Today's DCs are kicking the oil habit and looking to the elements for their power. Here's hoping the sun continues to shine brightly and the wind never dies.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
As it plots its $2 billion U.S. invasion later this year, the giant British retailer Tesco isn't just thinking red, white, and blue. It's also thinking green. That's green as in the green-shaded "Fresh & Easy" logo that will adorn the string of convenience stores it plans to open on the West Coast. That's green as in the greengrocer-type merchandise—fresh foods and organic produce— to be offered in these stores. And that's green as in environmentally friendly operations. "We have decided that American consumers want to go back to neighborhood retailing, which is about bringing high-quality affordable foods … into their neighborhoods and, in addition, being good stewards of the environment," says Tesco USA CEO Tim Mason. "And that's what we intend to do.
Going green is good public relations these days, but Tesco's commitment to eco-friendly practices looks to be more than just talk. The retailer's green initiatives go well beyond the plastic bag recycling programs at its retail stores. They also reach deep into its backend distribution operations. Tesco recycles 71 percent of its cardboard, plastic, and paper waste (with a goal of 80 percent by next year). It has introduced a dedicated train to move stock between two U.K. DCs—a move that allows it to shift freight from the highways to a more fuel-efficient mode of transport. And it's investigating wind turbines and other sources of renewable energy in an effort to cut greenhouse gas emissions. In January, Tesco began using a 50/50 blend of biofuels and diesel to power three-quarters of its European distribution fleet. The retailer says the reduction in emissions over the fleet's lifetime will be the equivalent of taking more than 20,000 medium-sized cars off the road.
In recent months, it has become increasingly clear that Tesco intends to bring its eco-friendly practices to the colonies. Exhibit A is the distribution center it's building in Riverside, Calif., to support its U.S. expansion. The 820,000-square-foot DC will be more than a roof over workers' heads; it will also be a solar power plant. Built right into the DC's roof are flexible photovoltaic solar panels capable of generating two megawatts worth of electricity, about one-fifth of the building's power needs.
Tesco is spending $13 million for the integrated photovoltaic roofing system, which is believed to be the world's largest roof-top solar panel installation. The panels, which were developed by Los Angeles-based Solar Integrated Technologies, will be installed on two of the site's five DC buildings, covering 500,000 of the 640,000 square feet of roof space. The company says the solar panel system will produce over 2.6 million kilowatt hours and eliminate 1,200 tons of carbon dioxide emissions each year.
green resources
Looking to go "green" but don't know where to begin? Help is
as close as your computer. The following organizations maintain Web sites that can help point you in the right direction.
U.S. Department of Energy Green Power Network www.eere.energy.gov/greenpower
The Green Power Network provides up-to-date information on green power providers, product offerings, consumer protection issues, and policies affecting green power markets. It also maintains a reference library of relevant papers, articles, and reports on the Web site. The Green Power Network is operated by the National Renewable Energy Laboratory (NREL) for the U.S. Department of Energy.
National Renewable Energy Lab www.nrel.gov
This site, maintained by the Department of Energy's National Renewable Energy Lab, provides information on renewable energy and energy efficiency, with sections for homeowners, businesses, students and teachers, electricity providers, and farmers.
World Resources Institute www.wri.org
The World Resources Institute is an environmental think tank that goes beyond research to find practical ways to protect the earth and improve people's lives. Its mission is to move human society to live in ways that protect the environment and its capacity to provide for the needs and aspirations of current and future generations. WRI organizes its work around four key goals:
People & Ecosystems: Reverse rapid degradation of ecosystems and assure their capacity to provide humans with needed goods and services.
Access: Guarantee public access to information and decisions regarding natural resources and the environment.
Climate Protection: Protect the global climate system from further harm due to emissions of greenhouse gases and help humanity and the natural world adapt to unavoidable climate change.
Markets & Enterprise: Harness markets and enterprise to expand economic opportunity and protect the environment.
U.S. Green Building Council www.usgbc.org
USGBC connects interested parties with the people, knowledge, and tools they need to leverage green building throughout their businesses. It is the overseer of the Leadership in Energy and Environmental Design (LEED) Green Building Rating System—the nationally accepted benchmark for the design, construction, and operation of high-performance green buildings.
Kicking carbon to the curb
Tesco is not alone in its efforts to green up its corporate act. As evidence mounts of a link between CO2 releases and global warming, companies around the world are racing to find ways to reduce their carbon footprints. Often as not, they're finding opportunities within their logistics and distribution operations, where much of that carbon dioxide is generated. Their solutions have ranged from solar power and wind turbines to environmentally friendly fuel alternatives for fleets and forklifts.
