GREEN LOGISTICS GREEN LOGISTICS vs TRANSPORT SYSTEMS CARBONE EMISSIONS IN A SUPPLY CHAIN BEST PRACTICES

SUPPLY CHAIN AS AN INSTRUMENT FOR TACKLING CLIMATE CHANGE

By FAROUQ Amine 1st Year Logistics Engineering

2011

SOMMAIRE INTRODUCTION ................................ ................................................................................................ ................................................. 2 AIM OF THIS REPORT ................................................................................................ ................................ ......................................... 2 WHAT IS GREEN LOGISTICS? ............................................................................................ 3 ................................ ............................ THE PARADOXES OF GREEN LOGISTICS IN TRANSPORT SYSTEMS: ................................ ...................................... 4 CARBON EMISSIONS IN SUPPLY CHAIN ................................................................ ............................................... 5 MEANS OF FREIGHT TRANSPORT IN EUROPE: ................................................................ SPORT ..................................... 7 LOGISTICS AND ENVIRONMENTAL BEST PRACTICES .......................................................... 9 .......................... POSSIBLE AREAS FOR IMPROVEMENT ................................................................ .............................................. 11
CASE STUDY:

TECHNOLOGY AND ORGANI ORGANISATION IN PARIS ................................ ................................................ 13

CONCLUSION: ................................ ................................................................................................ ................................................ 14

Logistics

Transport

Supply Chain

INTRODUCTION
Logistics represents an important link in the present transportation systems. The aim is to improve the cost, efficiency and reliability aspects along different links in a supply chain. However, transport movements have a negative environmental movement impact leading to high fuel consumption emissions, increased noise levels, con movement vibrations and accident rates that have now reached such high proportions that the sustainability issues have become a real subject of become discussions all over the world. In this context, the concept of Gr Green Logistics takes its place in relationship ip with Reverse Logistics which is a particular aspect and assumes great significance. Green logistics is quickly gaining resonance throughout logistics and supply chain management. Logisticians are becoming more and more aware of green more issues, and international legislation is being introduced and applied world wide to world-wide all aspects of business.

AIM OF THIS REPORT

This report aims to discuss the significance of the concept of green logistics, transport industry related Green House Gas (GHG) emissions, carbon emissions in a supply chain, freight best practices, and finally numerous sustainable practices and technologies that could improve efficiency and reduce negative transport impacts in general. I will explore how logistics activities can improve the way climate change is being tackled. Analysis of the most relevant measures to achieve Green Logistics,

focusing on the essential best practices, to identify the most promising actions to meet the challenge of reducing GHG emissions. ing

WHAT IS GREEN LOGIST LOGISTICS?

Green logistics is a form of logistics which is supposed to be environmentally friendly and often takes into consideration social aspects in addition to economic aspects functions. Logistics involves the movement of products from every step between raw products materials and final consumer of a finished product. One of the key of logistics is keys delivering a product which will satisfy consumers requirements at the lowest possible cost. A variety of creative measures can be used to cut costs and reduce overall costs. In transportation we speak about itinerary optimization. Supply chain management, warehousing, retailing, manufacturing, distribution and safety inspections are all a part of logistics. Indeed, the words that make up the title of this paper are each loaded with meaning, but combined, they form a term that is particularly evocative. ev Ultimately, Green Logistics can be defined as part of Supply chain management practices and strategies that reduce the environmental and energy footprint of freight distribution. It focuses on material handling, waste management, packaging and transport. Here is a figure that explains Green Logistics according to Economy and its consequences on the environment and society he society.

