3. Collaborate. Root out opportunities for savings through discussions with internal departments and with
suppliers, customers, vendors – even competitors.
4. Redesign your logistics network. Continually optimize your network to maximize cost savings and minimize
greenhouse gas emissions.
5. Demand cleaner equipment and practices. Urge your logistics service providers to use cleaner trucks and
cargo handling equipment, and employ other air pollution-reducing practices at busy transport hubs.
These Principles for Greener Freight can help you meet both your freight efficiency and cost-cutting goals. The
task now is for companies large and small to advance in their individual Green Freight journey. With widespread
adoption of proven Green Freight strategies and performance-based objectives, freight shippers can make a
meaningful contribution to reducing emissions. This Green Freight Handbook is designed to jumpstart the effort
by offering a practical approach for getting started. EDF’s 5 Principles serve as an underlying structure for this
handbook, as we move through the steps of establishing metrics, assessing opportunities, and implementing a
sustainable freight program.

For more information: www.edf.org/freight

Notes
1 Mathers, Jason, EDF, Analysis of U.S. Energy Information Administration Annual Energy Outlook 2012,
Table 19. Energy-Related Carbon Dioxide Emissions by End Use. September 2012.
2 Ibid.
3 Calvert Investments, Ceres and World Wildlife Fund (WWF), Power Forward: Why the World’s Largest
Companies are Investing in Renewable Energy, December 2012.

5 Chapter 1 INTRODUCTION
2
Chapter 2 ESTABLISH METRICS

E
stablishing metrics is the first step in a Green Freight journey. Metrics signal that your efforts are focused
on improving performance in a way that can be measured. They provide definition to your efforts and keep
you from chasing one-off, check-the-box kind of projects that, while they may be newsworthy, don’t tackle a core
component of your freight’s greenhouse gas footprint.
Well-defined, performance-based metrics keep
transportation teams focused on the top Green Freight U.S. Corporate-Driven Emissions (by end use)
goal of achieving meaningful, measurable, cost-effective Passenger Air and
Mass Transit
Other Transit
3%
5%
emissions reductions. Metrics also keep your team
(and your executives) from confusing activity with
achievement. For instance: Freight
16%
Commercial
30%

• Are you ready to sign an agreement with a carrier that

has a new fleet of advanced trucks? This can be a great
step, but if your empty miles double, is that progress?

• Are you under pressure to sign a new lease with a Industrial

46%
“green” certified warehouse? This could be a big win,
but only if it doesn’t add miles to your freight runs. U.S. EIA Annual Energy Outlook 2013. Table 19: Greenhouse Gas Emissions by End-Use

Just as a gym membership doesn’t guarantee your

ability to get fit, joining green clubs or purchasing green equipment doesn’t guarantee reductions to your greenhouse
gas emissions. Success in freight sustainability is about outcomes. It’s about setting a performance target, and
methodically monitoring results; tweaking behavior until the needle moves. That may not be worthy of a ribbon-
cutting ceremony, but it’s the formula for success – in achieving both operational and environmental gains.
Start your journey by establishing performance-based metrics, and report your progress regularly.

6 Chapter 2 ESTABLISH METRICS

 Tips From Establishing a freight sustainability
the Experts
metrics baseline
• Identify the performance outcomes you are seeking to track. including information from business partners such as carriers.
Be specific about the key environmental performance areas It’s important to have sufficient data to set a baseline. Then you’ll
your company wants to impact. For Green Freight activities, this want to choose one year as the baseline for future comparison.
could be change in fossil fuel consumption and/or change in Make sure you pick a roughly representative year – not one in
greenhouse gas emissions. the middle of a recession or a boom.
• Survey similar organizations. Find out what metrics companies in • Ensure data is calculated in a consistent manner. All greenhouse
your industry are using to track Green Freight programs. Similar gas calculators are not the same. There are dozens of different
metrics might work for you. assumptions that can return very different results for the same
• Establish absolute (overall) and normalized (productivity) metrics freight volumes. Decide on the calculation approach that best fits
for these outcomes. Your operations will benefit from having two your operations and stick to it, so you can usefully compare data
types of metrics: one type that tracks the overall direction of your from different sources.
efforts (e.g., Are your total emissions increasing or decreasing?) • Institutionalize data collection processes. An efficient and
and another type that puts your progress in perspective by transparent data collection process – preferably with secure
adding contextual measures (e.g., Are your emissions per mile electronic access to the necessary data – is critical to success,
or unit of product sold increasing or decreasing?). These metrics as is buy-in from your colleagues. Create a plan that specifies
will become your key performance indicators (KPI). not only what new data will be collected and reviewed, but also
• Collect historical data to establish baselines for absolute and the person responsible for collecting and reporting metrics
normalized metrics. Identify as much data as you can access, regularly. Often, this will mean finding extra resources to support
ongoing data collection.

What should you measure? Your baseline will include both high-level freight sustainability metrics and more specific freight efficiency metrics.

High-level freight sustainability metrics

The three primary metrics to gauge freight sustainability, at a corporate level, are:
• Emissions per ton-mile – the average emissions associated with moving one ton of freight for one mile.

7 Chapter 2 ESTABLISH METRICS

 • Absolute freight emissions – the total greenhouse gas emissions generated by transporting freight.
• Total fuel consumption – the fuel used by direct freight operations and by third-partly logistics companies (3pl) and
carriers in the transport of products.

Freight efficiency metrics

Your success in reducing freight’s contribution to your company’s carbon footprint will be a result of the specific
strategies you employ. You’ll want a more detailed level of metrics to assess progress in specific areas. Some of the
more popular environmental performance metrics for logistics are captured in the chart below, modified from the
Handbook on Applying Environmental Benchmarking in Freight Transportation.1 You’ll want to focus on those
metrics that are most relevant to your operation.

ENVIRONMENTAL PERFORMANCE METRICS

• Total emissions per $ of revenue or $ of purchases • Total purchased truck and air miles per
• Electricity consumption per $ of revenue $ of revenue
Greenhouse Gas =
• Electricity consumption per $ of purchase x x
• Percentage of transportation expenditure by mode

• Total emissions per ton-mile or per shipment • Percentage of revenue shipped by mode

• Number of people exposed to specific • Percentage of ton-miles by mode

concentration of emissions from facility • Percentage of transportation miles by mode
• Percentage of SmartWay carriers • Percentage of volume by mode
• Average score of SmartWay carriers • Percentage of trips by mode
• Average miles traveled per shipment • Average distance to shippers or receivers from
• Average emissions per shipment nearest location

How to calculate metrics and The logical starting point for developing a sustainable freight program is to understand where you are today.
determine your baseline Companies at the beginning stages of their Green Freight initiatives need to remember that ‘perfect should not be the
enemy of good’ when it comes to establishing a baseline of their environmental performance. Highly detailed data-
gathering and measurement may require time and resources you simply don’t have. In that case, rethink the scope of
the program (by geography, by business unit, by mode).

8 Chapter 2 ESTABLISH METRICS

 Although it may seem like a lot of work to do before you’ve even started to make changes, bear in mind that the
more accurate and comprehensive your baseline data, the better you’ll be able to assess areas for improvement and –
even better – demonstrate measurable progress down the line.
Greenhouse gas (GHG) emission levels are needed for several of the key environmental performance metrics
listed on page 8. At the most basic level, there isn’t anything complicated about calculating GHG emissions. 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. A simple greenhouse gas emissions
formula is:

GREENHOUSE GAS calculation3

Greenhouse Gas Emissions = D x W x EF

D = The distance your shipment has traveled (in miles or kilometers)

W = The weight or amount of your shipment (in pounds, kilograms or tons when data is
available, or volume metrics such as number of twenty-foot equivalent unit [TEUs])

EF = The mode’s specific emissions factor.

The distance and weight and/or volume information needed to calculate greenhouse gas emissions is most
likely already captured in your transportation management software (TMS). 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.

9 Chapter 2 ESTABLISH METRICS

 North American Freight Emissions Factors
Emission Greenhouse
Mode Category Functional Unit Source
Factor Gases Included

Air Longer flights ( >3,700 km/ 2,300 miles) grams per short ton-mile Weight 868.3 CO2 A

Shorter flights (<3,700 km/ 2,300 miles) grams per short ton-mile Weight 2,050.0 CO2 A

Barge All grams per short ton-mile Weight 17.5 CO2 A

Ocean- Asia to North America (east coast) grams per TEU kilometer Volume 68.1 CO2 B
Dry Goods
Asia to North America (west coast) grams per TEU kilometer Volume 59.1 CO2 B

Mediterranean to North America (east coast) grams per TEU kilometer Volume 79.6 CO2 B

Mediterranean to North America (west coast) grams per TEU kilometer Volume 76.8 CO2 B

North America to Africa grams per TEU kilometer Volume 89.5 CO2 B

North America to Oceania grams per TEU kilometer Volume 81.3 CO2 B

North America to South America grams per TEU kilometer Volume 68.6 CO2 B

North American (east coast) to Middle East and India grams per TEU kilometer Volume 77 CO2 B

North Europe to North America (east and gulf) grams per TEU kilometer Volume 78.2 CO2 B

North Europe to North America (west coast) grams per TEU kilometer Volume 69.6 CO2 B

Ocean- Asia to North America (east coast) grams per TEU kilometer Volume 95.3 CO2 B
Refrigerated
Asia to North America (west coast) grams per TEU kilometer Volume 87.9 CO2 B
Goods
Mediterranean to North America (east coast) grams per TEU kilometer Volume 113.9 CO2 B

Mediterranean to North America (west coast) grams per TEU kilometer Volume 112.4 CO2 B

North America to Africa grams per TEU kilometer Volume 127.1 CO2 B

North America to Oceania grams per TEU kilometer Volume 109.2 CO2 B

10 Chapter 2 ESTABLISH METRICS

 Emission Greenhouse
Mode Category Functional Unit Source
Factor Gases Included

Ocean- North America to South America grams per TEU kilometer Volume 102.1 CO2 B
Refrigerated
North American (east coast) to Middle East and India grams per TEU kilometer Volume 101 CO2 B
Goods
(Continued) North Europe to North America (east and gulf) grams per TEU kilometer Volume 107.6 CO2 B

North Europe to North America (west coast) grams per TEU kilometer Volume 98.2 CO2 B

Rail All grams per rail-car mile Distance 1,072.0 CO2 A

All grams per TEU-mile Volume 292.8 CO2 A

All grams per short ton-mile Weight 22.9 CO2 A

Truck All grams per mile Distance 1,700.0 CO2 C

Dray grams per mile Distance 1,750.0 CO2 C

Expedited grams per mile Distance 1,200.0 CO2 C

Flatbed grams per mile Distance 1,800.0 CO2 C

Heavy Bulk grams per mile Distance 2,000.0 CO2 C

LTL Dry Vans grams per mile Distance 1,625.0 CO2 C

Mixed grams per mile Distance 1,700.0 CO2 C

Refrigerated grams per mile Distance 1,750.0 CO2 C

Tanker grams per mile Distance 1,750.0 CO2 C

Truck-load Dry Vans grams per mile Distance 1,700.0 CO2 C

All grams per TEU-mile Volume 597.4 CO2 A

All grams per short ton-mile Weight 161.8 CO2 A

Source: A
 . EPA SmartWay: Shipper Partner Tool: Technical Documentation, 2013
B. BSR. Collaborative Progress: Clean Cargo Working Group Progress. 2013
C. EPA SmartWay: Carrier Performance for Public Export, 2014 (data is the median of each class)

11 Chapter 2 ESTABLISH METRICS

 CO2 vs ghgs
Carbon dioxide (CO2) is the most prevalent greenhouse gas (GHG). On average, it
represents more than 95 percent of the impact on climate change that comes from burning transportation
fuels. Methane (CH4) and nitrous oxide (N2O) are other GHGs associated with fuel combustion.
Hydroflurocarbons (HFCs) – high-impact global warming gases – can leak from refrigeration equipment
used to keep cargo cool. Because of its prevalence, some calculators measure carbon dioxide emissions
only. This approach will underestimate the overall impact of your freight operations, but it can make
for a simpler calculation. The inclusion of other factors can become particularly important when using
alternative fuels, such as natural gas, which can result in higher emissions of methane. Emissions
calculations that include all greenhouse gases associated with fuel combustion are often noted as a
CO2E factor – where “E” stands for equivalent. This means the warming impact of other greenhouse
gases has been factored in.

Before we get into the nuances that can make some of these calculations more complex, let’s put our formula to
work with a few straightforward examples:

Example: Calculating emissions from a truck-load move

Let’s start with calculating the emissions for a truck that travels 1,000 miles with 20 short tons of cargo (a short ton is
2,000lbs).
• Step One: 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 Two: Get the weight-based truck emissions factor from the Freight Emissions Factors chart. This tells us that
the average freight truck in the U.S. emits 161.8 grams of CO2 per ton-mile.
• Step Three: 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. Note that this calculation does not factor in emissions of other greenhouse gases, such as
methane or HFCs.

