GREEN SUPPLY CHAIN STUDY · Home Depot | CFS Consolidation ~12% of the orders for this study were...

GREEN SUPPLY CHAIN STUDY REVEALS WAYS TO INCR EASE FREIGHT EFFICIENCY AND REDUCE EMISSIONS.

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WELCOME TO THE FREIGHT MATTERS 2020

WEBINAR SERIES

February 12, 2020

Covered Today

Welcome

Freight Matters!

The Home Depot Best Practices

ICCT Green Supply Chain Study

Q&A

3

4

Today’s Speakers Leticia Pineda Buddy Polovick Harry Haney Kim Vaccaro

Researcher Team Leader Director Sr. Manager Import Operation

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5

Toward Greener Supply Chain:

How The Home Depot Reduces Its

Environmental Footprint and Costs

February 12, 2020

Home Depot | Import Overview

Industry Trade Lanes Top US Importers

❑ Home Depot is the 3rd largest US

importer

❑ Transpacific EB (Asia – North

America) lane is the largest

container shipping trade lane

❑ ~92% of THD volume transited via

the Transpacific EB corridor in

2017

Segment namg;

1. Chinn draya,ge

B

C

Origun nodlus

13 rac:taries in China: Supplier A: 1 factory Supplier B: 1 factory supplier C: n factories

DGstlinaUon n,c-dgs

wo port term inalS in Shenzhen metropoUta a~ (Shekou and Yantian)

Two port termin Is. in SJhenzJhen rnetropolitm 7 port t rminals in Los area (Sookoo and Yantian) Angeles/Long B. dh

7 port t. rminals in Los Angeles/Lon B dh

1 TSLD

4SDCs

7RDCs

BBQ griills

Lighting fixtures and equipment

109,430

2,111.764

1 ransload racl llty (TSU)} 1 stocicing distribution centar CSDC) i I'll Mira Loma

secs 7 rapid deployment centers (RDC)

615 stores

622 stores

4,453

4,295

41

2

30,545

ll.821

Transportation modfi

~ l[R)

~ ~

0.28

0.01

Home Depot | Project Scope

Home Depot | Import Freight Flow

TSLD SDC RDC

Import Cross-Dock Stocking Distribution Center Rapid Deployment Center

Distribution Platforms

Home Depot | Dray Overview

~ 60% of

freight

flowed

through the

transload

facility

Home Depot | Inland Transport & Final Mile Delivery

Inland Transportation

Transload aggregates product

from different suppliers and

ships outbound to 4 SDCs

and 7 RDCs using 53’ Trailers

Final Mile Transportation

SDCs and RDCs

service 622 stores in

the western United

States

Home Depot | Utilization Initiatives

✓ Load Optimization Software

✓ Consolidated Freight Stations (CFS) at Origin

✓ Destination Transload Operations

✓ Floor Loading

Home Depot | CFS Consolidation

Supplier A = 1 Factory (Ceiling Fans)

Supplier B = 1 Factory (BBQ Grills)

Supplier C = 11 Factories (Lighting)

CFS Process

Home Depot | CFS Consolidation

❑ ~12% of the orders for this study were consolidated through CFS at

origin

❑ Supplier A & B ship +87% Full Containers ❑ Larger product type

❑ Production aggregated to 1 single factory in the region

❑ Supplier C shipped 22% through CFS location ❑ Smaller product type

❑ Product spread across 11 different factories

CFS Penetration

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ICCt THE INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION

Toward Greener Supply Chains:

Case study of a U.S. – China supply

chain

Leticia Pineda

Freight Matters webinar series

February 12, 2019

icct

r

THE INTERNATIONAL COUNCIL ON

Clean Transportat ion

Share of freight activity (tonne-km)

3%

Share of energy and CO2

emissions

0 .9 %

Share of NO. emissions

The analysis evaluates each supply chain link based on real-

world data

China

United States

Los Angeles/Long Beach

Shenzhen

92km 12,000km 57km

1,350km

SDC 300km

RDC 224km

1. China drayageProducts are shipped from

suppliers’s factories to Shekou/Yantian port

terminals in Shenzhen

2. MarineContainers with

products are shipped across the Pacific

Ocean to Los Angeles / Long Beach ports

3. U.S. drayage Containers are transported

from Los Angeles / Long Beach ports to transload

facility or closest distribution center

4. U.S. inlandAggregated products at

transload facility are sent to distribution centers

5/6. SDC/RDC

to storesFinal delivery from

distribution centers to stores

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icct THE INTERNATIONAL COUNCIL ON


The analysis considers three scenarios to evaluate emission

reduction strategies

▪ Conventional Scenario: Basic supply chain without strategies

considered in the green scenario, instead those strategies are replaced

by basic technology and operational practices.

