How to set up a green transport program with your carriers: interview with Deverl Maserang
Internal sustainability programs will only get you so far, says Deverl Maserang of Chiquita Brands. But bring your carriers into the effort, and you stand to make noteworthy gains.
Susan Lacefield has been working for supply chain publications since 1999. Before joining DC VELOCITY, she was an associate editor for Supply Chain Management Review and wrote for Logistics Management magazine. She holds a master's degree in English.
there's one thing that Deverl Maserang believes passionately, it's this: Distribution and supply chain management is all about relationships. If you're looking to improve performance in your distribution network, says Maserang, who is vice president of North America product supply and logistics for Chiquita Brands, you're not going to get very far on your own. For truly meaningful results, you have to work collaboratively with your carrier partners.
when the fresh fruit and vegetable company launched a fuel efficiency program in 2007, it was a given that Maserang and his team would enlist their carriers' help. At its carrier conference that year, Chiquita brought in industry experts to talk about today's eco imperatives as well as techniques for cutting an operation's carbon footprint. The company also urged its carriers to sign on with the U.S. Environmental Protection Agency's (EPA) SmartWay Transport Program, a collaborative initiative between government and the freight sector to boost energy efficiency and reduce greenhouse gas emissions. In order to become a certified partner in the program, a carrier must agree to reduce emissions by a certain percentage each year.
The results have been impressive. Under Maserang's direction, Chiquita has cut CO2 emissions by 44 percent in its North American transportation/distribution network in just three years. At the same time, it has boosted fuel efficiency by 9 percent and reduced food miles (the distance food is transported from the place where it's grown to the point of consumption) by 8.3 percent.
Maserang, who previously held supply chain management positions at the information technology firm Freedom Pay and at Pepsi Bottling Group, joined Chiquita in 2003. He recently spoke with DC Velocity associate managing editor Susan Lacefield about the techniques Chiquita used to reduce its North American supply chain's carbon footprint.
Q: What led Chiquita to start looking at ways to boost fuel efficiency and sustainability in its transportation operations?
A: For decades now, Chiquita has looked for innovative ways to continue our efforts to be a good corporate citizen, especially regarding the environment. Even prior to the change in presidential administrations and the potential for a cap-and-trade policy, we were engaged in reducing our carbon footprint.
We also saw that fuel was not going to get any cheaper. If you remember back to the '06 to '08 time period, fuel was just going through the roof. We saw $4 dollar-plus diesel, almost $5 diesel. So we knew we were going in the right direction.
We're constantly looking for ways to drive efficiencies. That's partly because if you can drive efficiency, you can drive cost out, which is good for the customer and good for the carrier. But there's the sustainability side to consider as well. And that's more important because more people—at least from a consumer customer perspective—are focusing on food miles and on buying local. We just felt we needed to get as far ahead of that as possible to remain competitive in the market.
Q: How did Chiquita go about introducing its program to carriers? A: For the last 18 years, we've held annual carrier conferences, and we decided that would be the ideal opportunity to get the word out. So at our 2007 conference, we started encouraging carriers to participate in SmartWay.
Then, we set a goal of 100 percent SmartWay miles [freight miles logged by SmartWay-certified carriers] and using 100 percent SmartWay-certified carriers in the network. We also put out a challenge that year to push the network to work toward achieving 10 miles per gallon with the new engines that were coming out in 2010 [to meet the EPA's new stricter emission standards].
During the conference, we talked about some of the things that carriers should be doing. Obviously, you need to be thinking about single-wide tires [as opposed to using two thin tires]. We'd done our own internal application of single wides on about a thousand chassis that year, and we've seen a 0.3 to 0.5 mile-per-gallon differential. So we were trying do within our own network—our private fleet and dedicated operations—some of the same things we were asking all the common carriers to do.
We also installed cowlings, which are aerodynamic devices that you put on the roof of a truck, and freight wings, which go underneath the vehicle. We looked at some APU (auxiliary power unit) technology, which eliminates the need for drivers to keep their engines idling during long stops to provide heat, light, and power.
That's what we did at first. We measured ourselves so we'd have baseline numbers. Then, we started introducing small, incremental improvements. Each year since, we've gotten a little stronger.
Probably the most impressive thing we've done is change the way we compensate carriers for fuel. A couple years back, we decided the only way we were ever going to drive the right behavior was to take a different approach to fuel surcharges. Basically, we pulled all costs related to fuel out of the base transportation rate. We then created a new fuel surcharge table for the carrier that incorporates all of the fuel costs that were previously embedded in the base rate. Doing it this way provides full transparency to all costs related to fuel. Bottom line: You cannot impact effectively what you cannot measure.
