To build this report we gathered insights from over 200 companies to find out how they are approaching sustainability. Companies such as Teneris, The Greenheck Group, and APL Logistics face a multitude of sustainability risks and opportunities in their supply chains. This report will highlight the viewpoints of these companies, along with others, about how they and their transportations departments are structuring their approach to supply chain sustainability. 

The vast majority of companies understand that improving sustainability in the supply chain is a vital task. Almost 70% of the companies we surveyed said that sustainability was important or very important to their business. There was, however, less cohesion around how to define and manage sustainability. We outline and compare the different approaches to managing sustainability risk and offer insights into how best to get started or continue progressing. 

This report identifies the biggest levers that transportation companies can use to have a positive impact and increase their sustainability. For some companies, this includes reductions in greenhouse gas emission through the reduction of empty miles or other efficiency improvements. For others, implementing policies that improve carrier safety and diversity, or increase driver quality of life, will have a lasting impact upon their sustainability performance and reputation.

Download this State of Sustainability in Transportation report to see how businesses are prioritizing sustainability in their supply chain.

Sustainability at Convoy

We are focused on reducing the billions of waste in trucking and supporting the communities where we live and work. Learn more about Convoy’s commitment to sustainability.

The post The State of Sustainability in Transportation: Managing sustainable supply chain opportunities and risks appeared first on Convoy.

Survey highlights include key trends in trucking and new data insights, outlined below. Download the Sustainability in Trucking Snapshot Report to see the full analysis.

Carrier perspective on empty miles and climate change

Reducing empty miles is still a top priority for carriers

Inefficient truck routing and loading and unloading practices contribute to wasteful fuel consumption. Convoy research shows that 35% of truck miles may be empty miles. In this survey, the regional distance (100–400 miles) represents the biggest share of loads for both the owner operator and the dispatcher and driver groups. It is also this distance that drivers drive empty the most. A carrier that optimizes its freight logistics can save fuel, time and improve productivity, generating fuel cost savings and additional revenue. Trimming just 1% of empty miles from one long-haul truck can save over 100 gallons of fuel.

In this survey, 69% of respondents indicated that empty miles are very important to their business. Furthermore, compared to the response we collected in our previous sustainability in trucking survey of August 2021, a higher percentage of carriers believe reducing empty miles is even more important today. When breaking down the importance of empty miles by role, 63% of dispatchers believe that reducing empty miles is very important, a 5% increase from the previous survey. Similarly, 69% of dispatch drivers believe that reducing empty miles is very important, a 3% increase from the last survey.

Carriers feel increasing pressure to reduce carbon emissions

In our 2021 survey, 35% of respondents reported feeling pressure to reduce carbon emissions. In our 2022 survey, this number has increased to 38%. While previously the top cited reason for reducing carbon emissions was awareness of the environmental impact of carbon emissions, more recently respondents pointed to Government Regulation as the major reason for feeling pressure to reduce carbon emissions.

Views of the impact of climate change on trucking differ starkly by age group

Climate change is impacting trucking. About 61% of respondents said that climate change was an issue of some or a great deal of importance. The age of the respondent made a difference on their view of climate change. The youngest age cohort (aged 21 to 24) showed more concern about climate change, with 43% of respondents saying it was a great deal and 43% of respondents saying it was somewhat of an issue. Only 14% of individuals aged 21 to 24 said that climate change was not at all an issue. By contrast, the oldest cohort (aged 56 and over) indicated that almost one in four thought climate change was not an issue at all and another 15% said they thought climate change was not too much of an issue.

Carrier purchase considerations

Carriers heavily factor fuel economy in their purchase decisions

When considering their next truck purchase, 83% of respondents rated fuel economy as very important.

When examining how important fuel economy is in relation to the respondent’s planned timing for buying a new truck, the survey data suggests that fuel economy becomes more important the sooner the respondent plans to buy a truck. For respondents who planned on buying a truck within the next year, 86% said fuel economy was very important and 10% said it was somewhat important. In contrast, for respondents who planned on buying a new truck more than 3 years from now, only 77% said fuel economy was very important and 14% said fuel economy was somewhat important.

Additionally, respondents believe that higher Class 8 fuel economy standards now will significantly increase operating costs.

The carrier interest, or lack thereof, in electric trucks

When looking at the desire to drive an electric truck by how many years the respondent had been in the business, there’s a clear trend that the longer an individual has been in the business, the less likely they are to want to drive an electric/hydrogen truck. 

In looking at what electric/hydrogen truck respondents are most excited to drive, the Freightliner eCascadia comes out on top at 23%. The eCascadia is followed by Tesla at 18%, and Volvo at 18%. Rounding out the other brands were Kenworth at 12%, Peterbilt at 11%, Nikola at 3%, and Daimler Trucks at 1%. 

Notable respondent demographics

Gen X dominates the trucking industry

An aging fleet of drivers is one of the main reasons for driver shortages. The Bureau of Labor Statistics estimates that the average age of a commercial truck driver in the US is 55 years old. In our survey, 45% of survey respondents were over 45 years old, with most respondents between 45 to 55 years old.

Gender differences vary based on carrier roles

Compared to the overall survey breakdown by gender, with 17% of respondents female and 82% male, there are significant gender differences when examining role type. The percentage of female respondents increases to 60% for the dispatcher role, decreases to 7% for the role of dispatcher & driver, and is lowest at 6% for owner operators.

Download the Sustainability in Trucking Snapshot Report to see the full data for sustainability trends in trucking.

Sustainability at Convoy

We are focused on reducing the billions of waste in trucking and improving the lives of truck drivers. Learn more about Convoy’s commitment to supply chain sustainability.

The post Sustainability in Trucking Snapshot Report: March 2022 appeared first on Convoy.

The silver rating places Convoy in the top 25% of all the companies that EcoVadis evaluates. The award demonstrates the awareness and respect both companies have for sustainability, business ethics, the environment, human rights and sustainable procurement. 

Backed by a powerful technology platform and its actionable scorecards, EcoVadis provides benchmarks, insights and a guided improvement journey for environmental, social, and ethical practices.

The sustainable choice for our customers

As the most efficient digital network, serving shippers of all sizes, Convoy has a great responsibility for society and the environment. This is why Convoy has anchored sustainability in its core business strategy.

Convoy’s technology is already making progress in reducing carbon emissions by enhancing the ability to connect shipments more effectively. Convoy’s automated reload program reduces empty miles from the industry standard of 35% to 19% by bundling shipments into a single job for a driver. If the industry as a whole is able to achieve the same efficiency improvements that Convoy has seen on our bundled shipments, it would reduce CO2 emissions by 40 million metric tons every year.

United Nations Global Compact

Convoy is also a signatory to the United Nations Global Compact (UNGC). The UN Global Compact has a vision of a sustainable economy for the benefit of all people, communities and markets, today and in the future. It serves as a call to companies to align strategies and operations with 10 universal principles in the areas of human rights, labour standards, the environment and anti-corruption as well as the 17 Sustainable Development Goals (SDG). The SDG are at the heart of the 2030 Agenda for Sustainable Development, which was adopted by all member states of the United Nations (UN) in 2015.

The future

Our sustainability progress is merely a step along the way of our long term mission of “transporting the world with endless capacity and zero waste.” We are mapping out a future pathway to support zero waste trucking and are working to embed a culture of assuming responsibility towards the environment and people at all levels of the company.

The post Convoy Awarded with 2021 EcoVadis Silver Rating appeared first on Convoy.

Danny Gomez, Managing Director of Financial and Emerging Markets at FreightWaves and host of Net-Zero Carbon, recently sat down with Dennis Raffa, Program Lead of the Zero Waste World Initiative in North America for CHEP, to discuss how a pallet company founded in Australia during World War II is actively helping to create a “Zero Waste World.” 

Danny and Dennis discussed what CHEP does as it relates to the supply chain, challenges CHEP faces with regard to the supply chain both pre- and post-COVID, and how CHEP and Convoy are partnering to eradicate empty miles and ultimately create a Zero Waste World.

THE CHEP BUSINESS MODEL: CHEP helps customers move the most products and the most platforms across the globe. We are in over 60 countries working with top manufacturers and retailers where we have cooling platforms and regenerative platforms. CHEP was started back in World War II in Australia when the US Army had left pallet platforms, and a gentleman by the name of Walter Brambles had the bright idea of reusing these pallets in the shipping industry. Today CHEP is the global leader in re-leased pallet containers of all sizes. CHEP goes out and issues pallets to raw material suppliers and manufacturers who put products onto the containers and CHEP sends these pallets out to customers who then produce onto them. They will then send them downstream to retailers at the consumer level (if you have you ever been in a Costco or Walmart that blue pallet is a CHEP pallet) and what happens is once the pallet becomes empty of the finished goods, CHEP then collects the pallets in partnership with its retailers and we bring it back to CHEP service centers, inspect them, and then re-issue them again, so we continue to keep those pallets and containers flowing through the supply chain to provide that regenerative process instead of just a one-way asset where at the end of life or at the end of the supply chain it could go to landfill. (3:26)

HOW CHEP ADDRESSES CHOKE POINTS IN THE CURRENT SUPPLY CHAIN: From a reliability perspective, we’ve had our challenges, but we’ve worked with our customers to make sure we have the right products in the right areas to support their demand. We are operating a pooling model, so we’re constantly moving our pallets to different regions. Before the pandemic, we had seasonality issues, and we still do a little bit, but we also have the expertise to get the assets where we need to at specific points in time. If you think about produce season and heavy usage of pallets in the Texas market (south of San Antonio and Houston) and the California Central Valley region, as well as in southern Florida the produce spike is in the summertime where you’re harvesting and into the fall where you’re harvesting, and customers need to get these products across the US. So we’ve developed programs with our customers to get those assets to those areas to supply demand for our customers. We saw the pandemic coming and we’ve seen challenges on the retail side where they’re building inventory sitting on pallets longer and we’ve worked with them to keep those pallets moving in the supply chain. We’ve also brought inventory in so that we had enough inventory to supply the needs for manufacturing of these pallets in our supply chain. I would be lying if I said there weren’t challenges, but we’ve done our best communicating and being transparent with our customers and carriers and being up front with them to help better flow the product through the supply chain. (5:17)

WHAT PROMPTED CHEP TO LAUNCH ITS ZERO WASTE INITIATIVE: The program was launched about two years ago and CHEP has always been doing sustainability and zero waste, but the inflection point for us was what’s next and how are we going to take it to the next level? Two years ago when we launched this program we saw a need from our customers that waste was a problem in the supply chain and they wanted to do better or felt they weren’t doing enough, so we partnered with them to find different types of solutions in the supply chain. We sent a survey out to our customers and the top three things we constantly heard was packaging waste, transport waste, and overall process waste within the supply chain. This program focuses on those three pillars because that’s what the customers have told us is important to them in eliminating waste in their supply chain. As we all know, COVID brought light onto sustainability. There’s more focus on it. I read an article the other day where consumers are willing to pay a little bit more for a sustainable product. You know they’re willing to help the environment and do better. It’s all coming to light as people are starting to question what are you doing here from the consumer level, what are you doing to help the environment, what are you doing to do better and we had a head start two years ago, but COVID has really helped accelerate this program. (8:00)

HOW CHEP IS REDUCING PACKAGING WASTE: We’re teaming up with customers so when they look at reducing their packaging, how is it going to be impacted in the supply chain. When they reduce the plastic packaging or paper packaging that was more robust in the past, and they want to put less plastic in their products, what is that going to do to the product if a driver has to slam on his brakes and the unit load actually shifts in the trailer? It may create product damage so you have stretch wrap around it or you use dunnage (inflatable bags) to keep the product from shifting in the container. So we may be taking packaging out of the product itself but you’re adding additional packaging whether it be through the stretch wrapper, the dunnage, etc. We actually team up with our customers via our innovation center in Orlando where we can test the different types of packaging in the supply chain and see how it reacts in racking, how does it react to different climates, how does it react to vibration, etc., so before you make the packaging change and start shipping, you can see how it will function. The last thing we want is for these great packaging changes to happen and then it gets to the retailer and the load shifted, and there’s more product damaged and then now you have to take it back so you’re adding more transport, more packaging to redo everything, etc. so we look at that with our customers (11:28)

HOW CHEP IS REDUCING TRANSPORT WASTE: From a transport perspective with partners like Convoy, we actually look at where do we have dedicated lanes, where do we have short hauls, long halls, where are there empty lanes both within our supply chain and our customer supply chain where we can team up to fill those empty lanes and eradicate those empty miles. Where are those moves that don’t make sense that we can partner with — and not just with trucks — we are looking at how can we move our pallets into those high demand areas whether it be on barges, intermodal, how do we look at alternative transport that’s going unused or underutilized to capitalize on that? So we’ll team up with our customers and our carriers as well where we have these brainstorming session where we bring in the carrier, we bring in CHEP, and we bring in the customer and all three of us sit down to look to see what are the pain points with those empty miles and let’s do a network overlay and let’s see how we can fix that. (13:00)

HOW CHEP IS REDUCING PROCESS WASTE: From a process perspective, it is no surprise to anyone that labor is at a premium these days, so from a process perspective, it kind of all comes together with transporting packaging waste into the process piece. Customers are changing their packaging, so if there’s that product damaged at the retailer and then they have to resend it to a co-packer to have it reworked, what can we do there to eliminate that extra step in the supply chain from the process perspective so we’re not adding that additional labor. (13:50) 

HOW CONVOY AND CHEP PARTNER: Convoy does a good job of leveraging their technology and they are transparent too as a partner and they have some tools like their automated reload process which has been very valuable — especially with COVID — that’s been great from a transparency perspective. Their automated reload process has saved time in the supply chain and has eliminated that waste so we are partnering with them and looking at those empty lanes that I mentioned. Convoy may be running into a customer location, but then that customer is shipping product out and Convoy doesn’t necessarily have the visibility that CHEP does, so in those ideation sessions we bring that data together leveraging Convoy’s technology, CHEP’s technology, and then the customer’s authorization to look at those links. We see if Convoy is going in with a product and then turning around leaving empty. How do we team them up with our customers to haul our goods out and then the customer can use their own fleet or another carrier to move other goods, but then we get that golden triangle. That’s been something that we’ve developed with our carrier partners like Convoy in the supply chain, but it comes back to what they bring from a technology perspective. They’ve also worked with us with some of their products and tools where we’ve actually gotten driver feedback. You’ve mentioned some of the bottlenecks where we didn’t have visibility. We had the driver feedback at the location level where there were long wait times and it helped us raise awareness to a blindspot where we didn’t realize there were long driver wait times at certain service centers, so we were able to quickly identify that with Convoy’s partnership and the driver feedback through their process to go address that immediately and figure out what is the root cause, what is the problem, and how do we fix that to get these drivers moving quickly so that they want to go to a CHEP service center. It helped alleviate a lot of those blind spots so it has proven to be a great partnership with Convoy. (13:50) 

HOW CHEP COMMUNICATES ITS PROGRESS ON SUSTAINABILITY AND ZERO WASTE: My vision for this program is to be a conduit in the supply chain. We do a couple of things. We have a life cycle analysis that was created by an independent third party in conjunction with CHEP that looks at the CHEP pallet itself so it’s a life cycle analysis or when our customers use the CHEP pallet what is the benefit that brings? We have a whole solutions team that will go in and do these ideation sessions — someone for transport, someone from supply chain, for packaging on our side, as well as myself, but I come in and tie it all together with those benefits where we measure if it’s a transport piece where Convoy goes in, I mentioned filling those empty lanes so what does that equate to in carbon emission reductions? We actually have a calculator that looks at those carbon emission reductions. Now some of our customers like to use our life cycle analysis, many customers have their own, so we’re willing to work with them to dig into the data behind what ours looks like, what yours looks like, etc. LCAs are becoming very popular these days within the sustainability realm so everyone has one but it’s a preference with how do you use it, what do you want to use it for, so it’s also being transparent and we can get down to the granular level and look at what we are saving on emissions, what are we saving on labor waste, and then how do we get that out there? I want to get the word out that CHEP has pioneered this for a long time, but more and more customers are coming to us for a solution. They ask who can you get me in contact with to solve these issues, how can we partner with Convoy, are other characters out there? What I’ve seen that’s been a little bit unique since COVID is that from a competitor perspective, previously people didn’t want to share ideas with someone else because there’s so much competition, but when COVID hit and everyone was struggling to get goods to a customer, I saw competitors working with each other to deliver goods to the consumer. We can’t do this alone, you have to do it together, and that’s my huge message that I cannot talk about enough. What we need to do is leverage our powers within the supply chain to drive this change and get the word out and quantify it.

ADVICE ON WHERE AND HOW TO START ON A SUSTAINABILITY JOURNEY: There are plenty of networks out there, there’s a lot of data out there, and it can be overwhelming at times. Talk to people you know in your industry, talk to similar customers. CHEP is here to offer up consulting services as well. I work with some of our customers and we have a whole team that will work with our customers who are starting their journey and connect them with some of the folks out there. You can use your own life cycle analysis. I’ve seen it as simple as a spreadsheet that someone’s created because it is the first step of their journey, so they haven’t invested in some of these larger LCAs, but they’re trying to build it out. Lean on CHEP, lean on Convoy who has a team as well that focuses on sustainability. They’ve gone down this path before. I think that’s the one great thing coming from the commercial side of the business over to sustainability, it’s a partnership and everybody wants to help each other out because they want what’s best for the earth. I haven’t seen that in any other role before. Is it COVID? I don’t know, but it’s a change that I’ve seen coming in this role that everybody wants to partner to find out so there are plenty of resources out there. Take it one step at a time. You may stumble, you may get it wrong, but you know we’re here together. I have seen where people presented data and other people have pointed at that data and said, “well I would calculate it this way or I would look at it a different way have you tried this?” and they throw the ideas out there, so don’t be afraid to share your information with others and don’t be afraid to make those mistakes because you’re not going to get where you need to get without making those mistakes, but look at other people too for best practices. (22:40) 

The post How CHEP is Helping to Create a “Zero Waste World” appeared first on Convoy.