12 Chapter 2 ESTABLISH METRICS

 • Step Four: 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.
Here is the data we used in the previous example, plus another example for you to try:

Total Emissions
Distance Weight Total Ton-Miles Emissions Factor Total Emissions
(Metric Tons)

1,000 miles 20 short tons 1,000 x 20 = 20,000 161.8 grams of CO2/ton-mile 3,236,000 grams CO2 3.24 metric tons CO2

750 miles 13 short tons 750 x 13 = 9,750 161.8 grams of CO2/ton-mile 1,577,550 grams CO2 1.58 metric tons CO2

Example: Calculating emissions from a truck-load with mileage-only data

Let’s now consider an example where the shipper lacks access to tonnage data. It is possible to estimate emissions
from this move, too – though it is likely to be less accurate than a calculation based on accurate weight or volume
data. In our scenario, we have a truck traveling 1,000 miles again.
• Step One: Identify the appropriate distance-based truck emissions factor on the Freight Emissions Factors chart.
In this example, we are using a truck-load – dry van service. Our appropriate emissions factor is: 1,700 grams of CO2
per mile. This is the median score, based on the average weight of a full truck, for truck-load carriers participating
in EPA’s SmartWay program. One of the goals of the program is to allow shippers to identify their carrier-specific
emissions factor, significantly improving the accuracy of the calculation.
• Step Two: Multiply the distance of the truck trip (1,000 miles) by the emissions factor (1,700 grams per mile). This
gives us a total of 1,700,000 grams of CO2.
• Step Three: Convert this into metric tons by dividing the total grams by 1,000,000. This gives us 1.7 metric tons.
This is a significantly lower total than the weight-based approach above. As we highlight below in “Tips from the
experts: Choosing and Using Emission Factors,” the embedded assumptions in each factor are very important. Fuel
consumption, and therefore GHG emission, is going to be significantly different for shippers of toilet paper than tile
– cargo weight is an important factor. It is best to choose calculation constants that best fit with your operations, and
use them consistently – otherwise you’ll compromise the integrity of your data.
Here is the data we used in the above example, plus another example for you to try.

Total Emissions
Distance Weight Total Ton-Miles Emissions Factor Total Emissions
(Metric Tons)

1,000 miles N/A N/A 1,700 grams of CO2/ mile 1,700,000 grams CO2 1.7 metric tons CO2

750 miles N/A N/A 1,700 grams of CO2/mile 1,275,000 grams CO2 1.3 metric tons CO2

13 Chapter 2 ESTABLISH METRICS

 Example: Calculating emissions from an ocean-truck, multi-leg move
We will now calculate a multi-leg, multimodal trip: the movement of a twenty-foot equivalent container (TEU) from
overseas to a domestic distribution center (DC).
• Step One: Identify the origin and destination ports and calculate distance. In this example, the container will
travel from Shanghai to the Port of Los Angeles, which is 5,699 miles or 9,172 kilometers.
• Step Two: Identify the lane-specific emissions factor from the Freight Emissions Factors chart. In this example, it
is the Asia to North America (west coast) factor for dry goods – 59.1 grams per TEU-kilometer.
• Step Three: Calculate TEU-kilometers, which is 1 TEU multiplied by 9,172 kilometers.
• Step Four: Multiply total TEU-kilometers by emissions factor (9172 x 59.1g), which is 542,065 grams.
The container is transported from the port to a distribution center in the Inland Empire area of California.
• Step Five: Calculate the ton-miles. This trip is 75 miles with a load of 16 tons. The total ton-miles (75 X 16) = 1,200.
• Step Six: Multiply the total ton-miles by the weight-based truck emissions factor of 161.8 grams CO2 per ton-mile,
which gives us 194,160 grams.
• Step Seven: Add the truck leg to the total from the ocean leg (194,160 grams + 542,065 grams), which gives us
736,225 grams or 0.74 metric tons of carbon dioxide.
Here is the data we used in the above example, plus another multi-leg, multimodal example for you to try:

Total
Total Ton-or Emissions Total
Example Move Mode Trips Distance Weight Volume Emissions
TEU-Miles Factor Emissions
(Metric Tons)

1 Shanghai to Ocean 1 5,699 miles/ N/A 1 TEU 5,899 TEU miles/ 59.1 kg/ 542,065 0.54 metric
Port of LA (dry 9,172 9,172 TEU km TEU-km grams CO2 tons CO2
container) kilometers

Port of LA to Truck (dray) 1 75 miles 16 N/A 1,200 ton-miles 161.8 grams 194,160 0.19 metric
Company DC short tons CO2/ton-mile grams CO2 tons CO2

2 Manufacturing Facility Truck (dray) 2 35 miles 18.5 N/A 1,295 ton-miles 161.8 grams 209,531 0.21 metric
to Rail Yard short tons CO2/ton-mile grams CO2 tons CO2

Long-haul rail trip Rail 1 800 miles 37 N/A 29,600 ton-miles 22.9 grams 677,840 0.68 metric
short tons CO2/ton-mile grams CO2 tons CO2

Destination Rail Yard Truck (dray) 2 45 miles 18.5 N/A 1,665 ton-miles 161.8 grams 269,397 0.27 metric
to Distribution Center short tons CO2/ton-mile grams CO2 tons CO2

14 Chapter 2 ESTABLISH METRICS

 By the way, you can already see that rail transport burns a lot less fuel, and emits a great deal less GHGs, per ton-mile,
than trucks, and that ocean transport can be even more efficient. We’ll talk about this more later.

Key considerations Following the calculations above, you will be able to assess most of your current baseline activity and begin to track
when calculating emissions your performance-based sustainability metrics. As you move forward, you likely will need additional guidance on
items such as:
• What is the scope of your calculations and where should you set boundaries?
• What are the best emission factors to use for your specific circumstance – type of freight, size of shipment, etc.?
• How should you allocate emissions when co-loading freight with other shippers?
Below is some guidance on how to tackle these considerations. At the end of this section, you will find several
additional resources for more detailed guidance.

Scope of the calculations

Choosing organizational boundaries is an issue that will arise quickly. In a recent paper, MIT experts highlighted a
standard that “provides a guideline for establishing a definition of transportation in the supply chain.”4 This standard
is specifically written for freight shippers or cargo owners. Its recommended boundaries include:
• All vehicles used to perform the transport service, including those operated by subcontractors.
• All fuel consumption from every fuel source on each vehicle (i.e. include refer units auxiliary power unites).5
• All loaded and empty trips made by each vehicle.
The standard also has a list of items it considers to be out of scope. This list can be found in the NCFRP reference
document, Carbon Footprint of Supply Chains: A Scoping Study.

Best emissions factors to use

The emissions factors used for calculating supply chain freight emissions are activity-based factors. These aim to
capture what a typical vehicle type uses in a typical operations cycle. To create this factor, reasonable assumptions
must be made on emissions components such as the efficiency of the vehicle and the operating environment. Some
factors are arrived at through detailed modeling; others are built by collecting survey data from carriers, such as
through the EPA SmartWay Program. The best emission factors for your operations will depend on your unique
circumstances and how precise you need your calculation to be.

15 Chapter 2 ESTABLISH METRICS

 Tips From Choosing and using emissions factors6
the Experts

Less
• In choosing emissions factors, the Changes in emissions factors will
P Mode
more precisely the factor reflects r always impact absolute emissions
your specific operations the better. e reported, may or may not impact
c Equipment
The accompanying graphic depicts percentage emission reductions, and
i
precision levels for emissions factors s very rarely change final carbon-efficient
Carrier
based on how they were created. i logistics decisions.
o
Shipment-specific data is likely • Understand which emissions are
n Shipment
impractical. Whenever possible, use included in the emissions factors and
More
carrier-specific numbers. which are not. Most factors include
• Understand how data was collected in “direct emissions,” which are those
order to come up with the emissions factor. Was it a model-driven, associated with fuel combustion. Emissions associated with
top-down approach, or a survey-built, bottom-up approach? producing and processing the fuel – called “indirect emissions”
• Consider more detailed approaches, such as those put forward – are typically not included. These emissions can be significant,
by the Network for Transport and Environment (NTM) in Europe. and are particularly important to factor in when considering
It publishes a comprehensive reference on CO2 calculations at switching fuel sources.
various levels of detail that includes data requirements. • Given the global nature of our freight system, emissions factors and
• Keep good records of your assumptions, and be ready to equations can appear in either metric or imperial units. It’s important
adjust your calculations as new data becomes available. to note the system used and convert the data as needed.

Allocating emissions when co-loading freight

Many companies have partnered to share space in trucks and railcars for increased efficiency and cost savings. When
more than one company’s products are carried in a shipment, allocating emissions becomes more complex. To
calculate the emissions produced by each customer’s product within the same truck, you must consider the size and
weight of each pallet, the length of the total distance each product is shipped, and the amount of emissions the truck
would produce if it were empty. The calculation you choose will depend on whether your shipments vary in distance,
weight, and how much data you have available.
To illustrate the point above, let’s return to the first example we calculated of a truck trip of 1,000 miles with
20 short tons of cargo. Now, let’s assume that two companies are co-loading freight onto this truck. There are a few

16 Chapter 2 ESTABLISH METRICS

 ways they could allocate the truck emissions between them: by weight, by volume, or by share of the cost. When one
company’s freight is higher weight/lower volume and the other’s is higher volume/lower weight (e.g. tiles and toilet
paper), it’s usually best to make the allocation using a cost-based method.

Company 1 Company 2

Total Share of Weight 80% 20%

Weight-based Allocation 2.592 0.648

Total Share of Volume 40% 60%

Volume-based Allocation 1.296 1.944

Total Share of Cost 55% 45%

Cost-based Allocation 1.782 1.458

17 Chapter 2 ESTABLISH METRICS

 Additional resources EPA SmartWay:
The EPA SmartWay Program is a terrific resource for freight shippers. By joining the EPA SmartWay Program,
shipper members can assess carrier-specific data for many truck, rail and barge moves. Members also have access to
a comprehensive emissions calculation tool created specifically for shippers. EPA SmartWay staff members provide
technical support for companies filling out the SmartWay calculation tool.

Further guidance on calculations:

MIT Case Studies in Carbon-Efficient Logistics. These real-life case studies provide great reference materials for
how carbon calculations are done for specific Green Freight initiatives.
• Ocean Spray: Leveraging Distribution Network Redesign
• Caterpillar: Light-Weighting and Inbound Consolidation
• Boise: Leveraging Rail Direct Service
DEFRA Guidance on Measuring and Reporting Greenhouse Gas Emissions from Freight Transport
Operations. This document includes step-by-step calculation guidance for logistics service providers and carriers.
It’s created for operations within the United Kingdom. Calculations guidance can translate to the U.S. context, but
emission factors are not valid for operations in the U.S.
Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. This
standard, from the World Resources Institute, is the most widely used carbon accounting protocol for corporations.
The framework includes specific guidance on most aspects of calculating emissions.
The Climate Registry: General Reporting Guidelines. This is a U.S.-focused corporate climate accounting
framework, based largely on the World Research Institute protocol.
Carbon Footprint of Supply Chains: A Scoping Study. This is a detailed recommendation on the development of a
complex carbon calculation tool. It’s for those who want to dive in deep and get very precise with calculations.
• EN 16258 suggested boundaries (page 22)
• Review of existing freight carbon footprinting tools (page A-1)
Network for Transport and Environment (NTM). EU-based non-profit that established guidance on calculating
the environmental performance for various modes of transport. The group offers a calculation method and relevant
environmental data and tools for supplier evaluation.

Emissions factor resources:

EPA SmartWay Carrier-Specific Emissions Factors. For-hire trucking emissions factors by truck industry segment.
Good for over-the-road emissions calculations.

18 Chapter 2 ESTABLISH METRICS

 BSR Collaborative Progress: Clean Cargo Working Group Progress. Maritime trade lane specific factors. Good
reference if you are calculating emissions for international ocean cargo.
EPA SmartWay Shipper Partner Tool: Technical Documentation. Background information and emissions factors
for U.S. freight operations.
Cefic ECTA: Guidelines for Measuring and Managing CO2 Emission from Freight Transport Operations. A
source for emissions factors for European Union operations.

Other resources:
Carbon Footprint Study for the Asia to North America Intermodal Trade: Table 4 of this report includes distance
between major Asian and North American ports

For more information: www.edf.org/freight

Notes
1. O’Rourke, Larry, ICF, et al. Transportation Research Board of the National Academies, Handbook on
Applying Environmental Benchmarking in Freight Transportation, NCFRP Report 21, 2013.
2. Modified from O’Rourke et al, Handbook on Applying Environmental Benchmarking in Freight
Transportation, NCFRP REPORT 21, Exhibit 24: Shipper and Receiver Metrics. 2012.
3. Blanco, Edgar, Center for Transportation and Logistics, Massachusetts Institute of Technology, Delivering
“Green,” Case Studies in Carbon-Efficient Logistics. April 17, 2013.
4. Anthony J. Craig, Edgar E. Blanco, Christopher G. Caplice, Carbon Footprint of Supply Chains:
A Scoping Study, NCFRP Project 36(04), June 2013. Massachusetts Institute of Technology Center for
Transportation & Logistics.
5. EDF modified this phrase for clarity. The exact text from original text from the source document is: “all
fuel consumption from each energy carrier used by each vehicle”.
6. Modified from Edgar E. Blanco, Caterpillar: Light-Weighting and Inbound Consolidation, January 2013.
Massachusetts Institute of Technology.

