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Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is Environmental Benchmarking in Freight Transportation. Before I go any further, I do want to let those of you who are calling into the teleconference for the audio know that you need to mute your computer speakers or else you will be hearing your audio over the computer as well. Today we'll have two presenters, Larry O'Rourke of ICF International and Nate Springer of Business for Social Responsibility.
Larry O'Rourke is a Manager at ICF International, a management, technology and public policy consulting firm. He has over 20 years of experience conducting studies of freight transportation, focused primarily on the trucking, rail, intermodal and marine port areas. He recently served as the Principal Investigator on NCFRP Project 27, Promoting Environmental Goals in Freight Transportation through Industry Benchmarking. He has assisted federal, state and local clients with the development of transportation performance measures.
Nate Springer is a sustainability professional who advises multi-national companies on reducing the climate impacts of global trade. He currently manages BSR's Clean Cargo Working Group, which evaluates carbon emissions from container cargo carriers, and leads research and analysis of fuel sustainability for corporate fleet operators. Previously Nate worked with Malk Sustainability Partners to integrate environmental, social, and governance practices into the private equity industry. His experience includes writing sustainability reports for a utility and IT company, performing environmental and market analyses for Dow and Owens Corning, and producing an ecosystem services valuation of water-dependent industries in Central Oregon. He has more than 7 years in stakeholder and communications program management in the U.S. and internationally with the Peace Corps.
Today's seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the chat area. Please make sure you send your question to "Everyone" and indicate which presenter your question is for. Presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. If we run out of time and are unable to address all questions we will attempt to get written responses from the presenters to the unanswered questions.
The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next few weeks, along with a recording and a transcript. I will notify all attendees once these materials are posted online.
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We'll now go ahead and get started with our first presentation, given by Larry O'Rourke of ICF International.
My name is Larry O'Rourke and I'm from ICF International. I will be talking today about some basic key elements and an overview of what environmental benchmarking is. I will also discuss benchmarking metrics that are applicable to freight and transportation and look at major industry benchmarking initiatives focused on the environment in freight. Lastly, I will discuss case studies.
Much of this work is based on a project we did for the National Cooperative Freight Research Program and the focus of this project was freight transportation air missions. The end product of this project was a handbook on environmental benchmarking for freight. The handbook is divided by mode and also includes sections for ports, airports as well as shippers. Essentially it includes metrics and approaches for benchmarking environmental performance at the fleet, facility, and organizational level, as well as the supply chain level. Overall, I think the purpose of this project was to address a couple different problems. The first is that freight industry and freight transportation, and even within individual modes of transportation, is a very fragmented and diverse market. Because of this, one of the problems that companies or organizations that want to do benchmarking face is that making appropriate comparisons is very difficult. It's difficult because there are different types of operations and markets being served. So, there's a lot of diversity, and that is one of the issues. There is an opportunity for environmental benchmarking because there are a lot of existing technologies and practices and approaches to improving environmental performance that already exist. These are being employed by companies and are tested and proven and can be applied to gain superior performance. That's the challenge and the opportunity that environmental benchmarking poses.
To start off here's what environmental benchmarking is. Benchmarking is a continuous process of measuring products and services and practices against the toughest competitors. A key element of benchmarking is external comparisons to other organizations or companies, and learning from them. Benchmarking has also been said to be the search for the industry's best practices that lead to superior performance. Again, benchmarking is focused on identifying improvements and new technologies or practices that can improve operation.
The key element of benchmarking is looking outside your own organization to learn from what others have done and searching for best practices appropriate for your business. This is the challenge in freight- is that there are so many different types of operations and different markets being served that what works for one company may not necessarily work for another. Environmental benchmarking seeks, thorough understanding of operations and the operations of the organization that they are comparing to, it seeks to identify those practices that are appropriate. Benchmarking involves comparisons within your industry or can look outside your industry so perhaps comparing to diverse companies that have similar types of practices or functions as you're own. It's focused on the most important parts of your business so you benchmark the things that would have the greatest impact. In freight transportation benchmarking fuel economy is an important driver of both environmental performance and business profits. That is an area that some companies certainly have chosen to focus on. Ultimately benchmarking is data driven and action oriented so it's built on collecting data and understanding your operations and the organization or company you are comparing to. Then executing a plan based on that understanding of how you can improve.
