EPA program to reduce pollution from trucks serves as model for sustainability initiatives.
By Eric Kulisch
The U.S. Environmental Protection Agency’s SmartWay program has been so successful in the over-the-road trucking sector as a platform for sharing best practices and building partnerships to improve environmental performance that industry supporters want to expand it to other parts of the freight transportation world.
And other groups are copying the model to address environmental issues within other subsets of the business world.
SmartWay helps companies compare the environmental impact of their freight operations against their industry peers, and identify fuel-saving technologies and operational practices that reduce emissions of toxic compounds and greenhouse gases. In addition to submitting key freight performance and logistics data to EPA for scoring and benchmarking, members agree to make annual efficiency improvements. Strategies promoted by the program include the use of more efficient tires, better aerodynamic truck designs, lower speed, reduced idling, better logistics planning, intermodal conversion, reduced packaging, driver training, and tire maintenance.
There are more than 2,900 companies participating in SmartWay. It is credited with saving 50 million barrels of oil — equivalent to taking over 3 million cars off the road — and $6.1 billion in fuel costs since its inception in 2004. That has resulted in reductions of 16.5 million tons of carbon, 235,000 tons of nitrogen oxide, and 9,000 tons of particulate matter.
The program has also provided $30 million in low-cost financing to help truck owners, especially small and mid-sized companies, buy modern, less polluting tractors. And it tests and quantifies the emissions and fuel savings from various technologies on the market so companies can make more informed choices about investing in new equipment.
The collaboration between government, environmental groups and industry to jointly reduce freight-related emissions in a way that produces financial benefits, in contrast to businesses having to cope with top-down regulations, probably is the most appealing feature of SmartWay for corporate executives.
Sixty-eight of 100 logistics executives surveyed in American Shipper
’s 2012 Environmental Sustainability Benchmark Study listed SmartWay as the favorite program or third-party environmental organization their companies participate in to reduce pollution.
The program is so popular that the Retail Industry Leaders Association, some of its largest members, the Environmental Defense Fund and the Coalition for Responsible Transportation (CRT) wrote an op-ed in Politico
last November urging Congress not to downsize or eliminate the program as it debated how to reduce the nation’s massive debt.
They noted that SmartWay’s accomplishments have been achieved on a “meager” $1.5 million annual budget.
“Government appropriators are faced with difficult challenges in allocating increasingly scarce resources. Yet, as they weigh how funding can best be put to use, increased priority should be given to programs like SmartWay — which has proven cost effective while also successfully advancing important public policy goals,” the commentary said.
Last summer, the EPA began an initiative to reduce fuel consumption and curb pollution from drayage trucks serving seaports.
The Environmental Defense Fund and CRT helped design the SmartWay port-truck component and its benchmarks.
Most shuttle trucks used in local port markets traditionally are much older than those used on highways because small operators in a cut-throat business can’t afford anything but a second-, third- or fourth-hand truck. Model year 1994 and older trucks emit about 60 times more fine-particle emissions than model year 2007 and newer trucks, which burn ultra-low sulfur fuel and have diesel particulate filters.
Particulate matter is linked to premature deaths, heart attacks, childhood asthma and other respiratory problems.
The EPA’s standard is .01 parts per million compared to the prior standard of .6 parts per million. Trucks built since 2007 produce 98 percent less particulate matter than ones with engines built in the late 1980s. The EPA maintained the standard for particulate matter in the 2010 model year engine, but set tougher standards for nitrogen oxide.
Under the SmartWay dray truck initiative, participating carriers sign an agreement with the EPA to track and reduce particulate matter emissions by half and nitrogen oxide emissions by 25 percent below the industry average over a three-year period. All of CRT’s shipper members pledged to use cleaner trucks to haul 75 percent or more of port freight within three years. Charter partners in the program include Best Buy, The Home Depot, Hewlett Packard, JC Penney, Lowe’s, Nike, Target and Wal-Mart.
The CRT got its start five years ago as a private-sector alternative to restrictive regulations by Southern California ports governing various aspects of trucking operations. Target and other shippers committed to use logistics service providers that meet the ports’ standards and help owner-operators, who are contractors responsible for their own trucks, with down payments to acquire new vehicles with clean-diesel, or alternative fuel, engines. CRT members also help drivers secure lower interest loans and provide financial support for monthly payments on clean trucks that transport CRT members’ cargo.