19 Chapter 2 ESTABLISH METRICS

3
Chapter 3 ASSESS OPPORTUNITIES

T
here are many ways to reduce freight-related GHG emissions – mode choice, freight optimization, packaging
design to name just a few.
But which strategies make the most sense for you?
This section of the Green Freight Handbook provides a framework to help you answer this question based
on what initiatives will achieve the greatest environmental benefit in the least amount of time. It starts with EDF’s
5 Principles for Greener Freight. These are proven strategies that are in use today by companies with active and
successful sustainable freight programs. We’ll review each principle, and provide real examples of how companies are
leveraging that principle to reduce greenhouse gas emissions and operating costs. Then we’ll present a Green Freight
Diagnostic exercise – essentially a series of simple questions designed to help you determine which strategies are the
low-effort, high-return opportunities – the low-hanging fruit in your freight sustainability program.
We’ll present the Green Freight Diagnostic in the context of each of EDF’s 5 Principles. You can download the
full Green Freight Diagnostic.

Principle #1: Get the most out of every move

Principle #2: Choose the most carbon-efficient mode

Principle #3: Collaborate

Principle #4: Redesign your logistics network

Principle #5: Demand cleaner equipment and practices

20 Chapter 3 ASSESS OPPORTUNITIES

Principle 1: Whether it’s a trailer, a container or a boxcar, better capacity utilization reduces the number of required freight runs.
Transportation professionals recognize the business value of building fuller truck-loads. Yet, recent research has

Get the determined that 15–25 percent of U.S. trucks on the road are empty and, for non-empty miles, trailers are 36 percent
underutilized.1 Capturing just half of this under-utilized capacity would cut freight truck emissions by 100 million

most out of tons per year – about 20 percent of all U.S. freight emissions – and reduce expenditures on diesel fuel by more than
$30 billion a year.2

every move Nearly every company has the opportunity to improve its freight load factor. Realizing these gains and capturing
the financial savings requires creative, system-level thinking and, sometimes, an information systems solution. Many
leading companies are making impressive strides in this area.

KRAFT FOODS realized that, because of the variety of products either cubing-out trailers (reaching
the volume limit) or weighing-out trailers (reaching the truck weight limit), its refrigerated outbound
shipments were averaging only 82 percent of weight capacity. To address the problem, Kraft teamed
with Transportation/Warehouse Optimization, a company that sells software designed to enhance
efficiency. The AutoVLB software, also known as “Super Truck,” converts demand into optimized
orders to maximize truck usage without damaging products. As a result, Kraft cut 6.2 million truck
miles and reduced truck-load costs by 4 percent.3

WALMART was able to increase the number of pallets shipped in a truck from 26 to 30 simply by side
loading pallets4. This is one approach the retailer has taken to achieve its goal of doubling the efficiency
of its transportation operations by 2015. Other strategies that Walmart has employed to maximize cube
utilization include grouping delivery days together, adjusting delivery frequency, improving systems, and
educating local routers. Walmart’s senior vice president of logistics, Chris Sultemeier, noted: “Since 2008,
we have delivered 335 million more cases while driving 300 million less miles5.”

Traditional loading of pallets compared with side Homayoun Taherian, Cnergistics, LLC
loading in Walmart trucks

21 Chapter 3 ASSESS OPPORTUNITIES

 Other companies have made capacity utilization a strategic priority, and literally changed their terms with customers.

STONYFIELD FARMS developed new policies related to lead-time and minimum order size to ensure
that its shipping containers were full. As part of its approach, the company worked with its clients to
help them decrease the use of dunnage (inexpensive or waste material used to protect cargo during
transportation), allowing the company to maximize the available space per trailer.6

Sometimes the answer to more efficient freight operations lies outside freight operations. That’s certainly the case
with capacity utilization. How a product is designed and packaged has a major bearing on how much of it you can
pack into a trailer. Different types of packaging include primary packaging (the widget), secondary packaging (the
box of widgets), and shipping packaging (the master carton used to ship and store the boxes of widgets). Typically,
packaging decisions are made with little input from logistics professionals. However, when logistics experts engage
with colleagues in marketing, manufacturing and purchasing on smarter packaging choices, the company can yield
financial and environmental benefits that can’t be ignored.

CATERPILLAR, the world’s leading manufacturer of construction and mining equipment, gas turbines
and engines, examined the inbound supply patterns for one of its plants and identified a big opportunity
to cut carbon emissions by changing the type of packaging on inbound parts. The containers traditionally
used to transport Caterpillar’s huge component parts have been 235-pound steel containers, many in
circulation more than 50 years. The company has been aggressively phasing out these steel containers
and replacing them with plastic containers weighing 70 pounds. Caterpillar studies have determined that
about 10 percent of existing inbound shipments could switch to the lighter weight containers, delivering a
16.5 percent reduction in CO2 emissions, or 130 metric tons per year.7

HEWLETT-PACKARD began selling a laptop packaged in a bag made out of 100 percent recycled
fabric and a few plastic bags for consumers to re-use. This resulted in 97 percent less packaging than
traditional laptop packaging. The company reported that it was able to fit three bags in a box to ship to
the stores instead of shipping each laptop in its own box. This enabled 31 percent more product to fit
on each pallet.8

22 Chapter 3 ASSESS OPPORTUNITIES

 Tips From How packaging changes can make
the Experts
freight operations more efficient
According to the supply chain and packaging experts at Supply foot) and any package not meeting this threshold is billed on
Chain Optimizers, whatever expense packaging represents of size rather than weight. Denser shipments translate into fewer
your company’s supply chain costs, your transportation cost is six trucks on the road.
times larger. But many companies fail to consider how packaging • Avoid certain box sizes and shapes. Square boxes and cubes
decisions impact shipping efficiency and total costs. At most firms, actually require more box material than rectangular boxes,
packaging changes can cut 10 percent or more of the total costs of with the flap material often exceeding that of the sidewalls.
packaging, warehousing and transportation, while reducing GHG From a freight perspective, rectangular boxes are more likely
emissions. Supply Chain Optimizers offers the following advice for to precisely fit a pallet. Square boxes result in more overhang
driving more volume through your existing freight capacity. (more damage) or underhang (poor utilization of trailer space).
• Use more boxes, not less. Companies that have hundreds or Think about matching the box with the freight containers they
thousands of products use a limited number of shipping boxes are going into – trailers, ocean containers, rail cars – which are
in the mistaken belief that using fewer boxes is less complex all rectangles.
and ultimately cheaper. Ecommerce shippers are among the • Involve logistics in packaging decisions. Packaging is commonly
worst offenders, with the average firm using only 65 percent of seen as a marketing responsibility by Consumer Packaged
the cube of outbound boxes. Total costs (boxes, filler, packing Goods (CPG) firms, while industrial companies usually view
labor, freight) and carbon emissions actually increase as more packaging as an engineering exercise. Because of the far-
packaging material and transportation services are used. Use reaching impact of packaging across the organization, it should
box sizes that work for your shipment. always be a supply chain responsibility and must include input
• Pay attention to density. Why? Because it’s the #1 factor in from logistics practitioners, who can advise on the cost and
setting less than truckload (LTL) and small packaging freight carbon implications of box choices.
rates. Carriers have a required item density (weight per cubic

23 Chapter 3 ASSESS OPPORTUNITIES

 G r ee n F r e i g h t d i a g n o s t i c

Get the most out of every move

KPI: load factor Data Required:
The goal is to increase the load factor by reducing Average weight per shipment;
empty and partially loaded truck miles. Average cube per shipment;
Cases delivered per gallon of fuel consumed

Questions Strategies/Opportunities Potential Benefit

Does your company have well-defined policies on Having such policies helps plan truck-load Increase in utilization of trailer space.
lead-time and order size? shipments, leading to fuller trucks. Evaluate
average cost per mile and average cost per
pound by lane before and after to ensure
savings.

Can your customers be flexible about arrival dates to With an automated transportation management Reduction of product shipping volume by up to
enable freight consolidation? system, companies can determine when there is 30 percent.
an opportunity to hold orders for consolidation.
Where feasible, and with the right incentives,
companies can then send one larger shipment to
customers instead of sending two smaller ones.

Does your logistics team have input into shipping If yes, create recommendations for box size and Reduce product shipping volume by up to 30 percent.
carton selection? shape changes that can increase cube utilization
in trailers. For returnable packaging, aim to
improve route stacking and collapsibility. This
can reduce the need for underutilized backhauls.

Have you examined your purchasing patterns By applying optimization to replenishment, and 10 percent or more reduction in inbound freight cost,
to ensure they are driving the highest degree of routing supplier shipments together, orders through increased utilization of inbound trailer space.
inbound freight consolidation? can be proactively aligned to create efficient,
predictable multi-stop consolidations.

24 Chapter 3 ASSESS OPPORTUNITIES

 Questions Strategies/Opportunities Potential Benefit

Can you side load your pallets 90 degrees when Explore the feasibility of side loading pallets to 8-15 percent increase in truck productivity.
loading them on the truck? enable the loading of more cargo per truck. This
will be feasible only for fleets that cube out, but
do not weigh-out. This approach will require
changes to pallet construction and loading.

Can you use load bars to create a second layer for For truck-loads that cube out, but do not weigh Potential to increase truck productivity and decrease
product? out. Explore the possibility of using load bars that transportation costs and emissions.
enable multiple stacks of pallets to be loaded on
a truck.

Have you recently analyzed opportunities for If no, explore how you might be able to better 20-30 percent net reduction in process
balancing high density and low density products? balance weight and cube constraints. Options and resource costs.
include matching internal freight or co-loading
with a company with a similar need and
transportation lanes.

Are you leveraging software to ensure trucks leaving If no, examine product offerings available 4-8 percent cost reduction on outbound moves.
your distribution centers are loaded optimally? through various vendors. Many companies
have been able to leverage these solutions to
increase the utilization of each move. A manual
starting point could be auditing the dock to
assess load utilization.

What inbound routes do you operate that could Where feasible and beneficial, set-up 3 percent or more cost reduction and similar
benefit from use of a load consolidation center? consolidation operations, which can reduce greenhouse gas reductions.
the amount of trucks needed to move a given
amount of freight.

25 Chapter 3 ASSESS OPPORTUNITIES

 Notes
1 Taherian, Homayoun, Cnergistics, LLC, Co-loading Your Way to Green. March 7, 2014.
2 Russell D. Meller, Kimberly P. Ellis, Bill Loftis “From Horizontal Collaboration to the Physical Internet:
Quantifying the Effects on Sustainability and Profits When Shifting to Interconnected Logistics Systems”
Final Research Report of the CELDi Physical Internet Project, Phase I. September 2012.
3 Moore, Tom et al, Order and Truck Optimization: Increasing Sustainability and Profitability, Supply Chain
Conference, February 1, 2011.
4 Fretheim, Elizabeth, Walmart, Presentation to EPA SmartWay Summit. November 2011.
5 Bearth, Daniel P., Wal-Mart Hits 80% of Fuel-Efficiency Goal With Two Years Remaining, Executive Says,
Transportation Topics. October 21, 2013.
6 Mathers, Jason, Smart Moves, Environmental Defense Fund, 2012.
7 Blanco, Edgar, Case Studies in Carbon-Efficient Logistics: Caterpillar: Light-Weighting and Inbound
Consolidation, Massachusetts Institute of Technology, Winter 2013.
8 Bardelline, Jonathan, HP Reduces Laptop Packaging 97 percent, GreenBiz.com, September, 2008.

26 Chapter 3 ASSESS OPPORTUNITIES

 Principle 2: Choosing the most carbon-efficient mode may be the most impactful decision you can make in terms of carbon
reduction. There is a significant difference in cost and carbon output between transport modes – air, ocean,

Choose the waterways, rail and road.

Typically, the more carbon intensive option is also the more expensive one. Air freight emits 47 times more

most carbon- carbon per ton-mile than container ships, while costing 6.5 times more.1 Because rail is about 3.5 times more fuel
efficient than trucks, companies can lower costs at least 15-20 percent with intermodal rail based primarily on fuel

efficient mode savings.2 In the past, some companies have steered clear of rail more because of concerns over service and reliability,
but those barriers are disappearing:
• Cross-country intermodal moves are more streamlined. For moves that once required travel through
multiple rail yards and contracts with different carriers, railroads now work together to share lines, share boxes, and
execute moves under a single contract.
• Service levels have improved. Connections at rail
yards are faster, and railroads are offering more truck-like
networks, with service to all parts of the country. cargo ship: 1x
• Supply chain visibility has improved. Major investments
by rail companies in electronic monitoring technology is freight train: 1.6x

Greenhouse Gas Emissions per one-ton mile

allowing shippers to track containers anywhere en route.
The environmental benefits from switches in transport
mode are significant. If just 10 percent of truck shipments
truck: 10x
shifted to intermodal, one billion gallons of fuel per year could
be saved in the U.S, reducing carbon pollution by more than
11 million metric tons every year.3
Ocean or rail transport won’t be the best fit for every
move, of course. But where use of those modes, or of airplane: 47x
intermodal services that combine them with air and truck
are options, a strong business case can be made for these
choices. Consider, for example, how the use of intermodal
rail – which captures some of the cost and carbon benefits
of rail moves and some of the flexibility of trucks – has
Christine Daniloff/MIT News
skyrocketed in recent years.

JELLY BELLY CANDY CO. uses intermodal transport for all of its shipments from its main factory in
Fairfield, CA to its primary distribution center in Pleasant Prairie, WI. This change saved the company
$500,000 in one year while its use of intermodal for these moves went from 30 percent to 100 percent.
Plus, rail has matched the four-day transit times previously achieved via road shipment for 95 percent
of the shipments.4

27 Chapter 3 ASSESS OPPORTUNITIES

 Intermodal rail has even become an option for some “expedited” shipments.

