Aftermarket

Eyefortransport: Environment Still Key to Companies' Strategies

September 09, 2009

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Despite budget cuts, layoffs, restructuring and the looming losses over the past year, trucking companies have not forgotten about the environment. While many other company initiatives have been put on the back burner, the "greening" of the industry doesn't seem to be one of them. In fact, environmental issues and sustainability has gained more importance among the supply chain industry this year, according to Eyefortransport's 2009 Supply Chain Carbon & Sustainability Report
for North America.

"The greening of North American supply chains is widely recognized as a crucial investment both in individual businesses, and in America's new low carbon economy," the report said. "With President Obama's mandate to lead the world in industrial environmental responsibility, and cap and trade regulations being heatedly debated, now is a time of confusion for many companies who are trying to survive and thrive in an especially rocky environment."

Nevertheless, the report found, companies did not drop the ball on environmental issues this year. Forty-one percent of respondents said environmental issues were very important to their company's overall strategy, while another 36 percent see it as important. Comparatively, last year 29 percent responded that it was very important and 35 percent important.

In addition, the majority of participants indicated that environmental issues were either very important or important to their company's supply chain strategy, at 33 percent and 44 percent, respectively.

Efficent Supply Chain?

From the 2008 survey, Eyefortransport also saw some improvement in terms of the number who felt environmental initiatives had increased efficiency, with almost half reporting this. This is up from 38 percent last year. In 2008, 57 percent of those surveyed indicated that environmental efforts had not affected supply chain efficiency. This year, 46 percent reported no change in efficiency.

Eyefortransport surveyed more than 130 supply chain practitioners, including transportation providers, through e-mail lists, select trade association memberships, industry databases and other methods. The goal of the survey was to look at the importance to companies of environmental issues, the use of environmental initiatives, the participation in environmental programs, and measurement of carbon footprints.

Respondents also expected to see a return on investment for environmental initiatives over the next three years, with 60 percent responding. Another 24 percent anticipate public relations returns but not financial, while 5 percent expect financial returns but not public relations, and 11 percent do not expect any return.

Barriers to Green

When asked about the barriers preventing companies from implementing green initiatives, the biggest barrier to entry was the belief that customers are not prepared to pay a premium. Twenty-one percent said this was a big barrier, 17 percent as a barrier and 46 percent as somewhat of a barrier.

Companies also said the payback period being perceived as too long was a big barrier, at 18 percent. This was considered a barrier by 28 percent and as somewhat a barrier by 36 percent, while 18 percent said the opposite was true of their company. Other things considered as large barriers included cost being perceived as too high, at 17 percent, and not enough customer demand to justify it, at 16 percent.

Eyefortransport also asked participants about the environmental initiatives that companies are using or planning to use, with regards to supply chains and distribution networks. The most popular initiative was improving energy efficiency, with 75 percent using this approach. This was followed by emissions measuring and/or reductions at 53 percent, a corporate green team at 51 percent, vehicle re-routing to reduce miles at 47 percent, using more environmentally friendly logistics providers at 45 percent, design for environment at 44 percent, and strategic warehouse and distribution center placement at 44 percent.

"This year's difficult economic and business environment has put increased pressure on the environmental champions of all North American companies," the report said. "This is useful for every company, since those initiatives with clear environmental, customer relations and dollar returns are those that make sense both in- and outside a recession."


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