Cost, quality, and timeliness are the key focal areas of our global logistics operations at EMC, as our customers expect our product to be delivered on time, in perfect condition, and at a competitive price. We have consistently found that working to reduce our carbon impact helps us execute on those objectives. For example, choosing a transport route or mode with a lower carbon footprint often leads to lower expenditures. Through route consolidation, mode of transport optimization, and logistics carrier engagement, we are able to reduce GHG emissions from product shipping. In 2014, we will fully implement an enterprise data management system that will help us set aggressive new carbon performance goals for our global logistics operations.
Logistics Carbon Intensity Reduction Goals
EMC’s logistics carbon emissions management has focused on partnering with our carriers to optimize individual route designs and modal choices. This includes merging shipments in transit and shifting from truck to rail and air to ocean transport where possible. We have tracked the overall carbon footprint associated with our global logistics operations, and have made changes that saved money and led to thousands of tons of carbon emissions reductions each year. In 2014, we plan to expand these strategies to manage and reduce our carbon impact even more effectively.
Tracking and reducing our carbon footprint is an important means of managing our contribution to global climate change, but this metric alone does not actually tell us how well we are performing when it comes to carbon management. For example, if our carbon footprint were to double in a given year, a closer look could reveal that we had simply shipped twice as much product that year, meaning we grew our business with the same carbon impact, on a relative basis, as before. Or it could mean that we shipped three or four times as much product, and did so more efficiently from a relative carbon emissions standpoint. In order to manage our carbon performance more effectively for our logistics operations, we have chosen to focus on carbon intensity, not just measuring our overall carbon footprint. Using 2013 as a baseline, we set a 2020 goal to reduce by 20 percent the carbon intensity associated with our global logistics operations.
In 2014, we will complete implementation of a data management solution that will allow us to track the average kilograms of GHG emissions associated with each metric ton of product we ship globally (kg CO2e/metric tons-km). Understanding the carbon intensity associated with our logistics operations worldwide, as well as that related to each of our carriers, will allow us to systematically prioritize lower-carbon routes and modes where these make sense for our business and our customers.
Partnering with Our Carriers
In 2013, 98 percent of our U.S. domestic freight was transported by U.S. Environmental Protection Agency (EPA) SmartWay-certified carriers. Seventy four percent of our European freight was carried by companies certified to European Union (EU) Green Freight standards.
In Europe, one of our major freight partners has begun a significant fleet overhaul initiative that replaces older trucks with more efficient models. Additionally, in 2013 we encouraged this carrier to reexamine its inter-depot transit structure in the United Kingdom (UK). The old model used only one merge center to distribute products. With our support, the carrier established a more centrally located distribution hub, as well as several regional depots that are closer to customer delivery points. Dedicated vehicles now run overnight between depots, traveling the shortest possible routes and taking advantage of low traffic congestion to save cost, fuel, and time. This hub, route, and timing optimization has led to a reduction of over 60,000 vehicle kilometers traveled each year and avoided over 160 metric tons of CO2e emissions.
Elsewhere in Europe, we partnered with another carrier in 2013 to consolidate the Returned Material Authorization (RMA) process for products headed from the mainland to our Reverse Logistics Center in Cork, Ireland. We undertook a multi-part analysis of cost, lead time, and carbon impacts associated with further consolidating RMA shipments and transporting them back to Cork in a reduced number of trips via ocean, learning that such a shift could yield cost and carbon savings without negatively impacting material planning time objectives. This initiative is expected to save us over $350,000 and reduce our carrier’s GHG emissions by 226 metric tons CO2e each year.
Looking forward to 2014, we plan to use the Quarterly Business Reviews that we conduct with our primary carriers to set new expectations for the carriers’ carbon management performance. Focusing on areas including no-idling policies, efficient vehicle operator training programs, and carrier-specific carbon goals and performance plans, we will work to help ensure that each freight partner doing business with us continues to improve its sustainability performance.
Measuring our Impact
EMC’s global logistics operations generated approximately 109,802 metric tons CO2e in 2013. This number is estimated using the GHG reports from our logistics partners and is cross-checked with standard emissions factors and calculation methodologies. This value represents inbound, outbound, interplant, and customer service transportation and logistics. In 2013, we collected emissions footprint data related to carrier operations representing 89 percent of our logistics spend and extrapolated total emissions proportionately based on the data received.