Green Shipping Practices

States Logistics is making an impact in the logistics industry by focusing on sustainability and green business practices. With green shipping and bio-diesel transportation, States services have positioned themselves as a leader for fellow businesses. Alternative fuel methods have decreased carbon dioxide emissions, unburned hydrocarbons, the amount of sulfates released and much more. From SCMR, we have found this great article on others forming guidelines to help save the environment and promote green shipping.

Green logistics: New set of guidelines from World Economic Forum and Accenture focus on carbon impact of product transport

One major obstacle to more widespread carbon awareness in the corporate world has been a lack of standardized methods for measuring carbon emissions. Now, an industry group and a consultancy firm are trying to change that.

Jeff Berman, Group News Editor -- Supply Chain Management Review, 2/23/2010

An effort by The World Economic Forum's Logistics & Transport Industry Group with help from consultancy Accenture has come up with so-called standard guidelines for calculating consignment level carbon emissions from logistics and shipping operations.

Entitled the "Consignment-Level Carbon Reporting Guidelines," their objective is to help the transportation and logistics industries inform consumers and businesses about the carbon impact of product transport, and the guidelines were endorsed by the Governors of the World Economic Forum's Logistics & Transport Industry Group at its recently-held meeting in Davos, Switzerland.

These guidelines include principles for defining the scope of emissions to report and how these emissions should be allocated for things like shared transport or backhaul, according to the World Economic Forum and Accenture. They added that these guidelines will also complement broader upcoming and existing product-level carbon reporting standards, including the GHG (greenhouse gas) Protocol Life Cycle and Scope 3 Standards, which they said should be released by the end of this year.

In an interview with Logistics Management, Jonathan Wright, senior executive in Accenture's Supply Chain Practice, said that there were a number of factors that influenced the introduction of these guidelines.

Wright explained that as confidence begins to return to the freight sector, with weak signals of an upturn, or at least stability, conversations among industry executives shift from survival to growth. But in a highly commoditized and convergent market, new growth opportunities require the development of different business models by the sector's firms-from tackling the challenges presented by emerging markets-to embracing renewed demands from customers for granular reporting on sustainability.

"To help address uncertainty around carbon and sustainability in particular, Accenture has been collaborating with the World Economic Forum's Logistics and Transport group for the past couple of years," said Wright. "A year ago, Accenture jointly published the Supply Chain Decarbonization report...[which] outlined the main ways in which the transport sector-both unilaterally and working with the wider supply chain-can begin to take practical, near-term steps to cut its carbon footprint."

In 2009 between the Davos meeting and this year's meeting, Wright said Accenture has seen the demand for product-level carbon footprinting information take off, with many leading global retailers and manufacturers launching their own labeling efforts, which has led to a significant uptick in the number and detail of requests made of freight firms, where accurate product-level carbon footprint data is currently hard to calculate on a systematic and standardized basis.

These guidelines, Wright said, are a set of practical guidelines that the transport industry can use to respond to the increasing numbers of requests from its customers for product-level carbon footprint data.

"The guidelines come at a time when consumer interest in the carbon footprints of the products they buy is growing," said Wright. "For example, a recent Accenture survey found that 90 percent of consumers would be willing to switch to a new product if it was certified as minimizing its impact on climate change, our research shows that transport and logistics operations typically make up 5-15 percent of the carbon footprint of a product's carbon emissions. The remainder of the footprint is elsewhere in the value chain-in raw materials extraction, manufacturing, selling or disposal phases. These guidelines represent a first step towards creating a standard approach for measuring the transportation portion of a product's carbon footprint, which shippers can use as an input to reporting the total carbon emissions associated with the products they sell."

A leading expert on green logistics and supply chains said that these guidelines are very promising in that standardizing guidelines for calculating consignment-level carbon emissions from logistics and shipping operations reaffirms the impact that logistics drivers (facilities, inventory, and transportation) will have on the bottom lines of companies as the Green movement continues to grow.

"Simply trying to compete on price or through innovation is being severely tested by the increasing focus on reducing the carbon footprint of the products companies manufacture and that consumers purchase," said Brittain Ladd, a supply chain consultant and lecturer on green supply chain strategies for a consulting firm. "As we move towards a point and time when most products will have a carbon footprint rating, imagine how even more important supply chain management will become in ensuring competitive advantage in terms of minimizing the carbon rating of products. If consumers are willing to choose one brand over another because of small differences in price, why wouldn't consumers choose one brand over the other due to small differences in carbon rankings?" Ladd also noted that achieving low carbon rating on products is directly related to how well companies manage their supply chain and logistics drivers.

In order for these guidelines to come to fruition, Accenture's Wright said the in order to implement these guidelines logistics and transportation providers will have to invest in process, reporting and IT, which will take some time.

"We recommend the industry take two key next steps: conduct pilot operations on various transport modes and logistics facilities to establish consignment-level reporting at an operational level and assess implementation difficulties; and adopt automated reporting systems and software to increase efficiency and accuracy in reporting and enable automated information transfer to suppliers, shippers, contractors or customers," commented Wright.

Wright also explained that if done successfully, there is often a win-win on cost and carbon for shippers, and both the bottom line and the organization's emissions can benefit from an increased focus on energy usage.

"Quite simply, looking along the supply chain at carbon brings a different perspective that can yield new and previously unseen savings," he said. "One example is PepsiCo's Walkers Crisps, which switched to 100 percent British potatoes to lower food miles and used biodiesel containing 5 percent used cooking oil for their delivery trucks. There are other reasons to pursue carbon emissions reporting and reduction--it can often contribute to improved employee engagement and enhanced customer service, and perhaps most importantly is what many customers want."