Eight Ways 3PLs Help You Achieve Sustainability Goals
Sustainability is taking on increased importance as companies respond to consumer trends and preferences, regulatory requirements, and environmental and climate impacts. Organizations are using their supply chains to better align with their environmental, social and governance (ESG) goals.
The supply chain provides many opportunities to increase efficiency and improve sustainability. Many times, those opportunities also result in cost savings. “Any 3PL who can demonstrate they’re doing anything to improve air and water conditions provides value. That is a big deal in the annual report or any ESG statement,” said Kevin Smith, CEO of Sustainable Supply Chain Consulting, in the 2023 Annual Third-Party Logistics Study.
Logistics providers contribute to their customers’ Scope 3 emissions — indirect emissions that occur in a reporting organization’s value chain — and need to be able to quantify emissions savings when needed.
Penske is working to decrease greenhouse gas (GHG) emissions, and that effort includes participation in the EPA’s SmartWay program. The company is a seven-time winner of the EPA SmartWay affiliate challenge and has received the SmartWay Excellence Award six times. In 2022, Penske was a high performer in the logistics and carrier categories.
Here are 8 ways Penske helps customers meet their goals:
1. Improving Miles Per Gallon: Penske Logistics uses late-model equipment with significant fuel economy improvements, reducing emissions. The North American Council for Freight Efficiency’s 2022 Annual Fleet Fuel Study found that fuel efficiency for all heavy-duty Class 8 combination vehicles went from 5.97 to 6.24 mpg during the last three years.
2. Reducing Well-to-Wheel Emissions: Penske is expanding its use of renewable diesel fuel. This cleaner option performs identically to Ultra-Low Sulfur Diesel (ULSD) but has a lifecycle GHG emissions reduction of 63% or more. Additionally, renewable diesel reduces particulate matter by more than 40%, carbon monoxide by more than 25%, total hydrocarbons by more than 20% and NOx by 10%.
3. Optimizing Routes and Networks: The greenest mile is the mile that isn’t run. Finding more efficient routing and network designs improves utilization, which eliminates miles. Penske’s engineering team utilizes route optimization software to show how many miles can be removed, which results in fuel savings and a reduction in emissions. Creative engineering solutions also help shippers maximize the cube utilization of trailers to reduce empty miles and unnecessary trips.
4. Utilizing Backhauls: By maximizing backhauls, companies are optimizing routes and potentially taking vehicles off the road by filling miles that would have otherwise been empty. Penske matches backhaul capacity within its dedicated contract carriage customer base and freight under management, leveraging strategic partnerships with third-party shippers.
5. Enabling EV Deployments: Penske has been operating alternative fuel fleets for over 30 years and has invested in maintenance training and facilities that can service alternative fuel vehicles. Electric vehicles (EVs) continue to make headlines, and Penske built and operates North America’s first heavy-duty EV charging network. Penske collaborates with leading and emerging truck makers to field test and fuel vehicles in real-world conditions.
6. Designing Sustainable Distribution Centers and Warehouses: Penske is implementing deliberate actions to decarbonize warehousing operations. A key focus is reducing energy used through energy-saving projects, such as energy management controls like motion and light sensors, LED lighting, HVAC upgrades and refrigeration system optimization.
Penske procures renewable energy bundled with electricity supply as well as unbundled renewable energy certificates. In 2021, Penske’s renewable energy usage was 21% of total energy usage, and in 2022 it increased to 40%.
Additionally, DCs and warehouses can eliminate refrigerated trailer idling through the use of electric shore power and reduce the amount of tractor idling at the location by providing lounges so drivers don’t remain in their cabs.
7. Reducing Solid Waste: Penske manages its solid waste by continually monitoring solid waste volumes, right-sizing dumpsters, and instituting recycling programs for cardboard, paper, organics, plastic, glass, aluminum and wood. In 2022, 52% of Penske’s waste was recycled.
Penske draws on its experience to help customers reduce and recycle waste at distribution centers and warehouses. When possible, Penske can also help customers decrease handling, resulting in less packaging and reducing waste to the landfill. Penske also offers reusable containers or cages, which can eliminate waste.
8. Tracking the Numbers: It is no longer enough for companies to say they’re sustainable. They need to partner with providers who can help them analyze opportunities for savings, reduce their carbon footprint and track the results.
To learn more about how Penske can help you meet your sustainability goals, contact us.