ICC Climate Conference Session: Cutting Costs and Reducing Emissions By Eliminating Empty Miles
Sustainability • Published on November 9, 2021
Heavy trucks run 175 billion miles annually in the US moving truckload freight. The bad news is that approximately 61 billion of these are empty miles — meaning a truck travels without a load, thereby contributing to over 87 million metric tons of carbon emissions annually. Pretty much every business with a supply chain has an empty miles problem whether they realize it or not.
The good news is that empty miles represent a tremendous opportunity to reduce emissions. The even better news is that these businesses can also increase efficiency through freight matching, while simultaneously gaining a cost advantage.
During the recent ICC Climate Conference, I moderated a session entitled “Cut Costs and Reduce Emissions By Eliminating Empty Miles” and had the opportunity to speak with three transportation and sustainability leaders from some of the largest companies involved in consumer products, manufacturing, and food delivery: Bret Shepherd, Senior Director, Transportation Purchasing at Procter & Gamble, Brad Benbow, Business Growth Investments at Ardagh Group, and Rose Hartley, Sustainability at Imperfect Foods.
Representing diverse industries which all share the same challenge of empty miles, this group provided some invaluable insight into their individual sustainability goals, how they identified and implemented both small and large actionable items to work toward sustainability in logistics and transportation, as well as recommendations which any company can implement to eradicate empty miles. Key takeaways follow below.
Bret Shepherd on Proctor and Gamble’s Sustainability Agenda: Proctor and Gamble’s sustainability actually falls into its broader citizenship agenda which has a goal to be a force for good and a force for growth across the entire enterprise. Everyone has a responsibility to be a good citizen across the different pillars, including environmental sustainability. Our goals specific to sustainability are to be net carbon neutral by the year 2040, which is quite aggressive for a company quite the scale of ours. Specific to transportation, our mantra is fewer, friendlier miles and we’re working really hard to do that.
Rose Hartley on Imperfect Foods’ Sustainability Agenda: Every team at Imperfect Foods has a role to play in eliminating food waste and helping us reach our net carbon 2030 commitment. Many of our team members joined Imperfect because of our mission and to achieve our 2030 commitment.
Brad Benbow on Ardagh Group’s Sustainability Agenda: Our aim is to reduce any negative environmental impact while also remaining economically sustainable in social responsibility. We are a leading supplier in inherently sustainable packaging so this is at the core of who we are and what we want to do moving forward.
What Sustainability Looks Like Across Ardagh Group: The thing about sustainability in our portfolio is it’s across every organization. It’s not only at the heart of our environmental strategies, which are reducing our CO2 emissions within our manufacturing and within our logistics footprint. It’s across the board. It’s quality, it’s health and safety, etc. We are broken out into areas including social and ethical, environmental and economical. And we focus on these in each category of our business and it’s important we collaborate across the organization within these. For example, we might work with a customer that wants to reduce the size and weight of their bottles. And, within that, we want to work with transportation to understand how we can get that lightweight bottle manufactured close to the customer. We’re incorporating multiple different areas within our business so we can collectively work together to not just reduce one area of the carbon footprint, but multiple areas to maximize our results.
What Sustainability Looks Like Across Imperfect Foods: Whether it’s our sourcing team that is purchasing food in danger of being wasted, our IT team creating an e-waste program, etc., literally every team is involved. When we think about transportation for our company, we are a grocery delivery company, so logistics is very much part of that. Whether it’s upstream from our vendors in our daily deliveries from our fulfillment centers to our line hauls, in our last mile deliveries to our customers, logistics is a huge portion of it and a huge challenge and opportunity for us. Logistics and transportation are generally the second biggest bucket of our carbon emissions right after our scope three emissions from the food production itself. We have to tackle transportation emissions as a company and then obviously as an industry. We have a commitment to switch to 100% electric vehicle delivery vans for our last mile delivery by the end of 2027 and we’re constantly looking for ways to make the rest of our transportation network more efficient both in house and via 3PL.
How Sustainability Shows Up At Proctor and Gamble: We have a cultural move within P&G. It is a very good, strong culture which is moving toward a fail quickly, learn quickly, go try something else mentality. For something like sustainability, that has been a critical step change, because we have been more willing to go try stuff that really doesn’t have that great of a potential to win or to be successful. But if it is, it can then form something that is really big later. We have opened up that mentality across the culture and that has been a huge change for us.