The value of reaching net-zero is manyfold. Companies that are able to develop sustainable business practices will have a competitive advantage over their counterparts as customers demand green alternatives. 

General Insulation, an insulation distributor that stocks and fabricates a wide variety of industrial, commercial and fire-stopping products for the construction market, shares this forward-thinking approach to sustainability. Ian Allison, General Insulation’s Transportation and Supply Chain Manager talked with Ashley (General Insulation’s Account Manager) and I about the value his company sees in reaching net-zero emissions sooner rather than later. 

Alex: Hey Ian, thank you for joining us! We have some questions prepared and are looking forward to learning about how General Insulation is thinking about sustainability and the initiatives your team is engaged with. 

To kick things off can you tell us about the responsibilities of your current role?

Ian: Sure thing. At General Insulation I am responsible for implementing new processes and developing or, in some cases, purchasing technology to create a more efficient transportation network. Ultimately, this provides cost avoidance throughout our supply chain and leads to a more reliable network for our manufacturers and distributors across the country. 

Alex: Awesome. Ian, throughout our conversations I have been impressed with your knowledge of General Insulation’s operations and the transportation space at large. Can you tell us about your career in supply chain and what you have seen as the biggest evolution in this sector over the years?

Ian: My career in supply chain began 15 years ago at North America’s largest 3pl – C.H. Robinson. While working as a Sales Executive for CHR, I had the opportunity to study, and help improve, a wide variety of supply chains. This experience gave me insight into how best practices from differing supply chains can be shared within an organization. This process increases overall productivity and leads to a culture of innovation within an organization. 

To answer the second part of your question, the largest transformation I’ve seen over the years is the widespread adoption of web-based technologies, starting with simple software products and evolving more recently into the interconnected IOT space of today. It’s pretty wild to think that not long ago shippers and carriers were exchanging documents via fax.

Alex: Speaking of innovation within organizations, I know you have a reputation for being an innovator. Can you tell us why you think innovation is important?

Ian: Well, I think it’s fairly well understood that if organizations don’t embrace change, the risk of disruption increases over time. Organizations and teams within them need to have the forethought to explore future outcomes. It is important to understand the tradeoffs associated with new technologies and digital strategies. In my experience with supply chains, this pursuit often is the gateway to cost and process improvements.

Alex: How has Convoy helped you to improve your supply chain and what cost or process improvements has General Insulation realized through our partnership?

Ian: GIC had a few carrier partners, but we were missing a way to easily measure the competitiveness of their rates. At our branches, employees had to email or call carriers for rates. It was an inefficient use of their time, and unreliable as well.  By partnering with Convoy we were able to easily introduce competition within our truckload supply chain. We could compare rates and get a high-level view. At the end of the day, we’re seeing cost-avoidance and process efficiencies—from digital rate requests, to rapid load tendering and BOL creation.

Alex: Ashley, is there anything you have worked with Ian and his team on that would be worth adding here?

Ashley: With the market volatility we’re seeing heading into this holiday season, shippers are having to rely on the spot market more than ever before. It can be challenging to get a truck and far too easy to overpay. General Insulation is a great example of a shipper that jumped in with all hands on deck (they have 20+ active users!), which is a true testament to how easy Convoy’s online platform is to use and implement for larger teams. 

Alex: Thanks for all the background information! Keeping in mind everything we’ve just learned, Ian, I’m curious to hear in your words how sustainability fits into General Insulation’s business model?

Ian: Well, being ethical is core to our mission at GIC—we’re ethical in every aspect of our business operations. Part of that means we embrace our role as stewards of the environment. When it comes to emerging trends and thinking long-term about our company strategy, running a net-zero supply chain makes a difference. Some of our customers have sustainability goals, and our adoption of sustainable practices has set us apart from competitors. More and more I think this is going to be a differentiator. 

Alex: Ian, in closing I’m curious to hear your perspective on what trend(s) you think all supply chain leaders should pay attention to this year? 

Ian: Blockchain has the ability to transform the transportation and supply chain industry through secure communication and transparency between partners—up and downstream. Gaps in data disappear and decisions concerning purchasing, logistics and customer management can be made holistically. Widespread adoption of blockchain in the supply chain space is probably years away, but organizations should begin to understand the steps needed to evolve to embrace that solution.

Alex: That wraps up all of our questions for today! Ian, I want to say a sincere thank you for taking the time to share your experience with us. 

The post General Insulation Moves to Reduce Supply Chain Carbon Emissions appeared first on Convoy.

The good news is that empty miles represent a tremendous opportunity to reduce emissions. The even better news is that these businesses can also increase efficiency through freight matching, while simultaneously gaining a cost advantage. 

During the recent ICC Climate Conference, I moderated a session entitled “Cut Costs and Reduce Emissions By Eliminating Empty Miles” and had the opportunity to speak with three transportation and sustainability leaders from some of the largest companies involved in consumer products, manufacturing, and food delivery: Bret Shepherd, Senior Director, Transportation Purchasing at Procter & Gamble, Brad Benbow, Business Growth Investments at Ardagh Group, and Rose Hartley, Sustainability at Imperfect Foods. 

Representing diverse industries which all share the same challenge of empty miles, this group provided some invaluable insight into their individual sustainability goals, how they identified and implemented both small and large actionable items to work toward sustainability in logistics and transportation, as well as recommendations which any company can implement to eradicate empty miles. Key takeaways follow below.

Bret Shepherd on Proctor and Gamble’s Sustainability Agenda: Proctor and Gamble’s sustainability actually falls into its broader citizenship agenda which has a goal to be a force for good and a force for growth across the entire enterprise. Everyone has a responsibility to be a good citizen across the different pillars, including environmental sustainability. Our goals specific to sustainability are to be net carbon neutral by the year 2040, which is quite aggressive for a company quite the scale of ours. Specific to transportation, our mantra is fewer, friendlier miles and we’re working really hard to do that.

Rose Hartley on Imperfect Foods’ Sustainability Agenda: Every team at Imperfect Foods has a role to play in eliminating food waste and helping us reach our net carbon 2030 commitment. Many of our team members joined Imperfect because of our mission and to achieve our 2030 commitment. 

Brad Benbow on Ardagh Group’s Sustainability Agenda: Our aim is to reduce any negative environmental impact while also remaining economically sustainable in social responsibility. We are a leading supplier in inherently sustainable packaging so this is at the core of who we are and what we want to do moving forward. 

What Sustainability Looks Like Across Ardagh Group: The thing about sustainability in our portfolio is it’s across every organization. It’s not only at the heart of our environmental strategies, which are reducing our CO2 emissions within our manufacturing and within our logistics footprint. It’s across the board. It’s quality, it’s health and safety, etc. We are broken out into areas including social and ethical, environmental and economical. And we focus on these in each category of our business and it’s important we collaborate across the organization within these. For example, we might work with a customer that wants to reduce the size and weight of their bottles. And, within that, we want to work with transportation to understand how we can get that lightweight bottle manufactured close to the customer. We’re incorporating multiple different areas within our business so we can collectively work together to not just reduce one area of the carbon footprint, but multiple areas to maximize our results.

What Sustainability Looks Like Across Imperfect Foods: Whether it’s our sourcing team that is purchasing food in danger of being wasted, our IT team creating an e-waste program, etc., literally every team is involved. When we think about transportation for our company, we are a grocery delivery company, so logistics is very much part of that. Whether it’s upstream from our vendors in our daily deliveries from our fulfillment centers to our line hauls, in our last mile deliveries to our customers, logistics is a huge portion of it and a huge challenge and opportunity for us. Logistics and transportation are generally the second biggest bucket of our carbon emissions right after our scope three emissions from the food production itself. We have to tackle transportation emissions as a company and then obviously as an industry. We have a commitment to switch to 100% electric vehicle delivery vans for our last mile delivery by the end of 2027 and we’re constantly looking for ways to make the rest of our transportation network more efficient both in house and via 3PL. 

How Sustainability Shows Up At Proctor and Gamble: We have a cultural move within P&G. It is a very good, strong culture which is moving toward a fail quickly, learn quickly, go try something else mentality. For something like sustainability, that has been a critical step change, because we have been more willing to go try stuff that really doesn’t have that great of a potential to win or to be successful. But if it is, it can then form something that is really big later. We have opened up that mentality across the culture and that has been a huge change for us. 

An Example Of A Successful Transportation Shift Toward Sustainability At Proctor and Gamble: Partnerships are required for sustainability everywhere, and there is no single big issue to solve, at least for transportation sustainability. We have to partner everywhere — with retailers, our carriers, internally with our brands, the people that are designing our products and our packaging, our plants and making sure that our vehicles are filled, every truck, every box filled, etc. Those are the types of things that we’re doing. In Europe, for example, we partnered with Car Four, one of the retailers there to do these mega trucks. We ended up providing closed loops for these very large trailers which enabled us to have 52 skids per shipment, which is a tremendous increase. So 16% emissions reduction is our estimate. That’s a huge example of where we’ve been able to partner in a different way, with an actual retailer, and they said, “Absolutely. This is super important for us. Let’s go figure out how to do this.” And we’ve executed it and it’s running quite well. 

An Example Of A Successful Transportation Shift Toward Sustainability At Ardagh Group: Ardagh Group really wanted to try to integrate how we could optimize one of our shipping lanes that was just massive. And we used a program with Convoy and partnered and tried to figure out how we could best optimize this. And essentially, it was a pool of drivers that we’re able to use and rotate between a few different facilities and keep them in what we would call a loop. This would reduce our empty miles, which we were able to do, and also from a social aspect, keep those drivers within that fold so they are then able to increase their revenue which was a great model Convoy put together for us. And this is still running today. This is something that not only reduced our empty miles, but, also from a social aspect, is making driver’s lives better, which is something that doesn’t get talked about a whole lot. It’s certainly core to not only the environmental, but the social aspect of sustainability that we’re all trying to drive forward.

An Example Of A Successful Transportation Shift Toward Sustainability At Imperfect Foods: We obviously have goals for the lanes that we’re running with full truck loads. But one other way that we can think about it is, you have your existing logistics network, how can you take advantage of that existing network, not add incremental miles, but increase your impact for customers? So, we thought about this for our last mile deliveries, and we built a packaging return program. We’re already doing last mile for all of our customers and we wanted to offer them a packaging return program for free for those items that we’re sending them every week that they didn’t order, but we need to send them. So, they’re gel packs and they’re silver insulation liner. So, we’ve been collecting those from our customers when we’re already at their door every week with the deliveries. But in the last year we’ve been able to collect and partner with our customer to either recycle or reuse over two million pounds of plastic. That’s like 8 Statues of Liberty. Sometimes we can think about how you can take your existing network and do more with it. 

The Biggest Challenge Imperfect Foods Is Facing Today In Supply Chain Sustainability: There are two challenges in particular that we’re running into and it’s just basically around availability of EV and also range. A lot of the routes that we’re running with our last mile, not to mention upstream or sort of from our hubs to our spokes, to our line hauls, they require more than the range that EVs have right now. Another challenge from our transportation team or others in the industry is the high cost of conversion from typical trucks to electric power trucks. It’s not always feasible for smaller owner operators. Cost, range, availability — we need a push in this area generally. 

The Biggest Challenge Ardagh Group Is Facing Today In Supply Chain Sustainability: The biggest challenge is economical. Ardagh is in this really unique environment where we are trying to condense our carrier partners and when you move to an EV, you reduce the range you can operate in. And it’s not initially going to lead to more revenue upfront. These power units that are amazing are going to hopefully change the landscape of how we move goods, but they’re more expensive upfront. These guys that are now making less revenue are having to increase the cost of their equipment and there’s a bit of an unknown on what the maintenance side is going to look like. Some folks believe in the long term it should reduce overall maintenance costs. However, it’s still really new. So, there is uncertainty in this area. It involves just continuing to convince these guys that, ‘Hey, this is the way forward and this is how we are going to make incremental steps in changing how we operate in North America.

The Biggest Challenge Proctor and Gamble Is Facing Today In Supply Chain Sustainability: There are so many different challenges across the board and if you solve one, you’re going to get a little bit of progress. You need to solve a lot of different ones at the same time in order for us to really get where we’re going. As we think about it, transportation is inefficient as an industry overall. There is a lot of down time, empty miles, and things like that so a lot of what we’re trying to do is actually work with our retail customers, work with our own plants, work with our mixing centers and minimize any down time. Being the shipper of choice for these carriers is all about keeping their drivers moving and keeping their assets moving. How can we most efficiently get in, pick it up, and get going? And same on the drop side. Having that commitment, that focus on continual improvement is one of the many things that we’re trying to do. 

How Proctor and Gamble Measures Progress In Achieving Sustainability Goals: We use the Global Logistics Emissions Counsel (GLEC framework) for measuring emissions efficiency. That’s our single measure for emissions goals. It’s a little bit hard because that’s on a regional basis. So, in order to see what individual projects are doing for us, we’ll then have some in process measures things like gallons of fuel consumed, number of total miles, percent inner mobile versus truckload. Those are the in-process measures that we use to give us indicators of where that single emissions efficiency for the region will go. 

How Ardagh Group Measures Progress In Achieving Sustainability Goals: On the logistics side, it’s pretty new and a little bit raw. We are just going year over year data. For example, we’re going to see gallons consumed and then also what percentage we’re moving inner mobile versus over the road because that is a big one. You can reduce quite a bit going inner mobile than you can OTR and typically the vendors you work with are going to show that on a tender they give you and show the percent of carbon emissions saved, which is just huge. As far as a whole, you can go on our website and see that in the past we’ve worked with CDEX, CDP, Eco Vallance — all the big-time guys that we just roll up into it. But that’s just as a whole sustainability group. But speaking primarily on logistics, we’re still really trying to figure that out and it’s just a matter of seeing what works and what doesn’t. 

How Imperfect Foods Measures Progress In Achieving Sustainability Goals: We have the commitment to electric vehicles over the next couple of years bringing those into our lease fleet and for upstream logistics. Goals around full truckloads that are very aggressive as well. I think in general we’re reporting on a wide range of metrics related to sustainability. We’re in the business of eliminating food waste so we’re reporting about pounds of produce and grocery items purchased that would otherwise be in danger of going to waste which includes reporting to us by the people we are buying them from. With our vendors, we measure and report our carbon footprint, waste streams, and basically all areas of our business that relate to sustainability monthly as well as fuller quarterly reports that go to our leadership and our board. The goal is really to present these metrics at the same clip we’re presenting financial metrics so they really get ingrained in our company and then we report them out annually in the sustainability and social impact report. It is important because if we are not focusing on those metrics, we’re not going to be able to get to our net zero carbon 2030 commitment over the next nine years. 

The “Ah-Ha” Moment As It Relates To Sustainability At Proctor and Gamble: It’s all about the consumers and when we started seeing consumers being much more conscious about sustainability, then of course retailers become more because that’s their window into us, or our window into them. So when consumers started wanting more, then retailers started to push and ask us for it. Lay on top of that, there is more government activity in terms of pushing for more of this. There were a variety of factors that have influenced us to say, “Wow, this business model…” and we’ve been doing this. Our first sustainability goal specific to emissions we announced in 2010. We’ve been at this a while and since then, we have had all of these different changes that have occurred which reinforced the fact that it is the business strategy that hunts for us. 

The “Ah-Ha” Moment As It Relates To Sustainability At Imperfect Foods: Imperfect Foods was founded six years ago with the belief that we can do well by doing good. And our business model can be a win, win, win. Sort of a win for the environment by reducing food waste, which is one of the leading causes of climate change. Win for our customers, because that’s what people want. And then a win for our business as well. These examples show up all the time and there is a little bit of a misconception that these things are not married, but there are so many ways in which sustainability and having a strong business go hand in hand. With our packaging return program, because we’re collecting back our gel packs, we’re sanitizing them locally, and repacking them. We are avoiding a lot of those cross-country freight costs that come from purchasing the gel packs originally. So, there are plenty of examples.

The “Ah-Ha” Moment As It Relates To Sustainability At Ardagh Group: It was when we really figured out in working with Convoy that this is something that could actually work. When we were in that feasibility study on Convey Go and that particular lane, we could see that this could be expanded to multiple different areas of our manufacturing sites. We were able to take a leap and say this program is not only good for us, it’s good for the carrier, and it’s good for the underlying drivers. Once we saw the impact which that made, we internally realized, okay, this is something that can be replicated, and it gave us the encouragement to start taking more steps. Trying different things and saying, ‘Hey, okay. This failed.’ That really gave us the encouragement to say, okay, we can go do this at pretty limited risk and just attack it so the change that is driven is much more impactful than if we just say, ‘Hey, this didn’t work. It’s not a time waster. It really matters.’ We go do it again and try it harder and try it more intelligently. 

The Social Impact Of Sustainability At Ardagh Group: To think about others and to think about how we are interacting with our drivers and the role that they play in our supply chain is important. We look at the way we can make life easier for these drivers and for the people loading the trucks and the employees who are staying up, tracking, and tracing deliveries. The whole realm of supply chain and how we can be socially responsible within it is huge. It is a focus of anything we can look at and take a chance on, if this is going to improve their lives, it’s certainly something we want to do. 

The Social Impact Of Sustainability At Proctor and Gamble: In June of 2020, our products were essential. They are cleaning products, hygiene products, etc. So, we were shipping like crazy and the demand was super high. It was critical for us to let these drivers know how appreciative we were. We did a “P&G Loves Truckers” campaign where we rented billboards and within 20 miles of each one of our ship sites which simply said ‘P&G Loves Truckers’. It got so much internal momentum that our chief design officer said, “I want to design these.” So, he designed them, and it was a really amazing thing that we were able to do and of course we had a little bit of water and a snack that we provided for the drivers during that time when we were running the “P&G Loves Truckers” campaign. Without truck drivers, our business stops. So, you can’t just be all about emissions if you also aren’t going to be about the person that is operating the vehicle. For Proctor and Gamble they are very integrated, and they will remain that way because we don’t see any other way to do it.

