Shippers slow to adapt to new “green” supply chain initiatives in the coming years will not only be undermining the environment, say sustainability experts, but they’ll be hurting themselves and their companies in the long run. The European Union is imposing more stringent laws this year regarding industrial waste, and several U.S. states are challenging our own federal government with more stringent “clean air” standards of their own.

“We find that it is a function of pure self-interest to 'go green’ as soon as possible,” says Andrew Winston, founder of Winston Eco-Strategies, a multinational consultancy based in Washington, DC. The main thrust of Winston’s operations is focused on helping shippers use environmental thinking to create value through revenue growth, brand enhancement, risk reduction, and cost-cutting.

“Some of the biggest shippers in the world now are leading by example,” says Winston, “and have shown that there’s far more downside in not moving goods in the cleanest way possible.”

While Coca-Cola and IKEA are among the many iconic manufacturers seeking Winston’s help with benchmarking, he points to another global giant that is not one of his clients—Wal-Mart. “When a player of that size and significance says it wants its suppliers to change their ways, everyone listens,” observes Winston. “They keep a scorecard on how every logistics partner manages its fleet and what size carbon footprint it leaves. Those with the leanest and most efficient vehicles win. It’s as simple as that.”

Indeed, Wal-Mart has been recognized by the Environmental Protection Agency (EPA) for its mandate to reduce fuel consumption and greenhouse-gases emissions from its motor carriers. Along with several other Fortune 500 companies, the giant retailer made a three-year commitment with the EPA to upgrade its private fleet of trucks with auxiliary power units, energy efficient tires, and enhanced trailer aerodynamics. And that decisive internal action was soon made external.

As an EPA “SmartWay” F.L.E.E.T. partner, Wal-Mart has joined other major shippers in pledging to reduce between 33-66 million metric tons of carbon dioxide (CO2) emissions and up to 200,000 tons of nitrogen oxide (NOx) emissions per year. If this goal is met, say EPA spokesmen, it could result in fuel savings of up to 150 million barrels of oil annually.

“Wal-Mart demanded that its partners meet the 'hurdle rate’ pretty quickly,” says Winston, “but in any case, if they didn’t play along they’d only be faced with greater challenges in the future. Fuel is becoming more scarce, and prices are not going to drop.”

The EPA agrees, noting that Wal-Mart and other “good stewards” are saving 600 million gallons of diesel now at a cost benefit of upwards to $2 billion. And by doing so, say agency spokesmen, the company is helping to eliminate nearly seven million tons of carbon-dioxide that contributes to global warming.

Wal-Mart relied on several key shippers before making the leap, however. It now stays in contact with a variety of premium vendors, including Stonyfield Farm—the world’s leading organic yogurt maker—based in Londonderry, N.H.

“Wal-Mart and others have been contacting us to learn more about our energy and climate practices,” says Ryan Boccelli, Stonyfield’s director of logistics. “Strong performance in this area could literally open up markets for our products.”

Aside from being core to Stonyfield Farm’s founding mission, there are many reasons that it’s just smart business to “green” its logistics, says Boccelli. “Risk reduction is certainly one aspect,” he says, “since there may be a carbon tax or some other valuing of greenhouse gas emissions (GHG) emissions that could negatively impact our finances in future.”

Customer perception of liability is another concern, he says, as well as providing shareholder value: “More and more investors are looking at climate performance,” says Boccelli. “The Carbon Disclosure Product (CDP) represents institutional investors with a combined $41 trillion of assets under management which is looking at climate performance of a company. For many investors, green practices are a proxy for good management practices.”

And because consumers are increasingly valuing green business practices, he says, it’s a good way to not only operate more efficiently, but also win new customers.

“I would add that it is up to industry to make changes in distribution practices, using more efficient engines and fuels now. If they are waiting for government policy to mandate those moves, it may be too late,” he says.

According to Boccelli, when Stonyfield seeks an RFP for supply chain solutions, they consider many more aspects other than pure cost.

“For example, when we review our current leasing agreements on our tractors and trailers, it is important for us to know that Ryder is working with Freightliner and EPA’s SmartWay to design newer, fuel efficient equipment,” he says. “They may not be the lowest cost equipment, but units like those interest us as they supports our mission.”

