There’s opportunity in tackling environmental problems (November 01, 2008)
November 1, 2008
TORONTO, Ont. - The freight transportation industry's sizeable carbon footprint presents both a pressing issue and an opportunity, Gary Whicker, senior vice-president of engineering services at J. B. ...
TORONTO, Ont. –The freight transportation industry’s sizeable carbon footprint presents both a pressing issue and an opportunity, Gary Whicker, senior vice-president of engineering services at J. B. Hunt Transport told the Same Roads…New Challenges conference in Toronto at the start of October.
“Freight transportation is the fastest growing use of transportation but the flip side of that is that it is 100% powered by diesel fuel. How many of you think you’re going to see a wind-powered tractor any time soon?” he asked the audience. “But in every pressing issue, there is an opportunity.”
Since that opportunity is not likely, at least in the near future, to be found in a technological breakthrough, a more concentrated focus on energy conservation is the smartest strategy, according to Whicker.
“If you’re a carrier and operating at 5 MPG, 6 MPG or 7 MPG as fuel prices go up, the differences in your operation will get bigger. If you’re operating at 7 MPG you’re going to be increasingly at a competitive advantage,” said Whicker.
The two-day conference was held by the SmartWay Transport Partnership in coordination with several industry groups. It brought a host of carriers and shippers together to discuss the challenges, costs and benefits of their green plans. Speakers included an eclectic mix of carriers, shippers, industry suppliers, consultants and Canadian and US government representatives.
Whicker suggested the first step to reducing a company’s carbon footprint is to figure out how much carbon is produced by its operations and then identify possible improvements. But he cautioned that how the problem is defined is critical. For example, if the focus is solely on defining how to improve MPG, you may be missing opportunities such as those to be gained by looking at how to also increase payload.
For carriers adapting more green solutions, Whicker stressed three strategic areas that must be addressed:
1. Investing in the right technologies such as APUs;
2. Investing in the right processes to manage the technology;
3. Investing in changing behaviour.
“We have 10,000 tractors at J. B. Hunt. The driver has to have the right behaviour to achieve the return on investment we believe is there,”Whicker said. Changing the traditional trucking executive mind-set to consider the efficiencies offered by moving freight intermodally is another area Whicker pointed to, adding that half of J. B. Hunt’s revenue now comes from its inter-modal division.
In fact, although J. B. Hunt started as a TL carrier (“you call and we haul,”as Whicker characterized it) it has transformed itself into one of the largest drayage fleets in North America. He said that while truck transportation is about eight times more energy efficient than air transport, rail is about four times more efficient than truck transportation. And water transport is four times more efficient than rail -“generally, the faster you go, the less energy efficient you are,” he said.
Don Streuber, president of Bison Transport, widely hailed as one of the industry’s leaders in sustainable transportation practices, pointed out that the push towards more environmentally- friendly practices is coming not just from government and shippers but from trucking’s own workforce.
“We are in a state of flux. Young employees today ask different questions about their companies than they did 10 years ago. They want to know how the business is acting to help the environment and they are asking that before they ask about their dental plan,” he said. “We need to continually look around us and elevate our own standards.”
He related how when faced with a crisis of rising fuel costs, Bison turned to its drivers for a solution and it was the drivers who suggested reducing driving speeds.
“Contrary to the gut feeling of management there was no problem with the drivers. It made common sense to them,” Streuber said.
Whicker also had advice for shippers. He outlined four areas for shippers to attack in reducing their carbon footprint:
1. Eliminate miles through network realignment and route optimization;
2. Increase payload by maximizing cube and/or weight on every shipment;
3. Convert to the energy-efficient, cost-effective modes;
4. Use the most efficient carriers. “Do you want to pick someone who is driving the equivalent of a Prius or someone driving the equivalent of a Hummer?”
Olivier Joubert, director of logistics at Wal-Mart Canada, pointed out that shippers, particularly the larger ones, can and are starting to play a major role in driving environmentally- sustainable transportation and other business practices. For example, Wal-Mart is the largest commercial buyer of green power in Canada and is now powering the equivalent of six of its stores energy-free.