The Social Impact Of Sustainability At Imperfect Foods: Imperfect Foods doesn’t have trucking scale — we have a lot of our upstream logistics through 3PL, but for our last mile deliveries and our hub to spoke deliveries, the vast majority of those drivers are our own employees. They are full time benefited employees — equal members of the team with everyone else. The way you show appreciation to someone is by supporting them through great jobs and making them as much a part of the community as anyone else. In terms of impact generally at Imperfect, a lot of the work that we do is through food and food deliveries. We have 78 food bank and pantry partners across the country which allow us to also make sure we’re never wasting food. If there’s a product that’s not going to make it to the following week, we have a food bank partner who can get it out and get it to people immediately. We are really looking to make an impact for our own employees internally as well as for our neighbors in the markets we serve.

The Most Surprising Learning For Brad Benbow of Ardagh Group: I worked in advertising and strategy prior to getting in logistics. And as I got into it, I didn’t understand the magnitude of what emissions looked like within our supply chain and not even Ardagh specific, but globally and just how massive it was and little steps you can take to change that and have incremental change, to me was mind boggling. And to think about that on an exacerbated scale of, okay, now if we really focus on it what can we do and what kind of change can we drive? Having no prior experience, it just opened my mind to the possibilities of what we could do when we partner with really good people. 

The Most Surprising Learning For Bret Shepherd of Proctor and Gamble: Transportation is such a phenomenal industry to be in right now. It’s tight. Think about port congestion, rail congestion, drivers, you can’t get a tractor anymore because of supply issues on things. But the amount of innovation, the amount of investment that is occurring within the industry is so exciting because what will end up happening is the consumers are demanding it. The retailers want it. They want to make the consumers happy. We’re asking, we’re pushing, we’re investing. You’re going to see a breakthrough. From an excitement standpoint, all of the macroeconomic factors seem to be putting themselves in place to where you’re going to see some massive breakthrough in this area. It could be a couple years, it could be a couple of decades, but the biggest surprise is the level of investment and the amount of innovation in the industry right now. 

The Most Surprising Learning For Rose Hartley of Imperfect Foods: Coming into the role at Imperfect, I didn’t have any idea about the magnitude of food waste, but I think it’s something that I don’t want to become numb to. It’s no longer a surprise, but we do waste 35% of the food that we produce in this country while 1 in 7 people are hungry and it’s a top contributor to climate change. It was something I was learning several years ago when starting to join Imperfect and working in the agricultural industry prior, but it’s still going on. It’s reduced maybe 2% over the last two years, but it’s still such a challenge. I was also not so surprised that our emissions would be so high from transportation, but I am happily surprised that there are companies like Convoy which are really working to get creative and build dynamic lanes and driver networks to tackle this. 

Bret Shepherd of Proctor and Gamble’s One Piece Of Advice To Help Other Leaders In Sustainability Move Their Business Forward In Reducing Carbon Emissions: Think big, macro level, breakthrough crazy dreams. Plan very small. And what I mean by that is there is nothing like the power of quick wins. It builds momentum. There is a saying within P&G: How to eat an elephant? One bite at a time. Think big, plan small, quick wins are important.

Rose Hartley of Imperfect Foods’ One Piece Of Advice To Help Other Leaders In Sustainability Move Their Business Forward In Reducing Carbon Emissions: It’s hard to boil the ocean. There is a lot to care about. We kind of know where we all need to be heading. So, in that spirit, think about what your business is already doing. Think about the footprint your business already has and then try to drive more impact for your customers and for the environment without actually adding to that network and that footprint. For us, it looked like the packaging return program, but it’s going to look different at every business. 

Brad Benbow of Ardagh Group’s One Piece Of Advice To Help Other Leaders In Sustainability Move Their Business Forward In Reducing Carbon Emissions: You have to have some type of strategy within your logistics department and if you don’t and you don’t have the ability to, seek someone out who can or a group that can. The small investment you make is having a quick win. As soon as you get that quick win, you are going to start taking advantage of every opportunity that comes and the change which that drives, you’re not even going to believe it five, ten, fifteen years down the road. It’s not going to be a personal change for yourself, it’s going to be a change for us later in our lives, the next generation, and so on and so forth in the efforts we’re making now and how they can impact people for years to come.

The post ICC Climate Conference Session: Cutting Costs and Reducing Emissions By Eliminating Empty Miles appeared first on Convoy.

Kyra Whitten, Vice President, Sustainability and President, Flex Foundation at Flex, a global supply chain and manufacturing solutions provider which helps customers design, build and deliver products to make the world a better place, shares how Flex approaches sustainability.

As a $25 billion company operating in 30 countries around the world, Flex’s sustainability challenges are a little bit different than a traditional product company. Kyra breaks down how Flex approaches sustainability, what they decide to focus on, and shares thoughts on reporting, aligning goals with its non-profit foundation, and more.

• What Sustainability Looks Like At Flex: As a diversified advanced manufacturer, we manufacture products on behalf of our customers — products that you would see in your everyday world whether that’s your vacuum cleaner, the data center that’s powering your internet, your electric vehicle, etc., so there is a pretty high probability Flex was involved in the making of that product. I oversee The Sustainability Program Office which coordinates across operations, our business units, our sites, and our functions to ensure we have common goals and metrics for sustainability. They capture all of that data; we make sure it is validated and then we are responsible for external reporting and also providing updates to our investors and customers. (0:52)
• How Flex Approaches Sustainability: We try to think about it in a very holistic way. Through the lens of ESG, which is an interchange quite frequently with sustainability, we look at it across our world — the environment and our customers, suppliers, people, etc. — really anything associated with their health and safety, their career and development, including inclusion and diversity. That’s how we manage it from a data perspective and we look at governments and ethics through the lens of sustainability. We have established a new set of goals for 2030, but the story began five or six years before that when we launched our 20 by 2020 goals. Flex has always had goals with numbers or KPIs or milestones associated with them. This is the way you can make progress and can hold yourself accountable. We have had that data goal driven mentality for quite some time and it really laid the foundation for the strategies and the goals we just launched for 2030. (2:41) 
• How Flex Values Sustainability: It all starts with the consumer. We see there is a growing trend that people want to do business with and support brands that are sustainable and who have an agenda beyond making money — they have a purpose which is contributing positively to the planet. And so customers are driving that behavior and that’s influencing the entire value chain. As you go into buying a consumer product, I guarantee that anyone would be more apt to buy a product which has less packaging or recyclable materials in it. The customer demand for more sustainable solutions is driving our customer base to want more sustainable solutions. And then they’re coming to us with things like, ‘We have to measure our carbon footprint. As you manufacture our products, we need to know how much energy you’re using in that endeavor. How are you treating your people? Are you providing them a living wage, are you providing them with safe working conditions?’ So, this notion of sustainability is really being driven by that end consumer who is creating that requirement all throughout the value chain — literally back to the ground and the raw materials — to ensure we’re doing the best we can. (4:42) 
• Determining Which Initiatives To Focus On: Every company does not have to solve every problem. What’s important when you’re designing your sustainability strategy is that it has to be aligned to your business and it has to be about being relevant to, not only what your business goals are, but, as you think about sustainability, a lot of times it has been about risk mitigation and what is material to your business. The perfect place to start is understanding what are the areas of sustainability that are fundamental to your business. For example, we have 160,000 members of the Flex family around the world, we have roughly 130,000 of those employees working in factories every day to build products. So, they are our number one priority. Health and safety has been a number one priority in terms of our sustainability agenda. And then I would say number two is around the environment and it’s not just about carbon emissions, but also waste and water because we are a manufacturer, we consume materials. We need to make sure we are being as responsible as possible in terms of how we help our customers manage their product life cycle. Because we are so complicated and so broad, we have chosen to have goals across a lot of areas, but I don’t know if that’s right for everybody. It goes back to what really is material for you and builds from there. (7:23) 
• How To Align A Non-Profit Foundation With A Company’s Sustainability Goals: Anyone who is involved in philanthropy realizes it looks so fun and glamorous on the outside that you get to grant money to nonprofits and make positive contributions, but you also say no a lot. It’s really important in philanthropy and in your foundation to be super clear on where you want to make an impact and what’s aligned to your business. Aligning to the sustainable development goals is a really great way to help you with prioritization and make sure you’re not spreading yourself too thin. It’s all about going back to aligning with what is most important to your business and your key stakeholders. (9:50) 
• How Flex Is Expanding Sustainability Across Its Entire Ecosystem: One of the things we’ve embarked on with our 2030 sustainability goals is around customers and suppliers and having shared responsibility for scope three emissions. We look at our customer base by emissions. Which of our customers create the most emission, do they have carbon emission reductions goals based on climate science — whether that’s through the science-based target initiatives or other organizations that are based on climate science? That’s a very unconventional goal because, at the end of the day, we’re an influencer and a provider to our customer. We have no real control over the decisions that our customers make in terms of how they run their business, but we felt it was so important to take an ecosystem approach to our goals when we joined the science-based target initiative. And when we looked at our scope three emissions, our largest portion was in the use of products sold. We don’t own the products — they’re our customers’ products. We manufacture on their behalf, so it’s complicated, but we feel like we have an opportunity based on our learnings and our scope and scale that we can help our customers who don’t have goals today, to help them get started and join the conversation and contribute to the solution so everyone wins. (10:56) 
• How Flex Thinks About Disclosure As Part Of Its Sustainability Journey: A lot of companies are struggling with reporting because there are so many different rankings and ratings and there seems to be a new reporting format every few months. It starts with partnering with finance and your legal team to understand what you are already sharing in financial disclosures and what your philosophy is about transparency. The thing about sustainability that may be a little bit different than financial reporting has been that it’s not necessarily about whether you are doing well, it’s about disclosing where you are and what you’re doing to improve. This is a little bit of a different mindset in sustainability reporting versus other legal and financial reporting. As the investment community is paying very close attention to sustainability, one of the ways that we’re thinking about it is over time, making sure that we have more rigor and assurance in our data. In terms of what we choose to disclose, how we started is probably like most companies, which is aligning to the GRI (Global Reporting Initiative) and then building on it from there. And then along with those external indices whether its DJSI (Dow Jones Sustainability Indices) or Morgan Stanley, or Sustainalytics, it goes back to what is the philosophy of your company, what are you comfortable with disclosing, and what are you just not ready for. The key is to start somewhere and then try to improve every year. (13:56) 

TRANSCRIPTION

Jennifer: Can you tell me more about your role and responsibilities with the team? 

Kyra: Flex is a diversified advanced manufacturer, and we manufacture products on behalf of our customers. Products that you would see in your everyday world whether that’s your vacuum cleaner, whether it’s the data center that’s powering your internet, whether its your electric vehicle, there is a pretty high probability that Flex was involved in the making of that product. So, we have a very diverse customer base. We are about a 25-million-dollar company in about 30 countries around the world. So, our sustainability challenges may be a little bit different than a traditional product company. So, my role at Flex is to oversee what we call The Sustainability Program Office. So, my organization coordinates across operations, across our business units, across our sites and our functions to ensure that we have common goals and metrics for sustainability. They capture all of that data; we make sure that it is validated [2:00] and then we are responsible for external reporting and then also providing updates to our investors and our customers. So, we’re really in a collaboration role here in the program office and then we have specific owners across our nine pillars of sustainability who are responsible for delivering on that and then we act as a facilitator and a coordinator to those owners across Flex. 

Jennifer: Can you share more about how Flex approaches sustainability? 

Kyra: One of the ways that Flex thinks about sustainability is we try to think about it in a very holistic way. And if you think about it through the lens of ESG, which is an interchange quite frequently with sustainability, we look at it across, you know, what we would call our world which is the environment and our customers and our suppliers, our people, which is really anything associated with their health and safety, their career and developing, including inclusion and diversity. And then our approach and that’s how we manage it from a data perspective and how we kind of look at governments and ethics if you will in the lens of sustainability. So, we have established a new set of goals just this past spring for 2030 but really the story began 5 or 6 years before that where we launched our 20 by 2020 goals. So, Flex has always had goals that had numbers or KPIs or milestones associated with them. And that’s just the way that you can make progress and hold ourselves accountable. So, we had that data goal driven [4:00] mentality now for quite some time and it really laid the foundation for the strategies and the goals that we just launched for 2030. 

Jennifer: How does Flex view the value of sustainability? 

Kyra: It all starts with the customer and, you know, as consumers, we know. We see that there is a growing trend that people want to do business with and support brands that are sustainable, that have an agenda beyond making money, that have a purpose that is contributing positively to the planet. And so really customers are driving that behavior and that’s influencing the entire value chain. So, as you go into buying a consumer product, you know, I guarantee you that anyone would be more apt to buy a product that had maybe less packaging, that had recyclable materials to it. So, the customer demand for more sustainable solutions is driving our customer base to want more sustainable solutions. And then they’re coming to us with things like, ‘We have to measure our carbon footprint. As you manufacture our products, we need to know how much energy you’re using in that endeavor. How are you treating your people? Are you providing them a living wage, are you providing them with safe working conditions?’ [6:00] So, again, this notion of sustainability is really being driven by that end consumer that’s really creating that requirement all through the value chain, literally back to the ground, to the raw materials, to ensure that we’re doing the best that we can. And so, I don’t see this trend slowing down if nothing, accelerating. So, in terms of how we think about sustainability or why it’s so important is really because we can see what our customer’s customers are looking for, so we know that in order for us to provide that value, we have to deliver that and help our customers meet their sustainability goals. 

Jennifer: How do you determine which initiatives to focus on when you are such a diversified manufacturer, kind of globally? 

Kyra: Great question. And I think that’s probably why our sustainability agenda is broader than most. I don’t think that every company has to solve every problem and I think what’s important when you’re designing your sustainability strategy is that it has to be aligned to the business and it has to be about being relevant to, not only what your business goals are, but, you know, as you think about sustainability, you know, a lot of times it has been about risk mitigation at the end of the day and what is material to your business. And so, I think that’s the perfect place to start is really understanding what are the areas [8:00] of sustainability that are so fundamental to your business. And so, for example, we have 160 thousand members of the Flex family around the world, we have 130 thousand of those employees roughly working in factories everyday to build products. So, they are our number one priority. So, health and safety has been a number one priority in terms of our sustainability agenda. And so, again, making sure that the things that you’re really going to focus on is what is most impactful and important to your business. So, I would say the health and safety agenda is number one. And then I would say number two is around the environment and it’s not just about carbon emissions, but also waste and water because we are a manufacturer, we consume materials. And so, making sure that we are being as responsible as possible in terms of how we help our customers manage their product life cycle, you know, that obviously is really key to us. So, I would say, again, you know, because we are so complicated and so broad, we have chosen to have goals across a lot of areas, but I don’t know that that’s right for everybody. I think it goes back to what really is material for you and builds from there. 

Jennifer: That’s great advice. I think that is one of the biggest challenges, trying to figure out what makes sense for your business as well as your stakeholders when everyone wants to make progress against every sustainability topic because everyone cares about the environment or wants to support their team around them. 

Kyra: Yeah, and I think how that translates to is in our foundation. So, you know, and I think this is anyone who is involved in philanthropy. I think one of the hardest things, you know, it looks so fun and glamorous on the outside that you get to grant money [10:00] to nonprofits and make positive contributions, but, you know, you say no to a lot as well. And I think it’s really important in philanthropy and in your foundation to be super clear on where you want to make an impact and what’s aligned to your business. So, I think that aligning to the sustainable development goals is a really great way to help you with that prioritization and make sure that you’re not spreading yourself too thin. And again, back to aligning to what is most important to your business and your key stakeholders. 

Jennifer: How is Flex helping to expand sustainability across the entire ecosystem that you’re connecting with today? 

Kyra: I think one of the things that we’ve embarked on with our 2030 sustainability goals is one of our goals is around customers and suppliers and having shared responsibility for scope three emissions for example. So, we look at our customer base by emissions. So, which of our customers create the most emission, do they have carbon emission reductions goals based on climate science whether that’s through the science-based target initiatives or other organizations that are based on climate science? So that’s a very unconventional goal because at the end of the day, we’re an influencer and a provider to our customer. We have no real control over the decisions that our customers make in terms of how they run their business. But we felt it was so important to take an ecosystem approach to our goals [12:00] when we joined the science-based target initiative and when we looked at our scope three emissions, our largest portion was in the use of products sold. Now, we don’t own the products. They’re our customers’ products. We manufacture on their behalf so it’s super complicated, but we feel like we have an opportunity based on our learnings and our scope and scale that we can help our customers who don’t have goals today, help them get started and join the conversation and contribute to the solution, everyone wins. So that’s an example of where we’re really trying to drive the ecosystem. And I would say on the other side of that equation as suppliers, we’re working through CDP and enabling our preferred suppliers to have access to the knowledge of CDP and set requirements for our suppliers to have science-based climate emission reduction is one of our goals. So then again, we’re trying to impact the whole value chain, which is really what the science-based targets initiatives are trying to do. So, unconventional, and more of an influencing type of initiative but now less important to solving, you know, the challenge of climate change. 

Jennifer: How does Flex think about disclosure as a part of your sustainability journey? 

Kyra: That’s a great question and I think a lot of companies are struggling with reporting because there are so many different [14:00] rankings and ratings. There seems to be a new reporting format every few months. And so, it can be very overwhelming. And so, I think that, you know, it starts really with partnership with finance and your legal team to understand, what are we already disclosing in our financial disclosures and what is our philosophy about transparency. And so, I think that’s a good place to start. And then, you know, the thing about sustainability that may be a little bit different than financial reporting, at least traditionally, has been that its not about necessarily whether you are doing well, its about disclosing where you are and what you’re doing to improve. And I think that that is a little bit of a different mindset in sustainability reporting versus maybe other legal and financial reporting. Having said that, I think that they’re getting much much closer as the investment community in particular is paying very close attention to sustainability. And so, one of the ways that we’re thinking about it is over time, making sure that we have more rigor and assurance in our data. In terms of what we choose to disclose I think that, you know, how we started is probably like most companies which are aligning to the GRI and then building on it from there. And then along with those external indices, you know, whether its DJSI or Morgan Stanley, or Sustainalytics, I think that it goes back to what is the philosophy of your company, what are you comfortable with disclosing, and what are you just not ready for. And then, you know, just trying to improve every year. I think that the key is to start somewhere and then try to improve every year. And that’s been our strategy really over the last five years in terms of reporting. 