THE PARADOXES OF GREEN LOGISTICS IN TRANSPORT SYSTEMS:

If we analyse the main characteristics of a logistical system, we can show several basic paradoxes that are discussed below: Costs: The purpose of logistics is to reduce costs, notably transport costs. In addition, economies of time and improvements in service reliability, including flexibility, are further objectives. Companies that are involved in the physical distribution of freight are highly supportive of strategies that enable them to cut transport costs in a competitive environment. Most of the time environmental costs are externalized. This means that these costs have to be absorbed by the final consumer (e.g. environmental tax). Society in general and many individuals in particular, are becoming hostile to the idea of accepting these costs. Time / Speed: In logistics, time is very important, we should be reactive. By reducing the time of flows, the speed of the distribution system is increased, and consequently, its efficiency. This means that logistical activities impose increasing air freight and trucking. Flexibility in logistics & industrial production is mainly represented by two principal concepts: Door-To-Door (DTD) services, mostly coupled with Just-In-Time (JIT) strategies. On the other hand, Last-Mile-Logistics (LML) or Urban Logistics (UL) requires the use of panel vans that cause traffic jams in cities. In short, the more DTD and JIT strategies are applied, the further the negative environmental consequences of the traffic it creates. Reliability: Service reliability is considered as the heart of logistics. This success is based upon the ability to deliver freight on time with the least threat of breakage or damage. Logistics providers often achieve these objectives by utilizing the modes that are perceived as being most reliable. Unfortunately, the least polluting modes are generally regarded as being the least reliable in terms of on-time delivery, lack of damage and safety. Ships and railways have inherited a reputation for poor customer satisfaction, and the logistics industry is built around air and truck shipments which are the two most polluting modes of transport. Warehousing: Logistics is an important factor promoting globalization and international flows of commerce. Modern logistics systems economies are based on the reduction of inventories, as the speed and reliability of deliveries removes the need to store. Consequently, a

reduction in warehousing demands is one of the advantages of logistics. This means however, that inventories have been transferred and integrated in a certain step of transport system, especially the roads. Inventories are actually in transit, contributing still further to congestion and pollution. The environment and society, not the logistical operators, are assuming the external costs. Not all sectors are following this trend, however. In some industrial sectors, computers for example, there is a growing trend for vertical disintegration of the manufacturing process, in which extra links are added to the logistical chain. Intermediate plants where some assembly is undertaken have been added between the manufacturer and consumer. While facilitating the customizing of the product for the consumer, it adds an additional external movement of products in the production line.

CARBON EMISSIONS IN SUPPLY CHAIN

Successful companies have expanded their field of vision to take into account processes and operations of the companies that they buy from (Suppliers & subcontractors), and companies that they sell to (Customers). This has allowed them to adopt a collaborative approach with their partnerships, and to take efficient decisions about how to run their own operations. Many benefits have been seen: improved productivity, increased efficiency, reduced waste, lower capital requirements etc. Managing the carbon footprint of products across the supply chain is the next step for business to take in the effort to reduce carbon emissions and mitigate climate change. Industry is responsible for 29% of the greenhouse gas emissions, and transportation for more than 30% of which 8% is from freight transportation. Supply chains drive nearly 45% of greenhouse gas emissions. So transport constitutes a significant portion of logistics activity and is responsible for more GHG emissions than the other activities notably industry, so it can be an instrument to achieve wider GHG reduction objectives. GHG emissions across different freight transport modes are presented below:

3% 2%1% 1% Road Civil aviation Inland navigation Railway 93% Other

Figure 1: GHG emissions for freight transport modes

The schema below (cf. figure 1) describes the different steps in carbon emissions: low

Figure 2 Different steps of igure 2: carbons emissions

Carbon is emitted through transportation, facility lighting, heating, and cooling, and production activities. Here is a schematic representation of the supply chain of a can of cola, and its proportional carbon footprint as an illustrative case in point.

Figure 3: Carbon footprint in a cane of cola.

The cola example illustrated in this figure illustrates carbon emissions and shows the contribution that each of the steps along the supply chain make to the total makes carbon footprint of the product. The total carbon emissions are not just those due to the manufacturing processes or those due to food miles but should be based on all the steps in the supply chain to produce, use and dispose of or recycle the can of cola. This approach, often called carbon life cycle analysis, helps us to understand the life-cycle reasons why emissions are generated across the economy. Processes, and their economy. emissions, do not occur in isolation but are always part of the supply chains for different products or services. For more details concerning where we can find carbon footprint in a supply chain, please refer to appendix 1.