CONSTELLATION BRANDS makes heavy use of rail for long-haul shipments of wines and spirits.
Historically, that did not include rush shipments required when distributors ran low after a busy weekend,
but changes in rail service and the addition of “expedited intermodal” services have made intermodal a
viable option, even for rush shipments. The company estimates that, for long-haul trips, the product gets
there almost as fast as a truck, and at a much lower cost. Constellation’s savings estimates for rail: 40–50
percent on pure intermodal vs TL, and 20–25 percent on expedited intermodal vs TL.5

Some companies are having success with rail-only moves.

BOISE launched a Carload Direct initiative with a key customer, OfficeMax. This was possible because
both the Boise facilities and OfficeMax facilities are accessible by rail. Through this initiative, more than
200 carloads were shipped via rail direct from Boise manufacturing facilities to OfficeMax distribution
centers in 2011. The transition from using a mix of truck and rail to exclusive use of rail eliminated
more than 2,600 tons of CO2 per year from Boise’s supply chain – the equivalent of saving more than
264,000 gallons of fuel.6

The railroad and trucking industries have been rivals for decades, but intermodal transportation has made them vital
partners, too. Shippers can take advantage of those partnerships, using the best of both modes to gain maximum
efficiencies.
Moving from air freight to ocean freight is also possible for time-sensitive and valuable products.

MICHAEL KORS, a leading designer of high-end handbags, proved that moving from air freight
to ocean freight is possible even in the time-sensitive, high-fashion industry. The company used an
innovative ocean freight service through OceanGuaranteed, a joint service provided by APL Logistics
and Con-Way Freight. Since the volume of handbags was significantly less than the size of a typical
container, Michael Kors needed a service that matched loads into full containers. This “less than
container load” (LCL) approach historically added transit time. Unlike a full container, which can
be transported directly from the destination port to a distribution center, goods traveling via LCL
traditionally had to be unpacked and re-sorted upon arrival at a port before they could be transported
to the final destination via “less than truck-load” (LTL) freight. Through their partnership, APL Logistics
and Con-Way offered the designer a single-source option for LCL and LTL needs. The strategy helped
the designer reduce transit time by 30 percent compared to standard LCL shipments. This change also
cut carbon emissions and reduced freight costs by $20 per bag.7

28 Chapter 3 ASSESS OPPORTUNITIES

 Tips From Rail intermodal8
the Experts

• Consider intermodal when choosing a location for manufacturing • Frequently evaluate the advantages of intermodal compared to
or distribution sites. The farther you are from an intermodal over the road (OTR) trucking for specific lanes. Consider multiple
facility, the higher the cost of drayage – and that offsets any bids a year in order to take advantage of newly introduced
savings from moving freight via intermodal. freight rail service routes.
• Adjust your shipment schedule to take advantage of railroads’ • Keep enough product in the pipeline. Since intermodal moves
shipping schedules. If a company ships out product in the often take about one day longer than a truck move, it’s tougher
morning, often the load will just sit at the rail terminal waiting to to get product out quickly if demand suddenly spikes.
depart in the evening. Shippers can tighten transit times by 12 to • Use rail as a hedge against capacity constraints. New hours-
16 hours if they’re willing to load and ship in the evening. of-service regulations are making it even tougher to find long-
• Determine customer flexibility on arrival dates. They may be able haul drivers.
to work with you to get to a more efficient, sustainable supply • Don’t forget about drayage. If the carriers hauling containers to
chain. It may even be possible to offer customers incentives that and from intermodal ramps are unreliable, the advantages of
extend order-to-delivery windows. intermodal rail can quickly disappear.

Choosing the most efficient option within your current mode is an effective strategy when mode shifting isn’t
feasible.
Participation in the EPA SmartWay Program enables shippers to access carrier-specific environmental impact
data. These shippers are able to track the performance of the truck for carriers they are using. The transparent data
system used by EPA SmartWay members enables participating shippers to effectively work with carriers to reduce
emissions and create incentives for more efficient operations. Similar information is also available for marine carriers
through the BSR Clean Cargo Working Group.

29 Chapter 3 ASSESS OPPORTUNITIES

 G r ee n F r e i g h t d i a g n o s t i c

Choose the most efficient mode possible

KPI: modal use breakdown Data Required:
The goal is to increase the percent of total freight Ton-miles by each mode
volume shipped on more carbon-efficient modes. Total landed product cost
All-in cost per pound for truck-load and intermodal moves
Percentage of domestic trips greater than 500 miles traveled by rail (ton-mile)
Mode and carrier specific on-time delivery percentage
Order lead time requirements

Questions Opportunities Potential Benefit

Do you have access to fuel consumption data If so, determine total fuel consumption by Having a baseline and better understanding of fuel
(contracts or owned assets), and a system in place analyzing this data. When possible, ask carriers consumption can increase financial predictability.
to track the amount of fuel that is consumed in for direct fuel consumption data rather than
moving your freight? estimates based on mileage.

Have you done an analysis within the last year that If no, conduct analysis to determine the cost, 20-40 percent reduction possible in transportation
examines opportunities to move from truck-load to service and GHG impact of shifting a portion of costs. Greenhouse gas emissions can be reduced by
intermodal rail? your long-haul freight to rail. up to 60 percent.

Do you include both truck-load and intermodal as If no, consider including this information on
options on procurement bids, and request cost and new bids.
lead time on both for comparison?

Do your RFPs request information on all If no, consider including this information on
modal options? new bids to avoid “truck only” responses. Let
carriers know you are open to mode shifting if it
makes sense.

Do you know who is responsible for authorizing If managed by perception, make sure the cost
mode conversion?  Is authorization based on facts and service metrics are accurate and credible
or perception? and included in the decision-making process.

30 Chapter 3 ASSESS OPPORTUNITIES

 Questions Opportunities Potential Benefit

Is low volume a barrier to moving to rail If yes, reach out to your 3PLs and existing
from trucking? partners to see if there is a collaborative program
you can participate in.

Does use of air freight need to be authorized by If no, create parameters for the use of air Air shipments cost 6.5 times more than ocean
an executive? shipping and require that exceptions be approved shipments. Shifting freight away from air can cut
by an executive. transportation costs by tens-of-thousands to millions-
of-dollars each year. Air shipments also emit 47 times
Is volume a barrier to shifting cargo to ocean freight If yes, explore an expedited less-than-container
more greenhouse gas pollution per ton-mile than
from air? load arrangement.
ocean freight.
Are inventory holding costs a barrier to using ocean If yes, explore a value-added reseller approach
instead of air freight? where a third-party arranges the freight move and
takes ownership of the cargo during the move.

What freight moves could leverage barge shipping? While barge transport is more prevalent in
Europe, there are active barge options for U.S.
shippers on many rivers and short-sea shipping
routes. Evaluate all-in costs for barge moves and
the alternatives.

Do you require truck carriers to meet a certain If no, set a target performance score for all Up to $3.50 per 100 miles in reduced fuel surcharges
SmartWay score? truck carriers. based on the higher efficiency of elite carriers in the
EPA SmartWay Program, compared to a carrier at the
median level of fuel efficiency.

Is your truck-load fuel surcharge payment structure If no, consider establishing a baseline MPG Fuel costs for a truck that averages 6MPG will be
set up to reward carriers with higher fuel economy? assumption for all carriers. This will push less $6.00 less per 100 miles than a truck that averages
efficient carriers to adopt fuel-saving solutions, 5.5 MPG. Greenhouse gas reduction of one ton/5,000
such as more aerodynamic tractor-trailers, while miles traveled on a 6PMG truck instead of a 5.5 MPG
also rewarding carriers that are already more truck
efficient. Revisit the baseline MPG annually.

31 Chapter 3 ASSESS OPPORTUNITIES

 Questions Opportunities Potential Benefit

Do you ask about the fuel efficiency of ocean If no, ask potential 3PLs to provide a regular Up to a 24 percent reduction in fuel costs by choosing
freighters that ship your products? report about the Environmental Ship Index (ESI) the most efficient marine carrier available.
grades of the ships that carry your freight. You
can also ask carrier participants in the BSR
Clean Cargo Working group to share with you
their specific trade-lane emission factors. When
possible, choose the most efficient carrier
available to carry your goods.

Notes
1 Simchi-Levi, David, Operations Rules, 2010, Massachusetts Institute of Technology.
2 Kane Is Able, Look Who’s Riding the Rails, 2013.
3 Association of American Railroads, The Environmental Benefits of Moving Freight by Rail, June 2012.
4 Douglas, Merrill, Intermodal Efficiencies, Inbound Logistics, October 2013.
5 Kane Is Able white paper, Look Who’s Riding the Rails, 2013.
6 Blanco, Edgar, Case Studies in Carbon-Efficient Logistics: Boise - Leveraging Rail Direct Service,
Massachusetts Institute of Technology, Winter 2013.
7 Douglas, Merrill, Intermodal Efficiencies, Inbound Logistics, October 2013.
8 Jones, Kevin, APL Logistics, Personal correspondence with EDF, January 2012.

32 Chapter 3 ASSESS OPPORTUNITIES

Principle 3 The biggest breakthroughs in freight efficiency will come, not from the collective efforts of individual companies
working separately, but from companies working together to ship the same volume of freight in fewer, fuller loads.

Collaborate But that will require a shift in thinking. Companies that manage their own discreet supply lines must begin to
view freight capacity as more of a shared infrastructure. Company-centric strategies, while they might be easier to
manage, breed inefficiency.
• Partially full trucks today run side-by-side on the highway, even though they are travelling to the exact same retail
distribution center (DC), and freight could have been combined.
• Outbound deliveries of full trailers ride alongside empty trailers returning home to the same destination after a
delivery, even though the outbound shipper could have leveraged the opportunity presented by the empty trailer
for an aggressive backhaul rate.
• Heavy and light products cause trucks to weigh out before they’re full and cube out below the truck’s weight
capacity has been reached, creating inefficient trailer loads, even when the solution could have been as simple as
combining shipments of cotton balls and hammers traveling along the same route.
Here are some compelling examples that clearly illustrate the power of collaborative freight strategies:

OCEAN SPRAY and TROPICANA. Ocean Spray was shipping products by truck from a
manufacturing facility in New Jersey to a Florida distribution center. Both Ocean Spray facilities were
a short distance from rail yards used by a competitor, Tropicana, which shipped orange juice north
from Florida, via CSX Rail, in special refrigerated box cars. These box cars often traveled empty back
to Florida. Tropicana’s third party logistics provider (3PL) saw an opportunity for collaboration and
proposed that Ocean Spray operate an intermodal lane from NJ to FL that would put Tropicana’s
empty cars to use. By going from truck to rail and taking advantage of ready rail capacity, Ocean Spray
cut transportation costs more than 40 percent for that lane and reduced GHG emissions by 65 percent.
Meanwhile, Tropicana reduced costs and GHG emissions associated with the return of the box cars.1

SUN-MAID AND KANE. Sun-Maid is a medium-sized company that needs to ship with other
companies to minimize LTL shipments, which can cost 3-4 times as much as a portion of a truck-load
run. In the Northeast, Sun-Maid found a 3PL, Kane Is Able, that handles distribution for a large number
of other consumer packaged goods companies shipping to the same mass retailers and grocery
chains. By leveraging Kane’s ability to consolidate Sun-Maid shipments with other like shippers, Sun-
Maid saved 62 percent on the outbound freight costs for these consolidated shipments, while at the
same time taking trucks off the road.2

33 Chapter 3 ASSESS OPPORTUNITIES

 DALTILE and WHIRLPOOL. Ceramic tile manufacturer, Daltile, a subsidiary of Mohawk Industries,
and appliance maker, Whirlpool, both have manufacturing operations in Monterey, Mexico. Daltile’s
products are heavy. Filling a rail box car to its 200,000 lb. capacity left enough room for a 53-ft trailer.
Whirlpool cubes out a box car at 35,000 lbs. Together, they devised a load plan that put the equivalent
of four truck-loads (160,000 lbs) of tile in each box car, and then filled the rest of the box car with
refrigerators. Each company now pays just 50 percent of the cost for the trip, but gets 80 percent of
the maximum cube or weight capacity. Daltile’s complete freight collaboration program, which includes
multiple collaboration partners, generates $3 million in annual freight savings and reduces diesel fuel
usage by more than 600,000 gallons per year, eliminating 5,300-6,300 metric tons of CO2 from the
atmosphere.3

Tips From Making greater use of collaboration

the Experts
in freight transport
• Leverage 3PLs. Because they service multiple customers and • Openly share cost information. When co-loading freight,
are intimately familiar with customers’ freight and shipping two shippers agree to share the freight cost from the carrier.
lanes, 3PLs are often in the best position to recognize when Mutual trust is critical to determine an equitable cost-sharing
collaboration can occur. Make it clear to your 3PL and carrier arrangment. Both companies must be transparent about what
partners that you seek collaborative shipping arrangements. they are paying now and the benefits they will achieve through
• Think long-term. Collaborative strategies can take longer co-loading.
because they involve decisions outside your sphere of control. • Dedicate the required resources. One of the biggest reasons
But experienced freight collaborators report that the long-term collaborations fall apart is a failure to put in place the resources
Return On Investment on such initiatives are very attractive. required to manage the relationship. Often, it ends up as one
• Look to competitors. Your competition can make the best more task added to someone’s already over-full plate. Don’t
collaborators when it comes to efficient freight. Your products underestimate the time required to overcome differences in
are likely going to the exact same customers and locations. culture, terminology, and decision-making protocols.
While your products may compete on the store shelf, they don’t
compete in the back of a truck.