“We understand that we must play a role in making alternative energy more mainstream,” Joubert said.
He added that Wal-Mart stores being built from 2009 and onwards will be using materials and technologies that will make them 30% more energy efficient than the current ones.
Wal-Mart is of course famous in transportation circles for its environmental scorecard for carriers, which examines carrier performance in a variety of areas such as adoption of efficient equipment, recycling, idling and company vision for sustainability. Its move to switch 23 of its Eastern Canada stores from truck to rail transportation as a way to reduce transportation costs and cut greenhouse gas emissions was another recent move motor carriers could not ignore.
But Joubert said environmental sustainability is also about taking on small projects that make sense. For example, by abandoning cardboard shipping boxes in favour of plastic shipping boxes, which last about 60 times longer, Wal-Mart Canada figures it is saving $4.5 million over five years and reducing waste by more than 1,400 tonnes.
But whether they’re small-scale or large-scale, Whicker was honest about the challenges carriers face in adopting sustainable transportation practices, even after they have gone through the considerable work involved in evaluating the different technologies – APUs, trailer skirts, roof air deflectors, tractor-trailer gap reducers, tires, etc.
“You can do the math and build the business case but you still have to sell it,” he said, pointing out there could be many organizational impediments, from the executives to the maintenance department, who become concerned about the cost of new equipment. “They don’t like being yelled at when trucks are not available (due to repairs). Do you think they want another engine to maintain with the APU?”he asked.
He stressed that sustainable transportation projects don’t get done if the economics behind them are not sustainable.
“Transportation is a low margin business. You don’t want to make the wrong investment decision,” he said, adding that as a result, often carriers decide to play it conservative and do nothing.
He provided an example of how intricate and difficult decisions about investing in green technologies can be when a company gets down to the numbers by sharing J. B. Hunt’s experience with APUs.
With an initial cost of about $6,700 per unit and ongoing maintenance expenses of $300 per year, he calculated that it would cost his fleet about $8,300 over a five-year period to install an APU on one of its trucks.
J. B. Hunt currently has an idle program, which pays a bonus to its drivers for reducing idling. Installing the APUs would save J. B. Hunt the money it currently pays towards that bonus and so those savings can be quantified. But the other key consideration – exactly how much fuel would be saved by going to APUs – remains an elusive calculation, according to Whicker.
“We’ve studied this to death and we still don’t have a number we are comfortable with in terms of actual savings to take to the president,” he acknowledged. “If you’re going to pitch the person who holds the
purse strings, it helps to have the numbers and if you are not confident the costbenefit analysis is within your grasp, it will be a tough sell, even if it’s the right thing on paper.”
Sometimes, however, the costbenefit analysis requires taking a bold step in changing management strategy.
An 1,800 mile TL shipment on average will generate about three tonnes of carbon emissions. Idling reductions (to 16 hours) can cut it back to 2.87 tonnes, and reducing empty miles (by 10%) can bring it down to 2.86 tonnes. But switching to intermodal can cut emissions by half – down to 1.50 tonnes for that 1,800-mile trip, according to Whicker.
“If intermodal reduces costs more than your lowest-cost alternatives, then intermodal is the right solution,”Whicker said.
Similarly, Streuber spoke about making the bold move to allowing longer combination vehicles (LCVs) to operate across Canada and through the US as a way to instantly introduce large fuel efficiencies.
“What’s the thing that will make the biggest difference? Pulling two trailers behind one tractor. If you say you want to dramatically change efficiency, then this is the most logical progression,” Streuber said.
Streuber figures LCVs can reduce a truck’s greenhouse gas emissions by 38%, compared to 5% for APUs, 4% for aerodynamic devices, 2% for fuel efficiency training, and 2% for aerodynamic tractor designs.
He added that safety is not an issue if carriers running turnpike doubles adhere to proper safety practices. He pointed out that Bison Transport, which runs a considerable number of LCVs in the West, has been selected as the safest fleet in North America for the third year in a row.
– We are working with Natural Resources Canada on an e-learning initiative stemming from the conference. e-learning initiative will be released later this year.