Going Green Saves Green Environmental Commitment at FedEx Larry Adkins Arkansas Trucking Association Maintenance and Technology Council October 14, 2008
FedEx LTL Companies FedEx Freight is a leading U.S. provider of next- and second-day regional, less-than-truckload (LTL) services FedEx National LTL serves the long-haul LTL sector throughout North America. The long-haul sector is typically defined as LTL pick-up and delivery service completed in three or more days FedEx Freight Canada provides a seamless shipping solution in and out of Canada in addition to all-points coverage throughout the country with fast transit times and reliability customers expect from FedEx
Global Supply Chain The challenging dynamics of supply chain management • Fast-cycle logistics • Just-in-time inventory • Tight capacity and congestion at world ports • Short supply of ocean vessels • Skyrocketing fuel prices • Railway and trucking capacity issues (vehicles /qualified drivers) • Customs clearance • International security regulations • Threat of terrorism
Global Supply Chain How do you thrive in this changing environment? By taking a sustainability-based approach to problem solving and change management.
Sustainability What is sustainability? Sustainability is meeting the economic, environmental and social needs of the present without compromising the ability of future generations to meet their own needs. Whose needs must be met? • Customers • Employees • Shareholders • Communities
Sustainability A Long-Term Environmental Commitment • FedEx recognizes that effective environmental management is one of its most important corporate priorities. • FedEx is committed to the use of cost effective innovations and technologies to minimize atmospheric emissions from its operations and services. • FedEx strives for efficient use of natural resources to minimize waste generation through efforts that include recycling and pollution reduction.
Equipment Supporting GHG Reduction • Utilize two Hybrid Class 7 Kenworth trucks in California • EPA SmartWay Transport Partner since 2004
Equipment Automatic Air Inflation System for Trailing Equipment • Uses compressed air from the trailer to inflate any tire that falls below its appropriate pressure • Every 10 PSI of under-inflation will result in a 1% reduction in MPG
Equipment Wide-Base Tires • Used in place of two standard tires. • Improves roll resistance • 0.2 MPG improvement per axle • 3x life of standard tires with same cost (in dolly application) • OR and FL prohibit use on triples, complicating fleet management.
Equipment Engine Idling • Burning fuel while not moving decreases fuel economy • Limit idle time through use of idle management system that decreases engine idle times below 3 minutes • Engine idling policy limits length of time power units may idle while parked
Equipment Driver Education on Fuel Economy • Implemented education for drivers on attaining maximum fuel economy • The driver impacts fuel economy by approximately 30% through speed, acceleration, shifting, and idle management
Equipment Parasitic Drag Reduction • Assembling multi-vendor research partnership to determine how to remove load on engine due to parasitic devices (e.g. alternator, air conditioning, water pump, etc.)
Equipment Hydrogen Fuel Cell Forklifts • Extensively tested zero-emission hydrogen-powered forklifts. • Excellent performance, however ROI unsatisfactory due to cost of fuel cell.
Facilities Solar Power • Completed installation of solar panels at two California facilities • Systems will provide up to 54% of facility power needs using renewable sun power • Reduce CO2 emissions by 610 metric tons per year with positive NPV
Facilities Lighting Retrofits – Interior • Converted dozens of facilities from Metal Halide to T5 and T8 fluorescent, reducing lighting-related energy consumption by up to 65% • Improved visibility and safety in the working environment with payback < 2 years
Facilities Lighting Retrofits – Load Lighting • Worked with lighting manufacturer on custom LED load light solution that reduces energy by 92%. Over 4,000 fixtures installed or scheduled. • Continued program of lighting upgrades at 19 additional centers with $1.3 million capital investment. • Maintenance and energy savings create payback < 2 years.
Facilities Lighting Retrofits – Exterior • Implemented pilot program to replace standard site lighting with more efficient pulse-start metal halide lighting • Improves site visibility and safety and reduces energy usage up to 20% • Also testing LED area lighting
Facilities Utility Management • Engaged third-party provider to track electricity and gas usage across all facilities • Essential for benchmarking facility performance and measuring impact of facility upgrades
Communication Employee Engagement • Created “Energy Watch” program to increase awareness and engage employees in conservation efforts • Employees have changed 10,000+ (to date) incandescent bulbs to CFLs