Timeliness, quality, and cost 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 these objectives. For example, choosing a transport route or mode with a lower carbon footprint often leads to lower cost. By route consolidation, mode of transport optimization, and logistics carrier engagement, we are able to reduce GHG emissions from product shipping. In 2014, we implemented an enterprise data management system that will help us track our carbon performance goals for our global logistics operations.
Logistics Carbon Footprint and Intensity Approach and Performance
EMC’s logistics carbon emissions management has focused on partnering with our carriers to optimize individual route designs and mode choices. Optimizations include merging shipments in transit, and shifting from truck to rail and air to ocean transport where possible. We have tracked the 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 expanded these strategies to manage and reduce our carbon impact even more effectively.
While we track our absolute carbon footprint, this metric alone does not give us enough insight into how our decisions regarding mode, scheduling and consolidation impact our GHG emissions. For a more complete understanding, we are also tracking our carbon intensity, measured as kilograms of CO2e emitted per metric ton-kilometer moved. 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 completed the implementation of a data management solution that is enabling us to track the average kilograms of GHG emissions associated with each metric ton of product we ship globally (kg CO2e/metric tons-km). In 2015, we will conduct tests to ensure all algorithms and assumptions have been taken in correctly, and then fully transition our reporting to this system. 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.
This year we are restating our 2013 footprint due to some inconsistencies in data reporting we identified throughout 2014. These issues will be mitigated once the new data management system is completely implemented. We are also publishing for the first time our carbon intensity baseline and yearly performance. The following graphic illustrates EMC’s carbon footprint and carbon intensity for our global logistics operations, using 2013 as the baseline.
The footprints presented here include our inbound, outbound, interplant, and customer service transportation and logistics operations, except for in-country goods freighting for Australia, Brazil, Japan, Russia, and South Africa.
EMC's global logistics operations generated approximately 104,673 MT CO2e in 2013 and 92,081 MT CO2e in 2014. To calculate these numbers, we collected from our logistics partners job-level reports that include weight of goods transported, as well as route and mode data where available. We then applied associated standard emissions factors and calculation methodologies using Defra’s 2013 freighting goods guidance. The footprints presented here represent 96 and 93 percent of our logistics spend for 2013 and 2014, respectively. Total emissions were extrapolated proportionately based on the data received. Our absolute carbon footprint dropped 12 percent from 2013 to 2014, while our carbon intensity was reduced by 3 percent from our 2013 baseline.
Partnering with Our Carriers
In 2014, 94 percent of our U.S. domestic freight was transported by U.S. Environmental Protection Agency (EPA) SmartWay-member carriers. The SmartWay program helps freight carriers and shippers improve efficiency and decrease GHG emissions.
During 2014, we performed a carrier survey to benchmark our partners’ sustainability practices and develop a high-level performance baseline to identify opportunities for collaboration to further integrate sustainability into their operations. For 2015, our plan is to enhance this collaboration by holding sustainability-specific meetings with our logistics partners on a yearly basis, to continue identifying opportunities to further reduce the emissions from our logistics operations and to bring new initiatives to light.
Leveraging Technology to Reduce Emissions
Managing an effective customer delivery model is the result of multiple factors, including fuel efficiency, fleet optimization, scheduling, and routing. The latter two are critical to maintaining high efficiency and delivery performance, which are directly linked to our customers’ satisfaction. Working with one of our European partners, we implemented an automated delivery process in the United Kingdom in 2014. The use of this process enabled more efficient scheduling and routing, maximized vehicle utilization, and reduced fuel consumption, all of which have a direct impact on carbon emissions reductions. Additionally, the system reduced the number of expedited shipments and their associated costs, and improved communication between our logistics partner, EMC and end customers. Due to its success, the automated delivery process will be rolled out to all our European operations during 2015.