So what kind of environmental impacts are we looking at? he guidebook I mentioned we produced for this project looks at both direct and indirect air emission impacts, so typically these are defined in scopes. Scope one being emissions from equipment and vehicles directly owned by the company so these are the things that companies have the most control over. Scope two emissions are associated with purchased electricity. Scope three emissions are indirect in the sense that they are the consequences of the company's actions that are not necessarily directly controlled by them. For instance, a truck carrier might contract out to other companies or owner operators and they may have less control over those activities, or a shipper may use contract carriage and they would have less control over that. Nonetheless, you can still measure that and try to influence it.
In terms of air pollutants, we focused on criteria air pollutants, greenhouse gases, and air toxics. For greenhouse gases CO2 comprises the bulk of greenhouse emissions, HFCs, CH4 and N2O are also important. For air toxics DPM is important. The key item to look at here is that freight transportation is a significant fraction of overall greenhouse gases from transportation. So our guidebook basically dealt with the set of different entity types - so the key modes, truck carriers, rail carriers, marine carriers, major freight hubs such as marine ports and airports, and also shippers and receivers. The guidebook includes a section for each of these. Then there are scales of analysis and those included fleet, equipment types and so forth, facilities, it could include building efficiency or lighting, rail-yards and metrics to address those types of issues. At the corridor level you are looking at a supply chain that spans multiple modes or geographic areas or where you want to characterize the emissions from the entire corridor, or at the organization level you might be looking to roll up the environmental impacts for multiple fleets, facilities and operations to provide a measure of the entire company's environmental impact. For instance, UPS might estimate emissions per package.
There are several key business benefits of environmental benchmarking. One of them is through the process of conducting benchmarking data is collected and information obtained that is useful for other management functions as well. Environmental benchmarking in the context of freight often involves looking at reducing fuel use. So fuel is a major operating cost for freight carriers and therefore reducing fuel use has significant cost reduction potential for the company. So there is real business advantage as well as environmental advantages. There is also a competitive advantage to conducting environmental benchmarking. Many customers and other companies are looking to do business with firms that have a good environmental performance record, so environmental benchmarking can help companies demonstrate the good record that they have or it can help them improve that record. It can also help them reduce risks. There are always potential future regulatory risks associated with environmental impacts. There are other types of risks associated with environmental impacts and so environmental benchmarking provides a way to understand what the environmental impacts are and provides a way to look at those risks and proactively reduce them. Also, another key benefit is demonstrating environmental stewardship can often raise the standing of the company with stakeholders. The key stakeholders are the customers, local community, potential and current employees, regulators and licensing agencies, as well as investors. It may help to improve employee recruiting or retention for those employees who want to work for companies that are good environmental stewards, or attract investments from socially responsible investors. There are many benefits of doing environmental benchmarking.
The next section I am going to talk about the benchmarking process itself. I am not going to go through every step, but the environmental benchmarking process consists of planning, analysis, integration, action, and maturity. I'm going to talk through primarily the first 2 steps since this is where many of the challenges have been identified, but the guidebook actually covers the other ones as well. Under planning, the first step is identifying the function to benchmark. Companies may choose to benchmark a whole range of activities. They would pick the important functions, and then break those functions into steps. They would analyze them to understand their own operations first, and then that provides a basis to understand the operations of outside companies. The next step would be to identify best in class organizations in that function, and try to partner with them and compare. There are several different types of benchmarking which could be conducted - internal, competitive, industry, functional, or generic. Competitive benchmarking seeks to make comparisons to one's direct competitors. This is always very difficult since that information may be guarded - there may be trade secrets - your direct competitors may be less willing to share this information with you. Oftentimes companies will go to their industry, but not their direct competitors. For instance a truckload carrier might seek to compare to a less than truckload carrier that is not a direct competitor.
Another type of benchmarking is functional benchmarking which is to look at a certain type of function and seek to benchmark that. For instance, if GM benchmarked their logistic functions against Dell, that would be an example. Another type of benchmarking is generic; you could look across individual processes. So for instance, you might seek to benchmark a maintenance process in very different types of companies. Once you've identified a firm to work with and selected the performance measures - selecting the performance measure is important and here you're looking at the performance measures that can be linked to your own organizational goals and what performance measures are perhaps collected by others, and there is a balance that needs to be arrived at. The next step is identifying the data and collecting it, and there are a whole range of methods that can be used.
