The push for greener supply chains has been increasing for quite a few years now, and yet it's fair to say that not every U.S. manufacturer is entirely convinced that initiatives sponsored by various government agencies have their best interests at heart. For instance, when the Environmental Protection Agency announced its plan to regulate greenhouse gas (GHG) emissions from stationary sources through the Clean Air Act, the National Association of Manufacturers (NAM) was highly critical of the move, seeing it as nothing less than an ill-advised power play.
"The EPA's decision to move forward with the regulation of greenhouse gases from stationary sources is one of the most costly, complex and far-reaching regulatory issues facing manufacturers and harms their ability to compete globally," says NAM President and CEO Jay Timmons.
The EPA's regulations, Timmons points out, could have adverse effects on the U.S. economy by adding new requirements for more than 200,000 manufacturing facilities.
While overhauling production processes to reduce GHG emissions can be both expensive and time-consuming, manufacturers are earning their sustainability stripes and complying with other green initiatives by focusing on other areas of their supply chains, namely transportation and distribution. The benefit here is that not only can companies point to their efforts at improving the environment, but they also can enjoy substantial savings.
For instance, shipping goods by rail is much more economical for manufacturers than shipping by truck. In some cases, rail transportation uses less fuel and produces fewer GHG emissions than trucks, and substantially less than airplanes. A recent study produced by the Environmental Defense Fund (EDF) points out that if ocean vessels are used as the benchmark, rail produces 1.6 times as much GHG emissions as ships, trucks produce 10 times as much, and planes produce 47 times as much. Apparel producer Nike, for instance, reportedly saved $8 million in annual transportation costs by shifting most of its trans-oceanic cargo from air freight to ocean vessels.
-- Jason Mathers, project
manager with the EDF
"At any given moment there are more than 50 million tons of freight moving on America's roads, rails, rivers and airways, and nearly all of it could be moving on less fuel and fewer emissions," suggests Jason Mathers, project manager with the EDF. "The key is breaking down old walls and embracing new ways of getting all that stuff from A to B."
According to Brad Blizzard, director of logistics with consumer packaged goods manufacturer Colgate-Palmolive Co., his company is shipping 71% more of its freight using rail than it did two years ago, using an intermodal strategy designed to move freight via container the majority of the distance, drastically reducing the miles it travels on a truck. "We're focused on taking miles and trucks off the street," he says. Colgate also has moved its packaging operations so they're now located within their distribution centers to further reduce miles traveled. All told, the company's intermodal strategy has reportedly taken 300,000 gallons of fuel out of its transportation supply chain, equating to 3,000 tons of GHG emissions.
With fuel-price volatility a major concern for manufacturers, spending less on transportation not only helps shrink a company's carbon footprint, but also helps contain logistics costs. That's the kind of "green" any manufacturer can get behind.