An Example Of A Successful Transportation Shift Toward Sustainability At Proctor and Gamble: Partnerships are required for sustainability everywhere, and there is no single big issue to solve, at least for transportation sustainability. We have to partner everywhere — with retailers, our carriers, internally with our brands, the people that are designing our products and our packaging, our plants and making sure that our vehicles are filled, every truck, every box filled, etc. Those are the types of things that we’re doing. In Europe, for example, we partnered with Car Four, one of the retailers there to do these mega trucks. We ended up providing closed loops for these very large trailers which enabled us to have 52 skids per shipment, which is a tremendous increase. So 16% emissions reduction is our estimate. That’s a huge example of where we’ve been able to partner in a different way, with an actual retailer, and they said, “Absolutely. This is super important for us. Let’s go figure out how to do this.” And we’ve executed it and it’s running quite well.
An Example Of A Successful Transportation Shift Toward Sustainability At Ardagh Group: Ardagh Group really wanted to try to integrate how we could optimize one of our shipping lanes that was just massive. And we used a program with Convoy and partnered and tried to figure out how we could best optimize this. And essentially, it was a pool of drivers that we’re able to use and rotate between a few different facilities and keep them in what we would call a loop. This would reduce our empty miles, which we were able to do, and also from a social aspect, keep those drivers within that fold so they are then able to increase their revenue which was a great model Convoy put together for us. And this is still running today. This is something that not only reduced our empty miles, but, also from a social aspect, is making driver’s lives better, which is something that doesn’t get talked about a whole lot. It’s certainly core to not only the environmental, but the social aspect of sustainability that we’re all trying to drive forward.
An Example Of A Successful Transportation Shift Toward Sustainability At Imperfect Foods: We obviously have goals for the lanes that we’re running with full truck loads. But one other way that we can think about it is, you have your existing logistics network, how can you take advantage of that existing network, not add incremental miles, but increase your impact for customers? So, we thought about this for our last mile deliveries, and we built a packaging return program. We’re already doing last mile for all of our customers and we wanted to offer them a packaging return program for free for those items that we’re sending them every week that they didn’t order, but we need to send them. So, they’re gel packs and they’re silver insulation liner. So, we’ve been collecting those from our customers when we’re already at their door every week with the deliveries. But in the last year we’ve been able to collect and partner with our customer to either recycle or reuse over two million pounds of plastic. That’s like 8 Statues of Liberty. Sometimes we can think about how you can take your existing network and do more with it.
The Biggest Challenge Imperfect Foods Is Facing Today In Supply Chain Sustainability: There are two challenges in particular that we’re running into and it’s just basically around availability of EV and also range. A lot of the routes that we’re running with our last mile, not to mention upstream or sort of from our hubs to our spokes, to our line hauls, they require more than the range that EVs have right now. Another challenge from our transportation team or others in the industry is the high cost of conversion from typical trucks to electric power trucks. It’s not always feasible for smaller owner operators. Cost, range, availability — we need a push in this area generally.
The Biggest Challenge Ardagh Group Is Facing Today In Supply Chain Sustainability: The biggest challenge is economical. Ardagh is in this really unique environment where we are trying to condense our carrier partners and when you move to an EV, you reduce the range you can operate in. And it’s not initially going to lead to more revenue upfront. These power units that are amazing are going to hopefully change the landscape of how we move goods, but they’re more expensive upfront. These guys that are now making less revenue are having to increase the cost of their equipment and there’s a bit of an unknown on what the maintenance side is going to look like. Some folks believe in the long term it should reduce overall maintenance costs. However, it’s still really new. So, there is uncertainty in this area. It involves just continuing to convince these guys that, ‘Hey, this is the way forward and this is how we are going to make incremental steps in changing how we operate in North America.
The Biggest Challenge Proctor and Gamble Is Facing Today In Supply Chain Sustainability: There are so many different challenges across the board and if you solve one, you’re going to get a little bit of progress. You need to solve a lot of different ones at the same time in order for us to really get where we’re going. As we think about it, transportation is inefficient as an industry overall. There is a lot of down time, empty miles, and things like that so a lot of what we’re trying to do is actually work with our retail customers, work with our own plants, work with our mixing centers and minimize any down time. Being the shipper of choice for these carriers is all about keeping their drivers moving and keeping their assets moving. How can we most efficiently get in, pick it up, and get going? And same on the drop side. Having that commitment, that focus on continual improvement is one of the many things that we’re trying to do.
How Proctor and Gamble Measures Progress In Achieving Sustainability Goals: We use the Global Logistics Emissions Counsel (GLEC framework) for measuring emissions efficiency. That’s our single measure for emissions goals. It’s a little bit hard because that’s on a regional basis. So, in order to see what individual projects are doing for us, we’ll then have some in process measures things like gallons of fuel consumed, number of total miles, percent inner mobile versus truckload. Those are the in-process measures that we use to give us indicators of where that single emissions efficiency for the region will go.