Moving onto the analysis, the analysis process is very structured and the key to understanding here is that there is a whole range of issues that have to be dealt with. The way they collect data, the lingo and way terms are described differ from company to company. Those types of issues need to be dealt with in the analysis phase-and then in measuring and comparing an organization's performance you should look at both the negative and positive gaps. You would look at the things you are doing right as well as the things you are doing wrong. And then seeking to understand the underlying enablers, or all the many different factors that enable one company to do somethin-it may or may not be possible at another company, . Being able to understand the enablers and the environment that makes those strategies possible is an important way of understanding if you can use those strategies yourself. And then you would identify best practices and those could come from a whole range of things- vehicle strategies - these could include retrofits or new vehicle technologies, operational strategies would include, in the on-road truck segment you are talking about driver training and there is a whole host of operational strategies that can be employed. For infrastructure strategies, these could include lighting or energy efficiency for facilities
This next slide shows a type of analysis that could be done and this looks at the enablers for fuel economy for a truck carrier. It shows the many different factors that affect fuel economy and how complicated the issues really are and the benchmarking process would try to get a hold of all these different factors to understand what enables one company to achieve a certain level of fuel economy or environmental performance. Understanding that will help you understand if you can achieve the same level of performance as others.
Moving on, there are several different types of environmental benchmarking metrics. There's an ISO standard that addresses environmental performance evaluation and they've defined a few different indicators such as: management performance indicators, operational performance indicators, and environmental performance indicators. Typically most benchmarking metrics would fall under operational performance indicators. There are a number of different quantitative indicators. Most benchmarking indicators and would be relative or normalized so that the business operations of different scales could be compared on an apples to apples basis.
The next slide shows a sample set of truck carrier performance metrics. The key point I'm trying to make here is that there is a number of different ways that environmental performance could be characterized. For instance, one might look at average emissions per mile, but it wouldn't account for the weight of the cargo which would have a significant impact on the average MPG. One could also look at emissions per ton-mile to normalize for that. There might be many firms that cube out the load before they weigh out, so you might want to look at emissions per cubic mile instead. There is a whole host of other metrics that you could look at such as percentage of technology penetration on your fleet, for different types of technologies, operating measures such as idle hours as a percentage of engine hours etc.
The next thing I want to talk about is some examples of industry benchmarking programs. One of the most important ones is the EPA SmartWay Transport Partnership. That initiative is the flagship program for efficiency and has 3,000 participants which include most of the large truck carriers, railroads and a number of large shippers. The program assesses emissions of carrier fleets and benchmarks them against peers. The primary metrics are grams of emissions per mile and grams per ton-mile. The program provides a systematic process for companies to report their data on fuel use and emissions. It provides a tool for companies to estimate emissions per mile and emissions per ton-mile. The truck fleets are ranked in five performance "bins" so that companies can compare themselves to others. One of the benefits of this is that companies can identify others that are similar to them to compare to.
The next slide shows the market segmentation. Another great thing this program does is to provide this data for individual market segments, It provides these metrics for very detailed market segments, so they have truckload and less-than truckload, and then they have different types of specialized fleets - tankers, flatbeds, etc. Individual companies that have multiple different types of fleets can essentially perform this type of analysis for each of their fleets. SmartWay is a very strong example of benchmarking.
There are a number of partnerships in the marine sector and the next presentation is going to talk about the Clean Cargo Working Group. There is also the Carbon Disclosure Project, which is a voluntary CO2 emissions reporting program that doesn't just focus on freight transport but has a lot of coverage across different industries. It provides information on the mitigation strategies that companies are using. Another example in the trucking sector is the Truckload Carriers Association benchmarking program. While this isn't specifically focused on environmental issues, it does include fuel economy. It incorporates all the steps of the benchmarking process - including in-person meetings with other companies, the ability to network and understand strategies that make superior performance possible. I mentioned here a few other examples, the Dow Jones Sustainability Index, which has global and regional benchmarks, and also the Supply Chain Consortium.
