Supply chain

 
 

Managing carbon with logistics suppliers

Our delivery partner — Neway Transport.

Direction

Create cost and carbon efficiencies in our logistics supply chain while delivering on customer expectations.

10/11 objectives

How did we do?

Reduce carbon emissions from logistics by 10% on 09/10 levels.

  • Collaboration was improved between sales forecasting and ordering leading to a 13% reduction in total emissions.

Implement sales forecasting and ordering improvements to reduce additional unforeseen costs and carbon.

Continue improvement of routing efficiency for equipment deliveries.

  • We used our transport management system to create cost and carbon efficiencies in equipment routing.

Complete the implementation of the environmental intelligence system and establish regular reporting and review of scope 3 carbon emissions.

  • Progress cascading the national environmental intelligence system to encompass logistics was delayed as we focused on improving measurement methodology and data capture.

Reduce paper and supplies deliveries from twice to once daily in Victoria.

  • Reduction of paper and supplies deliveries from twice to once daily in Victoria, which now completes this exercise nationally.

11/12 objectives

  • Complete implementation of the environmental intelligence system for logistics.
  • Supply Chain Operations will review our national footprint, storage and transport requirements.
  • Pursue efficiency through warehouse space utilisation project and container optimisation, and extend slip sheeting for paper supplies to Brisbane, Adelaide and Perth.
  • Reduce airfreight for our imports and domestic distribution where possible.
  • Re-engineer asset recovery process for equipment to decrease the storage of used equipment.

Improvements to our measurement methodology

In 10/11 we formalised a rationale for establishing the boundary of our scope 3 carbon emissions from logistics suppliers and we also undertook the following initiatives to improve the quality of carbon data:

  • We revised our emission factors to improve the accuracy of calculations for imports, domestic movements and exports.
  • We developed a methodology for estimating carbon emissions from domestic logistics suppliers and built a database to record product weights, distances travelled and fuel type.
  • We improved the accuracy of our calculations by using the actual weights supplied by freight companies for domestic air movements and all imports.

International logistics

In 10/11 the volume of our total imports increased by approximately 19 percent. Nonetheless we have seen a 13 percent reduction in total emissions from our logistics suppliers. This is largely due to a 22 percent reduction in air freight imports. The reduction in the use of air freight (which is generally used to bring in unforeseen stock needs) was a result of improved sales forecasting, thanks to increased communication between sales, marketing and purchasing teams. Additionally, our sea freight forwarders have started using “slow steaming” vessels that reduce the carbon intensity of sea trips. Unfortunately we expect 11/12 air freight emissions to increase due to interruptions in our supply chain caused by the Japanese earthquake disaster.

Domestic logistics

In 10/11 the reporting of our inland surface and air distribution emissions improved significantly. Previously, domestic surface and air distribution figures were not fully recorded, so it is not possible to accurately compare last year’s data against this year’s. It’s likely that we have understated the carbon footprint of domestic logistics in previous years.

Initiatives to reduce domestic emissions included:

  • Continued use and refinement of the transport management system which improves supplier invoicing, and lowers costs and carbon by optimising routing for supplies to non-metro customers.
  • Continued roll out nationally of the weekly delivery system to service centres on clients’ sites.
  • The implementation of slip sheeting in Sydney and Melbourne, which reduces space and number of containers used to freight our paper.
  • Continued improvement of routing efficiency for equipment deliveries. Working with our courier company the equipment deliveries are now using consolidated delivery routings for non-metro areas. Agreement was obtained from the various stakeholders for delivery on specific days. Although this has now been successfully rolled out across the country, it is still manually driven.
  • A review of emissions by our equipment delivery courier, which resulted in reduction initiatives such as the use of more efficient trucks. Courier contracts now include the clause: ‘it is the responsibility of the Supplier to ensure that vehicles are kept in excellent condition and where possible to investigate the use of less carbon emission transport.’

In 11/12 we will focus on continuing to improve the quality of our carbon emissions data. This will be supported by the implementation of the Environmental Intelligence System for logistics information.

Logistics total tonnes CO²-e