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Making Supply Chains Sustainable During Times Of Emissions Limit Advocacy

The supply chain industry is living through some interesting times. Just as calls for curbing carbon emissions increase, supply chains face the pressure to deliver faster than ever – making this quite a catch-22 situation. 

Benzinga · 03/11/2020 15:54

The supply chain industry is living through some interesting times. Just as calls for curbing carbon emissions increase, supply chains face the pressure to deliver faster than ever – making this quite a catch-22 situation. 

A report from the World Economic Forum (WEF) projects that the growth of the last-mile delivery segment will lead to slower transit times a decade for now – scooping up 11 extra minutes from every person stuck in the ceaseless traffic. This will also increase emissions, which WEF forecasts will increase by over 30%.

FreightWaves spoke with Chris Wolfe, the CEO of PowerFleet, a vehicle tracking and fleet management company, to discuss the impact technology could have on supply chains in reducing their carbon footprints. Wolfe explained that the issue with emissions is the heavy particulate pollution, which when inhaled, can cause respiratory problems. 

"I think the industry recognizes it's a big problem and it is everywhere. For instance, just in the Long Beach area of California, we have ships, material handling equipment, and all sorts of trucks that go in and out of the area, creating emissions," said Wolfe. "Biofuels is a good alternative, and California is pushing for a biofuel percentage quota. Then you have electrification and platooning activities going on, where you're trying to get more fuel efficiency based on airflow."

Electrification of the last-mile is a vital step towards reducing emissions. Logistics providers like UPS Inc (NYSE: UPS) and FedEx Corporation (NYSE: FDX) are introducing alternative fuel delivery vehicles. However, as electric vehicles (EVs) grow in numbers, the electricity that they draw should also come from renewable energy sources like solar or wind energy. If EVs continue to use electricity that was produced via thermal power plants, the point of reducing emissions is moot. 

Another issue is the grid infrastructure, because cities might have problems with grids being overtaxed in instances when all the electric buses and trucks get charged at the same time. Wolfe spoke of the conundrum in Israel, where bus fleets are mandated to be at least 30% electric by next year, but the nation's power grids are vulnerable if overtaxed. "They've done the math and they realize they can't charge all the buses at the same time. Because otherwise, they need more grids and power plants, and that creates more pollution," he said. 

This analogy is similar across the U.S. as well, making it essential for cities to optimize their charging cycles. Providing tax breaks and incentives for installing solar panels on homes for daily use and to charge their EVs might be a good idea for governments to promote. But for the millions of EVs that depend on the grid, governments need to take up the initiative and gravitate toward more renewable sources of energy. 

"Even if people move to alternative transport, you still need energy. That has to come from somewhere because batteries don't charge themselves. There are these big solar farms around Las Vegas, in California and Arizona. But to push it down the grid, we still need to get power, and typically, that energy comes from fossil fuels, which is still a problem," said Wolfe. 

Aside from looking at alternate powertrains, the industry can also look at improving the utilization and efficiency of its equipment. For instance, monitoring driver behavior can help fleets measure the effectiveness and safety quotient of a driver. Analyzing this data, the management can help train truckers to become better versions of themselves, subsequently improving fuel efficiency and fleet safety. 

"Utilization levels are very low. If we go to fleet managers, they typically say that they run their fleets at 95% utilization levels. But when we run our models, it comes out that they aren't utilizing them more than 30% of the time, even accounting for holidays," said Wolfe. "This means that they have 30% more vehicles in their fleet than are actually needed. Improving utilization would lead to a situation where some equipment won't need to be built. Think of all the energy that we could save by not building unwanted equipment."

Image Sourced from Pixabay