There's a whole different range of benchmarking programs that already exist.
In the terms of the status of environmental benchmarking in freight transport, SmartWay is probably the most widespread form of environmental benchmarking, certainly among truck carriers. In the marine sector there are quite a few initiatives. Nonetheless, a lot of carriers don't do environmental benchmarking, even for fuel economy where there is a direct business potential and profit impact. A key challenge that has been identified, the concern that there is, is that there is too much diversity, every operation is unique and there's too much to characterize, there are too many differences to make meaningful comparisons. That is at least the perceived challenge and certainly for many medium and small sized companies, there are many who do not currently use this.
I want to talk about some of the companies that have put this to use. One of the case studies we did for this project was the Con-way fuel benchmarking program. Con-way has very detailed data available from truck sensors, they have quite detailed data about things such as the fuel used and where its purchased, the gross weight of trucks for each movement, the origin and destination for each movement and the vehicle miles of travel. There are sensors on the truck that collect information on shifting, braking acceleration, speed and idling. Included among this data are the make and age of the vehicle, the engine, the transmission, other characteristics of the tractor and the trailer that is being hauled, and any special features. For instance, does it have an aerodynamic retrofit? They have a lot of information available. They did make comparisons to outside of their organization. Obviously they do not have access to external data with that level of detail. But they do get comparative data from several different sources. So one of them is salesman for OEM manufacturers. During the sales process they have an understanding of what fuel economy other customers are getting. There is some information that can be gleaned from that channel. There are industry groups, the Technology and Maintenance Council also serves as a source of information. There are also private carriers. Private carriers communicate about the characteristics of the fuel economy they are achieving when they purchase dedicated carriage. The information is communicated through the sales process. They provide information on the fuel economy they are getting and they provide this information when they are contracting out because they want the companies they are contracting out with to beat that performance. Con-Way also relies on data from SmartWay.
And so how is all this information put to use? There are direct fuel measures. They can identify fuel wasting practices of drivers and provide driver training. It shows the types of equipment that are required - they have conducted very detailed analysis of the benefits of trailer side-skirts and under trays. They have also looked at improving maintenance practices, the data can also tell you when to conduct maintenance, and when the vehicle should be retired based on the fuel economy you are achieving and the payback. The information helps to improve larger corporate initiatives, such as improving dispatching software, the design of their LTL network or marketing strategy where can they go after customers to build density in specific transportation lanes. How can that improve the overall fuel economy of the company?
Another example is Stonyfield Farms. This example is a little different. One of the things that they do is to collect information on the fuel efficiency and CO2 emissions associated with delivering goods to their customers. They include metrics such as CO2 per metric ton of product delivered, CO2 emissions per customer, they will then provide this information to the customer and they can use it to inform their business decision. For instance, the volume they are ordering, the frequency of delivery- they will provide their customers with information that will allow them to include an environmental component to their decision as well. They are also working with Ryder to redesign their LTL routes and to reduce VMT.
Another example is CN. They participate in the Carbon disclosure project. They use two metrics - CO2 equivalent per gross ton-mile for rail. They have an intermodal operation where they also use gross ton-mile per gallon of fuel consumed for all modes. One of the things they do working with the Carbon disclosure project - that program provides a systematic way that data is reported and collected and so therefore allows comparisons between different companies. Even though in cases where the Carbon Disclosure Project doesn't necessarily provide the official metric they want to use the program includes detailed submissions from companies that provide more detailed information so that was one of the things that Canadian National Railway was looking at as well.
This last example is a leading energy company and this one was interesting because they conducted a detailed overview of their CO2 inventory program. They used benchmarking to understand what some similar types of companies engaged in logistics activities were doing to measure emissions, they examined what strategies they were using. One of the things they found is, first of all, based on these comparisons, they developed a detailed scope three emissions inventory and they came to understand that air cargo was a significant fraction of their overall CO2 footprint. They implemented management policies to make sure the air mode was being selected appropriately. They did identify areas where they could cut back on air and switched to a lower carbon transportation options. Also they had a wind turbine supply chain optimization program that they put into place, which had significant cost savings to the company as well as reducing CO2 emissions by significant amount as well. Those are examples of different companies using environmental benchmarking and there are many more. That concludes this presentation. I want to mention that the output of our project is NCFRP Report 21, Handbook on Applying Environmental Benchmarking in Freight Transportation. I provide the web link in the presentation. I have a number of hard copies which have already been printed and I would be happy to distribute as well.