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 G r ee n F r e i g h t d i a g n o s t i c

Collaborate
KPI: Miles traveled in a collaborative network Data Required:
The goal is to increase the volume of freight co-loaded Ton-miles moved in co-loading arrangement
with other shippers. Percent of ton-miles for replenishment stock that is sent via a shared network
Total empty miles
Load utilization rate
Number of “troubled lanes”

Questions Opportunities Potential Benefit

Have you evaluated opportunities for co-loading If no, work with other shippers and your 20-30 percent net reduction in process and
arrangements with other shippers? 3PLs to identify additional opportunities for resource costs.
co-loading freight.

If you measure transportation capacity in terms If yes, this is probably a good candidate for
of volume, is density less than 5 pounds per weight/cube collaboration.
cubic foot (pcf)?

If you measure transportation capacity in terms of If so, this is probably a good candidate for
weight, is density greater than 30 pcf? weight/cube collaboration.

Do you maintain a list of “trouble lanes”, where If no, develop such a list. Focus your initial
costs are over-market, or volatile, or service levels search on collaborative shipping opportunities in
are worse than market?  these areas.

Have you searched for shipper groups or consor- If no, reach out to other transportation
tiums that explore collaborative opportunities? professionals for advice on potential consortiums
that would be a fit for your operations.

Have you recently explored opportunities to match If no, work with 3PLs to map opportunities to Savings of up to 30 percent per lane.
your freight flows with another shipper’s backhauls? leverage other shippers’ backhauls.

35 Chapter 3 ASSESS OPPORTUNITIES

 Questions Opportunities Potential Benefit

Have you recently explored opportunities to If no, explore opportunities with your 3PL and 10-30 percent transportation cost reduction.
co-locate inventory and fully leverage possible distribution team.
efficiencies of a collaborative network?

Does your purchasing and logistics departments Include truck utilization percentage, freight cost per 10 percent or more reduction in inbound freight cost,
plan and manage according to a common set of case, and percentage freight under management through new freight consolidation solutions from
freight efficiency targets? as metrics upon which both purchasing and existing or new freight under management.
logistics performances are measured.

If you are in a Vendor Managed Inventory Utilize planning and optimization systems across 10-15 percent reduction in total outbound miles
relationship with multiple customers, are you VMI customers, rather than individually. travelled across targeted customer locations, increased
considering inventory replenishment patterns that truck utilization.
will support multi-drop routes?

Notes
1 Kruschwitz, Nina, Ocean Spray, Tropicana team up on shipping to reduce emissions, GreenBiz.com.
January 9, 2014.
2 Supply Chain Brain, Freight Consolidation Program Pays Off Big for Sun-Maid, August, 2013.
3 Jones, Sonney, Division Director-Transportation, Mohawk Industries, personal interview, July, 2013.

36 Chapter 3 ASSESS OPPORTUNITIES

Principle #4: Reconfiguring your logistics network can have a dramatically positive effect on freight cost, fuel usage and
greenhouse gas emissions. But it’s a strategy that requires an extensive effort across the organization to gather,

Redesign cleanse, analyze, and aggregate customer, supplier, inventory and transportation data.1 Individuals responsible for
sustainable freight programs should deliver clear results in other areas before tackling this resource-intensive task.

your logistics Traditional triggers for network optimization studies include M&A, business growth/contraction, expense
reduction initiatives, changes to customer service level requirements and increases in fuel/transport costs.

network Historically, sustainability has not been a key driver. But that’s changing. Today, more companies are factoring
sustainability into their supply chain strategy. They want to know the greenhouse gas impact of strategic options and,
increasingly, optimization studies are examining CO2-optimized scenarios.
Trade-offs between cost, service and carbon efficiency are inevitable when making changes to your logistics
network. While optimization studies may have been initiated for reasons other than sustainability, companies are
reporting dramatic GHG reductions as a result of distribution network optimization.

OCEAN SPRAY added new manufacturing and distribution capabilities in Florida to support the
company’s growing customer base. To fully and effectively utilize these additions, Ocean Spray
conducted a national network redesign project and determined that more than 17 percent of the total
shipments would be served from the new facility. This redesign:
• Reduced the required miles for delivery by 4.5 million miles per year for the same quantity of product.
The reduced mileage is estimated to save 14,000 tons of CO2 per year, a 17 percent reduction in CO2,
with more than 70 percent of these savings coming from the Southeast region of the United States.
• Saved an estimated 10 percent in shipping costs by combining and reducing the number of
shipments and distance travelled.2

Network optimization embraces much more than location choice. It can also involve decisions to streamline
your supply chain by eliminating extra product touches and freight runs.

37 Chapter 3 ASSESS OPPORTUNITIES

 TUESDAY MORNING was shipping product from the Port of Los Angeles to the company’s Dallas DC
for deconsolidation and delivery to Tuesday Morning stores. The retailer worked with its transportation
partner to develop a DC bypass strategy to ship a portion of the container volume direct to 337 of
Tuesday Morning’s 865 stores, avoiding the time, cost and emissions of the LA-to-Dallas leg. The
strategy cut store distribution cycle time by two weeks and reduced supply chain costs by 19 percent.
The company expects these results to improve as they shift more volume to the direct-to-store model.3

The drive to keep inventories low, particularly by retailers, requires vendors to send smaller shipments more
often. This “just-in-time” strategy is challenging when it involves delivering products made thousands of miles away.
Many high-tech products have a short shelf-life, and can quickly become obsolete. This leads to frequent, and often
unplanned, use of expedited freight typically air, the least carbon-friendly mode. One solution to this inventory
management challenge is “postponement,” where the final assembly of a product is delayed until just prior to
shipment, and is performed closer to the final delivery destination, for example, at the DC. This allows more efficient,
carbon-friendly inbound shipments, since shipping individual components takes up less space than finished goods
that are already packaged. It also lets you better match supply with demand when forecasts prove inaccurate. The
increasing sophistication of 3PLs is making mass customization possible, right on the warehouse floor.

CALIFORNIA INNOVATIONS, a global marketer of insulated coolers, was eager to increase supply
chain efficiency by assembling products on-demand. Products are made of two primary parts – soft-
sided collapsible cooler bags produced in Asia and rigid liners made in California. The liners are what
give the product its size and bulk, so final assembly, which used to be done by an outside packager,
is done by a 3PL at the distribution warehouse. There, trained associates insert liners into the bags.
By postponing final assembly, this small but growing importer saves $500,000 annually in freight
and storage costs, and eliminates shuttle runs between the packager and the DC. Also, decisions on
which of the 1,000 SKUs to assemble are based on actual retail demand. Products are created and
immediately shipped, not stored.4

Network optimization does not have to be a large-scale event. Your logistics network can benefit from regular
assessments of network efficiency. At the root, it involves frequently running “what-if” scenarios for warehouse
locations, shipping routes and transport mode choices.

38 Chapter 3 ASSESS OPPORTUNITIES

 Tips From Keys to Successful Network
the Experts
Optimization5
• Involve top-level executives early. You don’t want them to • Get cross-functional input. Managers from sales, purchasing,
challenge your assumptions three months into a four-month product development, sustainability, marketing and other
project. disciplines are all internal stakeholders, and have valuable
• Consider the proximity of rail terminals when choosing final perspectives that can contribute to the project’s success.
locations. Some optimization tools may miss this key element • Use a proven network modeling tool. The tool helps examine the
and the significant role that rail can play in reducing overall costs cost and service implications of different strategic alternatives by
and GHG emissions. quickly calculating “what-if” outcomes.
• Don’t forget your inbound supply chain. Inefficiency here can • Take your time. A typical network optimization project can take
add thousands of unnecessary truck miles, particularly if a large up to six months to execute well. When millions of dollars are
number of vendors are managing their own lines of supply to at stake, along with the potential to drive millions of costly and
your site. polluting miles out of the supply chain, don’t take short cuts for
the sake of a few weeks.

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 G r ee n F r e i g h t d i a g n o s t i c

Redesign your logistics network

KPI: Emissions per ton mile Data Required:
The goal is to optimize your network to minimize emissions Load Utilization Rate
from freight. Modal-use breakdown
Miles traveled in a collaborative network
Average distance of shipments
Total amount of empty miles
Average cost per pound by lane
Average cost per mile by lane points

Questions Opportunities Potential Benefit

Can your distribution network be modified to enable Develop a plan for longer-term actions that 25-40 percent reduction in transportation costs for
greater use of rail and ocean freight? modify your network to enable increased use affected lanes, from use of more efficient modes.
of efficient modes. For instance, moving your Carbon reductions of up to 60 percent are possible too.
distribution centers from an area that cannot Mode shifts can also be good fodder for articles and
utilize rail to a rail-served region might allow stories in Corporate Social Responsibility reports.
you to drive down both freight costs and
carbon emissions.

Can distribution locations of different business units If yes, this could enable shipment conversion Potential fuel and emissions savings.
be consolidated? and reduced miles.

When was the last time a network analysis Complex networks may benefit from conducting
was conducted? this analysis on a bi-annual basis.

Can you reduce inbound miles through use of a Consolidation centers and “milk-run” systems Up to 35 percent reduction in costs for
consolidation center or the implementation of a both take many small loads and combine them impacted moves.
“milk-run” system? into fewer, fuller loads. Analyze your inbound
freight to identify opportunities to increase the
load factor of these shipments. Evaluate average
cost per mile and average cost per pound by
lane, before and after, to ensure savings.

40 Chapter 3 ASSESS OPPORTUNITIES

 Questions Opportunities Potential Benefit

What opportunities exist to reduce the total truck Perform a network analysis that examines Cost and greenhouse gas emission reduction between
miles needed to service customers? the cost and mileage implications of various 5 percent and 15 percent.
strategies, including adding or consolidating
distribution locations, changing primary ports of
import, and increasing product mixing.

Is your process for eliminating errors optimized? Steps such as cross-checking of entered orders Cut fuel and emissions waste caused by incorrect
and cross-checking what was picked can save product shipping, which leads to returns and expedited
you from shipping the wrong product. shipping for the corrected order.

Have you reviewed your direct-to-client or direct-to- Identify products that can economically skip some Distribution center bypass can significantly reduce
store transportation policies recently? stages of your distribution network, or bypass road mileage and cut up to 10 percent of the cost of
it entirely and instead be sent directly to the goods sold.
customer’s distribution network or retail outlet.

Notes
1. MWPVL Intl. presentation at SC Chain Virtual Events, “Tips to Optimize the Distribution Network”.
2. Blanco, Edgar, Case Studies in Carbon-Efficient Logistics: Ocean Spray - Leveraging Distribution Network
Redesign, Massachusetts Institute of Technology. Winter 2013.
3. Schulz, John, Tuesday Morning’s DC bypass cuts two weeks, 19 percent cost out of supply chain. Logistics
Management, April 23, 2012.
4. Case Study, Just-In-Time Strategy Helps California Innovations Speed Time to Market, Reduce Freight
and Storage Costs, Weber Logistics.
5. Logistics Management, Six Tips for Optimizing the Distribution Network, July 2011.

41 Chapter 3 ASSESS OPPORTUNITIES

Principle #5: Emissions from transportation vehicles and logistics operations can contribute significantly to unhealthy air quality.
The major emissions of concern are diesel particulate matter (DPM), which leads to asthma and respiratory illness,

Demand and nitrogen oxides (NOx), which form ozone. These emissions are of particular concern in densely populated areas
that are often exposed to a number of pollutants.

cleaner The health impacts related to these emissions are staggering: increased rates of respiratory illness and asthma,
cardiovascular disease, heart attacks, strokes, emergency room visits, and premature death. The U.S. Department of

equipment Health and Human Services recently found that “exposure to diesel exhaust particulates is reasonably anticipated
to be a human carcinogen”1. For the more than 13 million people in the U.S. that live near major marine ports or rail

and practices yards2, these emissions come with heavy economic and health-related costs.
In fact, a 2009 study3 found health costs of $153 million a year as a result of emissions from truck diesel pollution
at the Port of Oakland. Across California alone, the health costs associated with diesel fuel – largely consumed by the
freight sector – runs into the billions4.
Workers are at risk too. A study evaluating occupational exposures of DPM and other emissions found port
employees and truck mechanics were often exposed to PM levels that are well above the exposure guidelines issued
by the World Health Organization5.
It is more challenging for shippers to tackle emissions of DPM and NOx in their supply chains than greenhouse
gas emissions. Given the immediate human health implications of these pollutants, however, reducing them should
be part of every Green Freight action plan. These emissions are largely associated with older diesel equipment: cargo
handling equipment, marine vessels and pre-2010 trucks. To make a real difference in this critical area, the entire
community of shippers must encourage – through questions and incentives – supply chain partners to use cleaner-
burning equipment, keep proper maintenance schedules,6 and enforce smart operational policies such as no-idling
and slow acceleration.
Activities aimed at behavior change have the lowest barriers to implementation, as they tend to have low
upfront costs and require few organizational resources. Companies can encourage behavior change internally,
of course, but they can also incent carriers, third party logistics providers (3PLs) and customers by rewarding
improvement in sustainability performance with more business, greater commitment, or faster payment, for
example. Here is an example:

LOWES, TARGET, HOME DEPOT and several other companies worked with EDF and the U.S. EPA to
create the EPA SmartWay Drayage program. Through the program, private sector investment is generated
to deploy clean technology and improve the environmental quality of our nation’s port communities.