"A lot of companies are becoming focused on being good stewards of the environment," says Jim Bowes, president and CEO of Peach State Integrated Technologies, an Atlanta-based logistics and distribution engineering firm.
"It's definitely something that everyone is starting to take much more seriously, from how companies handle their waste, to power requirements and power management."
One corporation that's taking environmental sustainability seriously is office supplier Staples. Staples is an inaugural member of the Environmental Protection Agency's Fortune 500 Green Power Challenge, a 13-month-long campaign that challenges corporations to roughly double their purchases of green power, which is electricity generated partially or entirely from solar, wind, geothermal, biomass (plant materials), and other clean energy sources.
Staples' efforts last year earned it one of the EPA's Green Power Leadership awards. In 2006, Staples purchased 121.4 million kilowatts of green power, raising its overall 2006 renewable energy use to about 20 percent of its estimated yearly electricity usage. This is more than twice the amount of green power Staples purchased in 2005, and is equivalent to the electricity consumed by 11,240 houses.
Power roof
Staples is looking to the sun for a big part of its savings. In January, Staples unveiled the largest solar power installation in New England at its 300,000-square-foot retail distribution center in Killingly, Conn. The DC's 433-kilowatt commercial solar photovoltaic system is nearly the size of two football fields and covers close to 74,000 square feet of roof space. The system has the capacity to produce enough energy to power 14 percent of the DC, or the equivalent of 36 homes per year. The annual reduction in carbon emissions will be comparable to the emissions produced by the average car driving 420,000 miles.
The Killingly DC is the fourth project that Staples has completed with solar-service provider SunEdison. It currently has six more projects under construction—five at retail locations in California and another at a DC in Stockton, Calif. Altogether, Staples has identified 150 locations where the solar power model could be applied.
"The solar power system at our Killingly DC is part of an integrated strategy for a 7-percent reduction in our U.S. carbon emissions by 2010 on an absolute basis, starting from a base year of 2001," says Mark Buckley, vice president of environmental affairs at Staples. "Through our relationship with SunEdison, we're able to purchase solar energy off our rooftop at a rate below or equal to the cost of electricity off the grid. This reduces our operating costs, while freeing up more electricity during peak times for use by local homes and businesses."
Blow ye winds
Harvesting electricity from the sun is only one portion of Staples' green initiative, however. The company is also expanding its product line to include a broader array of what it calls "environmentally preferable" products. These include everything from paper with high recycled content to re-manufactured ink cartridges to electronics that have earned the government's Energy Star rating. In addition, Staples has programs that make it easy for its customers to recycle ink jet and toner cartridges, cell phones, PDAs, digital cameras, rechargeable batteries, and some electronic equipment, all free of charge.
"We're really trying to take a very integrated approach to energy management, so we are committed to use less of it," says Buckley, "whether it is kilowatt hours, gas therms, or gallons of fuel. Obviously there is a direct bottom line benefit to doing that, but there is also a corresponding environmental benefit in terms of reducing emissions. We're committed to reducing our impact as it relates to climate change by reducing our carbon footprint, and reducing energy use is certainly the first step. The second step is taking a look to see what we can do to incorporate more green elements into our buildings."
One of those strategies is designing DCs to make optimum use of available daylight, using ambient light for activities like picking wherever possible. When lights are needed, they are controlled by motion sensors and photo sensors that click on when a forklift operator enters a certain aisle. In addition, Staples has retrofitted miles of conveyor lines to reduce energy consumption.
While Staples is looking to the sun for some of its power needs, Buckley sees great promise in wind power as well. Staples has identified distribution sites in Rialto, Calif., and Portland, Ore., for possible construction of 600-kilowatt wind turbines to power the DCs. The company also has a pilot program under way to harness power from the wind through a modular wind turbine system installed at its 220,000-square-foot fulfillment center in Ontario, Calif. The building-integrated installation is a beta test of AeroVironment's Architectural Wind, a new concept in wind energy systems in which the small roof-mounted turbines are actually tied in with the structure's utility grid.
Which type of power does he consider more promising? As much as he likes the idea of wind power, Buckley concedes that there are practical limitations to its use. "Universally, solar has more applications in more places because the sun shines everywhere," he says. "Wind, on the other hand, is very much dependent geographically on where the wind is good."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.