MEANS OF FREIGHT TRANSPO S TRANSPORT IN EUROPE:

European road freight transport There are several changes in policy and regulation regarding road transport due everal to the fact that this sector is in total progress, and notably for its ability to be reliable for door-to-door services. The European Union has been through a total liberalisation of international road freight transport movements between different states, based on principles of free market economics. In fact, the standardisation and harmonisation of regulation

made it simpler for logistics service providers to participate in international road solutions. Technology also helps transport operators limit the amount of pollutants in the road freight sector through the regulation of engine emissions (Euro standards) for new goods vehicles. In addition, states have agreed on a maximum weight (gross weight and axle weight) and vehicle dimensions (length and height) limits1.
European rail freight transport

In order to struggle against the negative environmental impacts that come principally from the growth of road transport (congestion, accidents and considerable ground and atmospheric pollution), EU decided to open the rail freight market to competition). Even so, where a physical cross-border connection does exist, one of the biggest infrastructure constraints for international rail flows is the different track gauges in the construction of the rail system in each country. Where gauges differ, time and cost are added to the rail cross-border transfer since goods have to be transferred between rail wagons or the axles on the wagons have to be changed for onward transport on the other gauge. Another infrastructure-related issue is that of differing voltages on electrified lines, which has traditionally required a change of locomotive at border crossings where electric locomotives are used. In many cases, diesel locomotives are used for cross-border services. So the biggest obstacles to the development of rail freight transport are related to infrastructure harmony. If European Railway Agency develop and introduce new standardised technologies and working practices, rail freight could be more competitive with road.
European waterways freight transport

The freight passing through European ports is increasing constantly. Around 90% of the European Unions trade with third countries passes through the ports of Europe, with some 3.2 billion tonnes of freight being loaded and unloaded annually. The European Unions seaports play a vital part in ensuring the competitiveness of both its internal and external trade.

The maximum weight for road trains and articulated vehicles with two- or three-axle trailers is 40 tonnes. For three-axle motor vehicles with a two- or three-axle semi-trailer carrying a 40 foot ISO container, it is 44 tonnes.

However, because shipments of goods by sea between the ports of the European Union are treated in the same way as shipments to third countries, maritime transport between Member States involves many documentary checks and physical inspections by customs, health, veterinary, plant health, etc. ysical To rectify this situation, the European Commission has introduced the idea of a European maritime transport area with a view to eliminating or reducing the number of administrative procedures that apply to goods shipped by sea procedures between European ports. The common aim of the initiatives already adopted by the European Union is to set up a framework enabling European ports to achieve sustainable development and to obtain the investments they need for modernisation. The modernisation of port facilities should help attract new customers and make a crucial contribution to providing real intermodal solutions for European carriers. Ultimately, to meet logistics and transportation requirements in term of reliability and effectiveness, the use of multi-modal transport seems multi modal to be very important on different sides. Here is a schema that explains that:

Figure 4: Intermodal

LOGISTICS AND ENVIRO ENVIRONMENTAL BEST PRACTICES

The objective of this topic is to provide some basic guidelines to help reduce costs arising from negative economic impact on the environmental, and achieve

a more sustainable balance between economic, environmental and social objectives that we talked about before.
Environmental Management Systems (EMS)

We have identified Logistics and transport activities as a major part of the percentage of impact on the environment. For this reason, logistics and transport have attracted significant legislation at both national and international level. Targets for improving environmental performance have been set mainly by the international community via the Kyoto protocol. The most well know series of environmental quality certification are ISO 14000 standards. The ISO 14000 family addresses various aspects of environmental management. The very first two standards deal with environmental management systems (EMS). ISO 14001:2004 provides the requirements for an EMS. ISO 14004:2004 gives general EMS guidelines. The other standards and guidelines in the family address specific environmental aspects, including: Labelling. Performance evaluation. Life cycle analysis. Communication and auditing.
Monitoring