42 Chapter 3 ASSESS OPPORTUNITIES

 Steps can also be taken at distribution centers:

WALMART recently signed a deal with the company Plug Power to deploy 1,738 zero-emission,
hydrogen fuel-cell forklifts in its distribution centers7. Their initiative is the most recent in a growing
trend in warehouses, where companies including Sysco and FedEx, are deploying zero-emission fuel-
cells in material handling applications. Many of these projects have been funded by federal grants to
help accelerate the commercialization of promising innovative technologies8.

Reducing the environmental health impacts of these freight pollution hot spots will require more groups to work
together. Shippers can help push forward “win-win” solutions that enable their carrier partners to make the capital
investments necessary to replace older equipment with equipment meeting the latest environmental standards.
These actions are in the business interest of shippers because it improves the lives of current and potential customers.
These actions also help to promote the image of a shipper as a clean air partner in the community as well as help
build the business network for future collaborations in other areas. Cleaner ports that have made the investments in
modern equipment are more productive. Steps that are good for clean air, such as outfitting wharves with shoreside
electrical power to allow ships and harbor vessels to plug in, developing efficient on-dock rail with cleaner switcher
locomotive engines, and deploying zero/low emissions yard equipment, are good for worker productivity and health.
As shippers, you partner and contract with a number of service providers to transport your goods in and
around hotspots. Ultimately, these service providers, including port authorities, drayage carriers, rail carriers, are
the entities that are able to directly reduce emissions. You, however, play an integral role in working collaboratively
with these partners and incentivizing their clean air actions. Whether you are negotiating contracts, strategizing
your transportation needs or working on a common issue of interest, you can help ensure that your service providers
are leading the way in cleaning up hotspots. Ask them about their commitment to local emissions reductions, new
technologies they are deploying, opportunities to partner on grant applications, active practices to reduce emissions
such as idle reduction, and emission reduction goals and metrics.
Your asset or non-asset based 3PL provider is also an important partner in clean air efforts. They can also
answer many of the questions posed to other service providers. In the case of non-asset 3PLs, you can partner with
them to engage the final service providers. The network of shippers, service providers and 3PLs all need to be on
board to ensure a successful hotspot cleanup program.

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 Tips From Cleaning up equipment and practices
the Experts

• Know the footprint of your operations. A successful air pollution • When possible, act in concert with other shippers to magnify
improvement plan will prioritize action in a few key areas. The your impact. Reach out to other shippers with significant,
impacts of the diesel particulate matter (DPM) and oxides overlapping air pollution footprints in your priority areas.
of nitrogen (NOx) that contribute to unhealthy area quality Consider how you could jointly work with key service providers
are localized. This differs significantly from greenhouse gas and facilities to enable them to move to cleaner equipment.
emissions, which have a global impact. Because of these local • Consider joint bids for government grants. Public funding is
effects, DPM and NOx emissions occurring in the vicinity of available in many geographic areas for innovative programs
communities or in areas where there are already air quality to cut emissions that contribute to unhealthy air quality. The
challenges are critical to reduce. Start by targeting emissions funding prospects of proposals can be greatly enhanced when
that occur in high-population areas that have existing challenges a key shipper is committed to participating in the effort. By
in meeting healthy air quality standards; in highly urban participating in SmartWay, Clean Cities, and your local COG
areas, further assessment might include identifying sensitive initiatives, you are more likely to be aware of opportunities for
populations in the vicinity of your operations, such as schools, funding and partnering with others.
neighborhood parks, or senior centers.
• Create goals for both your direct footprint and supply chain.
• Leverage existing programs. Successful programs for mitigating The majority of your localized air pollution footprint likely comes
DPM and NOx emissions exist in many areas. Look for from your supply chain. Because of this, most of your efforts
opportunities to coordinate your actions with existing initiatives to reduce this impact will target the operations of your key
such as the EPA SmartWay Drayage, Department of Energy’s service partners. Establishing goals and undertaking mitigation
Clean Cities program, and the local metropolitan area council of efforts for your direct footprint, such as emissions at distribution
governments (COGs). By partnering with these groups, you can centers, will help your team better understand how to implement
gain access to knowledge and resources to more efficiently and local air-quality mitigation efforts and will increase your credibility
effectively cut these harmful emissions. Your participation can on this issue with your key service partners.
help these groups too, as they can aggregate the impact of the
actions and more effectively demonstrate the strong interest in
air pollution mitigation efforts.

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 G r ee n F r e i g h t d i a g n o s t i c

Cleaner equipment and practices

Questions Opportunities Potential Benefit

Have you identified marine ports, transport hubs or If no, map your logistics and distribution system Reduce long-term risk of costly network redesign due
warehouses in your freight network that are located against the U.S. EPA non-attainment maps for to community pressure on operations and growth of
in air pollution hot spots? criteria pollutants, such as PM 2.5 and ozone. The existing facilities due to air pollution.
overlap between maps will be the key air pollution
hot spots in your distribution system. Work with
your supply chain partners to advance clean-up
plans for freight operations in these areas.

Are you leveraging “green lane” programs for If no, assess which ports in your network are Dray providers participating in “green lane” programs
cleaner trucks? operating these programs and which dray are able to complete more turns in a day – improving
providers meet the criteria to participate in the their service time and profitability. These programs
program. Encourage ports without existing push more drivers to cleaner trucks – thus reducing
“green lane” programs to create such a program. emissions per mile of operation.

45 Chapter 3 ASSESS OPPORTUNITIES

 M a r i n e P o r t Pa r t n e r s
KPI: Percentage of marine port facilities transited Data Required:
by your cargo that have air pollution mitigation plans. Ports of entry
The goal is to increase this percentage. Air quality attainment status for marine port locations
Percentage of TEUs moved through a port with a criteria emissions mitigation plan

Questions Opportunities Potential Benefit

Do the ports through which your cargo moves If no, request ports complete and publicize Reduce long-term risk of supply chain disruptions
regularly measure and report environmental a comprehensive emissions inventory and that result from the inability of key facilities to
impact mitigation efforts? Are they participating implement projects to reduce emissions, based expand because of significant community pressure
in programs that help them identify current best on best practices. Ports that are participating for air pollution mitigation efforts. Ports are often a
practices and work with their stakeholders on in programs such as ISO 14001 and other significant source of emissions that can influence the
emissions reduction projects? environmental measurement and/or recognition attainment or nonattainment status of a region; a lack
programs have demonstrated a commitment of progress towards meeting air quality standards can
to reducing emissions and improving the have financial repercussions to a region (and its local
sustainability at their port. businesses), as federal highway funding could be lost.

R a i l Pa r t n e r s
KPI: Percentage of rail facilities transited by Data Required:
your cargo that have air pollution mitigation plans. Location of rail yards
The goal is to increase this percentage. Air quality attainment status for rail yard locations

Questions Opportunities Potential Benefit

Is your rail service provider using the cleanest rail and If no, explore the opportunities available to you Cleaner technology means fewer emissions and
infrastructure technology at their switcher yards? and your service provider to work together and improved local air quality.
deploy cleaner technology.

Is your rail service provider using automated gate If no, consider partnering with other shippers to Automated gate systems often result in faster turn
systems at their yards? secure funding for these systems. times for trucks entering the yard.

46 Chapter 3 ASSESS OPPORTUNITIES

 D r aya g e Pa r t n e r s
KPI: Percentage of drayage moves that use 2010 Data Required:
or newer trucks Location of marine ports and rail yards served by your drayage providers
The goal is to increase this percentage. Air quality attainment status of areas where these ports and rail yards are located
Percentage of dray moves on pre-2010 trucks
Percentage of dray moves by EPA SmartWay Dray fleets
Drayage truck turn times (overall)
Drayage truck turn times (chassis component, if available)
Number of trips needed only to pick up different chassis

Questions Opportunities Potential Benefit

Have you identified where you are hiring drayage If no, map your logistics and distribution system Reduce long-term risk of costly network re-design due
services to transport goods into or out of ports against the U.S. EPA non-attainment maps for to community pressure on operations and growth of
or rail yards located in air pollution hot spots? criteria pollutants. The overlap between maps existing facilities due to air pollution.
will be the key air pollution hot spots in your
network. Work with your supply chain partners
to advance clean-up plans for freight operations
in these areas.

Do you require drayage drivers to operate 2010 If no, add "Clean Truck" requirement to dray Compared to mid-90’s trucks, 2010 or newer trucks
or newer trucks? bids. 2010 and newer trucks reduce harmful will result in 90 percent less emissions of particulate
emissions by 90 percent over older models. matter and oxides of nitrogen. Additional benefits:
Several regions have low-interest loan programs increased service reliability and potential access to
for drayage drivers to move into cleaner trucks. financial incentives.

Are you leveraging cleaner fuels with your If no, explore the opportunities available to you Trucks that can run on clean burning fuel can reduce
carrier partners? and your service providers to work together exposure of drivers to diesel fumes. They also have
and deploy dray trucks that run on cleaner- the potential to significantly reduce emissions that
burning fuel. When choosing between fuels, it contribute to poor local air quality and global warming.
is important to consider the emission impact Depending on fuel choice, many of these vehicles will
of combusting the fuel and also the impact of have a lower operating cost than diesel fueled trucks.
producing the fuel. In some cases, financial incentives are available to
offset higher up-front costs.

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 Questions Opportunities Potential Benefit

Are the drayage drivers who haul your goods using If no, add “Train and Require Green Driving Strict anti-idling policies and/or technologies can
green driving practices, such as avoiding rapid Practices” to dray bids. Good driving habits conserve fuel, reduce noise and avoid costly fines.
accelerations and extended idling, as well as driving can reduce harmful emissions of pollutants in Aggressive driving habits, like rapid accelerations, can
“slow-and-go” in traffic (instead of “stop-and-go”)? the community; in some cases, automatic idle be unsafe and may impose additional wear and tear on
limitation technology can be installed. Positive tires, engine, and drivetrain.
incentives, where fuel savings are shared with
drivers, can also increase compliance.

Is the chassis procurement structure causing Helping establish a chassis pooling structure Chassis provisioning can be complex and time-
inefficiencies for your drayage services? Do your can help simplify chassis provisioning and consuming, leading to additional costs and emissions
drivers spend unnecessary time and fuel finding enable drivers to focus on the cargo rather for drayage. Simplifying chassis provisioning will help
an appropriate chassis? Is there a chassis pool than the chassis. As a shipper, you can be your drivers make more turns, eliminate unnecessary
or another mechanism available to streamline the part of the solution with chassis providers and trips and idling and remove another step in the drayage
chassis provision service? drayage carriers, especially when considering process that can cause unexpected delays.
the complex and dynamic nature of chassis
provisioning at ports.

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 Distribution Centers
KPI: Percentage of facilities in air quality hot spots Data Required:
that have air pollution mitigation plans. Location of distribution centers
The goal is to increase this percentage. Air quality attainment status of areas where your DCs are located
Percentage of cargo handling equipment at DCs/warehouses using cleaner fuels

Questions Opportunities Potential Benefit

For distribution centers and warehouses in locations If no, implement strict no-idling policies on these With the thousands of annual truck trips at large
that have poor air quality, are truck idling restrictions properties. An idling truck can consume a gallon distribution centers, a strict no-idling policy can reduce
in place? of fuel an hour. fuel burn by tens-of-thousands a dollars a year. It will
also cut harmful emissions of PM, NOx and other
pollutants that harm workers and the surrounding
community.

Are you leveraging cleaner fuels at your distribution If no, consider cleaner fuel options for forklifts, Cleaner fuel options and lower operating costs improve
centers? yard hustlers and other mobile equipment. cost certainty. These options can also significantly
Additionally, determine if on-site renewable reduce emissions that contribute to unhealthy
electricity generation is possible. occupational exposure for workers, poor local air
quality and global warming.

For inbound and outbound moves through air quality If yes, explore the viability of off-peak deliveries Nighttime deliveries might reduce delivery costs by
non-attainment areas, are off-peak hour deliveries with key suppliers and customers. decreasing the amount of time that is wasted because
an option? of heavy traffic. Surrounding communities could also
benefit from lower harmful emissions of PM, NOX and
other pollutants.

49 Chapter 3 ASSESS OPPORTUNITIES

 For more information: www.edf.org/freight

Notes
1. U
 S Department of Health and Human Services, National Toxicology Program, Report on Carcinogens,
12th Edition, 2011.
2. Natural Resources Defense Council, Clean Cargo Center. 2014.
3. Lin, Jennifer and Prakash, Swati.Taking a Toll. The High Cost of Health, Environment, and Worker
Impacts of the Oakland Port Trucking System, East Bay Alliance for a Sustainable Economy and
Pacific Institute.
4. Anair, Don, and Monahan, Patricia, Sick of Soot, Union of Concerned Scientists, June 2004.
5. Pronk et al, Occupational exposure to diesel engine exhaust: A literature review, 2009.
6. Jääskeläinen, Hannu Emission Effect of Engine Faults and Service, DieselNet Technology Guide. 2007.
7. Danko, Pete, Fuel Cells Power Up, National Geographic, April 3. 2014.
8. U
 .S. Department of Energy, Fuel Cell Technologies Program, Highlights from U.S. Department of Energy’s
Fuel Cell Recovery Act Projects, May 2012.

