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.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
The “series B” funding round was financed by an unnamed “strategic customer” as well as Teradyne Robotics Ventures, Toyota Ventures, Ranpak, Third Kind Venture Capital, One Madison Group, Hyperplane, Catapult Ventures, and others.
The fresh backing comes as Massachusetts-based Pickle reported a spate of third quarter orders, saying that six customers placed orders for over 30 production robots to deploy in the first half of 2025. The new orders include pilot conversions, existing customer expansions, and new customer adoption.
“Pickle is hitting its strides delivering innovation, development, commercial traction, and customer satisfaction. The company is building groundbreaking technology while executing on essential recurring parts of a successful business like field service and manufacturing management,” Omar Asali, Pickle board member and CEO of investor Ranpak, said in a release.
According to Pickle, its truck-unloading robot applies “Physical AI” technology to one of the most labor-intensive, physically demanding, and highest turnover work areas in logistics operations. The platform combines a powerful vision system with generative AI foundation models trained on millions of data points from real logistics and warehouse operations that enable Pickle’s robotic hardware platform to perform physical work at human-scale or better, the company says.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."