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 value chain, this is not particularly energy intensive.
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 oil. This means that as we grow our business, the CO2 emissions will grow in line. We are working to reduce this dependency.
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 also use non-road forms of transport to move our goods, which has less impact on the environment.
We review the transport pallet and packaging design of our products to transport them more efficiently. We work with others to share and fill loads in order to reduce road miles. We are also actively exploring technology alternatives to diesel.
Making our logistics more efficient delivers real business benefits. These include reduced costs, lower greenhouse (GHG) emissions, better business planning and an improved service for our customers.
Unilever trucks save 15,000 tonnes of CO2 on european roads
A logistics project has so far cut the distance Unilever’s trucks drive on European roads by around 45 million kilometres. From 2015, the project is expected to reduce carbon emissions from the Europe network by around 15,000 tonnes of CO2 each year compared to 2011 levels. 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 value of the project’s environmental benefits – as measured by the European Union (EU) – has been put at €30 million between 2012 and 2014.
The project, which began in 2012, comprises 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. The TMS is already being used in the Americas. We are rolling it out across the rest of the world over 2014-2015.
“By building new logistics capabilities in Europe, and rolling out the new TMS globally, the project has built a more responsive supply chain, creating opportunities to deliver greater value and service to customers,” says Unilever project director Matthias John. “It has also ensured that Unilever and its logistics organisation continue to lead the industry, both in terms of capabilities and sustainability.”
Unilever wins global sustainability innovation award 2014
The Unilever Supply Chain Company was the global winner of the 2014 Oracle Sustainability Innovation Award in recognition of our new Transport Management System (TMS). Using the information enabled our team to improve the loadfill of inbound transports in North America by 10% and increase the loadfill of our primary European transport by 3% within just one year.
Unilever reduced total vehicle kilometres driven by 10% across key global markets in 2013 compared to 2012. Implementing the TMS across our global network is making it a critical part of Unilever’s every day operations.
Using secondary truckload to further reduce road miles
Secondary truckload is the movement of finished goods from our distribution centres to our customers. We wanted to ensure that these trucks were full in order to reduce carbon emissions and save on costs. So we analysed the top 10 retail customer transport routes and top four sales and marketing customers. We created databases to monitor loadfills, and developed action plans for each route, sharing information with our customers. The project delivered cost savings, reduced carbon emissions from having fewer trucks on the road and truck loads increased. Customer service rates also improved.
Low CO2 transport technologies
We are also looking at new low CO2 transport technologies and undertaking pilots to test these technologies eg battery-powered vehicles. In 2012 in Rome, we trialled a hybrid electric van for our ice cream deliveries. The test demonstrated potential CO2 emissions savings of up to 70% a year compared to a diesel van.
In Spain, meanwhile, we are piloting a technology that allows double temperature truck deliveries by isolating our chilled products from the ambient ones in cross-category deliveries. The technology enables us to combine deliveries of chilled and ambient products without wasting energy to cool the non-chilled products.
First compressed natural gas truck hits the road
In November 2014, our North America supply chain operations started a pilot with one truck that runs on compressed natural gas (CNG) rather than diesel. It produces 11% less CO2, 95% less particulate matter emissions and 35% less nitrogen oxide (combustion gases that cause air pollution). It is cheaper and the CNG’s price also fluctuates less than diesel. In December 2014, North America added 11 additional trucks into service on the current route. The route stretches from Pontoon Beach, Illinois to Jefferson City, Missouri; approximately 270 miles for the round trip. 50-60 more trucks are planned across the wider US network in 2015. We plan to add a further 300 trucks by 2018. This will have the potential to cut our fuel bill by $12 million and reduce CO2 emissions by 6,000 tonnes over three years.
Our North America team also signed an agreement with fuel company US Oil to directly serve Unilever’s needs for CNG.
We are leading the transition from diesel to CNG in North America. 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.
Other pilots are running in India, Argentina, Russia and Europe. Brazil has already completed its pilot. China and Mexico will start theirs in 2015. There are challenges to rolling out CNG trucks including worldwide infrastructure, technology, and the availability of engines and filling stations. Driver skill is also critical as this is the single largest factor in fuel efficiency. Alternative solutions will be explored for other countries – such as liquefied natural gas in Europe – depending on how the local energy market evolves.
The benefits of working in partnership
To reduce significantly our GHG emissions from transport, we must work in partnership with others. This is because, in general, we do not own the vehicles, trains and vessels used to transport our raw materials and finished goods.
For this reason, we are making sustainability part of our working agreements with infrastructure providers and operators. We also support a range of cross-sector sustainability initiatives at a national level. For example, we are a key player in the haulage element of a UK industry efficiency initiative to reduce transport impacts – the Sustainable Distribution Group of the Efficient Consumer Response (ECR).
In France, we are collaborating with three companies - our logistics provider STEF, food and beverage company PepsiCo and cheese manufacturer Bel. We share deliveries of chilled products from our north Paris distribution centre. This delivers financial savings, while at the same time reducing CO2 emissions by 40%. In 2014, our collaboration continued with Bel and FrieslandCampina. This has realised a CO2 emissions reduction of around 1,173 tonnes a year.
Transporting by sea
Shipping is an important part of the Unilever supply chain. We use ships to transport our raw materials and packaging to our factories and finished goods to markets.
Unilever became a member of the Sustainable Shipping Initiative (SSI) in 2011 and participated on the steering committee until 2014. SSI is a coalition led by Forum for the Future and WWF, and aims to define what sustainability looks like for the industry in 2040.
Transport by rail
Transporting our goods to markets by rail is an effective way for us to grow our business sustainably. However, in many markets, lack of adequate rail infrastructure represents a major constraint.
In Germany, we are one of the first fast-moving consumer goods (FMCG) companies to deliver our products to retailers using rail wagons. Instead of using two trucks to transport our goods over 600km, the rail wagons now provide improved flexibility to reach the required destinations.
In Italy, we took 6,500 truck trips off the road onto rail between our ice cream factory in the south of the country and a warehouse in the north. This was good for business and also traffic and pollution levels. We worked in partnership with our logistics provider, Catone, and rail company, Trenitalia, under the aegis of the Italian Ministry of the Environment. Our commitment allowed Catone to make an investment into refrigerated containers, building a capability in the market that did not exist before.