In 2006, Stonyfield created Mission Action Plan (MAP) teams, a strategic and comprehensive effort to engage Stonyfield Farm employees in the company’s environmental mission and GHG emissions reductions. These teams bring a renewed focus to the company mission. Boccelli leads the transport team, a cross-functional group aligned to support and directly work to reduce the company’s GHG emissions from the transportation of its finished goods.

“When we completed our last Carbon Footprint in 2006, we used a lot of assumptions around GHG emissions from transport,” he says. “Ryder and Stonyfield Farm developed tools and measurements allowing us to remove most assumptions—all but actual fuel MPG—to measure our carbon footprint. We know our exact miles, weight, and stops, and those are entered into the EPA SmartWay F.L.E.E.T. model. Ryder reports these measurements to us, and we validate for accuracy.”

As for benchmarks, Stonyfield Farm uses its own, developed internally. Using 2006 as its current baseline, the company has been able to reduce emissions by 40% in 2007. The achievement required the breaking down of several barriers, however.

“A real challenge has been the fact that there are not a lot of companies doing this,” says Boccelli. “Much of our effort last year had been in conducting inquiries into best industry practices, and there simply is not enough information out there yet.”

He also sees a need for companies to provide new capital investment to properly align manufacturing locations and distribution centers. This means the purchase of updated or—in some cases—entirely new equipment. But the most important element? People.

“At Stonyfield Farm, success was achieved by the individuals on the front line performing the work,” Boccelli says. “All employees have a role. Warehouse workers must pick orders correctly with 100% accuracy to avoid redelivery. Customer service works with sales and our clients to increase order minimums and review delivery frequency.”

This increases order lead-time and permits the company to plan effectively, adds Boccelli. The final piece in all of this is with the transportation and dispatch people, who must be aligned to Stonyfield’s overall goal to use its lanes for 100% truck utilization.

“I truly believe 'green’ is the hottest topic for supply chain professionals,” he says, “and our MAP team is completely focused on becoming industry leaders.”

In his book “Green to Gold,” Winston notes that like most innovative ideas, the greening of the supply chain was one embraced early on by the high-tech community. “They realized that it was not only a way to strip cost out of its pipeline,” he says, “but also a key differentiator in branding and value creation.”

On that particular score, there’s harmonic convergence with a visionary in the personal computing industry: Mr. Michael Dell.

“Michael has made this a major part of his business plan,” says Brittain Ladd, manager of logistics and transportation strategy for Dell, Inc. “We, as a company, are working very hard to implement our 'green’ strategy.”

Using concepts he developed as transportation manager at a major department store retailer before joining Dell, Ladd put together a “relationship team” charged with implementing a number of cultural shifts in transportation and distribution. “I encouraged them to embrace change,” he says, “to take control, and not be afraid of it.”

Among the first changes made was to pay greater attention to a practice already in place before Ladd was hired: “Geographic Manufacturing,” or what Dell calls “GeoMan.” This idea was to build product closer to the customer, thereby reducing miles and transit time. Cost savings were immediately realized as reliance on air travel was reduced, and best of all, less carbon is being emitted.

“But a whole host of LTL problems had to be dealt with first,” he says. “These included placing too much emphasis on rates, and not enough on best practices, metrics, and performance.”

And as one might imagine, a company with the bandwith of Dell does not hop on a bandwagon…it drives it. That was certainly the case with being part of the EPA’s Smartway movement.

“We were with them from the very start,” says Ladd. “And when we introduced 'LTL Direct,’ we ended our reliance on 3PLs for oversight.”

LTL Direct, explains Ladd, was developed by the Dell transportation team in 2006 to shed one 3PL and various underperforming LTL carriers, and retain just two “top tier” LTL players. He says that Both Saia and Old Dominion Freight Line, Inc., are SmartWay certified, and able to utilize enhanced service networks.

“This increased velocity, thereby cutting hours of time trucks were running their engines. But we’re not finished yet,” adds Ladd. “Projects under development include the creation of transportation rendezvous zones, which will use electric-powered tractors to deliver product within city limits.”

Ladd also wants to use a “Driver & Trailer Share” program that would make drivers and independent contractors free to operate any company’s vehicle. “The best way to reduce the impact of transportation on the environment is by using less transportation,” he says. “Trailer Share optimizes all available drivers and equipment from a single pool.”