August 21, 2009

First, a little more explanation of the metrics may provide clarity.

Second, 'indirect' metrics may well be the most effective means of measuring performance. Likely easier to get measures from existing data sets, ties performance to factors that suppliers can influence (number of shipments, etc.) rather than more removed measures (CO2 emissions from carrier.)

However, a key aspect of statistics is to show that the 'indirects' have significant correlation to the 'direct.' It is unclear as to whether the metrics reflected here have this connection. Example: multiple LTL shipments on successive days may simply travel on equipment that makes these pickups and stops daily. While it is likely that shipping orders more completely will drive efficiencies -- certainly costs and likely carbon impact -- it may well take a change in transportation patterns (pick ups or deliveries every other day versus every day) to drive actual carbon change.

Other metrics to consider to reflect carbon impact of transportation:

(1) overall miles of transport (fewer overall miles drives lower overall emissions)

(2) - the mode of transport (rail vs TL vs LTL vs parcel) and the corresponding carbon output per mile

(3) - the carrier base (the carbon efficiency of the carriers used)

Miles - metric = miles traveled per volume sold (tons, cubic feet, etc.)

Metrics in article reflect this as fewer shipments drive fewer miles. An additional metric could be miles traveled per origin-destination distance. That is, how efficient is the routing -- the miles traveled compared to the miles between origin and destination.

Mode - metric = the carbon impact for origin to destination distance. e.g., while rail may have less carbon impact per mile traveled, if this mode requires further distance to get to destination (indirect route), and/or transloading (carbon footprint of facility and subsequent transit), it may have higher overall carbon impact.

Carrier base - metric = % of miles on 'carbon focused carriers.'

Carriers certainly have the ability to calculate their CO2 per mile. Of course, there are programs (Smartway, etc) that carriers can participate in to verify and communicate their commitment to carbon reduction. Metrics that capture the % of miles on 'carbon focused' carriers will drive improvements.

Corbin C. Fowler
Senior Manager, Supply Chain Solutions
MeadWestvaco