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Green Supply Chain Management: Logistics and Transportation Services - A Canadian Perspective

Best-in-Class (BiC) Green Supply Chain Management (GSCM) Processes and Technologies

To be successful at GSCM, BiC logistics and transportation service providers are using many highly advanced processes and technologies — both at the corporate level and within their distribution centres (DCs) and transportation operations (see Annex 1 for detailed BiC activities). The most common activity used by logistics and transportation service providers is training on green processes (Figure 6). Focusing on green benefits, implementation, and integration, this training is intended for all levels of employees within an organization from corporate to technology and operations departments. The next most common activity is joint process improvement, a strategy that involves the collaboration of supply chain partners in the implementation of GSCM processes. One example is the use of a sustainability supply chain scorecard, which outlines the criteria that a business and its partners must follow in order to achieve their GSCM goals.

Figure 6: Processes for implementing GSCM practices in distribution activities — BiC logistics and transportation service providers¹

Description of Figure 6

Many BiC logistics and transportation service providers use advanced transportation operation processes to monitor and reduce GHG emissions and optimize efficient delivery. Load maximization and vehicle tracking are the most common BiC GSCM processes (Figure 7). Load maximization involves optimizing freight carrying capacity by, for example, changing the shape of delivery containers. Vehicle tracking can involve monitoring a vehicle's position as well as its internal and external condition. Applying several GSCM processes in multiple areas can further benefit businesses and their supply chain partners.⁴

Figure 7: Transportation processes — BiC logistics and transportation service providers¹

Description of Figure 7

The most commonly used GSCM transportation processes are low–risk and require minimal capital investment. Such processes can be easily applied across a logistics business' delivery operations and provide short–term return–on–investment (ROI) periods.² On the other hand, technologies that require larger investments, such as introducing hybrid vehicles and aerodynamic trailers, have longer ROI periods due to the numerous modifications that must be carried out on businesses' transportation fleets.

Adopting new technologies and modifying transportation management is common for Canadian BiC logistics and transportation service providers. Implementing anti–idling technology and energy efficient vehicles are the main GSCM technologies used (Figure 8). Other GSCM technologies include introducing auxiliary power units (APUs), which use an external power source to help start engines or power internal systems, and green dashboards, which consist of computer units that monitor the GHG emissions of a vehicle.¹ The goal of these technologies is to improve the fuel/energy efficiency of a vehicle by reducing its overall energy consumption, fuel consumption, and GHG emissions.

Figure 8: Transportation technologies — BiC logistics and transportation service providers¹

Description of Figure 8

In addition to adopting transportation technologies and processes, Canadian logistics and transportation service providers are changing their mix of transportation modes to maximize environmental and business benefits.

GHG emissions differ widely by transportation mode. Air and truck transportation are the most agile but emit the highest amount of carbon dioxide per ton of goods moved per kilometre (Figure 9).⁵

Figure 9: Emissions by transportation mode⁵

Description of Figure 9

To minimize GHG emissions, most BiC logistics and transportation service providers use multi–modal transportation^{Footnote III}, incorporating the use of rail among other transportation modes. They are also decreasing truck transportation, increasing marine transportation, and reducing air transportation (Figure 10). These transportation mode shifts allow BiC firms to reduce costs and GHG emissions while maintaining — or even improving — service levels.

Figure 10: Transportation mode processes — BiC logistics and transportation service providers¹

Description of Figure 10

When truck transportation is required, however, converting truck generators to function on electric power drastically reduces GHG emissions produced by idling and driving at slow speeds. This measure alone can significantly reduce annual distribution cost.

BiC logistics and transportation service providers also implement GSCM processes within their DCs. The use of reusable/sustainable pallets, shipping platforms and containers are the most common DCs processes (Figure 11). Although reusable/sustainable pallets are often made from recyclable materials, they are durable enough for multiple uses within the distribution process. Logistics service providers also can provide recycling, repair, and other pallet–related services to help clients streamline their supply chain management processes and emphasize green practices.

Figure 11: Distribution centre processes — BiC logistics and transportation service providers¹

Description of Figure 11

Of BiC logistics and transportation service providers, 70 percent implement waste recycling processes and use dock seals and canopies¹ (a way to maintain a consistent temperature in DCs during loading). Other environmentally friendly DC practices include pick optimization and the use of paperless processes. Pick optimization involves placing items in an ideal location to minimize inefficient movement and reduce excessive inventory. It should be noted that restructuring the DC itself (which may include introducing or modifying wind and solar energy sources and alternative cooling systems¹) is not a common practice. Cost, availability, and ROI all come into play when logistics & transportation service providers consider altering the structure and function of a DC.