▪ Green Scenario: Current supply chain considering improvements

already adopted (green strategies).

▪ Green Plus Scenario: Future supply chain with additional

improvements to those already implemented in the green scenario. To

consider implementation timeframe, we divide this scenario into:

▪ Short-term (2020)

▪ Medium-term (2025)

▪ Long-term (2030)

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The study categorize strategies in three groups

Clean &

Efficient

Logistics

Clean &

Efficient

Modes

Clean &

Efficient

Equipment

Strategies to improve

supply chain

efficiency through

reduction of vehicle

activity.

Strategies to leverage

the use of the

cleanest and most

energy efficient

modes.

Strategies to improve

truck/rail/vessel

efficiency through

technologies or eco-

driving.

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We evaluated a number of strategies applied to specific

segments under different scenarios

Strategy Type Strategy Supply chain Link

China drayage Marine US drayage US inland SDC to Store RDC to Store

Clean and

efficient

logistics

Cargo consolidation (Consolidated Freight

Station)

Cube optimization

Transloading (network reconfiguration)

Floor loading

Direct routing + Short sea shipping

Schedule optimization (port and ship)

Clean and

efficient

modes

Truck to rail

Transloading (container switch)

Move to larger ships (Tripple E etc. )

Clean and

efficient

equipment

Shore power

Slow steaming

Vessel technology

Vessel operations

Truck technology

Truck electrification

Rail technology

Driver training

Strategy applied to Green scenario

Strategy applied to Green plus scenario

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icct

0 % Land Marine

,-..

* .._, -10% 0 ...

Ill -20% C (1) u V) -30% Ill C 0 -40% ..... C (1) -50% > C 0 u -60%

E 0 -70% ... -C 0 -80% ..... u ::::s -90% 'O (1)

c::: -100%

-27%

-67%

THE INTERNATIONAL COUNCIL ON


NOX PM

l•I~J (i) l•I~J (i) Land Marine Land Marine

-25% -23%

-70% -81%

GREEN SCENARIO

■ Logistics strategies

■ Modal strategies

■ Equipment strategies

GREEN PLUS SCENARIO

■ Logistics strategies

Modal strategies

Equipment strategies

Total reduction in Green scenario

Total reduction in Green Plus scenario

Summary of energy and emissions reduction potential

19

Energy and CO2 NOx PM

- 0% ~ ~ 0 ·;: -10% ca C Cl)

I (.) (II

-20% iii C 0 :;:

-30% I C

~ C 0 0 -40% E 0 ... - -50% C 0 :;: (.) ::, -60% "C Cl)

a:

-70%

-80%

-90%

-100% ■ I I

C E E E Q) ... C E E E C E E E Q) Q)

~ .sl .sl .sl (!} t e o,

0 :, § .s::. '6 (/) ....J Q)

:E

~ .sl .sl .sl ~ ~ ~ ~ (!} t e o, (!} t:: E Ol 0 :, § 0 :, C

.s::. '6 .s::. '6 0

(/) ....J (/) ....J Q) Q)

:E :E

Green Plus Green Plus Green Plus

CFS ■ Cube optimization ■ Floor loading Driver training ■ Truck technology ■ ZE trucks



factors

Consolidated containers wlt'h higher

utlll2ation factor

Fuel-saving technology areas

Telematics, intelligent controls, and driver aids

Improved engine

Idle reduction technology

Advanc:~ transmission and dnvll:!hne

Reduced accessory loads

Enhanced aerodynami~

Weight reduction withmatll:!rial substitution

Reduce-cl rolling resistance tires and

inNation control syst@ms

China drayage energy and emission savings

20

0%

.2 ;:a -10%

~ Ill -20% iii a ~ Ill ~ 8 E 0 ..

-30%

-40%

i -50%

ti ::I

! -60%

-70%

-80%

-90%

-100%

■ Schedu li ng

■ S hip size

Energy and CO2

C: Q)

!!:! (!)

I

E !Ii ~ 0

ti,

E ,S:l E :::,

'g ~

Green Plus

■ Ship techno logy

■ Shore power

NOx

C: Q)

!!:! (!)

