What Is a Zero-Emission Vehicle?
May 08, 2024
A zero-emission vehicle (ZEV) is a battery-powered vehicle that does not emit exhaust or other pollutants from its tailpipe. ZEVs are fully electric vehicles and must be plugged in to recharge.
sustainable supply chain
What Is WAIRE?
May 08, 2024
Warehouse Actions and Investments to Reduce Emissions (WAIRE), sometimes called the Indirect Source Rule, is a truck traffic-based credit and deficit system impacting class 2B to class 8 trucks. Under the rule, some facility operators must monitor and submit accurate vehicle travel data, and they must earn a specified number of points through emissions-reducing activities or pay mitigation fees. The regulation also requires warehouses with ≥100,00 ft2 of indoor space within a single building to complete emission mitigation actions and investments.
What Is a Transport Refrigeration Unit?
May 08, 2024
Transport refrigeration units (TRUs) are climate-controlled devices that provide essential cooling or heating for consumer products being transported in various containers. They maintain a steady temperature for goods during transport or storage and allow the trailer to be cooled when the engine is shut off.
TRUs are also subject to state and federal regulations, most recently in the CARB TRU regulation mandating that owners and operators of truck TRU fleets in the state of California switch to zero-emission vehicle (ZEV) TRUs by a specified date.
What Is Renewable Diesel?
May 08, 2024
Renewable diesel is an advanced fuel option that helps reduce greenhouse gas emissions. It is refined using plant-based oils and can be added to existing fuel truck systems to help lower a fleet’s carbon footprint.
What Is an Alternative Fuel Vehicle?
May 03, 2024
An alternative fuel vehicle (AFV) is a vehicle that runs on alternative fuel rather than traditional gasoline or diesel. It uses alternative fuels such as electricity, natural gas, hydrogen, biodiesel or a combination of fuels. Common types of AFVs include electric vehicles or zero-emission vehicles, hybrid electric vehicles, compressed natural gas vehicles and hydrogen fuel cell vehicles.
Eight Ways 3PLs Help You Achieve Sustainability Goals
April 27, 2023
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, 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; in 2022, it increased to 40%, and in 2023 to 60%.
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.
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What Is Sustainability?
November 18, 2021
Sustainability is a business practice focused on shrinking a company's carbon footprint, reducing waste and saving money, while conducting operations in a socially and environmentally responsible way. Within the shipping industry, there are several ways to use the analytical power of network design tools to make supply chains focused more on sustainability. Some of these examples include shrinking the carbon footprint of freight operations, reducing waste and maximizing resource utilization, and supporting green operations.
As companies respond to increasing demand for sustainable products and services, the role of supply chain network design in supporting and furthering their green goals is gaining in importance.
There are many ways to use the analytical power of network design tools to make supply chains more sustainable. Leading practitioners such as Penske Logistics are using their deep experience to help shippers meet their sustainability goals as well as their cost and service targets.
Main Routes to Greener Networks
Since there are multiple tools and analytical methods to choose from, it can be helpful to think in broad terms when leveraging network design to support sustainability. Here are three examples.
Shrink the carbon footprint of freight operations. A clear route to greener supply chain networks is to reduce the volume of fossil fuels burned by freight vehicles. Penske designs freight networks that minimize the number of miles traveled without compromising service standards.
For example, Penske used its proprietary ClearChain® technology suite to create inbound and outbound integrated network designs for a large appliance manufacturer that wanted to optimize its Midwest regional network. The analysis increased load utilization while reducing overall miles covered by 12%.
Reduce waste and maximize resource utilization.These are not new goals in the supply chain industry. However, minimizing waste and maximizing resource usage are also key weapons in the drive toward a more sustainable future. In supply chain terms, these goals can be met in various ways — such as optimizing the number of DCs and warehouses in a network or streamlining freight operations.
A company in the food business that shipped frozen product to warehouses for final delivery to customers asked Penske to evaluate its distribution network. "They wanted to know how many distribution centers they should have and where the facilities should be located," says Amy Ilyes, vice president of logistics engineering for Penske Logistics. Penske developed a design that optimized DC capacity and freight transportation. "We often redesign supply chains for customers, taking into account variables such as warehouse locations, the distribution of suppliers and the pooling of loads," adds Ilyes.