It is just all about being okay with where you are and, you know, having the desire to improve is really the most important thing. Start with GRI. There are lots of great resources out there to help companies get started and learn from others. I think that the other key is to ask for help. People in the sustainable community are so generous with their time and we’re all working towards the same goal so don’t be afraid to reach out and ask for advice or ask for help.

The post Nailing the Foundation of Sustainability with Flex’s Kyra Whitten appeared first on Convoy.

Today, Convoy announced that it has submitted and received approval for their current data submission to the SmartWay^® Transport Partnership, an innovative collaboration between the U.S. Environmental Protection Agency (EPA) and industry. The SmartWay Transport Partnership provides a framework to assess the environmental and energy efficiency of goods movement supply chains.

Convoy will continue to contribute to the Partnership’s savings of 312 million barrels of oil, $41.8 billion on fuel costs and 133 metric tons of CO2, 2.6 million tons of NOx and 109 million tons of particulate matter. This is the equivalent of the annual electricity use in 20 million homes. By joining SmartWay Transport Partnership, Convoy demonstrates its strong environmental leadership and corporate responsibility.

Developed jointly in early 2003 by EPA and Charter Partners, this innovative program is represented by industry stakeholders, environmental groups, American Trucking Associations, and Business for Social Responsibility. Partners rely upon SmartWay tools to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 Partners including shipper, logistics companies, truck, rail, barge, and multimodal carriers.

For information about the SmartWay Transport Partnership, visit www.epa.gov/smartway.

The post Convoy renews with the U.S. EPA SmartWay® Transport Partnership appeared first on Convoy.

Brice Baillie is the CEO & Founder of Obvious Wines, a collection of family estate wines crafted through sustainably farmed practices across vineyards in California, Chile, and France. The company was founded on a mission of simplicity — making wine appreciation and consumption easy for the average consumer while enabling sustainably farmed wines straightforward to achieve by growers.

Brice explained what it looks like to farm wines sustainably, the impact it has on the lives of farmers and the consumer who drinks it, how to incorporate fair trade practices into wine making, and why sharing information with other farmers pays off for all.

• A Simple Approach To Starting A Sustainable Wine Business: I had a hard time becoming familiar with American wines when I moved to the US because I was born and raised in Champagné. I was really confused by the diversity there is in the US, and I realized a lot of people were really lost who had much less background about wine than I did. This started the idea of how we can help consumers and people to learn more about wine while drinking it? And that’s how I came up with the idea of Obvious Wines. It is simplifying and trying to be more transparent by educating with simple words while only working with boutique wineries which have a lot of criteria such as sustainability, but also vegan practices and transparency. It’s really about simplifying and educating while keeping good wine in the bottle. (1:23)
• What Sustainable Farmed Wines Looks Like: The sustainability in the farming means the vineyard has to respect the ecosystem but also be responsible for the social aspects. Every country has different regulations. We work with wineries in California, France, and Chile, so they have different types of regulations and different types of practices. Our sustainable practices include the following: 1) Soil: protect the soil. They don’t use any herbicide; 2) Wildlife: protect the local wildlife. We need to preserve the ecosystem around the vineyard; 3) Water: some regions are not allowed to water during summer; and 4) Fertilizer: don’t use any fertilizer. These are all simple examples that reflect what sustainability is — using historical or very modern practices to have the same results without using chemicals. (2:47) 
• Why It Is Important To Think About Sustainability In The Way The Wines Are Produced: I’m trying to build up a virtual circle. I care about it. I think consumers care about it and want it. And I think now, more and more, entrepreneurs are trying to create products which are very eco-conscious or eco-friendly. More and more people expect it and when small companies start, then they manage to grow things for those people. It is just a very positive ecosystem which forces the big wineries who know they will have to do it. In 10 or 20 years from now, everyone will expect wines to be made like that without any chemicals. (6:10) 
• Incorporating Fair Trade Into Wine Making: Our partner, Traciago in Chile, is certified fair trade. This is very important, especially in Chile where they historically have a lot of macro growers who are selling just the grapes to big corporations. Their commitment and our commitment is to pay fair wages to those micro growers and therefore, to the employees. It is having decent pay. We buy the grapes for much more money than what the big guys would pay, but in exchange, they also have to pay the employees in a very fair manner and also have to comply with organic farming practices. (7:05) 
• Recognizing These Practices Will Have Both Short And Long-Term Payoffs: By doing things like paying a fair wage, we speak to consumers who really expect it. We’re still too small a business to really see the impact of it. But because of it, we already have access to some stores and restaurants who have this kind of requirement, so it is a good differentiator in that way. It also gives us more credibility because we are able to talk about transparency, so it makes us different from the bigger corporations because the wine market in the US is dominated by a few very, very large corporations. It allows us to get into some channels, so that’s the impact. But I think we’re still too small. It’s more of a long-term bet.  (8:20) 
• How Other Wineries Can Become More Sustainable: All the tools to do it are out there. Online, you have a lot of agencies which offer certification, so it’s very easy to know how to do it. For instance, some of the wineries I work with in France have a group of wineries to share a compost to nourish the soil. They also exchange information with each other, “Oh, I tried this method, it doesn’t work,” or, “This way does work.” The other thing I think which prevents some wineries from doing it are the yields. The production per acre is way lower when you have those practices because you are more vulnerable to disease, to frost, and the weather. Wine is just a grape that grows. It’s very natural, so it’s also very fragile and sensitive. It is something they are often concerned about, “Okay, I’m going to produce this, but I might lose some grapes out of it.” But I think if they turn that around and communicate about the practices and are very transparent about what they do, it gives more value to the product. In the long term, they will be winning. They just have to be okay to lose a little bit in productivity at the beginning but communicate about it to try to offset that down the line. (9:31) 
• The Sustainability Trend He Is Most Excited About For This Next Year: Although I think there is a larger consciousness about all of that, I think it’s exciting about how everyone is very careful about what they do. There are some trends around plastics which I think are really crawling in Europe. More and more countries have a plan to ban plastic bags for instance in supermarkets. I know in the US, we still have some work to do there. And I see some companies that have limestone or seaweed plastic bags that dissolve in water or are very easy to recycle. To me, that’s something which is very exciting. If you need a plastic bag, fine. But maybe you can get a bag with a certain type of material that doesn’t pollute and is just carbon free. If it exists, I think that’s super exciting. It’s a good moment because we need it. People want it. (11:43) 
• What Everyone Should Know About Obvious Wines: Something poetic. Something like thinking that it was rain, rain fell into the soil, the soil grew into grapes, and they fermented and became wine. So, essentially it’s water. They’re drinking water, that became a grape, that became wine. And, I think that’s why the less entrants, the less chemicals we put in, the better it is. And wine has always been a healthy product for centuries — if you don’t abuse it, of course. The oldest people in Europe, those who live the longest, always have a glass of wine every day. (13:29)

TRANSCRIPTION

Jennifer: Tell me more about your story starting Obvious Wines.

Brice: As you can hear, I’m French. But I moved to the US about 10 years ago. I was working in consulting and then in finance, but I’ve always wanted to do something closer to, you know, to wine and food. And when I moved to Los Angeles, I had a hard time getting familiar with American wines because I was born and raised in Champagné. So, I was really confused by the diversity that there is in the US, and I realized as well that a lot of people were really lost, and they had much less background around wine. So then started the idea of, okay, how can we help consumers and people to learn more about wine while drinking it. And that’s kind of how I came up with the idea of Obvious Wines, which is really, you know, simplifying and trying to be more [2:00] transparent by educating with simple words and simple indications while only working with boutique wineries that have a lot of criteria such as sustainability, but also vegan practices and transparency. So, it’s really about simplifying, educating while keeping, you know, good wine in the bottle. 

Jennifer: Obvious Wines are sustainably farmed. Tell me more about what that means.

Brice: Yeah, no. I mean, like the sustainability in the farming, it really means that the vineyard has to respect the ecosystem but also be responsible on the social aspects. And every country has different regulations. We work with wineries in California, France, and Chile, so they have different types of regulations, different types of practices. So, I like to give concrete examples, and, you know, we hear the word sustainable, and we don’t always know what it means. So, I have a few examples if you want. 

So one is for instance, the soil, the protect the soil. You know, they don’t use any herbicide, because usually, you know, in a vineyard you try to avoid having too much grass because of, you know, the affect it can have on the vines. So instead of using herbicide, you know, they are simply just going to till the soil. And they also sometimes have goats in the vineyard in winter, before there are the grapes, they have goats in the vineyard. It’s a very simple and cheap way to get someone to remove your grass. So, that’s for the soil. [4:00] And they have to protect the local wildlife. That’s very important is we need to preserve the ecosystem around the vineyard. So, they don’t use any pesticides but again, to sometimes fight against insects, instead of using pesticide, they are going to have bats. Like, Batman, like the bats. They’re going to install bat boxes in trees around the vineyard and those bats are going to go and eat all the insects. And that prevents all the insects who come and attack the vine. The other problem would be for water. Some regions, in France especially, they are not allowed to water during summer. Some regions in California, they are going to have capitals that know exactly what area needs to be irrigated so instead of just spreading the water everywhere, they only target certain zones. And the last example I would use is, again, really to do the soil or the whole ecosystem is they don’t use any fertilizer to strengthen and nourish the soil and the vine. They are going to plant all the types of herbs that are very rich in oxygen and other others that are really going to nourish the vine and the soil. So, they are like very, you know, simply examples, I think that reflect what sustainability is, just using historical or very modern practices to have the same results as chemicals without using chemicals. 

Jennifer: Why was it important for you to really think about sustainability in the way that your wines were produced? When it [6:00] sometimes sounds like it is an even higher barrier, especially when you’re just getting started. 

Brice: To me it’s like virtual circle I’m trying to build up. I care about it. I think consumers care about it. Consumers, they want it. And I think now, more and more, entrepreneurs are trying to create products that are very eco-conscious or eco-friendly. So, I see that as a virtual circle. You know, more and more people consume that and expect that and that when small companies start, then they manage to grow things to those people. And I think its just a very positive ecosystem and that forces the big actors, big wineries for instance, know they have to do it because in ten, twenty years from now, I think anyone would expect the wines to be made like that, made without any chemicals. 

Jennifer: Right. And another thing that you also achieved too was being fair trade certified. Can you tell me more about that process? 

Brice: Especially in Chile. Our partner, Traciago, that makes the wine in Chile, they are certified fair trade and that’s very important, especially in Chile where they historically have a lot of macro growers who are selling to big corporations, just the grapes. So, the commitment and our commitment is to pay fair wages to those micro growers and therefore, to the employees. So, it’s really, you know, having really decent pay. So, we buy the grapes for much more money than what the big guys would pay but in exchange, they also have to pay the employees in a very fairly manner and also have to comply to the organic farming practices. 

Jennifer: I see. And a couple things that you mentioned, you gave some examples of why it was important to [8:00] incorporate sustainability into your farming practices for the wine. Could you share a couple of examples of the impact or results sustainability actually drives for your business? If you’re investing for sustainability today, are you getting business impact from it? 

Brice: Just by doing that, we speak multiples to consumers that really expect that. I think we’re still too small of a business to really see the impact of it. I think we have access to some stores and restaurants that for which it is kind of a requirement, so that’s good in that way. And also, it gives us more credibility because we are able to talk about the transparency, so it makes us different from the bigger, you know, corporation because the wine market in the US is dominated by a few very, very large corporations. So, it allows us to get into some channels, so that’s the impact. But I think we’re still too small. Its more like a long-term bet. 

Jennifer: You’ve already started making a lot of progress with the examples that you’ve shared. What advice would you give to other wine makers if they’re maybe just now starting to incorporate more sustainable practices into their business? 

Brice: All the tools to do it are out there. Online, you have a lot of agencies like certification, so that’s very easy to know how to do it. Like, I know, for instance, some of the wineries I work with in France, they have a group of other wineries, and they share a compost, you know, to nourish the soil as well. So, and then they exchange with each other, “Oh, I tried this method, it doesn’t work,” or, “This way does work.” [10:00] So, the first thing, information is there. If they want to, its very easy to find it. They could just ask any other winery. And then the other thing that I think prevents some wineries to do it is the yields, or the production of per acre is way lower when you have those practices because you are more vulnerable to disease, to frost, and you know, the weather. Its, you know, wine is just a grape that grows. Its very natural, so its also very fragile and sensitive. So, they are often concerned about, “Okay, I’m going to produce this, but I might lose some grapes out of it.” But I think that if they turn that around and communicate about the practices and communicate and are very transparent about what they do, I think it gives more value to the product. So, I think long term, they will be winning. So, they just have to be okay to lose a little bit in productivity at the beginning but communicate about it to try to offset that down the line. 

Jennifer: Now that you’ve gone through this process of really incorporating sustainability, what sustainability trend would you say you’re most excited for this next year? 

Brice: Although I think there is a larger conscious about all of that, I think that’s exciting about how everyone is very careful about what they do. I think there is some trends around plastics that I think are really crawling in Europe. More and more countries have a plan to ban plastic bags for instance [12:00] in supermarkets. I know in the US we still have some work to do there. And I see, you know, some companies that have, you know, like limestone or seaweed plastic bags that dissolve in water or are very easy to recycle. And I think to me that’s something that is very exciting. If, you know, 50 years from now, there is barely any plastic or its only like…and again, its getting the same result with a different product. 

Brice: Its, you know, okay, you need a plastic bag, fine. But maybe you can get a bag with a certain type of material that doesn’t pollute and is just, you know, carbon free and it exists, and I think that’s super exciting. It’s a good moment because we need it. People want it. 

Jennifer: As someone is uncorking their next bottle of Obvious Wines, what is something that you’d want them to know about in terms of sustainability and your company?

Brice: It’s a good question. I think something maybe poetic, you know. Something like thinking that it was rain, rain fell into the soil, the soil grew into grapes, and then, you know, then fermented and became wine. So, its water. They’re drinking water, that became a grape, that became wine. And, I think that’s why, the less entrants, the less chemicals we put the better it is. And wine has always been a healthy product [14:00] for centuries and…if you don’t abuse of course. And yeah, I mean, you know, the oldest people in Europe, those who live the oldest, they always have a glass of wine every day.

The post A Toast To Simple Ways To Be Sustainable With Obvious Wines’ Brice Baillie appeared first on Convoy.

Convoy’s Business of Sustainability interview series addressed some of the biggest challenges faced by companies large and small around the globe. Here’s what my guests had to say on the topic. 

1. Getting Started. David Young, Chief Operating Officer at Seattle Seahawks: “Starting. Getting off the ground. Once you build that momentum, it starts to build on itself and you just see the benefits to it. So, getting the initial program off the ground is probably the most challenging part. And when you’re building a program, anything new is always going to be facing challenges. Anything new that could look like it’s going to add incremental cost is going to present a lot of challenges. And as we pivoted from the waste diversion into utilities, that was another challenge for us because there is upfront cost in some of the retrofits, some of the additional installs that we had to do at the stadium to install low-flow water valves for example. We put a solar array on top of our events center, which, at the time, was the largest in the state of Washington. It generates over 830 thousand kilowatt hours of electricity and provides about 23-24% of our overall electricity needs at the stadium. So, once we got over those hurdles of the initial capital outlay, we started realizing benefits and savings afterward. If I could offer advice to anyone starting a large-scale program like this is look at the long term returns and benefits you’re going to have. Not just in the case of financial benefit — which we reduced our overall cost on utilities by about 21% with many of the measures we put into place since 2010 — but also the benefits.”

2. Getting Focused. Jess Bensley, Senior Product Line Manager at Teva, Deckers Brands: “We started off just swimming in a lot of different directions and I’m sure that’s where sustainability comes into a lot of work. We cared a lot and so we wanted to do a lot, but we had to focus. Packaging felt like a natural one and then looking at products is a natural way to get started as well. But as we were trying to tackle all these things — and they’re really hard to focus on — as we talked about it, we landed on three pillars that we really focus on: 1) product; 2) circularity; and 3) climate.”

3. Weaving Sustainability Into The DNA Of Your Business. John Sadlier, Chief Sustainability Officer at Ardagh Group: “Weaving sustainability into the DNA of our business — sixteen thousand employees across Europe, North America, and South America — that’s the biggest challenge. How do we do that? How do we get every employee in Ardagh Group engaged in this agenda? Community involvement, factory involvement — there are a whole bunch of levers to be pulled there, but that’s a huge journey to try and reach all of the employees, get all of them excited, and really get this agenda where we need it to be.” 

4. Learning To Look Through A Different Lens. Josh Raglin, Chief Sustainability Officer at Norfolk Southern Corporation: “When we first thought about sustainability, it was more about environmental compliance. It was a little bit about fuel efficiency, and it was more about economic returns. Now it’s more about engagement with communities. It’s about using a different set of lenses when you look at projects, instead of just pure financial return. It’s really how you can create multiple values and create things in a different way.”

5. Having A Positive Mindset To Address Obstacles And Challenges. Mokhtar Alkhanshali, CEO and Founder of Port of Mokha: “We live in a world with a lot of problems and if we try to think about what is something I can solve, it gives you a lot of motivation to get through those hurdles — both internal and external problems. I saw this opportunity and I was a young person when you’re trying to find your path in life. I was trying to figure out how to do this and I found out business was a way to do this. Creating a company that could do this and my biggest issue first was actually not external. It was actually internally I did not have any business knowledge. I did not know anything about supply chain management, marketing, etc. I didn’t know anything about quality control. But that’s also the most exciting part of the business. You just jump into a new world. You get to read the books. You get to go to conferences. You get to, you know, meet people, and so I’m very fortunate to have been around some incredible teachers in business.”