Once an EMS is set up, it is then formally monitored through an auditing process, which will identify corrective action that will need to be implemented. This process should encourage a commitment to continuous improvement in environmental management as well as ensuring that the organisation will meet its legal and moral obligations.
Performance Measurement

Organisations with environmental management systems will attempt to monitor their performance, and simple measures might include: Miles per gallon of fuel used; Average life of tyres expressed in miles; Percentage of tyres remoulded or re-grooved;

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Amount of waste lubrication oil generated by the operation; Utilisation of vehicle load space expressed as a percentage; Percentage of miles run by vehicle empty; Targets for reducing waste packaging.

POSSIBLE AREAS FOR IMPROVEMENT

Areas of intervention for green logistics:

Area

Actions within the area

Reduce the number of links in the supply chain Reduce the average length of links Optimise routes

Supply Chain Organisation

Despeed supply chains Information and Communication Technology (ICT) Reverse logistics/Recycling
Product and packaging rationalisation

Product design Packaging optimisation Use more space-efficient handling systems

Vehicle utilisation

Adopt more transport-efficient order cycles Intercompany collaboration / Co-loading Drive efficiently

Fuel efficiency through driver behaviour

Raise standards of vehicle maintenance Improve fleet management

Technological innovation Modal shift Communication initiatives Compensatory measures

Fuel efficient engines; aerodynamics; weight; tyres Rail and waterborne Training and communication Energy efficient buildings

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Further potential measures and ideas

In the short term, the contribution made by technological innovations may be modest, but in the longer term, stronger innovations can be expected if the price of oil increases and truck manufacturers intensify their R&D activities. Some actions such us optimisation of tour planning, increase of loading factors and better consolidation of consignments will reduce vehicle kilometres and associated fuel consumption. Areas where improvement can often be made are: reduction of water wastage by using simple water recycling methods; avoidance of pollution of watercourses with run-off from fuel dispensing run off areas by using interceptor tanks; nterceptor careful management and monitoring of other hazardous chemicals on site; keeping pallet stacks tidy; Better management of the production, collection and disposal of waste. For vehicles, we can consider the following: driver training reduces accidents and improves fuel consumption; monitor fuel consumption; monitor vehicle utilisation in terms of both payload and empty running; follow preventative maintenance programmes as a poorly serviced vehicle uses more fuel; Dispose of used tyre casings responsibly.

Analysis of the distribution patterns, as depicted in the following figure, shows that two or three transport legs are required to bring the product from the manufacturer to the shop or the consumer.

Figure 5: Distribution flow analysis

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CASE STUDY: TECHNOLOGY AND ORGAN ORGANISATION IN PARIS

Core of the action: The action consisted of organising the last mile deliveries of last-mile goods and reducing the impacts of urban freight transport in order to reduce congestion and pollution. The actors involved were Chronopost (a subsidiary of la Poste) and the French Ministry of Transport. mile Last-mile urban deliveries of goods were made by electric vehicles, travelling from the Vehicles Reception Point (platform of proximity) to the final destination: the decrease of CO2 is due two two-thirds to new vehicles and one-third to better third organisation.

Figure 6: Green transport organisation (same item)

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Figure 7: Green transport organisation (many items)

CONCLUSION:
Industrial processes have become more complex due to changes in demand for products and the incorporation of innovation in products. These new industrial organisation forms explain the death of the stock economy and the birth of the flow economy, characterised by personalised products with a faster production low cycle that enables more frequent renewal of all products. Moreover, this evolution triggers the specialisation of production units of large regions of production. The goal is to adapt offer to demand with best production costs, so productivity dapt increases and stocks are reduced. Freight flows must be fast, regular and responsive, respect delivery times and result in lower costs.

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