One of the benefits of SmartWay Dray is that it gives the marine cargo industry a national template for setting emission-reduction goals as ports develop individual clean-truck programs, which vary between regulatory and voluntary approaches, as well as their specific rules for phasing out dirty trucks, CRT Executive Director James Jack said in an interview.
The ports of Los Angeles and Long Beach are far ahead of the curve. A ban on all trucks without a 2007 model year, or newer, engine went into effect Jan. 1.
Other ports have not yet addressed truck emissions or are still in the process of phasing out their pre-1994 trucks, which is considered an important first step because they represent the majority of pollution from cargo traffic. The SmartWay certification standards go further and help accelerate air quality improvements regardless of the port involved because shippers commit to reduce emissions nationally across their entire port-shuttle fleet, Jack said.
Although SmartWay Dray applies some of the same principles used to address air pollution in over-the-road trucking, it is focused more on controlling emissions than on fuel efficiency because aerodynamic and other changes have limited impact when shorter distances are involved, he explained.
The General Services Administration is relying on SmartWay to implement President Obama’s executive order directing the federal government to use green practices for its supply chain. The World Bank, as well as the governments of China, Mexico and Canada, has projects or programs that rely on SmartWay technical assistance, methods and tools, according to the EPA. Canada calls its program FleetSmart.
The Commission for Environmental Cooperation, a joint effort between the United States, Canada and Mexico to integrate environmental policies across the continent, published a report last year recommending that the three neighbors harmonize their green fleet-programs to ensure wider dissemination of best practices for improving air quality and better collection and sharing of freight performance and emissions data.
Bill Nurthen, general manager of environmental and waterways development programs for the Port Authority of New York and New Jersey, wants SmartWay to cover the maritime sector too.
Vessels are the single largest contributor to air pollution in port districts. At a Freight Sustainability Summit organized by the EPA in Washington last November, Nurthen said he’d like to see an incentive program modeled on SmartWay that encourages shippers to place business with more fuel-efficient ocean carriers.
He also called for greater collaboration between ports and ocean carriers so that the later can receive financial benefits for ships that pollute less.
That’s the concept behind the Environmental Ship Index (ESI), an international Web-based tool ports can use to rate and reward vessels that exceed current International Maritime Organization emissions standards.
Developed by several major ports, and promoted by the International Association of Ports and Harbors, the ESI rates ships on how well their engine, fuel, and technology enhancements reduce smog-forming and heat-trapping gases.
Several European ports that have adopted the ESI standard are beginning to offer fee reductions to ship operators with best-in-class emission levels. The Port of Le Havre in France, for example, on Jan. 1 began offering, on a trial basis, a reduction of up to 10 percent in port dues to the 10 container or roll-on/roll-off carriers that emit the least pollutants and CO2.
Nurthen said the challenge for ports is determining what financial incentives to provide ocean carriers, especially if ports don’t operate the facilities themselves.
Now, there is an effort underway to create a European version of SmartWay. Twenty-five companies such as Heineken, The Dow Chemical Co., and parcel carrier DHL, with the endorsement of the European Parliament and European Commission, have committed to develop a voluntary program for collecting, analyzing and monitoring CO2 from highway carriers in a standardized format.
Like, SmartWay, the initiative intends to use market incentives to encourage companies to contract with carriers that take steps to minimize air pollution generated by their operations. Reduced fuel costs are among the expected benefits.
The program will be developed and managed by the European Shippers Council, which said in December it has engaged the Energy Saving Trust in the United Kingdom to create a database that calculates, validates and benchmarks the environmental performance of transportation companies based on their actual data. Shippers can then use the scores to help select carriers.
Carriers will provide data — fuel purchased, kilometers driven, and fleet profiles — to enable calculation of their carbon output and commit to improving their fuel efficiency over time. Shippers will also provide data — shipments and carriers used — to derive their own carbon performance scores.
Organizers said they plan to have a certification program to reward shippers and carriers that meet sustainability guidelines and establish a forum for sharing innovative, eco-friendly practices. They expect to have the program in place sometime during the first quarter of 2012.
Ten months ago a group of apparel and footwear makers, retailers, non-governmental organizations and the EPA formed the Sustainable Apparel Coalition to coalesce around a common set of standards for minimizing the environmental and social harm associated with the full lifecycle of their products.
Other goals include spotlighting priorities for action and promising technologies that reduce inefficiency and waste, and facilitating supply chain collaboration.