Support green operations. Supply chain networks are critical components of green operations. An example is circular supply chains, which require specialized design elements to support the "make-use-return" philosophy on which circularity is based. Used product or components must be moved between various nodes, including pick-up and storage points, recycling or refurbishment centers, and manufacturing plants. It is often necessary to configure these nodes and the product flows between them to support just-in-time production schedules.
Penske helped to create a closed-loop recycling network for aluminum manufacturer Novelis North America. The network moves finished aluminum coils from fabrication facilities to auto production stamping plants in several locations. The aluminum scrap generated by the stamping process is transported to a re-melt facility to be used in new coil production.
Applying the Tools
Having decided where supply chain network design can improve sustainability performance, companies must then apply the tools in the most effective way.
This is no mean feat. Network design is not without its challenges, the most common of which are software and data, internal resources, and an effective process. Many companies choose to work with experts such as Penske, who have deep experience with execution as well as design.
Smart practitioners leverage the lessons learned in developing broader design solutions. Here are some critical requirements from a sustainability perspective:
- Establish your goals. What do you want to accomplish in terms of your green agenda?
- Define your timeline. When does the new or modified network need to be implemented? What extraneous factors could impact your timeline such as the duration of current facility leases or impending supply changes?
- Determine your process. How often will you evaluate your distribution network design? Freight networks constantly change in line with shifting market conditions and company strategies.
- Define measures of success. What are your baseline and best-in-class measures for sustainability in your industry?
- Prepare for change management. Are the right incentives in place to meet your network sustainability goals?
- Choose your method. Will you use in-house resources, or will you fully or partially outsource the design project to a consultant or 3PL?
Green Gains Emerging
Supply chain network design has already proved its worth. For example, Penske research has shown that approximately 80% of supply chain costs are related to network design. A good design initiative can achieve as much as 10% to 15% in supply chain cost savings.
Sustainability represents a challenging new frontier in the network design space, but the benefits could be just as impressive.
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The "take-make-dispose" approach to economic growth is becoming less tenable as more consumers demand sustainable products, and companies face increasing pressure to conserve the planet's finite resources.
In response, the circular economy — where products are designed to be reused or recycled — is attracting much interest. Many leading companies have publicly committed to waste reduction targets, and a key element of these programs is a shift toward circularity.
But circular economic models require support from multiple tiers of the supply chain — and can be enabled with the expertise of practitioners.
The Role of Logistics
The concept of a circular or closed-loop supply chain is a well-established sustainability concept in which waste materials and used goods are reused or resold to reduce costs and create less waste.
Many companies have put this definition into practice. For instance, car batteries have long been recycled using closed-loop supply chains that collect and return used batteries for recycling.
However, circular operations are still the exception rather than the rule. The challenge is how to introduce circularity to conventional supply chains that are designed to move products forward into markets in a linear fashion.
The challenge can be overcome with creative logistics solutions.
Consider, for example, the closed-loop recycling network that Penske Logistics helped create for a leading aluminum manufacturer. The network moves finished aluminum coils from a fabrication facility in New York to various auto production stamping plants in Michigan, New York and Kentucky. It then transports the aluminum scrap generated from the stamping process back to the New York re-melt facility to be incorporated into new coil production.
The entire process runs 24 hours a day, 365 days a year, with a truck heading out approximately every 40 minutes. The recycling program not only saves money but also ensures a more sustainable supply chain.
Returnable containers also help to reduce waste, cut costs and promote sustainability. The same strategies apply to storage containers for transporting anything from car parts to a number of food-related containers such as bread trays used to transport baked goods and flip-top totes used to transport pre-made sandwiches and grab-and-go foods, such as fruit cups and salads.
Five Circular Routes
Such collaborations will become commonplace as more companies seek to embrace circular supply chains in response to market demand.
Here are ways in which supply chain experts such as Penske play a critical role in designing, implementing, and operating circular supply chains.
Network design: The "make-use-return" philosophy on which circularity is based may seem straightforward, but the logistics are far from simple. Used product or components come in countless forms and have to be moved between various nodes, including pick-up and storage points, recycling or refurbishment centers, and manufacturing plants. It is often necessary to configure these nodes and the product flows between them to support just-in-time production schedules. Leading fourth-party logistics providers such as Penske are highly experienced network designers who can use their expertise to create circular-based networks.
Balancing supply and demand: Reclaiming components and materials from end-of-life products to make new products is not the same as procuring virgin materials and new components for manufacturing operations. Supply is subject to the availability of materials from waste streams, which can be variable. In consumer electronics, for example, the supply of materials for reuse fluctuates with the amount of end-of-life products discarded by users. Again, the expertise of a logistics provider can play a vital role in helping companies to adapt to variable supply models.