Q: Was there any grumbling from the carriers? A: Oh, sure. Some didn't understand it or didn't want to change because they had been using the fuel surcharge to their advantage. I would always tell them, "You know, guys, I'm with you when it comes to competing in other areas of the business. But when it comes to fuel, I want all of us to be competing together to reduce fuel consumption levels or to achieve the highest miles per gallon. Now's the time for all of us as an industry to look at fuel because we've got to figure out how to use as little of it as possible."
Q: What else have you done in the past year? A: We've outfitted vehicles in both our private and dedicated fleets with a simple device called an "Eco-flap." Instead of the traditional mud flap you see on tractors and trailers, the Eco-flap features an aerodynamic design that allows for optimal airflow through the flap but still protects the cars behind from rocks and such. You get a pretty interesting increase in fuel efficiency just from reducing rolling resistance and reducing drag in terms of the air that's being stopped by the truck, the tractor, the wheels, and the flaps.
We did two other major things this past year as well. First, we upgraded all of our reefer units and the gensets on our chassis. The genset is the unit that generates the electricity to power the reefer unit. That alone has saved us a tremendous amount of diesel.
Second, we installed more plug-ins for electrical reefer units. Normally, when you're hooked up to a truck, the refrigerated trailer runs off diesel. So we collaborated with a couple of our carriers on the West Coast, and we put electrical plug-ins at our dock doors. Then, we converted some of the fleet to get off of genset fuel and run those reefers on the electrical grid. So they plug into our facility when they're there, and that has had a dramatic impact as well. Taken together, these steps have yielded substantial results.
Q: What was the carriers' response to all of this? Were they willing to partner with you on these efforts? A: People ask me that question a lot. We've had an incredible response from our carrier community. I think it's because of the way we manage our carriers. We're not in this for the short run. We've always taken a long-term view. We don't expect that they are getting disproportionately wealthy, nor are we getting disproportionately advantaged.
As an example, when we got into 2009, we voluntarily elected to hold our rates intact through the balance of the year, because we knew that our carriers were having problems. Everyone else was going out to bid constantly. The carriers were seeing more bids in the market than they had ever seen. But we take a long-term view with our carriers.
That long-term view has enabled us to gain their cooperation because they're more willing to listen to us and try to make things happen. We are constantly putting ideas in front of them, and we listen to them when they have a great idea. It's a nice give and take in terms of trying to push the network to a new level.
Q: What kinds of results have you seen from your sustainability program? A: In our baseline year of 2007, 21 percent of our carriers were SmartWay-certified. We're now up to 88 percent. And in 2007, 75 percent of our miles were SmartWay miles. Now, that number is north of 95 percent.
Also, from 2007 to 2010, we reduced our CO2 emissions by 44 percent in our North America network. Plus, between 2009 and 2010, we improved our fuel efficiency by 9 percent. In addition to the fuel savings, we were able to reduce the total number of trucks. As a result, we consumed 17 percent fewer gallons of fuel in 2010 than we did in 2009. And we reduced our food miles by 8.3 percent.
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Economic activity in the logistics industry continued its expansion streak in October, growing for the 11th straight month and reaching its highest level in two years, according to the most recent Logistics Managers’ Index report (LMI), released this week.
The LMI registered 58.9, up from 58.6 in September, and continued a run of moderate growth that began late in 2023. The LMI is a monthly measure of business activity across warehousing and transportation markets. A reading above 50 indicates expansion, and a reading below 50 indicates contraction.
October’s reading showed the fastest rate of expansion in the overall index since September of 2022, when the index hit 61.4. The results show that the industry is continuing its steady recovery from the volatility and sluggish freight market conditions that plagued the sector just after the Covid-19 pandemic, according to the LMI researchers.
“The big takeaway is that we’re continuing the slow, steady recovery,” said LMI researcher Zac Rogers, associate professor of supply chain management at Colorado State University. “I think, ultimately, it’s better to have the slow and steady recovery because it is more sustainable.”
All eight of the LMI’s indices grew during the month, with the Transportation Prices index showing the most growth, at nearly 6 points higher than September, reflecting increased activity across transportation markets. Transportation capacity expanded slightly during the month, remaining just above the 50-point threshold. Rogers said more capacity will enter the market if prices continue to rise, citing idle capacity across the market due to overbuilding during the pandemic years.
“Normally we don’t have this much slack in the market,” he said. “We overbuilt in 2021, so there’s more slack available to soak up this additional demand.”
The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."