6. Recognizing You Can’t Solve Every Issue Alone. Julie Mishner, Product Manager at Jabil Packaging Solutions: “The increase in customer demand for sustainability is having revenue impact. Nobody can solve this problem alone, so we’re partnering with our customers and our suppliers. The relationships we are developing across the supply chain are huge and feel like nothing we’ve done before. We are currently developing new material compounds which are home compostable for our customers. This is not something I thought I would have seen us do five years ago. ”

7. Wanting To Always Achieve More. Kimberley Sundy, Director, Corporate Sustainability at Kellogg Company: “Not only do we always feel like we could be doing more, but we also set really high standards for ourselves. In 2019 at the Sustainable Brands Conference, our CEO unveiled our next generation of commitments. One of the things that we all like to say at Kellogg is, “Even better if…” and I think that has been one of the most inspirational environments for me to work in because people at Kellogg love to give their best, but they also love to think about what even better would look like. Every year we publish our corporate social responsibility report in the spirit of transparency and collaborate with the World Business Council for Sustainable Development to make sure our report showcases the best of our goals and our ambitions as well as our progress against our goals.”

8. Collecting And Analyzing Data To Demonstrate Results And Understand Impact. Rob Johnson, VP of Sustainability and Transportation for Seattle Kraken and Climate Pledge Arena: “Finding and collecting all of the data from all these different sources, analyzing that data, and then accounting for the carbon footprint of the building is going to be an enormous challenge. We’ve got very little scope one emissions. But when we think about all of the other things that happen within a building as busy as ours with 200 programmed events every year so that’s an event 2 out of every 3 nights, this is an enormous task. We have 10,000 to 20,0000 people coming to and from that event, purchasing food, using the restrooms, the clean up of all of those people before and after the events, the total amount of operations of this facility, etc., collecting and analyzing all of that data, and then finding ways to understand the impact of that is going to be an enormous challenge.”

9. Working With Companies At All Stages Of Sustainability Initiatives Within Your Supply Chain. Zach Freeze, the Senior Director, Strategic Initiatives, Sustainability at Walmart: “Companies are at all stages — some are just getting started while others have long established and assigned targets they’re actively pursuing. Walmart has suppliers at every step along this journey, and we want to engage with them wherever they are in order to move them up the curve. We want to make it really simple to get started and then push suppliers who are doing great work to move even faster and farther. Project Gigaton is designed for us to activate with any supplier at any level to begin and understand the business case and keep it front and center as to why it matters to Walmart. We are typically one of the larger customers for these suppliers, so we want to make sure they understand it is very important for us and for us to help them as well. We want to provide resources and collect everything we can and we learn from our environmental NGO partners like World Wildlife Fund or Environmental Defense Fund and, in turn, translate these learnings into actions on things like reducing food waste, reducing packaging, reducing energy use and making that conversion to greenhouse gas and making it really simple to use, easy to engage with, and incentivizing and encouraging companies to do more.”

10. Identifying The Next Step In Your Sustainability Journey. Bryan Pape, CEO of Miir: “It was easy for us because we started with the concept of sustainability from day one. So, it’s easier for us to bake it into the model and it becomes second nature. For a company who doesn’t grant money or give in a way that we do, it’s hard to go from not doing anything to doing it. My encouragement for anybody who is not doing it or doing it lightly is just take that next step. What is that next step for you as a business to either look at grant making or setting aside a little bit of money for your employees to help out with? Even in sustainability, it’s the same thing. Just take the best next step. Whether that’s reducing plastic in your packaging or offsetting one of the three scopes within becoming climate neutral or researching being a certified B corp. There are always a couple of steps and it can be very daunting at first thinking you have to do all of this work, but it just takes one better step day after day to achieve the sustainability goals you have.”

11. Securing Finance For Your Initiatives. Kelly Fisher, SVP/Head of Corporate Sustainability at HSBC: “A lot of things can’t happen unless there is financing for it. For example, if you’re a major shoe company and you know you can change the way you manufacture one of your shoes and make it from recycled materials, that’s great. The impulse to want to do that is the right thing, but if you don’t have the funding in the company right now to do that, a loan from a bank who believes it needs to happen, can make it happen. One of the most exciting examples of what we’ve done to date is with Wal-Mart. They have one of the world’s largest supply chains and have an enduring commitment to environmental sustainability. What we’re doing now with them is simply tiering the way their suppliers are paid depending upon an impartial rating of how sustainable they are.”

12. Deciding Who Will Oversee Sustainability. Wylie Robinson, Founder and CEO at Rumpl: “We don’t have a sustainability team at Rumpl. It’s just a small team where everybody is responsible for knowing what they are doing and the effects they have.”

13. Setting Priorities. Jane Franch, Director, Strategic Sourcing & Sustainability at Numi Organic Tea: “There is so much to be done, it is such a challenge to sift through all the priorities and say “Where do we put our attention now?” It has been a journey about listening to our partners and when we enter a tea sourcing relationship, we try to listen deeply and understand what is happening at this origin and what the challenges are. If we enter into a business relationship, what are the different things we each bring to the table? How can we leverage our position and be the voice of our consumers to have an ethically sourced, cleanly produced product? How can we bring that back to the place of origin to positively affect the lives of the people there? And often that is achieved by listening to what is actually needed in the situation and determining if it is the right kind of match. We employ deep listening to think through what the priorities are.”

14. Maintaining A Sustainability Culture. Jeff Smith, Vice President of Sustainability at Six Senses: “The biggest challenge over the last few years within our organization has been our growth. The challenge is to maintain the culture of understanding that sustainability is core to what we do. Every time we open a new hotel, we have all of the orientation training, learning our brand for the new people who are running that property and sustainability is embedded into that orientation training. But what is a perceived challenge is also an opportunity because it’s a new location where we’ve got new people and we can bring them on board and have them join our mission to make the world a better place and to benefit those communities where we’re opening the hotel.”

15. Aligning Sustainability Goals With Business Goals. Julie Verdugo, Director of Sustainability + Social Impact at Free People: Sustainability must align with the business goals. When sustainability didn’t align to the business goals, it didn’t stick around. The key is knowing your values, knowing where the impact opportunities are, and then playing the matching game of what your business needs are. Think in terms of the same KPIs you use to measure for other campaigns or product launches. When we tracked how social impact and sustainability campaigns had performed using the same KPIs (engagement, sales, click-throughs, conversion, etc.), it was no surprise those campaigns outperformed our everyday campaigns.

16. Moving Passed The Anti-Plastic Sentiment. Altium Packaging’s Brian Hankin, SVP Strategy, Innovation, Marketing at Altium Packaging and Sarah Dwyer, Sustainability Associate: “There’s a little bit of an anti-plastic sentiment out there. And we’re very much aware of it and concerned about it. Plastic is a good thing. For one thing, it meets essential needs better than any other material can in certain industries like healthcare delivery — medical supplies and pharmaceuticals. In the food industry, food preparation and preservation and getting foods to areas that they need it. And also, consumer products, we think it is the best material that’s why there is so much of it and why its grown so quickly. But we need to do a much better job recycling and making sure that there is enough supply in our recycling stream so that we can meet these goals and be an efficient user of this material that we feel is an excellent alternative.”

The post The Biggest Challenges in Sustainability appeared first on Convoy.

Many of the sustainability executives I spoke with on our Business of Sustainability interview series have shared their viewpoints on what the future of sustainability looks like and how companies will need to act as we move forward. While their business models vary, the one thing they all share, however, is a commitment to doing the right thing and finding ways to be more sustainable for the long term. Their key takeaways include:

1. Set High Standards And Hold Yourselves To Them. Kyle Polansky, CEO of Blue Dog Bakery: “We don’t set hard lines and look out and say, we want to accomplish this or that. We generally hold ourselves to a non-GMO ingredient list. And that’s really hard to do. As you expand your product portfolio and grow, it can be harder and harder to do. There is a cost associated with that and you have to be really resourceful to go chase the solutions down. Do we have big long-term goals that we set up and say, hey, we’re working toward this? Maybe not. But we try to set very high standards and hold ourselves to them as we make progress. As life evolves and business evolves and you have success, that becomes harder and harder to do. So, I think really holding dear to those core values that we started with — healthier options for pet parents and their animals and doing it in the most sustainable, world healthy way — is what keeps us pushing the envelope.”

2. Focus On Recycling Plastic And Supporting The Recycling Stream. Altium Packaging’s Brian Hankin, SVP Strategy, Innovation, Marketing at Altium Packaging and Sarah Dwyer, Sustainability Associate: “There’s a little bit of an anti-plastic sentiment out there. And we’re very much aware of it and concerned about it. Plastic is a good thing. For one thing, it meets essential needs better than any other material can in certain industries like healthcare delivery. In the food industry, food preparation and preservation and getting foods to areas where they need it. And also with consumer products, we think it is the best material and that is why there is so much of it and why it has grown so quickly. We need to do a much better job recycling and making sure there is enough supply in our recycling stream so we can meet these goals and be an efficient user of this material which we feel is an excellent alternative. Plastic right now is the suitable choice of material as it provides significantly less carbon dioxide emissions. We have the infrastructure to support the recycling stream and recycle materials back into new packaging and products. In order to move the industry forward, there needs to be a higher level of consumer engagement with brands, and Altium, as well, can play a part in educating consumers on how to recycle and the benefits of plastic versus alternatives. ”

3. Look Beyond The Obvious Sustainability Initiatives Josh Raglin, Chief Sustainability Officer at Norfolk Southern Corporation: “When we first thought about sustainability, it was more about environmental compliance. It was a little bit about fuel efficiency, and it was more about economic returns. Now it’s more about engagement with communities. It’s about using a different set of lenses when you look at projects, instead of just pure financial return. It’s really how you can create multiple values and create things in a different way. One example I’ll point to is our living shoreline project which was completed last year. We lost around three acres of land at our Lambert’s Point Terminal in Norfolk, Virginia, on the Chesapeake Bay at the Elizabeth River. We could have come in and developed this fully armored shoreline of rock, but what did we really accomplish from an environmental perspective? Instead, we partnered with a local conservation group to come up with a better plan to create a living shoreline with native vegetation. We restored the shoreline and it saved 75% of costs and we have this great habitat there and it’s much more aesthetically appealing because it’s along the main stretch of the river. Most of the products we consider, we look for cases where we can lower our environmental impact or produce revenue in some cases. They are good for the environment and good for communities.”

4. Take A Step In A New Direction When Designing Footwear. Jess Bensley, Senior Product Line Manager at Teva, Deckers Brands: “The way footwear is constructed is just all of these layers and extra materials and glues and adhesives and it makes the product really hard to recycle. So, some things that need to happen to make shoes more recyclable is to simplify your product. There are a lot of things that don’t need to be in there. You’ll save money by taking them out and making it simpler and then also just looking at, if your upper is made of all one material then it will be able to be recycled. And if your bottom is made of EBA and rubber, that’s also able to be recycled. But it’s really how those two things are put together and that it needs to be able to come apart so that they’re recyclable in their own waste streams. And that’s definitely the design challenge in the footwear industry and it’s going to take us back to how shoes used to be made. They used to be cobbled together by a stitch that would be easy to take out and then those pieces came apart. So, we really just need to think about how footwear is being constructed to be able to make things more recyclable and I think that can be accomplished.”

5. Redesign Packaging To Make It More Efficient. Julie Mishner, Product Manager at Jabil Packaging Solutions: “The big trend is the cubitization of products in order to have more efficient packaging. Even with eCommerce, it is imperative to fit more in a box to ship to your customers. It is an entirely new problem to solve.”

6. Ensure Your Brand Helps Consumers Live Their Values. Kimberley Sundy, Director, Corporate Sustainability at Kellogg Company: “We know that consumers and people want to live their values through their purchases and this has become all the more apparent during COVID. Kellogg has purpose-driven brands and we’re really committed to making sure that our purpose-driven brands deliver for consumers and the planet. We really try to make sure our portfolio resonates with consumers the entire world over. We know that sustainability is a reputational driver. Our portfolio at Kellogg is 86% plant based, and when you think about the value of sustainability, it plays a really critical and important role and it really does touch consumers at every level and everyone across the business. Shoppers are demanding transparency and accountability. They want to know where their food comes from. Customers have been really aggressive in setting aspirational goals for themselves from a corporate perspective and we’ve been really aggressive in setting aspirational goals for ourselves. It’s been nice to be able to collaborate with them and find out where these ambitions overlap and how we can create value together.”

7. Collaborate And Build Partnerships. Alan Turanski, President and Beekeeper of GloryBee: “We have clients we’ve been supplying for 45 years as well as newer ones. All of this has allowed us to change the conversation beyond an exchange of goods and services to something that we’re doing together. How can we do good together? That is really where the value is because when we do things together, we do things better. One of the things that happened with our Save the Bee initiative is in the first year, we brought in maybe $12,000 dollars from our 1% of sales around our retail products. It became clear to me that we needed to collaborate and build partnerships because this really wasn’t something that we should do on our own — this is something which affects all of us. So, we all need to get involved and doing it together quickly shifts results.”

8. Maintain A Long-Term View On The Value Of Sustainability. Zach Freeze, the Senior Director, Strategic Initiatives, Sustainability at Walmart: “We know our customers care about sustainability and we know our customers care about climate and plastic waste elimination. It’s very connected to our approach of how to engage with the customer and what we view as long-term success. If you think about the definition of sustainability, we have to be able to continue to be able to put products on our shelves in the years to come and we depend on the planet to do that. We have to make sure we’re good stewards to the planet, and we’re taking care of that. We’re putting people and the planet first. And that’s intrinsically tied to our business mission. Our goal as a company and our tagline is very closely associated with that. Walmart sells products that are good for people, good for the planet and it goes all the way up to the top. Our CEO believes it and understands it and recognizes the connection to what he calls ‘shared value’, which is really about taking all stakeholder perspectives into consideration to make sure that we deliver for the customer, the investor, the associate, and the shareholder. We feel all of this can and should be done in order to be a truly sustainable company.”

9. Listen To Consumer Demand. Ryan Emmons, Co-Founder & CEO at Waiākea: “Consumer demand for sustainable products is really what’s going to drive change. It’s going to be a couple of brands and plenty of others that are doing exceedingly well in beating out a lot of competitors in their categories. That’s going to make a lot of people start to question why, and if sustainability is a big part of that business model, they’re going to know why. That’s how you change. It’s when sustainability basically becomes the must have for capitalism. That shift is starting to happen right now because people are realizing that you can’t not address climate change, and you can’t not address sustainable packaging because you just won’t sell and I think we’re still kind of 5 years away from that big shift but we’ve definitely been starting to see that over the last 10 to 20 years.

10. Thread Sustainability Initiatives Through All Aspects Of Your Business. Mia Davis, Director of Environmental and Social Responsibility at Credo Beauty: “Companies will always be learning and growing and revisiting how to incorporate sustainability into their business and weave it through a variety of programs like looking at packaging, or composting, or carpools, designing stores to reduce waste, shipping, etc. Depending upon how a business is set up, it’s important to try to thread sustainability at the store level, HQ, manufacturing, vendors, partners, etc.”  

The post What the Future of Sustainability Looks Like appeared first on Convoy.

Dan Lewis, CEO of Convoy was invited to talk shipping and sustainability with Danny Gomez, Managing Director, Financial and Emerging Markets at FreightWaves, for the inaugural episode of Net-Zero Carbon. 

Some of Dan’s key takeaways follow.

What Inspired Dan To Form Convoy: His varied background from working at his family’s office supply business to a career at Amazon provided insight into the supply chain where he saw an opportunity to impact the business. His goal was to create efficiencies and reduce waste, particularly as it relates to the middle mile with heavy haul freight in terms of both shippers as well as the livelihood of truck drivers.

How The Pandemic Highlighted The Importance Of The Supply Chain: The world saw how incredibly critical and important the supply chain is for this country and how necessary it is when you are living at your home, not able to go out, and need things brought to you or your local grocery store. Even before then, however, Convoy was focusing on how truck drivers do such incredible work and why we need to build a system where they are treated fairly and respectfully and we can take care of them so they can thrive. This is what led the company to establish its mission of “transporting the world with endless capacity and zero waste.”  

How Convoy Differs From A Digital Freight Broker: Convoy creates a more efficient trucking system using technology.

How Supply Chain Companies Can Get More Involved In Sustainability: Companies have so many opportunities to do the right thing, and they need to talk about it with their customers to create more awareness around sustainability as well as to keep truck drivers employed. As an organization gets bigger, they can organize things better and have their operation run more efficiently.

When It’s The Right Time To Begin Talking About Sustainability Initiatives: Dan believes it is never too early to start talking about it and start measuring sustainability initiatives. He strongly believes the way to get data is to imperfectly measure it at first. The difficulty in figuring out how to first measure it causes you to learn how to formalize it within your company and determine how to best measure it, and the more you work at it, the better you become until you can begin to share sustainability reports.

One Of The Biggest Issues In The Trucking Industry Which Needs To Be Addressed: Empty miles. By becoming better at reducing empty miles, less fuel is being burned per job and the driver doesn’t have to sit and idle while waiting for his appointment. There are a total of 175 billion miles being driven, 30-35% of those miles are empty or 62 million miles, which equates to 87 million metric tons of carbon emissions.

How The Trucking Industry Can Become More Sustainable Overall: If we can get carriers to apply a better system to reduce empty miles throughout the entire trucking system. As an industry, we should be invested in reducing fuel costs and reducing wasted hours so this becomes a win-win for everyone.

Misperception In The Industry: There is the perception that you have to sacrifice revenue to achieve sustainability goals. 85% of shippers say sustainability is really important to them and there have been some challenges overall, but Dan feels as an industry we have turned a corner. Sustainability goals help businesses to run more efficiently, make smarter procurement decisions, and then ultimately customers and partners are happy to work with them because they are working to be more sustainable. 