Thank you, Larry. I think we have good conversation going in the chat box for Larry and Nate. Please post questions that you have and we will get to them at the end. Now we will move on to our next presenter, Nate Springer, of Business for Social Responsibility.
Thank you, Larry for a great overview of benchmarking across the sector. I'm going to kick off from where Larry started and will be going into a deep dive on one benchmarking program. What I will do over the next few minutes is provide a brief overview of BSR, the organization that I work for, and then talk more specifically about the Clean Cargo Working Group and what we hope to achieve and what we are doing, the tools we use, and some of the results for carriers and shippers who use marine freight services.
BSR is an NGO. We consider ourselves a hybrid organization in which we work with the world's largest company's toward the creation of a sustainable world. We are built around a membership network of about 250 multinational companies and we do a variety of consulting, primary research, and cross sector collaboration to address more intractable industrywide environmental challenges. Working with these companies allows us to understand the biggest constraints and barriers to the private sector making more progress on sustainability, human rights, and social justice as well as to help them to accelerate their initiatives.
We are a global organization with staff across the world in eight offices. Two in North America and one in South America, a couple in Europe, and several in China. About 100 people are working at BSR across the direct consulting and research as well as collaborative initiatives spectrum.
As a part of BSR work, we have a specific transportation logistics practice that works with companies and our members to integrate sustainability into the supply chain and transportation and logistics aspects of the supply chain, with environmental, social, and ethical considerations and practices. We work with companies such as Maersk as well as shippers such as IKEA, Nike and Walmart. We also have a number of air freight members, as well as passenger like United and even UPS who moves packages all over the world.
The Clean Cargo Working Group is part of the transportation logistics practice and it is designed to solve a specific challenge. We've been around for about 11 years now and we were started by the same program that created EPA SmartWay, that was referenced earlier, and I believe we have a couple of their colleagues on the line. The challenge is that transportation is a significant emitter of carbon emissions that are some of the leading causes of climate change. Yet it's very difficult to find reliable ways to track, measure, and improve performance and related to carbon emissions. We know that about a quarter of global energy-related carbon emissions have come from the transportation sector and recent evidence tells us that it is the fastest-growing sector of carbon emissions. The challenge here is that shippers such as a company like Walmart, Nike and Heineken who have made aggressive emission targets for which supply chain is a big piece need the tools to be able to measure their performance and be able to measure and evaluate the performance of their logistics providers.
We are a global business-to-business membership. Our mandate is to provide the metrics and evaluation of carriers, such that shippers can use to compare and understand environmental performance among ocean carriers.
We now represent the industry with about 85% of global ocean container trade now represented within the membership of Clean Cargo Working Group. We are also supplying information and tools used by the vast majority of our shipper members, the Nike's and Heineken's of the world, in their procurement practices. As a result of providing the measurement evaluation and reporting of environmental metrics in the ocean freight sector we can say that there has been a 16% reduction of CO2 on average per container moved among ocean carriers since 2009. While other trends likely explain some of these results, the continued performance improvement is also attributed to carrier fleet efficiency and data quality, both of which have direct benefits for shippers. It is the visibility of the data collection process and transparency of the methodology that allows us to evaluate across the entire sector. We now have as of last year almost 3000 vessels that were reporting their information to us and this year we've had significant growth in our membership and we are expecting 4000 to 5000 vessels. We are now wrapping up our annual data collection process.
I will briefly touch on some of the tools we use to do this and try not to go too long on that to focus on the results, which will probably be most interesting to you. I will be happy to return to this if there are questions on the specifics of how we go about doing the work that we do.
Some of the tools that we use are specifically designed to provide quantitative data and quantitative data from the carriers. Using our environmental performance metrics scorecard we collect data on such metrics as fuel usage, on total kilometers traveled, capacity in total TEU capacity of the vessels that report to us. We also gather data on NOx, SOx, as well as environmental management systems and various waste, water, and chemical data. We also asked them about their practices to reduce carbon emissions and reduce emissions and we provide a framework for external verification. We do not perform verification but the majority of our carrier members are externally verified. The end result is a scorecard. You see it in the upper right that shows the individual carriers specific carbon emissions performance.