How Ardagh Group Measures Progress In Achieving Sustainability Goals: On the logistics side, it’s pretty new and a little bit raw. We are just going year over year data. For example, we’re going to see gallons consumed and then also what percentage we’re moving inner mobile versus over the road because that is a big one. You can reduce quite a bit going inner mobile than you can OTR and typically the vendors you work with are going to show that on a tender they give you and show the percent of carbon emissions saved, which is just huge. As far as a whole, you can go on our website and see that in the past we’ve worked with CDEX, CDP, Eco Vallance — all the big-time guys that we just roll up into it. But that’s just as a whole sustainability group. But speaking primarily on logistics, we’re still really trying to figure that out and it’s just a matter of seeing what works and what doesn’t.
How Imperfect Foods Measures Progress In Achieving Sustainability Goals: We have the commitment to electric vehicles over the next couple of years bringing those into our lease fleet and for upstream logistics. Goals around full truckloads that are very aggressive as well. I think in general we’re reporting on a wide range of metrics related to sustainability. We’re in the business of eliminating food waste so we’re reporting about pounds of produce and grocery items purchased that would otherwise be in danger of going to waste which includes reporting to us by the people we are buying them from. With our vendors, we measure and report our carbon footprint, waste streams, and basically all areas of our business that relate to sustainability monthly as well as fuller quarterly reports that go to our leadership and our board. The goal is really to present these metrics at the same clip we’re presenting financial metrics so they really get ingrained in our company and then we report them out annually in the sustainability and social impact report. It is important because if we are not focusing on those metrics, we’re not going to be able to get to our net zero carbon 2030 commitment over the next nine years.
The “Ah-Ha” Moment As It Relates To Sustainability At Proctor and Gamble: It’s all about the consumers and when we started seeing consumers being much more conscious about sustainability, then of course retailers become more because that’s their window into us, or our window into them. So when consumers started wanting more, then retailers started to push and ask us for it. Lay on top of that, there is more government activity in terms of pushing for more of this. There were a variety of factors that have influenced us to say, “Wow, this business model…” and we’ve been doing this. Our first sustainability goal specific to emissions we announced in 2010. We’ve been at this a while and since then, we have had all of these different changes that have occurred which reinforced the fact that it is the business strategy that hunts for us.
The “Ah-Ha” Moment As It Relates To Sustainability At Imperfect Foods: Imperfect Foods was founded six years ago with the belief that we can do well by doing good. And our business model can be a win, win, win. Sort of a win for the environment by reducing food waste, which is one of the leading causes of climate change. Win for our customers, because that’s what people want. And then a win for our business as well. These examples show up all the time and there is a little bit of a misconception that these things are not married, but there are so many ways in which sustainability and having a strong business go hand in hand. With our packaging return program, because we’re collecting back our gel packs, we’re sanitizing them locally, and repacking them. We are avoiding a lot of those cross-country freight costs that come from purchasing the gel packs originally. So, there are plenty of examples.
The “Ah-Ha” Moment As It Relates To Sustainability At Ardagh Group: It was when we really figured out in working with Convoy that this is something that could actually work. When we were in that feasibility study on Convey Go and that particular lane, we could see that this could be expanded to multiple different areas of our manufacturing sites. We were able to take a leap and say this program is not only good for us, it’s good for the carrier, and it’s good for the underlying drivers. Once we saw the impact which that made, we internally realized, okay, this is something that can be replicated, and it gave us the encouragement to start taking more steps. Trying different things and saying, ‘Hey, okay. This failed.’ That really gave us the encouragement to say, okay, we can go do this at pretty limited risk and just attack it so the change that is driven is much more impactful than if we just say, ‘Hey, this didn’t work. It’s not a time waster. It really matters.’ We go do it again and try it harder and try it more intelligently.
The Social Impact Of Sustainability At Ardagh Group: To think about others and to think about how we are interacting with our drivers and the role that they play in our supply chain is important. We look at the way we can make life easier for these drivers and for the people loading the trucks and the employees who are staying up, tracking, and tracing deliveries. The whole realm of supply chain and how we can be socially responsible within it is huge. It is a focus of anything we can look at and take a chance on, if this is going to improve their lives, it’s certainly something we want to do.
The Social Impact Of Sustainability At Proctor and Gamble: In June of 2020, our products were essential. They are cleaning products, hygiene products, etc. So, we were shipping like crazy and the demand was super high. It was critical for us to let these drivers know how appreciative we were. We did a “P&G Loves Truckers” campaign where we rented billboards and within 20 miles of each one of our ship sites which simply said ‘P&G Loves Truckers’. It got so much internal momentum that our chief design officer said, “I want to design these.” So, he designed them, and it was a really amazing thing that we were able to do and of course we had a little bit of water and a snack that we provided for the drivers during that time when we were running the “P&G Loves Truckers” campaign. Without truck drivers, our business stops. So, you can’t just be all about emissions if you also aren’t going to be about the person that is operating the vehicle. For Proctor and Gamble they are very integrated, and they will remain that way because we don’t see any other way to do it.