50 Chapter 3 ASSESS OPPORTUNITIES

4
Chapter 4 CHOOSE AND IMPLEMENT
STRATEGIES

S
ustainability initiatives stand the best chance of gaining support when they align with overall business
objectives, such as reducing costs and gaining a competitive advantage. Sure, improving the environment and
simply “doing the right thing” are good motivators for developing sustainable freight programs, but they’re rarely
enough on their own. It’s crucial that environmental efficiency goes hand in hand with fiscal efficiency.
So, where should companies start on freight sustainability? Time and again, the most successful practitioners
encourage companies to focus first on where they can get the best return. The good news is that there are a great
many initiatives that can achieve both environmental and financial goals quickly and without huge effort.
In the Assess Opportunities section of this handbook, you identified initiatives with strong potential to reduce
freight’s impact on your company’s carbon footprint. Now you need to weigh these benefits against the resources
needed to make them happen, including capital costs, internal staff and outside consultants.
If you’re just beginning a concerted freight sustainability effort, focus on projects over which you have complete
control and can quickly demonstrate results. A simple four-quadrant Action Priority Chart, such as the one pictured
here, can help you determine the low-hanging fruit. You’ll want to prioritize projects in the upper left quadrant.

High

Big Wins,
Quick Wins
Hard Fought
CO2 AND
COST IMPACT
Long,
Fill Ins Hard Roads
Low
EXPENSE AND EFFORT

51
Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES
 Once you’ve identified projects that make the most sense, you’ll need to do research and crunch some numbers.
For each initiative, you’ll also want to answer a few questions.

Key questions What is the predicted greenhouse gas reduction impact?

The specific emissions savings associated with your efforts will depend on the unique circumstances of your company.
Many of the strategies included in the Green Freight diagnostic have the end-goal of running fewer trucks miles.
Co-loading freight, reducing packaging cube and leveraging software to increase load-factors are all methods to
reduce the overall number of truck trips needed to move freight. Several other strategies focused on migrating freight to
different modes. Here are some quick rules-of-thumb to determine carbon reductions for these types of changes:
• Eliminating truck miles: 1.6 metric tons of CO2 reduced per 10,000 miles
• Converting truck to rail: 1.4 metric tons of CO2 reduced per 10,000 ton-miles
• Converting plane to ship: 4.5–5 metric tons of CO2 reduced per 10,000 ton-miles

What are the incremental costs involved in implementing the initiative?

This could include additional drayage fees, additional inventory carrying costs, new equipment purchases, and the
costs associated with buying, installing and maintaining new software, along with paying for outside consultants,
and other expenses. You may need to talk to appropriate contacts in freight operations, warehouse operations,
purchasing and other departments to develop cost estimates. You’ll also want to determine how you factor in the
extra time required by existing staff. Will this time be allocated as a cost of the program, or will you factor in only
incremental costs?
To create the most efficient transportation network, software can be a significant expense, but can also deliver
a compelling investment return. Tools are available to determine your optimal distribution network, specify lowest
mileage routes for truck runs, maximize trailer utilization through smart loading, and determine opportunities for
freight consolidation. With Software-As-A-Service (SaaS, or “cloud”) models, you don’t necessarily need to purchase
the software outright. Also, many companies provide outsourced transportation management services and bring with
them very sophisticated modelling and optimization tools. One key decision your company will have to make is what
IT systems will be required to capitalize on available emissions reduction opportunities, and whether to run them
internally or through an outside service provider.

What will be the annual financial savings?

Cost savings will largely be a function of reductions in transportation costs, less any additional inventory carrying
costs, recurring capital or financing expenses, or new transportation costs, such as additional dray fees.

52 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

 What financial metrics should be used for evaluating each potential project?
There are different financial formulas you can use, including Return on Investment (ROI) and Internal Rate of Return
(IRR), however the following methods have proven to be the most useful for sustainability projects:
• Net Present Value (NPV) is the sum of forecasted discounted cash flows minus the initial investment, and is the
primary measure of a project’s attractiveness. Using NPV positions money spent capturing energy/fuel savings
opportunities as an investment, not an expense, regardless of whether the project is paid for out of operating
budgets or capital investment budgets. In general, projects with a positive NPV should be considered for
implementation. There are several variables that influence the calculation of NPV, including discount rate, tax rate
and depreciation.
• Simple payback is the length of time required for the accumulated savings of a project (in actual results delivered to
the bottom line) to equal the cost (in actual capital) of the initial investment. This metric is frequently used to assess all
types of projects. The calculation is simple to understand, and can be convincing when the project payback period is
one or two years. Simple payback calculations typically ignore the time-value of money, and cash flows that occur after
the payback period, thus underestimating the value of a longer-term investment. Payback calculations should always
be accompanied by an NPV calculation to allow for a full assessment of the cost-saving opportunity.

Financial analysis The following is a hypothetical output from an assessment of potential initiatives to implement. A decision-making
tool like this can be great for gaining the company-wide support you’ll need. Clearly, the quicker the payback, the
more likely it is that you will receive support and approval. However, energy/fuel spend reduction efforts typically
take more time, so it’s important to be able to lay out a solid financial argument for your investment. In the case
below, for example, the project with the largest cost and emissions reduction potential has the longest payback
period, but it will deliver the most significant business value in the end.

Financial Analysis: Freight Sustainability Initiatives

Months
Annual
Initiative Annual Carbon Reduction Upfront Cost for NPV (10 year)
Savings
Payback

Leverage software to increase load factor on 4,500 outbound trucks by 5 percent 124 metric tons CO2 $50,000 $160,000 4 $1,073,773

Convert 2,000 truck trips to intermodal 1,800 metric tons CO2 $2,000,000 $1,420,000 17 $7,973,486

Establish a DIY co-loading arrangement for 1,000 annual truck trips 450 metric tons CO2 $300,000 $500,000 7 $3,211,791

Add a distribution center to network to enable significant reduction in 6,900 metric tons CO2 $20,000,000 $5,700,000 42 $20,034,415
outbound miles

53 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

 Driving organizational To achieve the greatest value, your Green Freight efforts need to have broad buy-in among your executives, supply chain
alignment team, and other impacted parties. With this support, this effort can be more than one-time improvement projects.
EDF has worked with hundreds of leading companies to cut energy costs and curb greenhouse gas emissions.
We have found that the most successful companies embrace sustainability as part of their culture, as with quality
and continuous improvement. The companies that are making the most progress in cutting energy costs and curbing
greenhouse gas emissions are benefiting from The Virtuous Cycle of Strategic Energy Management.1
EDF developed this model based on our learnings from EDF Climate Corps – our innovative fellowship program
that places specially trained graduate students in companies to save money and reduce emissions by cutting energy
waste. Its learnings apply to Green Freight initiatives, too, and may help you to develop an implementation plan.
The five components of the Virtuous Cycle influence one another and work together to influence energy
performance. Improving performance in one category provides positive feedback for the entire cycle, while barriers
to any individual component can negatively impact the performance
of the other components. When all components function at capacity,
the virtuous cycle will run smoothly to improve energy performance,
generating maximum financial and environmental returns.
1. Executive Engagement The executive leadership team is
responsible for setting the organization’s direction, and establishing
long term strategy for success. By assigning formal roles and
responsibilities for improving organizational energy performance,
the leadership team can build accountability and prioritize energy
management strategies and goals. The leadership team can then create
a comprehensive energy reduction strategy supported by ambitious
goals, which will help differentiate the organization as a green leader,
and drive innovation through targeted strategies designed to meet
those goals.
2. Resource Investment To empower an organization to capture
energy savings, its executives need to make strategic, capacity-building
investments to free up the necessary human and financial resources
that enable concrete action. Making funding consistently accessible allows dedicated personnel to purposefully
plan and implement effective energy management. Energy efficiency projects will pay for themselves, but they
need dedicated seed capital to get started, as well as attentive managers to ensure those seed funds grow and are
reinvested on an on-going basis.
3. People Resources are deployed to build staff capabilities, and to equip them to go after efficiency opportunities.
Providing training opportunities, organizing cross-functional teams, and establishing full-time positions for
sustainability staff all help to build employee knowledge, foster enthusiasm and create accountability for
improvement. A workforce that feels ownership and responsibility for its energy use at all levels – one that is actively
encouraged by leadership to work toward a shared vision of optimized energy performance – will maintain the

54 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

 momentum needed to make real progress and inspire innovative solutions. This organization fosters a culture of
collaboration. Staff recognizes the importance examining a challenge from different perspectives. Employees of
various levels of seniority are engaged to enable the organization to capture all information and ideas.
4. Projects & Data What gets measured gets managed. Making energy data visible and accessible provides
organizations with the information needed to make thoughtful energy-performance improvements. Comprehensive
and detailed energy data collection is vital to identifying sources of inefficiency, and gives concrete demonstrations
of the energy savings achieved through specific interventions. This, in turn, generates the verified financial and
environment results that prove the benefits of taking action in the first place. Ongoing energy-usage tracking validates
persistence of savings, and provides feedback to inform future investments.
5. Visibility Sharing results from successful projects helps to maintain momentum beyond a first round of initiatives.
Top-level executives appreciate the validation of their plan for prioritizing energy performance as a key strategy.
Meanwhile, making results available to the outside world improves corporate transparency and accountability in key
performance areas. Success stories tend to make a compelling business case for implementing further energy-saving
projects, and they foster a culture of investing in additional human and financial resources to go after even bigger wins.

Implementation guidelines The following chart includes actions that will help you leverage the Virtuous Cycle model for your Green
Freight initiatives.

Virtuous Cycle components

Engagement

Investment

Projects &
Executive

Resource

Visibility
Action Benefit

People

Data
Establish a This person will be accountable for planning, execution, and evaluation of sustainable freight     X    
project lead initiatives, and for maintaining the momentum of the program. This person should have the
authority to collaborate across multiple departments to achieve stated goals.

Establish an This person will ensure the collection and proper dissemination of data related to Green     X    
information manager Freight strategies. They will ensure that the needed data management systems are in place
and appropriate people have access to the data.

55 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

 Virtuous Cycle components

Engagement

Investment

Projects &
Executive

Resource

Visibility
Action Benefit

People

Data
Establish a lead for This person will be the lead for identifying and implementing external collaborations with X   X    
external collaboration industry partners.

Appoint an executive The executive sponsor is responsible for setting the organization’s direction and establishing X   X    
level sponsor long-term strategies for success. This person is also responsible for the strategic, capacity-
building investments necessary to free up the human and financial resources to enable
concrete action.

Identify an external This person will incorporate Green Freight success stories into ongoing corporate     X   X
communications communications to stakeholders and the media. If your company already issues a
manager Corporate Social Responsibility report or responds to a Carbon Disclosure Project survey,
the point person for those actions likely will be the appropriate person to lead external
communications related to Green Freight stories.

Reward energy- Staff contributions to sustainability efforts should be considered during performance X   X    
saving in evaluations. This should apply not only to staff who have specific sustainability
performance responsibilities, but also other staff key to implementing new Green Freight projects.
evaluations

Ensure incentives are Energy-saving projects can be slowed or even stopped because of internal budget X X X X  
aligned for staff structures. It is important that staff members with the power to implement these projects
are not penalized for success. Managers will be less inclined to invest in an energy-saving
project if that investment will lead to a smaller budget the following year. One option for
aligning incentives is to create a specific budget for energy-saving projects. With access to
a specific budget, managers are able to receive incremental capital to put towards efficiency
projects and can reinvest the energy savings incurred by those projects.

56 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

 Virtuous Cycle components

Engagement

Investment

Projects &
Executive

Resource

Visibility
Action Benefit

People

Data
Create a central Create momentum and spur innovation by listing, in one place, all energy-saving projects       X X
project database underway. Include data on performance, costs and details about successes and challenges.
Provide staff with access to this information. Encourage staff to review project write-ups
and suggest opportunities to apply project learnings to other initiatives. This is particularly
important for sharing information at companies with distinct regional operations or distinct
business units.

Develop plan for Sharing successful results maintains momentum beyond a first round of initiatives. Ongoing       X X
sharing success engagement of top-level executives validates their prioritization of energy performance as a
stories internally key strategy. Success stories make the business case for implementing additional energy
projects and encourage the investment of additional human and financial resources to go
after even bigger wins. Engaging employees on specific topics, such as recycling or energy
efficiency, can lead to them feeling empowered and more engaged in their work as a whole.

Broaden the staff Establish a process for encouraging suggestions on new energy-saving projects. Provide x X X X X
engaged in Green training opportunities and organize cross-functional teams to build employee knowledge,
Freight efforts foster enthusiasm, and create accountability for improvement. A workforce that feels
ownership and responsibility for its energy use at all levels, and is actively encouraged by
leadership to work toward a shared vision of optimized energy performance will maintain
the momentum needed to make real progress and inspire innovation.

Add Green Freight Performance metrics on freight sustainability, such as total miles, fuel usage and carbon     X X  
metrics to standard emissions, should be part of the team’s ongoing performance reporting, alongside on-time
internal reporting delivery, safety and other critical success factors.

Develop a Green Your scorecard will be a uniform way of evaluating energy-saving projects. It will enable       X  
Freight scorecard identification of top-performing projects, while also revealing learning opportunities. The
data collected here can also be useful in CSR reports and other venues for demonstrating
corporate leadership on sustainability.