Founding members of the Sustainable Apparel Coalition also include Adidas, the Environmental Defense Fund, Esprit, Gap, H&M, HanesBrands, J.C. Penney, Kohl’s Department Stores, Nordstrom, Target, REI and Wal-Mart. Together they represent one-third of the global market share in the apparel and footwear industry.
Initial membership was by invitation only, but is now open to other companies, according to the group’s Website.
Participating companies and organizations see an opportunity to advance their own sustainability goals by collaborating to create more uniform, broadly defined tools for measuring sustainability, and for collective actions to drive innovations in products and manufacturing that will benefit the entire apparel industry and consumers, the group said at the time.
Members were reacting to confusion within and outside the industry on how to assess and compare competing standards and databases developed by individual companies and organizations.
The coalition stressed the need for joint action because the environmental challenges facing individual companies are systemic and can’t be solved alone. Working together will accelerate the adoption of effective sustainability measures and reduce cost for individual companies, it said.
The market-based approach is intended to create pressure on companies to adhere to common practices by rating them against approved benchmarks that are visible to competitors, suppliers, buyers, customers and, eventually, consumers.
The Sustainable Apparel Coalition’s first major project is to develop an index to measure and evaluate industry members’ environmental impact in a variety of areas, including water use and quality, energy consumption and carbon emissions, textile recycling, supply chain operation, chemical content and discharges, and workplace quality.
Participants will be expected to share primary data in all categories, and request their suppliers do so as well. The data will be scored by an automated algorithm, with results verified by an independent third party. They also commit toward meeting the group’s minimum criteria within their supply chains and share information on best practices.
The toolkit, which will include criteria for selecting freight carriers, draws the best parts of the Outdoor Industry Association’s Eco Index and two systems for measuring environmental performance developed by Nike.
The initial version of the apparel index will evaluate subjective, written submissions about a product’s environmental and social impact, such as whether a company’s facilities have an environmental management system.
One section, for example, collects responses on the various attributes of packaging components, such as the types of ink, coatings, adhesives, bleach process, percent of post-consumer recycled content that is third-party verified, percent of virgin content, and the name of the packaging facility.
The second version will collect quantifiable data, such as the energy use per kilogram for a finished product. The raw data is intended to provide a more accurate picture of a company’s practices.
Version 1 pilot testing by members and their suppliers in late 2011 was completed at the end of January, according to the Website. An expanded index to include footwear criteria will be added in 2012, it said.
Greenway Miles’ way
Greenway Miles in Atlanta is an organization that provides carbon emission audits of supply chains in response to growing shipper interest in reducing the environmental impact of their freight moves and doing business with more energy efficient logistics providers.
It is a collaborative venture between CostDown Consulting and Carbon Clear, an international provider of carbon management services. CostDown Consulting, founded by trucking industry veteran Joe White, helps motor carriers manage the SmartWay Partnership Annual Fleet Model requirements and provides other training and recommendations on how to reduce operating costs.
DHX-Dependable Hawaiian Express announced a few weeks ago that it’s now measuring the carbon emissions of its trucking fleet as well as at each of its facilities on the U.S. mainland, Hawaii and Guam.
As a Greenway Miles-certified carrier, the freight forwarder can report carbon emissions on a per-mile basis and provide customers with carbon neutral shipping options. The program also enables DHX, part of the Dependable Cos. Group, to measure its own progress in lowering carbon emissions from an initial baseline.
Greenway Miles says its carbon audits comply with the strict standards of the Greenhouse Gas Protocol, a widely used international accounting tool for quantifying and managing greenhouse gas emissions.
Participating carriers receive audits for fleet and facility emissions. Results for the two audits are added together and divided by a carrier’s most recent full-year total miles, or total ton miles in the case of a less-than-truckload carrier, to calculate total grams of carbon dioxide per mile. Greenway Miles uses the figure to determine a premium rate for shippers who are willing to pay extra to offset their carbon emissions with investments in wind and solar power, reforestation or other projects that serve to eliminate or reduce the generation of carbon. Each carbon offset neutralizes 1 metric ton, or 1 million grams, of carbon emissions.
The typical trucking company averages 1,500 to 2,500 grams per mile, so each carbon offset neutralizes between 400 to 600 miles of driving, according to Greenway Miles.
Carriers can use the information from Greenway Miles to bid for business on a carbon neutral basis, Greenway Miles says.