Expert Insight: The Executive View
  By Gene Tyndall  
  October 9 , 2007  

Green Transportation and Logistics – How Are We Doing?

  "Green" Movement May Serve as Catalyst for Improved Transportation Collaboration and Innovation  
Tyndall Says:
Time will tell if more companies will get moving on initiatives before government regulations are issued, and then compliance becomes the behavior, at the possible expense of supply chain innovation.

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I recently chaired the “Green Transportation and Logistics Summit” conference, held in San Francisco, and hosted by eyefortransport (EFT).  The theme was “How Transport, Logistics, and Supply Chain Managers can Innovate, Comply, and Benefit from Going Green.”   I thought SCDigest readers would enjoy reading some highlights from this timely conference.

Those of you who attend EFT conferences are aware that they secure excellent speakers who often provide meaningful insights into their initiatives at their respective organizations.  This summit was no exception.  We heard some interesting presentations from managers of well-known brand companies such as Nestle, Coca-Cola, Interface, Intel, Procter & Gamble, Motorola, Staples, Isuzu, Sun Microsystems, IBM, USPS, and Sharp.  We also received meaningful insights from analysts from AMR Research; the MIT Center for Transportation & Logistics; the Rocky Mountain Institute; and Booz-Allen.  And, from service providers such as Maersk Logistics, YRC Logistics, Blue Source, Aero Logistics, CR England, and others.  We also had an outstanding panel session by real estate executives of Prologis, CB Richard Ellis, AMB Property Group, and the Staubach group.

In my chairman’s opening, I offered the view that while “green” is “in” these days, and many are jumping on the bandwagon to publicize their companies’ green actions, we need to hear more about real initiatives at the operational levels to judge whether or not this is just another fad or attempt to promote consumer products, or if we are making true progress toward sustainability and its value for the planet.  I challenged the speakers to provide the truth, information on their methods, and the results of their initiatives, as well as to share what they are doing.

Most did not disappoint.  We heard about combining operations and technology to save fuel by reducing loads and empty miles;  about collaboration among suppliers and customers for backhauls, for dwell time reductions, and for continuous moves ; about how the EPA-sponsored voluntary -- and expanding -- smart way shippers and transport partnership is fostering collaboration to  reduce the transportation “footprint”;  and even about new designs for more efficient trucks that include “bolt-ons” that can be added in the aftermarket to save up to 25% fuel (a Wal-Mart result).

We also heard about new quantitative tools and methods to calculate carbon emissions; measuring energy use and emissions by ships, containers, ports, aircraft, warehouses, and other logistics operations;  improved waste reduction and disposal;  and, how some leading companies are reporting on their actions in annual reports and other communications.  Our real estate panel executives focused on new requirements for “LEED” approved buildings (environmental guidelines), and other energy-reducing improvements in the construction and renovation of plants and distribution facilities.  Each of the four global real estate firms has green initiatives of their own.

John Davies, VP of Green Research from AMR, provided a valuable status report from their sustainability forum and council.  While there are about 50 companies doing true green initiatives, the numbers drop off quickly.  But, there are wake-up calls occurring – from government, from investors, from insurance companies, banks, and very importantly, customers – that are changing mind-sets.  We even had a brief discussion of “CGO” titles (Chief Green Officers) that are starting to show up (oh, oh!).

There were meaningful debates and Q/As about the issue of Substance vs. Communications, i.e., can green initiatives really improve profitability?  And, will innovation be fostered by the green movement, or will compliance be the true call to action? We had a very relevant presentation by Dr. Edgar Blanco of the MIT Center for Transportation and Logistics, reporting on their newly started research on the four stages of strategic supply chain green evolution – (1) compliance (must do) ; (2) mitigation (being a good citizen); (3) transformation (change); and (4) value creation (new innovative products and services).

From my perspective, many of the initiatives in transportation and logistics are based upon efficient operations, and should be done whether there are green benefits or not.  Yet, if it takes the green movement to be the catalyst for improved transportation collaboration and innovation, then fine.  The win-win benefits are there – for the companies, for the planet, and for society.  Reducing fuel use and emissions – the primary result of transportation excess – is a positive outcome.  And, reducing the energy use of facilities – the primary result of inefficient buildings – is also a positive outcome.

We should certainly hope that the green movement throughout global supply chains is real, sustainable, and expanding.  Time will tell if more companies will get moving on initiatives before government regulations are issued, and then compliance becomes the behavior, at the possible expense of supply chain innovation.  We not only need more conferences to share information on positive green actions and results, but we also need more executive leadership from the many companies that were not present at this conference and quoted on the business news.

As always, supply chain managers can help.  We can promote, advocate, and initiate proposals to senior management that deliver meaningful green benefits, as well as adequate returns on investments. We can also make continuous operational improvements that make good supply chain sense, and also benefit the environment, our energy problem, and advance other sustainability goals.  It is about time.

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