The Path Forward: Organizations really do want to be more sustainable. Convoy is trying to figure out how to give them the tools, data, information, and pathways to do that on the trucking and transportation side and how to measure it. Convoy gives all customers it works with a sustainability report to show the impact they are having by working with them. Everyone involved in the logistics and supply chain industry has a big responsibility to do everything they can to build efficiency into the system. 

What Companies Can Do Now: First and foremost, ask providers you are working with what you can do to make your company more sustainable and reduce waste. Secondly, force yourself internally to measure your efforts. Make a goal as a company to come up with a metric to measure sustainability and assume you are not going to be perfect in the beginning, but it drives you to continue to make changes to get closer to something more impactful. Companies can also ask Convoy what they can do, including thinking about warehouse times, when you tender freight, appointment times, how to optimize live versus drop times, etc. In the near term, technology will look at different fuel options as we lead up to electric vehicles in the long term.

The Most Important Action A Company Can Take: Reduce the number of miles a truck has to work and reduce the time a truck is at a facility running idle or waiting for an appointment as a result of inefficient appointment times. We, as an industry, even need to look at truck stops and figure out more efficient ways to get power to that vehicle so it doesn’t have to sit there idling and using fuel.

What We Can Do As An Industry: Create standards around reporting the efficiency of networks. We need to measure the efficiency of systems, create incentives, and advertise the way we do rates and pricing to incorporate better efficiencies. It’s important for us to find a way to connect these efforts to the ultimate price people are paying and the money drivers earn. We also need to give benefits/incentives to companies who create efficiencies in the system as these drive behaviors which would align with a more sustainable network. 

How We Need To View The Environment: We need to realize the environment is also a customer that pays us in different ways. Extreme weather is not good for the supply chain so consider the impact our industry has on the climate. If we reduce emissions, the environment pays us with fewer storms, cleaner air to breathe, better food we can grow, etc. The environment is a customer of ours and we must do our part to make sure we are taking care of this customer.

TRANSCRIPTION

Danny Gomez: Welcome to Net-Zero, a show where we focus on information insights and inspiration sustainability in transportation. I’m your host, Danny Gomez, and today I’m joined by Dan Lewis, co-founder and CEO of Convey. Dan, thanks for joining us today. 

Dan Lewis: Thanks, Danny. Its awesome to be on here with you. 

Danny: So, I want to jump in really quick. We have a lot to cover in a little bit amount of time. I’d like to go back a little bit. You know, you’ve got a really interesting background. You know, you graduated from Yale with a degree in cognitive science, you have a pretty well studded resume. You’ve worked at Amazon, Google, Microsoft, and then you decided to jump into transportation. Could you take us a back a little bit on that journey of, you know, just the personal story of kind of where you came from and how you got to that decision to jump in and start your own company. 

Dan: Yeah, so I grew up in Seattle. I’m actually one of five kids. At the time, I would have never thought that it would have impacted future roles that I had but growing up my job was to work for our family office supply distribution company. So that was everything from doing accounts receivable, calling companies and saying you guys have to pay us, or packing trucks and building furniture and doing delivery routes, straight vans, around the Seattle area delivering stuff to companies. Fast forward a bunch, I went to Yale, that was extremely fortuitous. That was a great experience in my life, and I had, you know, left Washington, the west coast for the first time, lived pretty far away. Went to Chile actually. Spent my junior year abroad and the reason that was impactful is that ended up leading me to go later do some work with [2:00] the Panama Canal in Mexico and Panama and ultimately went and worked for an airline in Spain on a project doing a lot of maintenance repair and overhaul work and parts distribution work. So little pieces of supply chain exposure and experience that I picked up along the way, then got into tech when I moved back to Seattle, where I’m from and had a great experience learning about how to build software, consumer products, did a ton of work in machine learning, artificial intelligence, and that was what led me to Google. The company that I was with was acquired. And ultimately it was Amazon. And at the time, for a while, Amazon had been differentiating itself through supply chain innovation and through rapid delivery and consumers were getting used to this idea of very fast delivery and it was changing behavior. If you wait until there is one to two days left and you’re a subscriber to Amazon Prime, you’re probably going to buy there because you know its going to be delivered in one to two days. So, you can procrastinate and be lazy and order from your house and get it in a day. That was kind of a pretty remarkable change. A lot of companies started to take notice of that and respond. I was at Amazon, I saw an opportunity to go and back in the supply chain, I felt like there was a big opportunity there. I didn’t realize how much opportunity there was to create efficiencies and reduce waste. And so, I quit Amazon in early 2015 to go explore some ideas and I spent…and those ideas were going to be in transformation supply chain because some of the investors I had spoken with, some of the opportunities I had seen at Amazon and other companies just seemed like that space was really exploding. I looked around there were so many companies doing last mile delivery, or reverse logistics, or things like that and parcel delivery. But there weren’t a lot of companies focusing on heavy haul freight for the middle mile. And after a bunch of conversations, I realized that, you know, that was an area that had [4:00] extreme fragmentation, it was pretty much off the grid at that point, pretty opaque from a data perspective, and, you know, there were two big sustainability opportunities which were directly tied to the business model. One was reducing waste from an environmental perspective, reducing carbon emissions, reducing, you know, time center burning fuel at a facility or empty miles being driven. And the other one was related to the livelihood of truck drivers and kind of essential workers which in 2020 I think the supply chain was highlighted as being so incredibly critical and important for this country. And so many people recognized how, you know, necessary it is. Everything from all the PPE to the vaccines, to just food when you are living at your home and not being able to go out, having someone bring that to you, or your local grocery store. So, even before that, you know, we were thinking about, man, truck drivers do so much incredibly difficult work, we need to create a system where they get treated really fairly and respectfully so they can thrive. So those are the two areas, the sustainability and kind of taking care of truck drivers that are directly tied to our business model and if we’re successful in doing those two things, we’re creating an extremely valuable business at the same time. 

Danny: That’s interesting because there is a lot of companies who are adding in sustainability now. Maybe because they want to, or they feel like they are being forced to. But for you it was part of the beginning. Was it part of your going out and finding investors in, you know, that value rung true to them? It sounds like, right? 

Dan: Yeah, the stated mission of the company is to transport the world with endless capacity and zero waste. And that sort of has been the idea of what we can go do since we started. And every shipper I’ve ever talked to says, ‘Look, we’d love to have trucks when we need them, where we need them, efficiently, reliably, at a fair price, with transparency and visibility.’ And in order to get that, they…anyway. There is a lot of waste that goes into the system to get that level of service. So how do you give that level [6:00] of service while also reducing waste at the same time, 

Danny: Alright, so, just for a moment, for those who may not be super familiar with Convoy. Can you just very quickly describe exactly what Convoy does and the value it provides? 

Dan: Yeah. We make T-shirts. Sustainable T-shirts. Yeah, Convoy provides trucking services, full truck load services. So, you know, and we work on one side with small owner operators, small carriers that use the Convoy platform to find work and complete work and then on the other side of our marketplace are companies that ship truckload freight. And so, we’re moving truckload freight all across the United States. We do drive in, refrigerated freight, we do, you know, live load, unload. We have a trailer pull, a universal trailer pull. Really innovative trailer pull concept we’ve built for, you know, pre-loaded trailers and dropping hook work. And sort of expanding on that, we’ve now built some TMS offerings for small shippers and we have a bunch of services we provide for carriers along the way that are part of our network. But ultimately, we’re providing trucking services for shippers and work for small carriers and owner/operators. 

Danny: That’s very helpful. And you very intentionally say that you are a freight network and not a digital freight broker. I assume that those choice of words are meaningful to you and your business. 

Dan: Yeah, that is intentional and that is something that we started talking about a year or two ago. And, you know, the ideas that the digital broker concept, which in part applies to what we do, but it tends to relate to building technologies and tools that allow brokers to be more efficient. 

Danny: Right. 

Dan: And what we’re building is a system where each of these different trucking companies and truck drivers is plugged into our system and we have a requirement to use our technology, so we have really high use and adoptive technology across the board. And so, we do a lot of network planning. We think about how do we then take this freight and make it optimal. [8:00] How do we find the optimal round trip, we automate backhaul recommendations to reduce empty miles, and we think a lot of about network planning. We have a trailer pull, we kind of optimized around the system. And we think really long term with our customers. So, it’s about using technology to create a more efficient system of appointment times, trailer utilization, you know, rolling assets and knowing what they are at what point and kind of brining that all together using technology and machine learning to optimize, while still providing all the customer support along the way. That’s a requirement. But behind the scenes, we are doing a lot of work to try to reduce waste and optimize systems. That’s more of a network play when you think about the level of planning that goes into that. 

Danny: Sure, and in everything you’re saying, you hear efficiency and reducing waste and even as you’re forming the company. Obviously, a lot has changed in the recent years whether it was because of Covid, and people are more aware or there is just more talk about ESG and sustainability. It’s been part of your DNA since you started. You did make a change and you had Jennifer Wong come up as the head of sustainability, did something change? Surely there was more attention around it. I think helpful for people who are listening is one, what brought you to that decision point to bring it to the next level, and as people look internally whether it is your peers or other people in the industry, when they’re looking to source of find talent internally or externally to fill these types of roles, you know, it’s a fairly new discipline, right? How do you go about identifying the right people internally to help you lead on this charge? 

Dan: Yeah, it is a relatively new discipline. I remember a friend of mine in Seattle became the sustainability director manager at Brooks Sports, maybe eight, nine years ago, his name is Dave Camp and I remember thinking, oh, that’s a job. That’s interesting, that’s kind of cool. Like, it’s a job, you can be the sustainability person. And Brooks has [10:00] been a leader in this area. And that’s the first time I ever even heard about that job. So I think the reason we decided it was worth it is we were getting to the point where there were so many opportunities to not only do the right thing internally and focus on the sustainability of how we run our business, but we were getting to the point where we had the data and the information to start to talk about a lot more in highly relevant ways with our customers, help them see opportunities to build sustainability into their business, talk to truck drivers about how they can actually improve their earnings by acting more sustainability and partnering with us on some of these initiatives, and kind of the scope of impact that we could have was significant. So, it made a lot of sense to have somebody come in and full-time kind of run that and tell that story and drive those actions. And, you know, before that, we were doing a lot of these things and it was part of the company and everybody kind of had a hand in doing it, but one thing I just learned as a first time CEO, as you get bigger, everyone chipping in and doing something is still great but you can actually organize that energy so much better when you have somebody kind of like driving it directly, and a single threaded owner as we talk about for that particular thing. So, Jennifer graciously stepped up and she is super passionate about it, and she took on a role and she has done an incredible job of helping us achieve this. And the other thing that I think I’ve learned that is worth sharing is its never too early to start talking about it and measuring your sustainability outcomes. One of the things that I was nervous about was when we first started, we actually had internally for Convoy, along with our revenue goals, our shipment growth goals, our margin goals, we had a reduce empty miles goal that was a stated company goal well before we ever talked about it publicly, and we were really bad at measuring it. We didn’t even know how to measure it exactly. We just said, “Look, we’re going to make this goal for the company, we’re going to talk about it every month, we’re going to figure out how to measure it.” So, we tried to measure it, we got better and better, we tested this and did this. [12:00] And several years later, we were at the point where we actually knew how to measure it well enough, and we built a tools and systems to measure well enough that we could actually release our sustainability report and talk about it. But that wasn’t just overnight, and I think sometimes people think, I’ve got to wait until I know exactly how to measure this, until I have all the perfect data to start doing it. And you just wait. But actually, the way you get to that data, is imperfectly measuring it. Doing it, you know, maybe in a way you’d be embarrassed to share, but that causes you to learn a bunch and figure it out and people think about and they’re like, oh, I can do this thing and then they have this idea, and it goes forward. So, its never too early to start formalizing it within your company and talking about it and measuring it. Even if its imperfect. I think that’s really important. 

Danny: Yeah, I think when you say internally is probably the good first step, right. I think what we see is there is a tendency for people to get out in the public, they want to make a headline and they’ll make commitments to being net zero by a date or reducing or being 100% EV by a certain date. You know, I was talking to someone recently, a consultant, saying, “We went into a company and said, ‘Hey, look, that wasn’t the best approach to sustainability. There was other things you could have been doing.’ And I think in reading your sustainability report, what I find really inspiring is the data that you have behind the things you’re achieving. And you guys have been hyper focused on efficiency and empty miles. Talk a little bit about what you’re doing there, and I think extending, even on your website, right. Its not just talking your own book, it’s a little bit of a challenge of saying, “Hey, look, if we did this as an industry, this is the types of savings we would see.” Talk a little bit about the empty mile focus for you. 

Dan: Yeah, and that obviously directly relates to less fuel being burned per job and then its empty miles and its appointment times. Like, having the right times…at the facilities, you don’t sit there and idle and burn fuel. So, we look at all the ways unnecessary fuel is burnt. We estimate that about and looking at some of the Bureau of Transportation statistics and things like that, [14:00] some of these sources, but 175 billion miles are driven truckload every year. About 30, 35% is empty. In our network, its 35, I think 36 on account of the medium to small carriers, and so, we estimate about 61 billion of those miles are driven empty. And that actually results in about 87 million metric tons of carbon released in the atmosphere every year. We’ve run a bunch of experience to look at what happens to empty miles when carriers adopt our automatic reloads program and systems that we build to try to create kind of perpetual optimized trips and reduce empty miles between jobs. And we found that when we do that correctly, we can get those carriers down to about 19%, 18, 19% empty miles. Which is really remarkable for a pretty fragmented system of, you know, smaller companies. This considers all of their miles. And so, if we can apply that system to the entire, you know, community of trucking and truck drivers, you could reduce 40 million metric tons of carbon, which is equivalent to over 10 million, you know, the emissions of 10 million passenger cars every year. And so, you know, that’s the top level and those are big numbers, that’s the high level. There is probably a million details underneath that we need to figure out but that helps us set the goal post for kind of the opportunity size, it makes it really clear that we, as an industry, should invest in this. And what’s great is if we do that, we also reduce a bunch of costs in the system. Truck drivers spend less money on fuel, they’re spending fewer hours getting their jobs done because they have fewer empty miles legs, and the industry actually runs more efficiently, and things probably get there faster too. So, it’s a win, win. And we’re really fortunate that, you know, in trucking it’s a very clear win, win. We can go after that with all of our energy. 

Danny: I think, you know, that messaging that you talked about earlier in kind of marrying these, you know, you’re talking to owner operators and you’re trying to make them run as efficiently as possible. I think there is this, I don’t know, [16:00] this perception that you have to sacrifice revenue if you’re going to achieve some sort of sustainability goals. If you’re going to be operating in a more sustainable way. How do you guys message that, you’re providing data, you obviously have the information to show them but I’m sure there is a healthy amount of skepticism that comes with that type of messaging and how do you get through those walls? 

Dan: Yeah. First off, we’ve done some surveys and 85% of the shippers that we talk to say that sustainability is really important to them as an organization. And most the Fortune500 companies that we work with have sustainability goals, for example. So, there are some challenges around motivation but actually at this point I think we’ve turned a corner for a bit where a lot of companies know this is important and they can see that when they act more responsibly and sustainably, they run their businesses more efficiently. They’re smarter about the procurement decisions they make, and their customers and partners are happy to work them. And so, just first and foremost, I think that, you know, people really do want this now and they’re caring about it. So, what we’re trying to figure out is how do we give them the tools, data, information, and you know, pathway to do that on the transportation trucking side. And then to measure it and say we give all of our customers a sustainability report that shows the impact that they’re having when they work with Convoy and using our various programs. And I think that’s either all the way rolled out or is rolling out. And then, you know, if there are questions or concerns, I think it really just comes down to, again, what are their customers care about. Ultimately, they’re serving their customers, so their customers care about sustainability. And its generally better for their business if they partner with us on reducing waste in the system because that can actually reduce their cost. So, they can lower their cost by working on programs like this. So, I feel like in the logistics and supply chain space, we have a big responsibility [18:00] in the greater scheme of things to do our part and push pretty hard here because it actually accrues very nicely in the business as well. Its very complimentary and so, aligned I mean. So, I think we should be doing everything that we can in the space to reduce waste and build efficiency in the system. 

Danny: Its interesting that what you guys have highlighted, and this is a question I get all the time, what can we do now. Right. And there is a lot of focus on EV and, you know, with EV there’s the demand side which is picking up and then there is going to be constraints on the supply and the infrastructure side and people want to know what they can do now. So, I think it’s very good that you guys have highlighted a problem in the industry that can be addressed now through technology but not in a way that is overly burdensome from an investment perspective, right. This is opportunities that are out there, and it doesn’t sound like there needs to be a huge investment made whether its working with you or even doing it within their own fleet to make things more efficient. I’d like to understand two things. One, how do you scale that model out beyond just Convoy, right. How do you push that across the industry? And then, two, what other things are you guys thinking about that are around the corner that may be a little bit heavier handed in terms of investments and technology? 

Dan: Yeah, everything you said kind of makes a lot of sense on where things are going, and I agree. Electric vehicles are super impressive and they’re going to make a really big impact here and its going to take some time to roll out the infrastructure and the equipment, obviously, to do that. So that’s quite a ways out I think in terms of the turnover in the industry on that. So, things people can do now, one I would say is when you are working with your providers, ask them to provide you with information and data or recommendations for how you can be more sustainable. The people that are providing logistics services or transportation services for you are thinking all the time about how they can reduce waste for their [20:00] own business because it is generally better for them. Ask them what you can do to actually make their lives easier and help them reduce waste. You know, come and talk to Convoy. We have Jennifer, we have other people here who have a lot of experience in thinking about sustainable networks and programs, and we’re happy to talk to companies about how they can do that themselves, to give advice to kind of look at people’s programs and we learn a lot by doing that as well. So, I think asking for data and feedback and then, you know, if we are able to do that on the truckload side, I think those are both really important. I would also say that, you know, internally, its just something to try to force yourself to measure. I say force yourself as in, it might not be obvious in how to do it but, you know, present that. Say, let’s make a goal as a company in the next quarter, the next two quarters, we’re going to come up with a metric to use to measure the most direct way that we are impacting sustainability. Let’s track it, we’ll do the best we can to track it and we’ll get better and better over time. And assume you’re not going to be perfect at the beginning. I think that’s a really good way to get started as well, and any companies that work with Convoy are looking at truckload, please come ask us, like how could we think about our warehouse operations, how could we think about our appointment times, how could we think about when we tender freight, and kind of the network that we run and how we optimize maybe live or a number of things, there is a lot of room for improvement and efficiency on those things that reduces waste and that’s kind of the bread and butter of what we’re doing. 

