February 1, 2009
green logistics | Green Best Practices

Into the green

into the green

With their sprawling, energy-sucking DCs and carbon-spewing trucks, logistics/distribution operations may seem the very antithesis of green. But our exclusive reader survey tells a different story.

By James A. Cooke

They may not be setting up wind farms or investing millions in hydrogen fuel cells, but make no mistake: DCV's readers are going green. In a recent survey, nearly three-quarters of the respondents reported that their companies had embarked on programs to make their transportation or distribution operations more eco-friendly. These ventures covered the gamut from water conservation efforts to initiatives aimed at reducing landfill waste to policies promoting the use of environmentally conscious truckers.

Those were some of the findings of our recent survey on sustainability initiatives. In total, 190 readers completed the online questionnaire. The respondents came from a cross section of industries, with the largest share working in wholesale distribution (19 percent), transportation and logistics (14 percent), or retail (10 percent). Seventy-three percent of the respondents told us their companies had undertaken some sort of environmental initiative, and nearly half—48 percent—said their companies had a formal sustainability plan in place.

As for where they're concentrating their efforts, the majority of the survey respondents said they had targeted their distribution center operations. Of those companies that have green programs under way, 64 percent said they had put warehouse-based sustainability programs in place. Other common areas of focus were packaging operations (37 percent), transportation operations (34 percent), and the overall supply chain network (26 percent). Last on the list were manufacturing operations (24 percent) and reverse logistics (14 percent). (Survey takers were allowed to select multiple responses.)

Tried and true
When it comes to specific green initiatives, the survey respondents appeared to favor time-tested strategies over experimental or venturesome pursuits. For example, when asked what steps they had taken to green up their DC operations, 55 percent of the respondents whose companies were pursuing green initiatives said they were working to reduce the volume of waste sent to landfills. Next on the list was the use of recyclable material and packaging (52 percent), followed by retrofitting the building for energy efficiency (47 percent). (For a look at what two companies are doing to make their DC operations more sustainable, see the accompanying sidebars.) Forty percent said they were working to reduce the amount of packaging material used, and an equal number reported that they were using recyclable containers or pallets. By contrast, only 13 percent said they were experimenting with using fuel cells to power their lift trucks. (For a complete list, see the accompanying chart.)

It was pretty much the same story with sustainability initiatives in the respondents' transportation operations. Here again, it was evident that the companies that have launched green initiatives have favored tried-and-true approaches over the experimental.When it came to transportation- related green programs, the top three choices (each of which was cited by 12 percent of the respondents) were using aerodynamic trucks, purchasing hybrid or electric trucks, and hiring only motor carriers that have joined the Environmental Protection Agency's SmartWay Transport program. (Truckers participating in the SmartWay program commit to reducing their fuel consumption and greenhouse gas emissions.) Programs involving relatively unproven technologies, like the use of biofuels (9 percent) and alternatives to diesel for powering refrigerated trailers (3 percent), appeared at the bottom of the list.

As for programs aimed at making the overall supply chain more eco-friendly, the survey respondents were more apt to be exploring ways to modify their existing systems or facilities than engaging in drastic network overhauls. When questioned about their efforts to green up their supply chains, 22 percent of the survey respondents whose companies had green initiatives under way said they were retrofitting DCs to make them more energy efficient. That was followed by redesigning the network (17 percent) and near-sourcing (11 percent). At the bottom of the list were relocating warehouses and plants (7 percent), opening new warehouses (6 percent), and opening new plants (1 percent).

Good citizens
What's motivating companies to undertake these initiatives? Of those respondents whose employers had green programs in place, the majority—43 percent—said it was because their company wanted to be a good corporate citizen. Another third—35 percent—said the motivation was to save money, while 9 percent indicated that they wanted to save the planet. A mere 4 percent said they had embarked on green initiatives in order to comply with existing or upcoming government regulations.

But as a practical matter, it's likely that many of the respondent companies actually had multiple motives for going green. One of the respondents may well have been speaking for many when he or she wrote that his/her company had undertaken a sustainability project "to achieve both business and environmental goals."

About the Author

James A. Cooke
James Cooke is a principal analyst with Nucleus Research in Boston, covering supply chain planning software. He was previously the editor of CSCMP’s Supply Chain Quarterly and a staff writer for DC Velocity.

More articles by James A. Cooke

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