The Social Impact Of Sustainability At Imperfect Foods: Imperfect Foods doesn’t have trucking scale — we have a lot of our upstream logistics through 3PL, but for our last mile deliveries and our hub to spoke deliveries, the vast majority of those drivers are our own employees. They are full time benefited employees — equal members of the team with everyone else. The way you show appreciation to someone is by supporting them through great jobs and making them as much a part of the community as anyone else. In terms of impact generally at Imperfect, a lot of the work that we do is through food and food deliveries. We have 78 food bank and pantry partners across the country which allow us to also make sure we’re never wasting food. If there’s a product that’s not going to make it to the following week, we have a food bank partner who can get it out and get it to people immediately. We are really looking to make an impact for our own employees internally as well as for our neighbors in the markets we serve.
The Most Surprising Learning For Brad Benbow of Ardagh Group: I worked in advertising and strategy prior to getting in logistics. And as I got into it, I didn’t understand the magnitude of what emissions looked like within our supply chain and not even Ardagh specific, but globally and just how massive it was and little steps you can take to change that and have incremental change, to me was mind boggling. And to think about that on an exacerbated scale of, okay, now if we really focus on it what can we do and what kind of change can we drive? Having no prior experience, it just opened my mind to the possibilities of what we could do when we partner with really good people.
The Most Surprising Learning For Bret Shepherd of Proctor and Gamble: Transportation is such a phenomenal industry to be in right now. It’s tight. Think about port congestion, rail congestion, drivers, you can’t get a tractor anymore because of supply issues on things. But the amount of innovation, the amount of investment that is occurring within the industry is so exciting because what will end up happening is the consumers are demanding it. The retailers want it. They want to make the consumers happy. We’re asking, we’re pushing, we’re investing. You’re going to see a breakthrough. From an excitement standpoint, all of the macroeconomic factors seem to be putting themselves in place to where you’re going to see some massive breakthrough in this area. It could be a couple years, it could be a couple of decades, but the biggest surprise is the level of investment and the amount of innovation in the industry right now.
The Most Surprising Learning For Rose Hartley of Imperfect Foods: Coming into the role at Imperfect, I didn’t have any idea about the magnitude of food waste, but I think it’s something that I don’t want to become numb to. It’s no longer a surprise, but we do waste 35% of the food that we produce in this country while 1 in 7 people are hungry and it’s a top contributor to climate change. It was something I was learning several years ago when starting to join Imperfect and working in the agricultural industry prior, but it’s still going on. It’s reduced maybe 2% over the last two years, but it’s still such a challenge. I was also not so surprised that our emissions would be so high from transportation, but I am happily surprised that there are companies like Convoy which are really working to get creative and build dynamic lanes and driver networks to tackle this.
Bret Shepherd of Proctor and Gamble’s One Piece Of Advice To Help Other Leaders In Sustainability Move Their Business Forward In Reducing Carbon Emissions: Think big, macro level, breakthrough crazy dreams. Plan very small. And what I mean by that is there is nothing like the power of quick wins. It builds momentum. There is a saying within P&G: How to eat an elephant? One bite at a time. Think big, plan small, quick wins are important.
Rose Hartley of Imperfect Foods’ One Piece Of Advice To Help Other Leaders In Sustainability Move Their Business Forward In Reducing Carbon Emissions: It’s hard to boil the ocean. There is a lot to care about. We kind of know where we all need to be heading. So, in that spirit, think about what your business is already doing. Think about the footprint your business already has and then try to drive more impact for your customers and for the environment without actually adding to that network and that footprint. For us, it looked like the packaging return program, but it’s going to look different at every business.
Brad Benbow of Ardagh Group’s One Piece Of Advice To Help Other Leaders In Sustainability Move Their Business Forward In Reducing Carbon Emissions: You have to have some type of strategy within your logistics department and if you don’t and you don’t have the ability to, seek someone out who can or a group that can. The small investment you make is having a quick win. As soon as you get that quick win, you are going to start taking advantage of every opportunity that comes and the change which that drives, you’re not even going to believe it five, ten, fifteen years down the road. It’s not going to be a personal change for yourself, it’s going to be a change for us later in our lives, the next generation, and so on and so forth in the efforts we’re making now and how they can impact people for years to come.