TRANSPORT: How can logistics help cut costs and carbon?

Jonathan Riley, partner, Pinsent Masons (chair)Gordon Telling, policy director, Sustainable Freight SolutionsMorag White, director, Environment4logisticsJerome Saint-Marc, development director in logistics, Morrisons

Saving costs and reducing carbon through Green logistics

Gordon TellingPolicy DirectorSustainable Freight Solutions

What is Sustainable Freight Solutions

Specialist guidance on: Cyclist Safety Out-of hours deliveries Freight Quality Partnerships Air Quality management

Where does Carbon come from?

1 litre of Diesel produces 2.65 kg Carbon Dioxide

Typical fuel consumption 8-10 mpg 1.3kg per mile Euro Standards – focussed on noxious

emissions HGVs are largest single emitters Grammes per tonne/km are lowest with HGV

So how can we reduce Carbon?

Fewer miles Greener miles

Fuels Vehicles Operations

How can we change Operations?

Shift delivery times Consolidate deliveries Encourage other modes of public transport

Shifting delivery times

Road network is very congested between 07:00 and 09:00 and from 16:00 to 18:00

Most customers want their deliveries....... Out-of-hours / QDDS Wandsworth trial 25,000l saving 65 tonnes CO2!

Consolidating deliveries

Consolidation Centres Delivery & Servicing Plans

Sharing delivery vehicles Sharing delivery locations

Construction Logistics Plans

Encouraging other modes

- Promoting Cycling

- Improving Cyclist Safety

- 16 fatal collisions in London in 2011

Cyclist Safety

- Ignorant Driver, Ignorant Cyclist

- Cycling Concordat

- Cycle Code

- Cycle Mark

Can green logistics cut costs and carbon?

Morag WhiteDirector E4L

Context

CO

NTEX

T

Source: McKinnon and Piecyk, 2009

Total amount of freight movement stable at 2007 level

Road share of freight tonne-kms reduced from 64% to 50%

% of truck kms run empty reduced from 27% to 17%

Average weight based load factor up from 59% to 70%

40% improvement in energy efficiency

30% reduction in the carbon content of the energy

80% reduction in CO2 emissions relative to 1990

www.Environment4Logistics.co.uk

Policy P

olic

y

www.Environment4Logistics.co.uk

Challenges C

halle

ng

es

• spend to accumulate

• people power

• industry paradigms

www.Environment4Logistics.co.uk

Cultural paradigms C

ULT

UR

E

www.Environment4Logistics.co.uk

Reducing carbon can reduce cost S

UM

MA

RY

BUT….

• Spend to accumulate – you can’t do this properly without spending something

• A clear strategy is vital and realistic KPI’s important for measuring ROI

• Board direction is needed but grass roots involvement cannot be ignoredas the enabler to successful implementation

• The biggest rewards will only be achieved by challenging the norm and

doing something completely different

• The businesses that are brave enough to challenge the norm and do so successfully will be those the rest of the industry will be following

www.Environment4Logistics.co.uk

Food for thought F

INA

L T

HO

UG

HTS

If we do nothing we wont achieve the high targets set. • More legislation & red tape?

• Competitors?

• The industry is watching the larger players however smaller supply chains and SME’s have more flexibility?

www.Environment4Logistics.co.uk

Thank Youmorag@environment4logsitics.co.uk

www.Environment4Logistics.co.uk

MorrisonsCarbon Approach

to Logistics

Jerome Saint-MarcDevelopment Director

24

Our starting point

• Wm Morrison Supermarkets was founded in 1899, today we are the 4th largest supermarket in the UK. But also:

-The 4th largest Haulage company and

- The 2nd largest fresh food manufacturing company

• Morrisons is different to other UK food retailers because it is vertically integrated and controls all aspects of the Supply Chain – it has its own abattoirs, food processing factories, Logistics and Retail network.

Context

Context cont…./

• Morrisons employs over 134,000 colleagues and welcomes an average 11.5 million customers a week in stores. Annual turnover of £17.7 billion, over 475 stores and over 14,000 deliveries a week.

• We take our Green credential extremely seriously and are the proud to have been recognised by the Carbon Trust.

Our Network

• 13 distribution centres across the UK. Own fleet of 700 tractors and 1650 trailers.

• Gives greater control over provenance for our customers and the quality of food we offer.

• Our two newest distribution centres in Sittingbourne and Bridgwater demonstrate how we are investing in our infrastructure.

• Over the last 5 years we have invested heavily in refreshing our infrastructure, both warehousing and transport and delivering the following:

-Reduced road miles by 12.5m from opening Sittingbourne, saving 49,740 tonnes of CO2 over last 4 years

-Our new DC in Bridgwater is one of the most energy efficient DC in Europe (Breeam Excellent) and contributed to saving a further 1.3m miles and 1.7m tonnes of CO2

Green Logistics

Green Logistics cont…./

Double Deckers- Introduced 105 double decks with 80% more volume per trip.

- By end of 2012 we’ll have saved 15.3 million kilometres, 20,411 tones CO2 in two years.

Outstanding results mean we’ve decided to design all new stores over 15,000 square feet

to accommodate double deck trailers..

Green Logistics cont…/

We Maintain our own transport fleet in house and are focusing on several programmes:

New oil – we’ll save a total of 4,327 tonnes CO2 by end of 2012New tyres – we’ll save 3,154 tonnes CO2 in three years.New electric fridge points – we’ll save 5,916 tonnes CO2 in two years. New air tabs- saving 1,127 tonnes CO2.

InMotionBackhaul delivery service for suppliers. We’ll save 19.9 million kilometres in two years.

Next Steps

• Continuously drive improvement in reducing our Carbon emission

• Work with our communities to provide better service to our customers

• Assess and trial new development in assets, fuels and technology