E m ~ 0 .c (J)

E $ E :::,

'g ~

E C1)

6, §

Green Plus

■ Fuel savings ■ China 100-nm ECA ■ US ECA



PM2 .. 5

I

E m ~ 0

ti,

E $ E :::,

'g ~

Green Plus

■ Global sulfur cap China 200-nm ECA

1,I

Op■ratlonal

Weather routing 1•4% Autopilot upgrade 1-3% Speed reduction 10-30%

Thrust efficiency Propeller polishing 3-8% Propeller upgrade 1-3% Prop/rudder retrofit 2-6%

'•

Auxiliary pow■r

Efficient pumps, fans 0-1% High efficiency lighting 0-1% Solar panel 0-3%

Engln• ■fflclency Waste heat rec.overy 6-8% Engine controls 0-1% Engine common rail 0-1% Engine speed de-rating 10-30%

A■rodyna mlc1 Air lubrication S·1S% Wind engine 3-12% Kite 2-10%

Hydrodynamic• Hull cleaning 1-10% Hull coating 1-S% Water flow optimization 1-4%

Marine energy and emission savings

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-- 0% ~ ~ 0

I ·;:: -10% C'CI C G) () Ill

-20% ia C 0 ;:

-30% I C

~ C 0 0 -40% I E 0 ... - -50% C 0 ;: () :::,

-60% "O G) • a:

-7(J%

-80%

-90%

- I I ■ I -100%

C: § § § Q,)

~ ~ ~ ~ (.'J t:: E Cl 0 ::::, C: .c 'o

0 (f) ...J

Q,)

~

C: E E E C: E E E Q,) ... Q,)

~ ~ ~ ~ ~ ~ ~ ~ (.'J t:: E Cl

(.'J t:: E Cl 0 C: 0 ::::, C: .c ::::, 0 .c 'o

0 (f) 'o ...J (f) ...J

Q,) Q,)

~ ~


■ Floor loading ■ TSLD ■ Cube optimization CFS Driver training ■ Truck technology ■ ZE trucks



Containers with low utl l lz.atlon

factors

( )

COn$Olldated container$ with higher

utlllzatlon factor

Fut l·1avlng technology lrHI

Telcmatics, Intelligent controls., and driver aids

Improved engine

Idle reduction technology

Advanced transmission and drivelme

Reduced accessory loads

Enhanced aerodynamics

Weight reduction with mater.al substitution

Red uce-d rel ling roslstance t1ros and

ln~lation control systems

U.S. drayage energy and emission savings

22


-- 0% ~

I ■ ~

I 0 ·;: -10% Ill C Cl) u 1/1 -20% ■ iii C I I I -0

:;::; -30% C Cl) > C 0 -40% (.)

E I 0 ... -50% -C 0 :;::; u -60% ::, -0 Cl) a:

-70%

-80%

-90%

-100% C: E E E C: E E E C: Q) Q) Q) E E E ~ .lJl .lJl .lJl ~ .lJl .lJl .lJl ~ .lJl .lJl .lJl (;) t E (;) (;) Ol t E Ol t E Ol

0 C: 0 C: .c :::, 0 :::, 0 C:

'6 .c 0 .c :::, 0 CJ) ...J CJ) '6 ...J '6

Q) CJ) ...J

Q) Q)

~ ~ ~


■ TSLD ■ Cube optimization CFS ■ Floor loading Driver training ■ Truck technology ■ ZE trucks ■ Rail technology

0 I CC t THE INTERNATIONAL COUNCIL ON


N\N

•

■ Shift to rail

Containers with low utl l lz.atlon

factors

( )

COn$Olldated container$ with higher

utlllzatlon factor

U.S. inland energy and emission savings

23

RDC to store energy and emission savings

SDC RDC

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Key takeaways

▪ Sustainable practices and green freight programs like

SmartWay are delivering real cost savings, efficiency gains

and environmental benefits.

▪ Many of the green strategies are already being

implemented by companies proving that they work,

reducing uncertainty and cost.

▪ Operational and vehicle technologies are both necessary

▪ Collaboration among stakeholders is key!

▪ Other companies and supply chains can leverage from the

work developed in other projects by sharing experiences

and best practices

▪ Data analysis is a powerful tool to inform decision making

processes

▪ Robust assessments using private data are possible

without disclosing sensitive information

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Check out the full report at the link below:

https://theicct.org/sites/default/files/publications/ICCT_

Toward-Greener-Supply-Chains_201909.pdf

Thank you!

[email protected]

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https://theicct.org/sites/default/files/publications/ICCT_Toward-Greener-Supply-Chains_201909.pdf

~ , · artWay· ~ S'"!JROTECTION AGE NCY U.S. ENVIRONMENTA

Questions?

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GREEN SUPPLY CHAIN STUDY · Home Depot | CFS Consolidation ~12% of the orders for this study were...

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