Danny: Aside from EV, what is some near-term technologies that you think, is it alternative fuels, is there something in the medium term that we should be looking at as well? 

Dan: So, I think different fuels and leading to EV in the future I think is part of this. I know there are other systems. There have been systems around, you know, Peloton for how different trucks can draft down the highway together and, you know, reduce fuel burn. But I think honestly, [22:00] the most impactful thing that we’re going to see over the next five to ten years, until some of these alternative systems are there, is simply [24:00] reducing the number of miles a truck has to run to do the same amount of work and reducing the time the truck has to run at facilities idling. And I think, or kind of waiting for an appointment. Like, inefficient appointment times that cause the truck to lose hours or spend a lot of time waiting. And another one we’ve been looking into, you know, at truck stops, are there more efficient ways to provide power to the trucks versus them running and being idle or in different places. So, there is some other ways we can think about getting power to that vehicle when it doesn’t need to run and burn fuel to achieve that power. But I think honestly, its about efficiency. That’s, you know, 10X, most of the opportunities in the next few years. 

Danny: What do you hope to see, and you mentioned it a second ago, you’re happy to talk, you’re happy to share your ideas. This is a unique problem, right. Its not one that Convoy can solve on its own. We’re better together than alone mentality, right. So how do we as an industry come together, what do you want to see? Is it associations, you know, there is obviously some lobbying efforts, but you know, just in general, how can we come together to solve this? 

Dan: I think that, so there are a few things. One is when you’re building a platform, they can really optimize these things. Finding ways to open it up and let other people plan their system using some of these best-in-class platforms. We’re working on some things like that, and we think that that can be really valuable because there is a lot of companies that don’t know how to build this stuff and don’t have the engineers, technologists, data scientists on staff. The companies that are fortunate enough to have that should build these solutions and kind of allow other people to plug into those platforms. So that’s one thing that we believe in, kind of open platforms that allow companies to do that. And we’re going to be doing some work there in the future. I think, another one is simply, you mentioned, you know, maybe some of these companies setting goals against it or going and getting input, I think that one thing we can do, I’ve mentioned this several times now, to share as an industry is to actually create standards around reporting on efficiencies of networks. So, our customers think a lot about, you know, on time performance and are we, you know, are we fulfilling all the jobs that we are going to do in a given lane and how much of their needs are we meeting, etc. There are other things around how you actually measure the efficiency of the system and creating incentives so that if we operate more efficiently, and our customers partner with us to do that, they can save money. So, advancing the way we do rates and pricing to really incorporate efficiency would be I think a way to win. And I think it would right now, you know, companies that are super-efficient don’t always realize all those benefits through lower prices and companies that are very inefficient, don’t realize all those costs. They’re often shared across all the providers. I would love to find a way to, you know, connect those efforts with the ultimate price somebody is paying and give the benefits to companies that are creating efficiencies in the system for everybody. That actually would drive it because, you know, money talks and money drives behavior. So, if we could find ways to align those better, I think behaviors would change to align with this better as well. 

Danny: Yeah, I think you’re right. Market, everyone loves market-based activity so that would be great to see that, and we’ve talked about that here at Freight Waves as well. You know, how does emissions show up in pricing and I think that you’re right. I think that probably is around the corner. At Convoy, you guys are working with shippers and carriers. How does the environment fit into that picture? 

Dan: Yeah, that’s a great question. So, shippers and carriers of the customers that operate as part of our marketplace, I honestly think the environment is also a customer. And I’m not just [26:00] saying that it pays us in a bunch of different ways. We’ve seen extreme weather pick up across the country. Not having extreme weather is really good for the supply chain. And so, if you think about, you know, the environment having a stable, like, system and a stable rhythm and operating within like normal bounds, that’s really good for the ability for trucks to drive. Fewer hurricanes, fewer extreme winter storms, fewer extreme heatwaves, so I think the environment pays us that way. And honestly, like, we’re breathing fresh clean air right now and, you know, we can operate our businesses with all these benefits that come from the environment. The food it produces, you know, all the materials it produces for us, the water that we get to drink. So many things, its pragmatic to think the environment is a customer of ours and it’s paying us every day in so many different ways and we need to do our part to make sure that we are taking care of it along the way. 

Danny: Dan, this has been super great. I would love to have you back. We just kind of scratched the surface. You guys are doing amazing things. For those that aren’t following you, they should. You guys are putting out a lot of great content, your sustainability report as well as the surveys that you’re doing so I recommend people get plugged. I really appreciate your time today and hopefully we can have you back. 

Dan: Absolutely, I’d love to come back some time. Thanks, Danny. 

Danny: Thank you.

The post FreightWaves TV: Sustainability in Transportation with Convoy appeared first on Convoy.

Those who manage sustainability know there is always something greater to be done and their wish list can be quite long. Many of the executives I have spoken with on my Business of Sustainability interview series admit they have some favorite sustainability initiatives they are most excited about. I wanted to share those proud moments as they may help inspire something new at your organization. 

1. Recycling Material To Create New Packaging Options. Altium Packaging’s Brian Hankin, SVP Strategy, Innovation, Marketing at Altium Packaging and Sarah Dwyer, Sustainability Associate: “As a consumer, hopefully if you recycle, you put the materials in a bin and it gets shipped off to a sorting facility where it is sorted, and we buy that material. Envision, our fully-owned subsidiary, is a mechanical recycler. We put the used plastic through a process, sort it again, create flakes, clean it thoroughly, and then extrude it into new resin pellets purely made better of recycled material. We are essentially taking this trash and turning it into material that is clean and can be used across a variety of applications including food applications. Our recycled material can make its way back into food packaging which is currently being legislated in states like California and Washington. We also have a product out of Envision called Ocean Bound. Ocean Bound is material that we collect close to the shores of developing areas of the world. We take that material, reclaim it, and put it through that same process, so we’re diverting material that might have ended up in the rivers and in the oceans. It is pretty exciting. The supply chain has a lot of pieces to it, the costs aren’t ideally where we’d like them to be, and it is more expensive to use this recycled material. But it’s pretty exciting that we are able to construct a system to enable our customers to build in this PCR (post-consumer resin), or recycled material into their products.”

2. Having A Social Impact With Your Business. Mokhtar Alkhanshali, CEO and Founder of Port of Mokha: “When you build a brand, you should always recognize it’s not just about the consumer, you think about your producers, you think about your employees, think about the people around you, and your company culture. It’s pretty important on the producer side that you build that strong connection with people there. And so, for us, our farmers, to see their lives being changed by being able to earn more. They can now afford school for their children or hospital bills, or whatever it is that they need in their lives that they have their needs taken care of and they have a way to connect to markets they never would have thought possible.”

3. Helping Customers Reevaluate Shipping Choices. Josh Raglin, Chief Sustainability Officer at Norfolk Southern Corporation: “Our largest environmental impact is locomotive diesel. This comprises over 90% of our emissions. Anything we can do to lower emissions is good for our bottom line. Lowering emissions is good for our customers because at the end of the day, our emissions are our customers emissions. And more of our customer base is looking at their supply chain emissions, they’re wanting to measure those, but they’re also wanting to understand how we can lower those emissions. A lot of our customers are just now starting their sustainability journey so we can assist them in that regard in helping to identify lanes for those conversions. Not every lane makes sense to go by rail, but there are a lot of opportunities out there. There are things moving right now that are in expedited fashion that maybe don’t need to be.”

4. Growing Vegetables With The Stadium’s Compost To Be Served Back At The Stadium. David Young, Chief Operating Officer at Seattle Seahawks: “We’ve got a tremendous partnership with Cedar Grove, who is our compost hauler. They have a farm, and we send our compost to them, they take it to the farm, and they use that compost across their whole farm, but there is one portion of that farm that is dedicated to Lumen Field and we get the vegetables back out of that piece which are consumed in salads and other items that we make for game days and other events so it’s really a closed loop composting cycle there. So, you can eat a hotdog, throw part of it away, it’s going to be used to create lettuce or carrots that you’re going to eat next year or in the next game in a salad. Every year we have a sustainability game and at that game — we plant potatoes early in the year in the cycle — and then when we get to that game, every potato — including potato chips, french fries, even potato salad — every potato that is served is organically and sustainably grown on the farm for that game.”

5. Recycling Shoes. Jess Bensley, Senior Product Line Manager at Teva, Deckers Brands: “You go on to teva.com, there’s a place where you can recycle your sandals, and it just takes you through a few easy steps to download a free shipping label. You get that shipping label, pack up your Tevas and send them off and then they actually go directly to TerraCycle’s facility which is handling the cleaning, the sorting, the breaking down and the separating of materials. This is where we can start the circular journey a bit more, if those materials are broken down to the bottoms. The bottoms of our shoes are made out of EBA and rubber, it’s very common in footwear and these can actually be recycled together so they’re ground up and then put into tracks and playgrounds and sport courts. So that’s how they’ll be having a new life. And then, the upper, not quite as cool. They’re going into the carpeting industry, but we all have carpets and rugs, so we’ll see those come back to life again. But as you talked about next steps, circularity is our ultimate goal. We want to create a backwards loop in our supply chain and we have a lot of work ahead of us, but we want to make old Tevas into new Tevas and that is our ultimate goal.”

6. Formulating Recycled Cardboard Into Bottles To Reduce Plastic Usage. Julie Mishner, Product Manager at Jabil Packaging Solutions: “We just acquired a company called Ecologic Brands. The shell of this beverage bottle is made out of recycled cardboard and it can be separated and then the amount of plastic needed inside is greatly reduced. It enables you to use significantly less plastic because you don’t need to rely on it for the structure. You can separate the components and each product is completely recyclable offering huge plastic reductions.”

7. Prioritizing People-Focused Outcomes. Kimberley Sundy, Director, Corporate Sustainability at Kellogg Company: “We are really dedicated to people-focused outcomes and so the work we do with farmers — our commitment is to support a million farmers and workers — is really demonstrative of that. We are helping farmers do things like conserve natural resources, think about how they can meet science-based targets, etc. We responsibly source our ingredients and we collaborate with farmers to do that too. We are also doing really important work to help support farmers from a climate perspective and to improve climate resiliency. We work with real people throughout the value chain. Real farmers on real farms and a lot of real farm families to get that work done.”

8. Using Rainwater To Resurface The Ice Rink And Banning Single Use Plastics. Rob Johnson, VP of Sustainability and Transportation for Seattle Kraken and Climate Pledge Arena: “Two things that have really captured our fan’s attention are first, the fact that we’re collecting rainwater off of one quarter of our roof, holding it in a 15,000-gallon cistern and using that to resurface the ice on our game nights. We call that our Rain to Rink Solution. The second is the idea that we’re going to be banning the use of single use plastics. When you stand at the arena’s front door and you look to the west, you can see Puget Sound. We know collectively the impact those single use plastics are having on the health of Puget Sound, our native salmon and orca population, but also our human health. When you consider that an artist like Billie Eilish could just come into a building and say, ‘I’m going to play in your building, but one of the prerequisites, one of the riders is that you can’t have any single-use plastics while I’m in the building.’ That was inspirational to us and we thought, if she can ban it for one night, why couldn’t we ban it for 365 days a year? So, we’re not going to be able to ban everything on day one but we’re going to ban most things and then we are going to phase out everything, we hope by the 2024 timeline. The idea here for us to inspire fans to really reduce their plastic use and consumption is going to be a really, really great one.”

9. Improving Manufacturing And Sourcing Of Product At The Largest Retailer In The World. Zach Freeze, the Senior Director, Strategic Initiatives, Sustainability at Walmart: “We’re doing a lot of great work to improve the manufacturing and sourcing of our products, including things like working very hard to improve the recyclability of packaging. Walmart is challenging and working with our supplier partners on improving the ingredients, the way things are made and sourced, and even the store itself. For example, we have moved to extremely energy efficient lighting and this is an example of how we are constantly looking at how we can improve our business while keeping our customer in mind. We want them to trust that when they select Walmart as a retailer by either walking into a store or going online, they are getting a product and a service which keeps sustainability at the forefront.”

10. Removing Plastic From Product Packaging. Bryan Pape, CEO of Miir: “We’re working on reducing all of our plastic packaging so we’ve moved entirely from a plastic-based poly liner to one which is basically compostable to protect the product from being scratched during transit of the package. We do have compostable liners holding the product inside of the box and we are almost there to completely eliminate any sort of poly bag to protect that product. We are trying to think holistically about sustainability, not just the end product, but also what is on the product between transfer of the goods. It is an evolving journey for sure.”

11. Reducing Reliance On Fossil Fuels In Production. John Sadlier, Chief Sustainability Officer at Ardagh Group: “We are working on a project at the moment called The Furnace of the Future. Glass furnaces typically have been 80% fossil fueled and 20% by electricity. Rough numbers. We’re working on a project that will invert these stats and get you to a 20% fossil fuel, 80% electricity breakdown. And then driving that electricity toward being from a renewable source. Not only is it Ardagh Group, but we’re also working with a consortium of 20 glass container manufacturers in Europe through a project coordinated by FEBI, the European glass container manufacturer association and we’re currently applying for an EU innovation grant to help us with that. It’s a super exciting project. There is a huge amount of innovation involved. We’re all really excited about this project and it’s a lot of work. It’s not going to be easy to achieve, but it’s really important that we do it because if we’re serious about this agenda, we have to make progress and we have to get this transition away from fossil fuels.” 

12. Focusing On Sustainable Finance. Kelly Fisher, SVP/Head of Corporate Sustainability at HSBC: “We were the first bank to help two big insurance companies issue green bonds last year, which is huge for the insurance industry. If we could be known for this, I think that’s really exciting because at some point, I don’t even think it’s going to be a label — it is going to be a way we have to do business.”

13. Giving Back To Environmental Nonprofits. Wylie Robinson, Founder and CEO at Rumpl: “Participating with 1% for the Planet, so 1% of the revenue we generate from all of our products goes straight back to environmental nonprofits. All of these things really resonate with our customers, so we’re just continuing to build on that connection that we have with our customers through our sustainability activities.”

14. Achieving Climate Neutral. Jane Franch, Director, Strategic Sourcing & Sustainability at Numi Organic Tea: “We are now climate neutral. We’ve calculated all of our emissions from our farm level through our warehouse and those are being offset with reduction initiatives as well as investing in voluntary offsets in the Amazon. Additionally, our switch to plant-based packaging has enabled us to displace 13.3 metric tons of single use plastic from the material stream.”

The post Business Leaders Share Their Favorite Sustainability Initiatives appeared first on Convoy.

This year we partnered with the team at Emitwise to collect, analyse, and report on our scope 123 emissions. These are our results and actions to take to reduce our environmental impact.

Sources of our emissions

Commuting

Convoy’s headquarters are in Seattle, home to approximately 70 percent of its employees, with a second office in Atlanta, home to the remaining 30 percent. Both offices are in downtown areas that make it easy to commute by public transit, biking, or walking. 

How we commuted, pre-pandemic

Commuting emissions drastically fell in March as Convoy switched to remote work as a result of COVID-19. From January to March, Convoy employees emitted 608,034 pounds of carbon emissions via daily commutes, but the pandemic pushed Convoy to re-evaluate our practices. We implemented work-from-home policies that reduced our commuting emissions by 97 percent from March to December. Today, fewer than 10 percent of employees commute to the office at all.

Office Workspaces

In our workspace, all employees — including our executive leadership team — work in an open seating model, fostering a vibrant and inclusive place to work. Open seating models also require less square footage than individual offices, resulting in less energy spent overall.

In aggregate, Convoy has ~144,000 square feet of office space and that requires an estimated 2,600,000 kWhs of electricity in 2020. To reduce emissions from building energy, both our Seattle and Atlanta buildings are LEED Gold certified, which reduces our energy footprint by about 20 percent and saves a total of 115,000 pounds of carbon annually.

Servers, Software, and Hardware

In addition to building energy, Convoy also provides every new employee with hardware and office supplies (i.e., a laptop, desk, chair, and monitor). Manufacturing these products comes with a cost of carbon emissions. In 2020,our purchased goods and services equated to roughly 1,279,000 pounds of CO2. Looking ahead to 2021, we will start to evaluate the sustainability of these products, both in the production and supply chain phase but also the end-of-life phase of each product. 

As a tech company, we rely on cloud servers to store our data and power our company, which contributes to our Scope 3 emissions. In 2020, Convoy’s servers used an estimated 431,219 kWhs, which resulted in roughly 600,000 pounds of carbon. Like many companies, we also purchase software to improve the productivity of our workforce. 

Physical Waste

Since Convoy is a paperless office (invoices, bills of lading, and so on are stored in the cloud), the majority of waste comes from our kitchens. Convoy generates ~300 pounds of waste daily, which totaled about 13,816 pounds of carbon from January to March. Of this waste, roughly 40 percent ends up in the landfill, 33 percent is recycled, and 27 percent is composted. Since we switched to working from home, in-office waste has reduced by 97 percent. We estimate that our waste and water resulted in 24,250 pounds of CO2.

In summary, in 2020, Convoy has produced 4,425,000 pounds of carbon from commuting, building energy, and so on, while also preventing 1,605,535 pounds of carbon emissions from America’s highways.

How We’re Reducing Convoy’s Environmental Impact

Now that we have our baseline, we’ve started to work on some projects to help reduce our environmental impact.

Offsetting Our Emissions

As a first step towards reducing our footprint we decided to offset our scope 123 emissions. We want to be sure we support projects that have a real impact on the environment and the communities around them. 