The scorecard is that tool. This is a more detailed view of the scorecard itself. It's broken down by 25 trade lanes that we track and monitor and ask our carrier members to report on. For every trade lane they operate on, many of those are the largest in the world such as Asia and North America and West Coast Asia and northern Europe. We also track smaller trade lanes such as interregional lanes in Asia, North America, and Europe. We generate a carbon emission for both your dry storage as well as cold. In just this past year we added a sulfur emissions factor per trade lane.
The second piece is that we use this data to publicly share with the industry information on industry trends. We track and report on performance trends on the 25 trade lanes that we are monitoring. We also track the average carbon emissions in grams of CO2 per kilometer. We do that for all of the vessels that are in our fleet. We've been doing the performance reporting and sharing publicly for almost 8 years now.
We also have an intermodal calculator that allows shippers, freight forwarders, and of course the carriers themselves, to do some carbon emissions benchmarking and to have a carbon emissions calculator for their entire logistics supply chain. So we use our own data for the maritime mode and then we will use the best available public information from EPA SmartWay for North America, and for trucking and aviation in other parts of the world. The carrier or shipper or freight forwarder can use that data and input the distance and the emission factors we provide as well as is publicly available factors to model their entire carbon footprint across the logistics supply chain.
We currently have 38 members; most of those are the carriers. We have 10 to 12 shipper members and, what is most appealing to us since our goal is environmental performance improvement, is to see how these data are being used by various companies to improve their performance.
We will start with an overview of how some of these tools can be used. One is that it allows shippers to quantify supply chain footprint and also to compare different operators and compare carriers. As you can see from these comparisons here, looking at two different routes needed to go to Atlanta, you can actually use our data then to estimate the carbon emissions and choose a route which will result in lower carbon emissions. Secondly, you can also as a shipper look at the individual performance carbon emissions as well as NOx and as SOx and other factors to compare carriers and estimate whether you would like to contract with those who provide a higher or lower emissions profile.
Next thing we do because there is as of yet no standard across the all modes in transportation and logistics, we are active in representing our members and representing the maritime sector across other modes. Transit organizations around the world are developing standards which are at the early stages of leading towards regulatory standards related to how companies will measure and report on their carbon emissions from transportation. We are the standard that is used by all of these for the ocean link and we are actively involved in helping to shape the direction for others as they align with our standard. For the shippers themselves, as well as the carriers, we provide a one-stop shop where they can access the other standards.
I would love to highlight a couple of examples of from our members: Maersk is the world's largest ocean container transport carrier and they have been an active member for many years. They are involved in Clean Cargo Working Group to be able to track and measure their own performance and to be able to set goals towards emissions reduction and seek progress towards those goals. They just recently released a 2013 sustainability progress update in which they highlighted their involvement with Clean Cargo Working Group as the standard for measuring environmental impacts in container shipping. They have also been able to track their own performance and have been moving and progressing towards an addition carbon reduction goal that they are on track to meet. Additionally I would highlight that again they find value in having the harmonization and alignment that we do across modes so that their customers can compare them and other suppliers of transportation services.
Nike is also a member of many years and they are using the collaborative aspect to find ways to engage the industry to help Nike in their own and broader industry-wide sustainability and carbon emissions reduction goals. The tools that we provide and the facilitation in our work between their carriers and other shippers and that enable a standardized set of expectations reinforces their work to set expectations and goals for their service providers. They also appreciate the visibility across the industry and they use the industry wide performance as a part of their modeling and data analysis that tracks their performance towards their own emissions reduction goals.
Of course the facilitation that we provide with the other shipper members and with the carriers helps to surface and work through challenges and constraints that moves the industry forward.
Finally, the Clean Cargo Working Group combined with other modes enables Electrolux to track emissions reductions across the entire transportation value chain that includes trucking, aviation, and rail. They appreciate that we are influencing and in contact with and used by other standards across other modes. They use the detailed data that we provide on a regular basis as well as the qualitative data that we collect on best practices to help them understand how they can promote emissions reductions and improved environmental performance in the maritime industry through procurement efforts. Of course they have been actively involved in helping us to continue to improve the quality of our data collection and results such that they can give greater accuracy and understanding of their environmental impact and goals to reduce those impacts.