Transportation solutions: Given the variables described above, a circular design may well require a tailored transportation component. For example, an established logistics provider will call on its extensive network and business intelligence resources to create business connections that serve and enhance a closed-loop supply chain. Penske has also designed customized unique universal trailers for the aluminum recycling operation.
Facilitating collaboration:Circularity can't become a viable modus operandi without supply chain alliances. The concept of one company's waste becoming another company's feedstock is at the heart of circularity. Bringing this concept to reality requires companies to look for suitable partners and establish mutually rewarding relationships, which can take much time and effort. In addition to having a uniquely holistic view of supply chains, experienced logistics providers develop collaborative relationships between different supply chain entities.
Fueling innovation: As the circularity movement gathers momentum, companies are looking for new, creative ways to embrace it. An example is how to establish efficient return channels for used products — a significant challenge, especially in consumer markets. New solutions are emerging. For example, some companies are exploring the use of e-commerce returns services as convenient channels for collecting end-of-life products. Logistics providers can use their market and logistics know-how to help develop such innovative solutions.
Drivers of Circular Supply Chain Success
Moving circular supply chains into the mainstream requires the expertise gained in the linear world combined with new thinking in supply chain management.
Companies are being held more accountable for sustainability initiatives not only through legislation and mandates but also by customers who demand a healthier and cleaner environment. And, while circular supply chains require initial investment, recycling and reuse efforts can be turned into profit through lower-cost materials and cost of waste.
With so many components involved with a circular, or closed-loop, supply chain, partnering with a logistics provider has several notable benefits. A logistics provider offers a single point of contact for all parties involved in the supply chain and provides a greater sense of ownership and control over the business. This ultimately creates leaner and more effective supply chain processes, enabling the business to focus more on its product and services, not on supply chain complexities.
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How the Automotive Supply Chain Can Benefit from Returnable Containers
September 01, 2017
Companies strive to get more products on a trailer and reusable containers offer that capability. They create significant cost savings when compared to throwaway packaging, and they eliminate variances in packaging. That, in turn, standardizes pack sizes, drives consistency and increases efficiency.
Penske Logistics has perfected the use of reusable containers within the automotive industry. By working closely with our customers, Penske helps to determine the proper amount of reusable containers needed. Then, through big data analysis, Penske identifies peak times, volume files, year-over-year numbers or anomalies. This expertise balances the flow of returnable containers and ensures production keeps moving.
Make Reusable Containers More Effective
The reusable container supply chain includes four key areas:
- Containers in use for finished goods being produced
- Containers holding products that are in use at the customer's location
- Empty containers being sorted and processed for return
- Containers in the return loop
Any irregularities within those four areas can disrupt the entire supply chain. So too can uneven or unpredictable deliveries. For reusable containers to be effective, they must be tracked with strict parameters that ensure a parallel inbound and outbound flow. If containers aren't in place when needed, it can slow a production line, increase cost and hurt productivity.
Start with the End in Mind
Penske Logistics starts the process by understanding a customers' crux – the set of inventory cases needed to make a day's worth of production. So, if a factory needs 11,000 cases for a day's crux, has 7,000 cases now and another 2,000 coming, then they'll need 2,000 more.
Once Penske knows the crux and can identify where containers are within the supply chain, they can help ensure customers have the amount of containers they need when and where they need them. This eliminates container shortage and overflow.
Benefit from Innovative Tracking Technology
To track reusable containers, Penske scans outbound deliveries, keys in pickup quantities and monitors inventory levels within a warehouse. Drivers can use their smartphones to enter the number of reusable containers that have been picked up. Penske's technology transmits the information directly to the customer and sends a report every two hours. That real-time information is tied to the trailer number, so customers know the quantity of available containers and their exact location.
If data shows a low inventory of reusable containers, Penske sends drivers out on a sweep to pick up additional containers. Tracking software allows drivers to know exactly where to go to pick up the proper quantity.
This frees companies from the burden of storing extra containers for just-in-case scenarios. In fact, with one client, Penske's process management freed up six trailers full of reusable containers.
Shippers want a continuous flow of reusable containers, but they don't want to be overflowing with them. Penske Logistics gives customers the visibility they need to become more efficient and more successful.
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