57 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

 Virtuous Cycle components

Engagement

Investment

Projects &
Executive

Resource

Visibility
Action Benefit

People

Data
Create a Green Making energy data visible and accessible provides organizations with the information   X   X  
Freight data needed to make thoughtful energy performance improvements. Comprehensive and
management plan detailed data collection is vital to identifying sources of inefficiency, and measuring the
energy savings achieved through specific interventions. This data generates the verified
financial and environmental results that prove the benefits of taking action in the first place.
Investments in data management software will be necessary for some companies. This
investment will enable regular reporting of key Green Freight metrics, such as emissions per
ton-mile and fuel usage. It will also inform future projects.

Establish and Public goals enable companies to fully leverage the Virtuous Cycle. These goals provide a X   X X X
communicate a platform for executive engagement, including reporting on progress and challenges. Goals
public goal encourage longer-term thinking, leading to increasing buy-in for more impactful projects
that also require up-front investments. Public goals are statements of commitment to
internal and external stakeholders.

58 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

 Tips From Choosing and implementing
the Experts
sustainable freight strategies
• Ensure support from top executives. Without this support, it will • Establish a measurable goal that is time-based. Make your goals
be difficult to implement or sustain Green Freight initiatives. visible inside and outside the company. Knowing that others
• Choose initiatives that align with the company’s stated are watching and monitoring progress against the goal is a
environmental and energy goals. Continually reinforce how motivator, since people want to succeed. People also want to be
specific Green Freight efforts contribute to these broader goals. part of something important.

• Think big, but start small and simple. Get early wins under your • Communicate to business partners, carriers and 3PLs. Let them
belt. Start with a project that is easily measured; one where you know of your sustainability goals and plans. Solicit their ideas
can see a clear start and finish. and involvement.

• Identify key staff members with the power to make required • Establish a timeline. Revisit and report progress regularly.
changes. Clarify what resources you have at your disposal.
Manage expectations regarding what you expect from staff in
terms of time and availability.

For more information: www.edf.org/freight

Notes
1. H
 iller, Jake; Reyna, Emily; Riso Chris, Environmental Defense Fund; and Jay, Jason, MIT Sloan School of
Management, The Virtuous Cycle of Organizational Energy Efficiency: A Fresh Approach to Dismantling
Barriers, 2012.

59 Chapter 4 CHOOSE AND IMPLEMENT STRATEGIES

5
Chapter 5 SET GOALS AND REPORT RESULTS

G
lobal leaders in freight sustainability share common traits. Their programs are performance-based. They
establish objectives – both broad-based and specific to individual initiatives – and regularly report these
freight sustainability metrics. Within their organizations, they have established a culture in which sustainable
freight operations are viewed as a long-term commitment, not a one-time event.
In many cases, these companies have also made aggressive public commitments to reduce freight-related
greenhouse gas emissions. Here are a few examples:

“ By 2020, CO2 emissions from our global logistics network will be at or below 2010 levels despite
significantly higher volumes. This will represent a 40 percent improvement in CO2 efficiency.
UNILEVER
Unilever plans to achieve this by reducing truck mileage, using lower emission vehicles, employing
alternative transport, such as rail or ship, and improving the energy efficiency of warehouses.”1

“ By 2020, Dell will reduce greenhouse gas emissions by 50 percent from its facilities
DELL
and logistics operations.”2

“ Ikea’s goal is to reduce CO2 emissions per cubic meter of products transported by 20 percent
IKEA
by the end of FY16, from FY11 levels.”3

General commitments to reduce greenhouse emissions from freight typically yield poorer results than the
specific goals cited above. The illustrated “SMART” approach to goal setting can be a good guide. Because Green
Freight strategies have been largely untapped by many shippers, dramatic improvements are possible. When it comes
to setting goals for freight sustainability, don’t underestimate your power to change things. Set aggressive targets
and challenge the organization to achieve them. Setting a modest goal may allow you to declare victory when it is
achieved, but can leave you far short of your emissions reduction potential.

60 Chapter 5 SET GOALS AND REPORT RESULTS

 There are two types of sustainability goals. Absolute
goals involve increasing or decreasing a specific baseline S Specific
number. For example, “Reduce freight-related carbon
emissions by x%.” Normalized goals frame progress relative M Measurable
to another factor – for example, “carbon emissions per ton of
product” or “carbon emissions per sales dollar.” Achievement A Aggressive
toward normalized goals is particularly useful when
demonstrating trends in performance and benchmarking
R Realistic
your results against a peer group.
T Time-bound

Reporting results Sustainability metrics have become a standard component in annual corporate social responsibility (CSR) reports.
Key stakeholders, including shareholders, customers, employees, and community groups, want to know about
the successes and challenges your company is facing in the area of sustainability. Freight and logistics operations
can have a substantial positive impact on sustainability goals for large and mid-size companies. Given the strong
correlation between transportation cost reductions and improvements in sustainability performance, freight logistics
teams can contribute “good news” stories that can be shared in CSR reports and other public communications.

Who does the reporting?

The corporate department responsible for sustainability (typically the Environmental Health & Safety or CSR group)
typically gathers data from across the organization and reports on sustainability practices and results. Your logistics
and transportation team should work closely with your sustainability officer to communicate the strategies employed
and the specific results achieved through Green Freight initiatives. To facilitate the process and minimize extra data
gathering, integrate sustainability metrics into your department’s standard performance reports.

What should you report?

A sustainability report is more than a spreadsheet with data. It should be a compelling story that outlines your
organization’s journey toward becoming a better corporate citizen. In addition to listing your goals and progress,
describe your department’s new projects, like switching to intermodal or redesigning your distribution network.
What key learnings have you taken from the process? If you’re not on track to achieve a goal, describe the challenges
you’ve faced, and what infrastructure or other external barriers are limiting your progress.

61 Chapter 5 SET GOALS AND REPORT RESULTS

 Below are links to recent reports that provided data and context about each company’s progress and challenges
along its Green Freight journey.
Scotts Miracle-Gro: 2011 Corporate Responsibility Report The company notes the share of its CO2 emissions
that are associated with distribution operations (38 percent), reports on one pilot effort to improve its performance,
and highlights future plans to scale-up the pilot project.
Read the report
Heinz: 2013 Corporate Responsibility Report The company states that the transportation network is within the
bounds of its global sustainability goal (10 percent reduction in fossil fuel consumption and GHG emissions per unit
of production), reviews its main strategies for tackling transportation emissions, and acknowledges challenges in
meeting its stretch target.
Read the report
JC Penney: 2013 Sustainability Report This report includes an engaging diagram that describes fuel-savings
strategies used in four legs of product logistics: manufacturing to DCs; DCs to stores; reverse logistics; and
e-commerce deliveries. The company reviews how it is helping to reduce harmful air pollutants in and around the
ports of Los Angeles and Long Beach.
Read the report

For more information: www.edf.org/freight

Notes
1. Unilever Sustainable Living Commitment, 2013.
2. Dell Press release October 15, 2013.
3. IKEA Sustainability Report, 2012.

62 Chapter 5 SET GOALS AND REPORT RESULTS

6
Chapter 6 CONCLUSION

R
ight now, you have an exciting opportunity to create business value and improve environmental performance
by implementing Green Freight strategies. Whether you’re a retailer, manufacturer, or supplier, you can
contribute to a greener planet and save money by getting smarter about how you manage your freight operations.
Freight transportation typically accounts for 15 percent of the cost of goods sold. It also accounts for percent of
U.S.-based corporate emissions. When moving goods, costs and carbon are highly correlated metrics – improve
one and you will likely improve the other, too.
Through the EDF Green Freight Handbook, we have provided you with the key tools you need to advance your
green freight journey.

ESTABLISH METRICS Define the objectives of your green freight efforts and track your progress through
performance-based metrics, such as greenhouse gas emissions per ton-mile. Well-defined metrics will keep you
focused on the projects with the biggest impact.

ASSESS OPPORTUNITIES Leverage the EDF Five Principles for Greener Freight to identify impactful, strategic
green freight projects that create business value and improve environmental performance.

CHOOSE AND IMPLEMENT STRATEGIES Scale-up green freight activities at your company. Use key financial
metrics and internal strategies to build the capacity and support needed for these efforts to thrive.

SET GOALS AND REPORT RESULTS Communicate your green freight efforts to key stakeholders and set
challenging, multi-year environmental performance goals.

By utilizing these tools you can unlock the environmental, economic and fuel-security benefits available
through more efficient logistics.
Whether your company is researching green freight efforts for the first time or has set a multi-year improvement
goal, EDF encourages you to take the next step. By acting today, the influential community of freight shippers
can help create a future where freight transport remains affordable, results in less greenhouse gas pollution, and
minimizes the threat to public health.

63 Chapter 6 Conclusion
7
Chapter 7 EDF’S WORK ON FREIGHT

EDF Green Freight Initiative EDF’s Green Freight initiative partners with leading retailers, manufacturers, consumer brands, and other large
freight shippers to achieve transformational reductions in greenhouse gas emissions and fossil fuel consumption
from supply chain logistics. EDF works with companies to establish metrics to track progress; implement cost- and
carbon-saving strategies, and set measurable targets for sustainability in logistics operations. Through our thought-
leadership and case studies, we share our learning so other companies can benefit too from cost-effective and
carbon-efficient green freight practices.

EDF Clean Ports Project EDF works to protect the health of communities that live near marine ports by reducing harmful air emissions and
climate risk at these facilities. To accomplish this, we collaborate with key stakeholders, including beneficial cargo owners,
port authorities, logistics service providers, community groups, the U.S. Environmental Protection Agency and other
government agencies. We seek a comprehensive strategy to address emissions from port operations and are creating an
index of environmental best management practices being employed at ports. The index will highlight top performing ports.
It will also showcase “gold standard” operational efficiencies and the role of advanced, cleaner technologies.

Work with the EDF Green There are many ways EDF can support your company’s efforts to create a more efficient, sustainable supply chain.
Freight Team Explore the EDF website.
The Green Freight section features helpful Green Freight data, strategies, case studies and publications.
Request a Phone briefing.
This hour-long briefing links you with EDF experts to discuss best practices in sustainable logistics.

64 Chapter 7 EDF’S WORK ON FREIGHT

 Hire an EDF Climate Corps Fellow.
Each summer, trained fellows from the nation’s top graduate programs team up with leading organizations to identify
and implement high-value energy management strategies.
Host an EDF Green Freight workshop.
This half-day, in-person discussion focuses on how your company can apply industry best practices to logistics
operations.
Establish a Green Freight Emissions Improvement Goal.
Our customized Green Freight goal-setting engagement combines phone calls and on-site workshops to help you
create your own goal and plan of action.

Contact Email: [email protected]

EDF’s Green Freight team Phone: 617 406 1806
Web: www.edf.org/freight

EDF Experts Elena Craft, Ph.D., Senior Health Scientist

Dr. Craft’s background is in molecular toxicology; she holds a M.S. degree in toxicology from NC State University, and a
Ph.D. from Duke University. She also holds an adjunct assistant professorship at the University of Texas School of Public
Health in the Division of Epidemiology, Human Genetics, & Environmental Sciences. Her research experience includes
work at both the U.S. EPA and the National Institute of Environmental Health Sciences, where she studied the health
effects resulting from exposure to environmental pollutants such as PCBs, dioxins, and metals. Over the last seven years,
she has worked to identify, monitor, and mitigate risk from environmental pollution in highly industrial areas, most
specifically around port areas, petrochemical facilities, natural gas drilling areas, and freight corridors.

Jason Mathers, Senior Manager Supply Chain Logistics

Jason leads the EDF Green Freight initiative. He works with some of the world’s largest companies to improve the
bottom line and cut fuel consumption associated with freight movement. The companies he works with include
Caterpillar, Walmart and Ocean Spray. In 2013, Jason was named a “Pro to Know” by Supply & Demand Chain
Executive Magazine – a prestigious recognition and an acknowledgment of his ability to work with industry to affect
change. Jason has managed EDF light- and medium-duty fleet partnerships, working with PHH Arval, Pepsi, FedEx,
and Abbott Labs among others. Prior to joining EDF, Jason was an organizer with the Union of Concerned Scientists.
Jason has a graduate degree in economics from Suffolk University. He is also a veteran of the U.S. Navy.

65 Chapter 7 EDF’S WORK ON FREIGHT

 Marcelo Norsworthy, Transportation Analyst
Marcelo works on air pollution issues related to freight logistics and transportation. He has developed and analyzed
metrics for estimating emissions at ports, worked with corporate partners on leveraging their support for pollution
mitigation programs, conducted an evaluation of clean truck programs, and partnered with the U.S. EPA and other
federal and regional agencies on transportation sustainability. Marcelo focuses on criteria pollutant emissions and
their localized health effects, especially how they affect environmental justice communities, trade shifts and growth
associated with the Panama Canal expansion, expanding outreach to Latin American partners and measurement of
seaport environmental programs.

Christina Wolfe, Ports & Transportation Analyst

Chris has more than ten years of experience in various scientific roles that include air quality, environmental
studies and toxicological assessment, in addition to six years of experience in business analysis and finance.
At EDF, she works on ports and transportation projects for the US Climate and Energy team and is currently
managing an executive level port stakeholder group to develop recommendations for establishing environmental
performance metrics at ports. She also works to identify potential innovative partnerships to leverage grant funds for
environmental projects. Her technical expertise is in air quality regulation (mobile and stationary sources) and the
development of scientific and financial models. Chris holds a master’s degree in Biology from the State University
of New York at Stony Brook, as well as bachelor’s degrees in both Biology and Business Administration from the
University of Washington.

66 Chapter 7 EDF’S WORK ON FREIGHT