That is the extent of my presentation. I pared it down a little bit and I can certainly go into some of the details but I see there is a vibrant conversation going on in the dialog so I will turn it back to U.S. Department of Transportation to moderate.
Thank you. We will now move into the Q&A session. Nate, we will start with a question for you. Can you track emissions of clean fuels like LNG?
No. We are not tracking that yet although we have developed the methodology that could also be an example methodology for LNG or CNG and other fuels. So no, what we are collecting right now is data two types of fuels: HFO and MDO. The fuels are higher and lower sulfur bunker fuels.
Can you or do you track the effects of slow steaming and coal ironing?
That is a trend that we are monitoring with interest. Honestly we think we can see the effects of slow steaming. For those of you who are not as familiar with the industry, about five or six years ago the maritime industry began to reduce the speeds at which they were operating and it resulted in significant cost savings and emissions reductions in fuel savings. That happened right around the same time that we were beginning to collect our data. So we believe most of our data came in after slow steaming was implemented. We have some rudimentary data from before that but we haven't gone back to dig into that to see whether you can see the immediate step change in performance because of slow steaming.
Cold ironing is not something we can track very easily. It's a great trend. We applaud it. We hope to see more towards building the capacity to do that. Unfortunately the data we collect doesn't allow us to estimate or see the impact.
Does the BSR participate in Climate and Clean Air Coalition which has a global green freight program? Most of the participants are countries but also NGOs participate.
I am not the one to answer that. I believe Angie, who is listed below my name as our Director of Transportation and Logistics, is somewhat engaged. But honestly, I don't have any knowledge of that and it is something that is on our radar. I was in conversation with EPA folks on Friday and we talked about that and they're doing great initiatives.
Are there any examples of inventories or approaches that have been using to develop an average emissions rate for terminal and land site activities that is tie to ship size?
Not that I'm aware of. That would be great data to have as well. That might be a Larry question.
I would be in the same category. Not that I am aware of.
Let's move on to a question for you, Larry. Do you have any view on what analytical boundaries work best for landside and waterside to truly capture relevant emissions that can be influenced at a port and our cost effective to assess. Is there any port inventory you hold up as a model for medium and small sized sports?
That's a tough question. The question to consider here is it may depend on the purpose of the analysis so depending on the type of modeling you want to do for instance the purposes of modeling could very. In some cases people want to look at do a dispersion analysis of look at population impact. There are also differences between ports as well. For instance some ports have more control over the operations within the port or in some cases you may have terminals. It's a difficult question to give one answer to. It depends on the purpose of the analysis and perhaps the type of port operation.
Thank you. Question for both the presenters: What are the greatest barriers to aligning and harmonizing freight benchmarking tools and metrics and what do you recommend to overcome those barriers. Larry?
This idea of harmonizing some of the different rules has appeal. Potentially there are a couple key issues you have to think about. Of course one of them is organizations and companies may be willing to share different types of information may be with close we they could share more or public information they be willing to share less. So I think there are differences in how information is reported and provided to partners versus the public. Some of that is driven by the fact that if the information is closely held and provided say to the partners and a benchmarking program more detailed information can be provided which could be more useful for the participants. But obviously there is also wider interest in that information as well. In some cases they really can make that information available for competitive reasons. I think it may be a key issue here is it may not be possible to harmonize and report the same information in every single context because of those reasons.
Thank you. Nate?
I would certainly build on things Larry has touched on and mention that I think the industry momentum, or industry as defined by mode, is different across different parts of transportation. So for example there is some great early work being done I believe by EDF on cross modal emissions within the U.S. here, while trying to standardize and get good primary data from certain industries like rail and air freight is difficult. So I think that is one of the big barriers. It's one that we had to overcome. And defining the common methodology that the industry was willing to use in marine carriers, in the case of EPA it was trucks and vehicles. So getting them to agree on what they were willing to share, and then setting up a system such that they can feel confident that their private data was secure which we, and I assume SmartWay as well, have been doing for many years. Having a third-party intermediary like BSR is I think a benefit to help overcome some of those because there is trust by both sides. They want to know they're going to get credible information, and from the carrier side they want to know they will be evaluated with a standard methodology and have performance metrics produced without sharing some of their sensitive data.
