Going to market - reducing transport emissions
We aim to reduce mileage and use lower-emission transport to get our products to market.
Transporting millions of products every day
We estimate that our transport and distribution systems emit a similar proportion of CO2 emissions from energy as our manufacturing operations. This means that compared to other parts of our business and the wider value chain, transport and distribution is a relatively low contributor to greenhouse gas (GHG) emissions.
However, we make millions of products that must be moved efficiently from our factories to their point of sale. Our logistics network transports our finished goods over 1.5 billion kilometres each year – the equivalent of travelling to the moon and back more than 2,000 times. Goods transport has an extremely high dependency (over 90%) on a single energy source - fossil fuels. This means that as we grow our business, CO2 emissions from transport will grow in line. We are working to reduce this dependency.
The majority of our logistics transportation is still carried out on roads. We aim to use fuel efficiently in all our activities in order to keep our emissions from road transport as low as possible. Our transport management systems are crucial to this.
We regularly review our road transportation to discover areas where we can increase efficiency, for example by standardising pallet height to ensure optimal loading. We work in partnership with others to achieve efficiencies, for example we are working with our partners in our wider supply chain to share loads in order to reduce road miles. We also know that driver skill and education is critical as this is the single largest factor in ensuring fuel efficiency.
We aim to increasingly use non-road forms of transport such as rail and sea to move our goods. We are also actively exploring alternative fuels to diesel.
Making our logistics more efficient delivers real business benefits. These include reduced costs, lower GHG emissions, better business planning and an improved service for our customers.
Reducing road journeys by over 100 million kilometres
Since 2012, our logistics project has cut the distance Unilever’s trucks drive on European roads by over 100 million kilometres.
The project comprises of a new Transport Management System (TMS), which was part-funded by the EU. This allows for the optimisation of transport flows between suppliers, factories, warehouses and retailers. It also involves transport efficiency initiatives and a new network structure. We have rolled this project out across a number of regions across the world.
This is the largest project of its size and scope for Unilever in Europe and will significantly reduce the impact that our supply chain has on the environment and on Europe's road network. The EU has measured the value of the project’s environmental benefits as €30 million between 2012 and 2014 alone.
Investing in alternative fuels
We aim to increasingly use non-road forms of transport such as rail and sea to move our goods but for those journeys still carried out on the road we are investing in alternative fuels such as Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG). LNG produces 11% less carbon dioxide, 95% less particulate matter emissions and 35% less nitrogen oxide than diesel. Trucks that run on LNG produce 50% less noise pollution – a key consideration especially in urban areas.
In certain parts of the world it is also cheaper than diesel and the price fluctuates less. We are conducting alternative fuel trials around the world including in the US, Europe, India, Indonesia, Turkey, Argentina, China and Russia.
In November 2014, our US supply chain operations started a pilot with one truck running on CNG rather than diesel. In December 2014, we added 11 additional trucks into service on a route that stretches from Pontoon Beach, Illinois to Jefferson City, Missouri; approximately 270 miles for the round trip. As of the end of 2015 we have 40 CNG fuelled trucks operating in the US, which is expected to increase to 250 trucks by 2018. This could the potentially to cut our fuel bill by $12 million and reduce CO2 emissions by 6,000 tonnes over three years.
In the US we are leading the transition from diesel to CNG. In March 2014, we brought together interested parties – including carriers – to showcase the technology and clarify common misconceptions such as fuel efficiency, driver acceptance and engine power. In 2014 we worked with our partner GAIN Clean Fuel to set up a CNG fuel station to support our conversion to CNG in Pontoon Beach.
In Europe we are also taking a leadership position and have introduced trucks that run on an alternative fuel, LNG. In doing this we faced the challenge that while the interest in LNG is growing, Europe’s roads don’t currently offer a sufficiently large network of LNG fuelling stations to ensure trucks can complete their journeys.
This resulted in the establishment of a Unilever-led consortium, Connect2LNG. This unique collaborative project, supported by the European Commission, aims to build five LNG fuelling stations in France and Germany, where the infrastructure gaps are greatest. The building of these fuelling stations will support our commitment to alternative fuels into the future and will hopefully unlock the potential of LNG as a fuel for international long-haul transportation in Europe.
“With Connect2LNG, we’re working with partners from across the value chain, including logistics companies, infrastructure companies and manufacturers,” says Mark Rickhoff, Logistics Transformation & Innovation Manager. “We’re taking a step towards the overall reshaping of the road freight industry in Europe, working towards a sustainable transportation future.”
Developing long-term solutions
While we know that alternative fuels such as CNG and LNG have many benefits versus diesel, they are not long-term sustainable fuel solutions. We see CNG and LNG as transition fuels while we look into the possibility of more sustainable fuel sources such as hydrogen and biogases in the long-term.
Paul de Jong, Logistics Transformation & Innovation Director, says “LNG is a transition fuel as we make our way to a cleaner future. The use of electricity or hydrogen to power trucks over long distances is still some way off. However, biofuels are a more realistic and cleaner fuel for our fleet in the medium term. We will almost certainly look to them as road transportation gears up for a low-carbon future, especially as they offer a 70% reduction in carbon dioxide emissions compared to diesel.”
There are also barriers to globally rolling out alternative fuels such as CNG and LNG, including gaps in worldwide infrastructure, technology, the availability of sufficiently powerful engines, and a suitable network of filling stations.
As we do not generally own the vehicles, trains and boats used to transport our raw materials and finished goods, we are working in partnership with our infrastructure providers and operators to make sustainability part of our working agreements. We also support a range of cross-sector sustainability initiatives at a national level.
We know there is only so much we can do alone so we hope that by exploring other alternatives to fossil fuels, and working with our partners, we will encourage the wider industry to explore more sustainable alternatives.
Sustainable logistics for the future
As well as our work in reducing greenhouse gases we are also committed to sustainable logistics beyond transporting our goods.
We have piloted a scheme in the US to provide safe parking facilities for delivery drivers who need to rest before continuing their journeys. Providing these ‘safe havens’ improves driver well-being and safety as well as ensuring that our deliveries are a viable and often preferred option for logistics partners.
When it comes to reaching our targets there is no one easy solution. It is only by making changes across the entire business and ultimately in our entire value chain that we will make a true impact.