Sustainability and the green supply chain: Crescent/Stonco and energy efficiency

By Bob Trebilcock, Executive Editor
July 12, 2010 - MMH Editorial

After covering the materials handling industry for about 25 years, the most exciting developments to me have been the convergence of other disciplines with our industry. First there was automatic data collection, with barcode scanning, voice and now RFID. That was followed by an increased emphasis on software-based solutions and now web-based solutions. And over the last year, I’ve begun to see the convergence of what we do in the DC with broader corporate initiatives, including sustainability, or green supply chain. At NA this year, there were solar panel and energy efficient lighting displays tucked in between the lift trucks and conveyors. 

Crescent/Stonco, a provider of industrial lighting solutions, is tapping into that convergence with something the company calls the Stonco Warehouse Energy Program. “We’re finding there are a number of DC owners that want to reduce their total energy consumption or manage the total energy in their facility,’ says Bill McShane, director of sales. That’s because lighting and heating can account for up to 70% of the electricity use in a facility, according to McShane. The challenge is that DC managers are in the business of moving materials, not turning down the thermostat or flipping off light switches, so to speak. What’s more, capital budgets are frozen: Brother, can you spare a Cap Ex dime could be the mantra at most companies. 

That’s where the Stonco program comes into play. The company and its partners will redesign your heating and lighting systems and lease them back to you through a banking partner with money to lend. There’s a unique concept. Think of it as a 3PL for energy management. The goal is to reduce energy consumption by as much as 50% by installing new energy efficient lighting and HVAC systems; earn a one-time Federal tax deduction (and possibly state and local deductions as well) of from $1.20 to $1.80 per square foot as a result of the Energy Policy Act of 2005 – a program that has been extended until 2013; and finance 100% of the project through a banking partner.

Here’s how it works: The program is an alliance of four partners: Stonco Lighting provides the lighting, Cambridge Heating provides the HVAC, De Lage Landen the financing and Energy Tax Savers, a green tax firm, helps participants achieve Federal tax incentives aimed at making energy efficient investments as economically viable as possible.

“There are no upfront fees and the total payment for utilities and because we design specifc lighting products to go into these facilities, you get a system that’s designed properly for optimization,” says McShane. “If we can reduce your utilities by 50%, the lease payment and your utilities bills will be less than they’re paying now just for the lighting and heating.”

Those systems include not just the light fixtures and bulbs or the heating unit, but sensors and controls to only illuminate or heat and cool sections of the warehouse when there is activity. Lease terms can last from 12 to 60 months, and at the end of the lease, the warehouse owns the system.

Why now? For the same reason that many companies are leasing their lift trucks, outsourcing their distribution to third party logistics providers and even contemplating the leasing of automated materials handling systems. “If capital budgets are frozen, there’s no way to upgrade a DC,” says McShane. “Through a lease, you can improve your building, tout your green bonafides and do it without dipping into capital reserves.”

McShane adds: “People are looking for the catch, and there isn’t one. We can quantify the savings.”

About the Author

Bob Trebilcock
Executive Editor

Bob Trebilcock, executive editor, has covered materials handling, technology and supply chain topics for Modern Materials Handling since 1984. More recently, Trebilcock became editorial director of Supply Chain Management Review. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in October at 135.7 (2000=100) was up 1.9 percent compared to September’s 133.1, and the ATA’s not seasonally-adjusted (NSA) index, which represents the change in tonnage actually hauled by fleets before any seasonal adjustment was 139.8 in October, which was 0.9 percent ahead of September.

The average price per gallon of diesel gasoline fell 3.7 cents to $2.445 per gallon, according to data issued today by the Department of Energy’s Energy Information Administration (EIA). This marks the lowest weekly price for diesel since June 1, 2009, when it was at $2.352 per gallon.

In its report, entitled “Grey is the new Black,” JLL takes a close look at supply chain-related trends that can influence retailers’ approaches to Black Friday.

This year, it's all about the digital supply network. In this virtual conference, we will define the challenges currently facing supply chain organizations and offer solutions designed to transform linear operations into dynamic, automated networks that offer seamless communication, visibility, and the ability to respond and optimize processes at any given time.

In his opening comments assessing the economy at last week’s RailTrends conference hosted by Progressive Railroading magazine and independent railroad analyst Tony Hatch, FTR Senior analyst Larry Gross said the economy continues to slog ahead at a relatively tepid pace, coupled with some volatility in terms of overall GDP growth. And amid that slogging, Gross said there is currently an economic hand-off occurring between the industrial sector and the consumer sector.

About the Author

Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484 or email [email protected].


Post a comment
Commenting is not available in this channel entry.