Both speakers did an excellent job discussing the benchmark measures. Do either of you have thoughts on how these partnerships can assist in their development of a national freight policy especially since such a policy will likely focus on performance-based freight system. I will open up either one of you if you have thoughts.
I think that one of the issues with freight obviously is as we've been talking about the various modes are so different and obviously within each mode there is many different sectors. So there's such diversity. Obviously when you roll that up to the national level you are using the very aggregate view. I think maybe at least from the environmental perspective what one of the things that these efforts to contribute is that by showing that there are different organizations and companies achieve a different levels of performance and that it is possible to four in many cases to improve that performance it provides information that could be used to set aspirational targets in the sense that they demonstrate the performance that could be possible to say improve environmental performance or reduce fuel use. That my point the way to assist with a target setting type process.
Nate, any thoughts?
I will start with the caveat that I am well out of my league when talking about policy. What I would say is we certainly see policy in freight \ movement environmental performance and in the broader transportation sector as being an enabler of strong environmental performance and reduced environmental impact. The three ways that come to the top of my mind about where policy can play a role is related to infrastructure, demand reduction related to enabling efficiency, and low impact fuels. Clearly we a need tremendous amount of infrastructure to support a cleaner good movement industry and that can be everything from cold ironing to direct from boats-to-rail to avoid bigger impacts caused by road movement of freight.
Demand reduction is other piece of that. We are still trying to figure out what that means for commercial movement of goods but clearly urban planning and how cities are designed have a significant and decades long impact on the emissions profile with particular regions. Strong and solid urban planning is essential to enable improved environmental performance of freight.
And finally policies that support efficiency in reducing waste in the system. By one measure in the United States, about three quarters of transportation fuel use is wasted due to idling and inefficient driving practices and any number of other factors. There are many policy intervention opportunities to improve efficiencies as well as interventions to accelerate the commercialization of lower impact fuels.
We have another initiative called Future of Fuels which is specifically working across the value chain with producers like Shell to fleet owners like Walmart on tracking fuel with the idea of looking at what are the sustainability impacts of about six different fuel types from gas and diesel to electric vehicles and grid technology as well as biofuels and hydrogen. And natural gas of course. There are policy interventions that could significantly accelerate or significantly decelerate the adoption of lower impact fuels. You can go to our website, BSR.org under our initiatives. Or you can Google Future of Fuels and to learn about our work and collaborative initiatives.
Thank you. I don't currently see anything else typed in that we still have some time so I want to give people more time if they want to type in questions. We will see if anybody has a question over the phone. Is Stephanie could give instructions on how to ask a question on the phone.
If you would like to ask a question press star one. We don't have any questions at this time.
Thank you. We will go ahead and close out but if you do think of any questions in the next minute or so go ahead and type it in and I will come back to it. I want to offer both presenters to offer closing thoughts.
Just wanted to reiterate our completed guidebook is available to NCFRP and we are happy to send a hardcopy. I am always interested to speak with people about this topic and provide any insight or today information that we have collected doing our research. I'm always happy to talk to people. I provided my contact information in the presentation.
Thank you, Larry. Nate?
Thanks to U.S. Department of Transportation for hosting this event. We appreciate the opportunity to talk about and learn from Larry and your efforts on environmental initiatives and the good movement sector. I would say our feeling is having done this now for a few years that the capability and data that goes into measuring environmental performance is coming of age. We are now able to give insight into how businesses and local communities have the opportunity to improve their environmental performance through low-cost or even ROI positive interventions with modifications to business practices. We are pleased to be a part of this effort and to provide some of the data and results that help the transportation sector to measure its environmental performance.
Thank you all for attending today's seminar. The recorded version of this event will be available within the next few weeks on the Talking Freight website.
The next seminar will be held on May 21 and will tentatively focus on Accommodating Freight Movements in Complete Streets Settings. More information about the topic of this seminar and a link to register will be available soon. I will send a notice out through the Freight Planning LISTSERV once it is available.
I encourage you to join the Freight Planning LISTSERV if you have not already done so.
Enjoy the rest of your day!