Shippers and carriers continue to make the transition from lean to green with bottom line improvements

John D. Schulz, Contributing Editor -- Logistics Management, 7/18/2007

WASHINGTON—The push is under way to make freight logistics greener and supply chains more environmentally sustainable. The question for shippers and carriers is whether they can make it pay. Some already are.

Some of America’s biggest shippers already are on board. At Wal-Mart, the world’s largest retailer, it expects to save $3.4 billion by forcing its suppliers to reduce packaging materials by 5 percent starting next year. That’s part of a larger push by the Bentonville, Ark., retailer to cut some 667,000 metric tons of carbon dioxide emission, the equivalent of taking nearly 250,000 of its trucks off the road.

Los Angeles, in particular, and California in general, are epicenters of the movement to make freight greener. The ports of Los Angeles and Long Beach, the busiest in the nation, is pushing a “Clean Trucks Program,” that would shift the responsibility of operating clean trucks from the drivers to the trucking companies. 

Under a plan not yet approved that would go into effect January 1, some 16,000 old diesel trucks serving the ports to inland distribution centers would either have to be replaced or retrofitted. Its all part of the ports’ proposed Clean Air Action Plan to reduce emissions from ships, harbor vessels, cargo handling equipment, locomotives, and trucks. The plan is to cut diesel pollution from trucks serving the ports by 80 percent in five years.

To fund the replacement trucks, the ports would charge pollution fees on the dirtiest ones. The first step would be to eliminate all trucks that are more than 20 years old, which account for about 15 of all drays serving the ports.

Drivers, mostly non-union owner-operators serving the ports, are not keen on that. But they may be powerless. A recent 100-truck protest convoy from South Los Angeles, where many port truckers live, drew only 27 trucks on the 100 Freeway from downtown L.A. to the Port of Long Beach.

A port spokesman says the idea is for costs of the plan to be passes to the “beneficial cargo-owners,” or shippers. “Those are the people whose goods are being transported,” spokesman Arley Baker said.

If passed, the plan would start next January. Opposition has come from the California Trucking Association and the Waterfront Coalition, a consortium of major shippers including Wal-Mart and Target. But a spokesman for the Coalition for Clean and Safe Ports pushing the plan says the ports are moving in a “real positive direction” on going green. 

Wal-Mart is hardly alone is discovering green sells. Staples already has installed speed governors on its private fleet, reducing top speed to 60 miles per hour, which it says increases fuel mileage by 25 percent, saving at least 500,000 gallons of fuel a year. It’s part of Staples’ overall plan of cutting carbon emissions by 7 percent by 2010.

Wal-Mart and Staples may have gotten their green cue from Dow Chemical. It began a 10-year green plan in the 1990s that it says already has saved the chemical giant $3 billion in energy costs at the $46 billion chemical giant. Now Dow has embarked on its 2015 sustainability goals which include reducing its overall greenhouse gas emissions by 2.5 percent every year by 2015. Dow Chairman, President and CEO Andrew Liveris has said “we will reach beyond the fences of our company” to improve the environment.

Truckers already are feeling that push. Twice in the past six years, trucking fleets have endured Environmental Protection Agency-ordered changes in emission regulations for Class 8 trucks. Combined with mandates last year for use of ultra-low sulfur diesel fuel and mandatory filter traps and catalytic converters, diesel particulates that form smog have been reduced by 90 percent compared to levels in 1990, according to the EPA.

Washington isn’t done yet. In 2010, another round of clean-engine requirements comes on line. The EPA says that will reduce by 98 percent the levels of smog-forming gases emitted by diesel trucks. That has caused FedEx Freight President and CEO Douglas G. Duncan to wonder aloud, “By 2010, the exhaust that is coming out of a new diesel truck will be cleaner than the air we are breathing in Los Angeles right now.”

The rails are next. By 2015, diesel locomotives will use diesel particulate filters to eliminate as much as 95 percent of all particulate mass emissions, according to the EPA.

“Clearly, the future points to a bolder vision of energy development that is not only cleaner, but also sustainable.” says Rep. Mark Udall, D-Colo., co-chair of the Renewable Energy and Energy Efficiency Caucus in the House. Udall, who is considering a Senate run from Colorado, adds, “You can be green and make green.”