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Why Nike's Green Efforts Don't Sound All that Green

March is traditionally the month of green, thanks to its association with springtime and St. Patrick's Day, and in keeping with that tradition, we've been looking closely this month at some green initiatives undertaken by manufacturers in pursuit of the savings that carbon reduction efforts can offer, to say nothing of the public relations boost companies tend to get when they're recognized as environmentally friendly.

In a recent article, I wrote about how some companies, such as Nike, are shifting some of their freight from the most expensive transportation modes (air freight, less-than-truckload motor carriers) to less expensive modes (ocean cargo, rail). This by itself is hardly a revolutionary move since companies have been doing this for years, namely, realigning their distribution networks so their goods will still arrive in time even though they'll be transported on slower vehicles. What is relatively new, though, is the ability for companies to now point to those intermodal shifts as "green initiatives."

After that article appeared, a reader sent me a great question, namely: What's so "green" about intermodal strategies? The same amount of goods are being moved, so isn't Nike just saving a few bucks by using cheaper transportation? Does this really count as being environmentally conscious?

The short answer is, yes, it does count. When a company moves a significant amount of freight off of airplanes or LTL trucks, in favor of ocean vessels and railcars, there is a formula that measures how much fuel and carbon emissions are saved from those intermodal strategies, relative to the amount of freight being moved over a distance. When Nike changed its transportation modes, the company saved money on transportation costs (though Nike also had to adjust its delivery dates, production schedules, etc., to accommodate its freight taking longer to cross the ocean, so it's not a simple matter of canceling the planes and hiring the boats). But Nike also reduced its carbon footprint in terms of how much fuel it's estimated was saved by putting the freight on a cargo ship instead of a plane.

The Environmental Defense Fund offers five rules for a more carbon-efficiency freight supply chain:

Choose the most carbon-efficient mode possible. The EDF points out that planes emit 47 times more than container ships, and trucks emit six times more than trains.

Collaborate with other shippers. Load-sharing, which has been a best practice probably dating back to when the first rolling cart was invented, has gained a new cachet as a more enviro-conscious way of moving freight.

Redesign your own network for efficiency. Again, it's an application of an old idea to a new green mentality. Use supply chain software tools such as warehouse management systems and transportation management systems to optimize where and when you move your goods.

Get the most out of each move. Yes, that means that the old best practice of cubing out a truck to get the maximum amount of freight into the trailer is now considered a green best practice.

Increase energy efficiency in distribution centers. The EDF estimates that warehouses and DCs account for 11% of the carbon footprint of goods movement, so they recommend looking at upgrading the HVAC, lighting, motor controls and refrigeration to save energy and emissions.

The point is, good supply chain management practices usually result in better environmental sustainability practices as well, if for no other reason than because when companies start questioning what they do and why they do it, they eliminate a lot of waste and a lot of bad practices.

TAGS: Supply Chain
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