We are partnering with Carbonfund.org as our provider for carbon offsets. They are both a project developer and sourcer for offset projects from voluntary carbon markets. We also evaluated several other carbon offset providers as part of this program: Terrapass, 3Degrees, Native Energy, and Patch.

We selected projects to fund that resonate with our business in transportation, our customers, and our employees. We choose projects that Convoy is proud of both for their positive environmental impact and their benefit to local communities. In addition to the reduction of greenhouse gases, many carbon offset projects create “co-benefits”, or supplemental positive outcomes, in their development areas. Co-benefits are generally planned and mapped to U.N. sustainable development goals by project developers. Among others, co-benefits include community job creation, education, gender equality, water quality, and social equity.

Carbon Offset Projects

Project 1: Truckstop electrification

Truck drivers in the U.S. are required to take rest periods in between driving in accordance with U.S. federal regulation. Drivers often idle their engines during these rest periods in order to power personal electronics and maintain a comfortable temperature, especially at times of year with peak high and low temperatures.

Truck idling produces carbon dioxide (CO2), in addition to other harmful emissions including nitrogen dioxide (NOx), volatile organic compounds (VOCs), particulate matter (PM), and carbon monoxide (CO), which can have an adverse affect on the health of truck drivers and people living in communities adjacent to truck stops. Argonne National Laboratory estimates that U.S. drivers idle for approximately 1,800 hours per year on average, which results in 11 million tons of GHG emitted annually.

This truck stop electrification project eliminates the need to idle by providing an in-cab module that heats, cools, and provides power to the cab of the truck. Drivers save approximately 1 gallon of diesel per hour by using the electric module. This project reduces the negative environmental impact of idling and saves drivers money by using cheaper electric sources.

ENVIRONMENTAL BENEFITS

• Mitigate climate change
• Reduce localized air and noise pollution
• Reduce fuel usage and the environmental harm caused by fossil fuel extraction

COMMUNITY BENEFITS

• Development of new technologies and additional jobs created
• Better resting conditions for drivers
• Provide alternative to idling in parking lots or road shoulders

DEVELOPER
IdleAir

STANDARD
American Carbon Registry

LOCATION
Multiple U.S. States

Project 2: Forest Conservation (REDD+)

10-20% of worldwide greenhouse gas emissions are due to deforestation. The majority of deforestation occurs in tropical forests in developing countries driven by the economic needs of the community. Forests are cleared for logging, mining, cattle ranching, and production of soft commodities like palm oil and cocoa.

Reducing Emissions from Deforestation and Forest Degradation (REDD+) projects work with local communities to mitigate deforestation pressures by providing economic resources, agricultural training, and establishing alternative economic activities that do not rely on the degradation of natural forests.

REDD+ projects mitigate climate change through preventing forest loss and increasing the removal of greenhouse gases through forest conservation, management, and expansion. REDD+ projects offer advantages over tree planting or reforestation projects, because they provide immediate and recurring reductions in greenhouse gas emissions, whereas tree planting projects can take 30+ years for trees to grow to their mature state.

ENVIRONMENTAL BENEFITS

• Reduce carbon dioxide emissions
• Mitigate climate change
• Conserve habitat for endemic bird species and threatened tree species
• Improve local water quality
• Retain top soil and control erosion

COMMUNITY BENEFITS

• Establish alternative sources of income and employment opportunities
• Provide agricultural extension training
• Grant official land tenure
• Social projects and programs such as commercializing the collection, transport and sale of açaí, rubber and medicinal plants

DEVELOPER
CarbonCo (wholly-owned subsidiary of Carbonfund.org)

STANDARD
Verified Carbon Standard

LOCATION
Brazil (State of Acre)

Reduce electricity usage in homes and at the office

All of our scope 2 emissions are from purchased electricity. We can take immediate action by being more conscious of turning off lights at the office and at home to reduce our overall usage. Long term, we can look at ways to increase the use of renewable energy. 

In our Seattle office we purchase our electricity from Seattle City Light and we are only given detailed information on about 50% of the electricity supply mix we receive from them. However,  We will look further into information on the mix of that remaining 50%, which appears to be imported from other regions. In general, the grid mix in the pacific northwest region is made up of more than 80% hydropower, which decreases our office’s carbon footprint.

We need to do more research on purchased electricity for our Atlanta office to understand where we can improve. In 2020 we modeled our electricity usage using regional averages in the absence of data. 

Purchase refurbished laptops and equipment

Convoy provides every new employee with hardware and office supplies (i.e., a laptop, desk, chair, and monitor). We will continue to evaluate the sustainability of these products, both in the production and supply chain phase but also the end-of-life phase of each product. Remanufactured products save up to 98% of CO2 emission compared to equivalent new products. We are reducing our use of unsustainable products and purchasing refurbished products when possible.

Include sustainability questions to vendor management progress

A simple way to reduce our impact is to support other organizations that are conscious of their impact on people and the planet. Every dollar we spend is a vote in favor of a certain way of doing business. We plan on putting together a checklist of values we look for in suppliers to ensure we’re working with the right people. This has already prompted us to reevaluate purchasing for some marketing materials and we plan to apply it more widely as the year goes on.

Reduce physical swag shipments

The fashion industry has a huge environmental impact and the emissions from sending all those t-shirts, stickers, and gifts around the country is harming our planet and our future. We plan to reduce the amount of physical swag we send out and are moving towards digital gifting instead. For the occasions when we still want to send a physical gift, we are only using sustainable suppliers to ensure what we do send out has been produced in a sustainable way.

Reduce physical waste in our offices

In our office kitchens, we provide our employees with full access to beverages and snacks. To discourage the use of single-use products, we provide all employees with a water bottle during onboarding. In addition, ceramic coffee mugs, bowls, and metal silverware are in our kitchens to further reduce the use of single-use products. We also focused on reducing the amount of individually packaged snacks by switching to more bulk items, but due to the pandemic, we’ve reverted to individually packaged snacks. While we aim to not use paper and plastic products, we do guarantee that 100 percent of the paper cups, paper plates, and plastic utensils are compostable in Seattle’s compost bins. Now we are testing ways to focus on health and sustainability by partnering with companies that produce recyclable or compostable wrappers on individually packaged snacks.

We need to act fast

We now have a baseline we can measure future improvements against and we’re continuing to monitor our emissions going forward. It feels like our industry is finally waking up to the climate crisis, but time is not on our side. In order to limit a global temperature increase to 1.5 degrees Celsius, aligned with the Paris Agreement, every organization needs to better understand their impact and take significant measures to reduce it now. We’re doing that at Convoy and we’ll be sharing more as we go. Learn more about our efforts in our first sustainability report.

The post Reporting on Convoy’s Environmental Impact appeared first on Convoy.

The Retail Industry Leaders Association (RILA) recently hosted a webinar featuring Convoy’s Head of Sustainability, Jennifer Wong, and Home Depot’s Ron Guzzi, Senior Manager, Transportation Carrier Relations and Sourcing, to discuss the topic “Cut Costs, Increase Efficiency, and Reduce Emissions Through Freight Matching.” Jennifer and Ron shared perspectives on a variety of topics including freight matching, route optimization, carrier collaboration, and much more.

From Convoy’s perspective as a digital freight network, Jennifer shared data on the evolution of the empty miles phenomenon, how the industry has been attempting to move the needle on empty miles, current strategies to address the reduction of carbon emissions, and ways to offset the rest. 

As the largest home improvement retailer in the world, Home Depot faces a host of challenges in its supply chain and Ron shared the building blocks of how they address sustainability efforts, the organization of their supply chain, strategies they have been implementing including floor loading, final mile delivery, direct fulfillment centers, and flatbed delivery markets.

Some of the key takeaways from the webinar follow.

Industry’s Sustainability trends in Empty Miles:

Estimates in the mid-1970s suggest that between 20 and 30% of miles driven by freight carriers were empty. But if you look at the several results between the 1990s to early 2000s, it puts empty miles between 15 to 18%. Since then, there’s really no sharp improvements because surveys from the past decade or so put empty miles in the range of 15 to 20%. So there hasn’t been a lot of improvement of empty miles over time but the significant amount of waste continues to occur. 

Difficult to Measure Carbon Emissions:

Convoy recommends the first step in sustainability efforts is to measure your carbon emissions because unless you can measure your output today, you don’t really know the biggest areas of impact to be able to improve upon. Some companies have their own internal systems where they are trying to collect the carbon emissions from all different departments across their entire organization, while others work with third-party consultants. One challenge of sustainability today is a lack of standardization and visibility. Convoy has tried to give more visibility into sustainability data to any customer partnering with them by automatically adding sustainability metrics into monthly reporting. 

Identify Strategies to Decarbonize:

One avenue is to more efficiently bundle shipments because if you’re able to bundle shipments, you can actually reduce emissions by 45%. A second way is offering more flexibility with deployment windows. Convoy has done some research and for those who choose a green appointment window — meaning they have flexibility in pickup and delivery times — they can actually reduce emissions by about 36% because they are maximizing the carrier transit time, the carriers aren’t having a lot of time at the beginning or end of those runs so they can actually stay more efficient, and they’re picking up more bundled shipments as well. 

Offset What You Can’t Reduce:

Companies won’t necessarily be able to fully reduce every emission in their transportation network immediately, but they can reduce as much as possible and then offset the rest to make an impact. Through a partnership with CarbonFund.org., which is one of the largest credible offset providers, Convoy is now able to give more data and insights for customers to be able to offset their truckload transportation. 

How Home Depot Has Modified Its Supply Chain:

Prior to 2007, Home Depot was probably one of the most inefficient retailers in the country. They were, by far, the leading LTL shipper in the country with about 60% of its freight moving vendor direct to store. About 40% of it flowed through its stocking and bulk centers. Fast forward to where Home Depot is today, where over 60% flows through 19 Rapid Deployment Centers (RDCs). 23% goes through its stocking and bulk location, and only 14% now goes direct to store. Things like live goods will never go through a distribution center, and that makes up a good part of that 14%.

Home Depot Manages Their Dedicated Fleet System:

Home Depot does not have a private fleet. They run massive, dedicated fleets with a high priority on reducing or eliminating empty miles. They also do a good job of selling some of their empty miles when they can, and do even a better job of purchasing empty miles from other shippers across the industry that run either dedicated or private fleets. Home Depot runs about 2600 total drivers and approximately 2300 tractors. There is some slip seating and they run just under 200 million total miles each year with the dedicated fleets. Total loaded miles are about 145 million or about 73%  

How Home Depot Employs Intermodal Shipping:

Home Depot is definitely one of the largest intermodal shippers. Intermodal is not necessarily eliminating empty miles but it’s just eliminating miles in general because of the fact that you’re moving many 53-foot containers off the same train. So, the fuel and the emissions difference is huge between truckload and intermodal. Home Depot moves about 150,000 intermodal loads a year. Anything that is over an 800-to-1000-mile distance is oftentimes going to move intermodal for Home Depot. 

Partnering With Other Shippers:

Three or four years ago Home Depot became very actively involved in working either directly with other shippers or through a company like Elaine Hub, which is now run through Transplace, and purchasing other major retailers or even shipper private fleets or dedicated fleet empty miles. Considering Pepsi and Frito Lay alone, Home Depot has moved over 4,000 loads of theirs simply benefiting from their empty miles moving its freight via a one way. They are a part of Home Depot’s annual national bid and one of the bigger carriers within the Home Depot fleet. Home Depot continues to look at other opportunities to either sell its 50 million empty miles or fill the rest of them by looking at other shippers with the same opportunities to enable the company to benefit from really good costs and at the same time reduce its carbon footprint.

Working To Adapt Final Mile Deliveries:

Currently, and over the next few years, Home Depot is creating very large direct fulfillment centers and flatbed delivery markets. So instead of delivering from stores, the company is going to be delivering things like lumber, building supplies, appliances, patio furniture, and other big and bulky items from these locations. There will be about 150 extra distribution centers or small delivery centers which will be opened up across the country to create the fastest most efficient delivery network within home improvement.

To learn more about Convoy’s carbon emission reductions and how The Home Depot addresses shipments throughout its network, watch the webinar recording here.

Video transcript

(edited for clarity)

Jess Dankert: Good afternoon everyone. My name is Jessica Dankert, and I am the vice president of supply chain for the Retail Industry Leaders Association or RILA. My colleague, Erin Hiatt is RILA’s vice president of corporate and social responsibility, and she and I are co-hosting today’s webinar, Cut Costs, Increase Efficiency, and Reduce Emissions Through Freight Matching. But we will be talking about a lot more than just empty miles today. First, for those that aren’t familiar, RILA is the trade association for the largest and most innovative companies in the retail industry. We bring retailers together to share, learn, and advocate, advancing our members and strengthening the industry. Visit RILA.org to learn more about us. 

Today’s webinar is the second in our six-part series on topics at the intersection of transportation and sustainability. Today we’ll be focusing on the transportation and logistics operations of shippers and exploring how sustainability isn’t just a feel-good buzz word in today’s retail supply chain but rather a strategic imperative that yields bottom line benefits while working toward important goals for the environment. As a significant source of emissions, transportation and shipping is a key area of focus and today we will hear from Convoy and The Home Depot on topics like freight matching, route optimization, carrier collaboration and more. I’d also like to thank Convoy for sponsoring today’s webinar. As most things, supply chain and sustainability topics and goals are a journey so whether your company is just getting started with developing goals and strategies or continuously improving on existing journeys, Convoy is a good partner to connect with. And I’d invite you all to visit RILA.org to register for the next webinar in the six-part series. 

Erin Hiatt: As Jess mentioned, I am Erin Hiatt, vice president of corporate social responsibility with RILA and I have the pleasure of introducing today’s webinar speakers. So, first off, we are going to hear from Jennifer Wong who is the head of sustainability at Convoy. She sets the direction for Convoy to meet its own sustainability goals as well as helping businesses and carriers ship more responsibly including many RILA members. Then we’ll hear from Ron Guzzi, who is senior manager of transportation carrier relations and sourcing with The Home Depot. Ron has been with The Home Depot for 24 years and his roles have covered a variety of responsibilities with transportation. He has led the carrier relations and sourcing team for the last 10 years, and he partners with more than 200 carriers in Home Depot’s network finding ways to lower Home Depot’s carbon footprint that also yields savings and efficiencies. So, let’s jump right in. Jen, I’m going to turn it to you first. Thank you so much for joining us and for Convoy’s support of today’s session. 

Jennifer: Thank you for having me! At Convoy, sustainability is a part of our day-to-day business. We are a digital freight network transporting full truck load freight for companies of all sizes who really need a reliable transportation partner to get their freight from point A to point B. Our sustainability journey started the very first day of the company. April 2015 is when Convoy first started. I love that Jess mentioned that sustainability isn’t’ a buzz word because it really is true where a lot of the companies that are the leaders in sustainability today are incorporating it into their business practices. It’s not just a program that’s on top of their business today but everything that they launch and invest in around sustainability actually drives meaningful business results as well. Here are some of the highlights around Convoy’s sustainability journey. It showcases some of the products, programs, and partnerships that we’ve launched to be able to better support our customers and every shipper that wants to think about how they can leverage their supply chain partners to ship more responsibly. 

Today there will be a few different poll questions. I have the first one up today just to understand if you’re responsible for reducing carbon emissions at your company.

More than half of you are responsible for reducing carbon emissions at your company. So, excited to have you in this conversation today. Today I’ll be sharing the problem of empty miles and why it exists today. And then I’ll share some of the research that we’ve really doven into around the reduction of empty miles to reduce carbon emissions and then I’ll leave you with three simple steps that you can consider if you’re looking to really take some immediate action to reduce empty miles in your transportation network. 

For the second poll question, curious to hear from all of you what percentage of your transportation runs empty today. The Bureau of Transportation’s statistics, they actually see that heavy duty truck load freight accounts for more than 252 million tons of carbon emissions every year. So, if you’re able to reduce that by about 35%, you could see that 87 million metric tons is just due to empty miles. So, it’s a pretty significant problem that have a lot of solutions to be solved for right now. 

It’s interesting to see the different numbers in terms of percentages because it kind of follows the trends that we’ve seen when serving estimates in the mid-1970s, they’re suggesting that between 20 and 30% of miles driven by freight carriers were empty. But if you look at the several results between the 1990s to early 2000s, it puts empty miles between 15 to 18%. But since then, there’s really no sharp improvements because surveys from the past decade or so put empty miles in the range of 15 to 20% so you could see that there hasn’t been a lot of improvement of empty miles over time so there has just been so much waste that has been incurring over time. And if you look at a chart like this, at first glance it does look like asset-based carriers drive more of their empty miles than maybe private fleets or independent carriers, but there are a lot of differences between kind of the mid-size, larger asset carriers versus the independent carrier owner/operators. So, it’s a little bit of an apples to orange comparison. But one thing that we did is actually take a look one step deeper. So, in an attempt to control for some of those differences such as the types of trucks and trailers that different carriers run, you can see the differences in empty miles quickly disappear. So, if you only look at the carriers operating a class 8 dry van and reefer trailer, the total share of miles running empty if you look at the 2002 data, from this data, you can see its about 32% for mid-size to large asset-based carriers and independent operators are about 35%. 

The first step is to first measure your carbon emissions because unless you can measure your output today, you don’t really know the biggest areas of impact to be able to improve upon. Our four types of scope emissions, scope one, scope two, scope three, scope four, and you can see transportation is actually in that scope three category. And it’s pretty meaningful because if you look at most companies’ scope three emissions today, it involves their entire supply chain, their value chain, so typically the emissions in that category are bigger than scope one and scope two combined. 

Some companies have their own internal built systems where they are trying to collect the carbon emissions from all different departments across their entire organization. We know that some companies work with third party consultants. One challenge aspect of sustainability today is a lack of standardization and visibility. One thing that we’ve tried to do is give more visibility into sustainability data to any customer that is partnering with Convoy. So, we automatically add sustainability metrics into monthly reporting. Here is a snapshot example here but we believe that it’s important to be able to see these metrics alongside of the other operational metrics that you would typically care about on a month-to-month basis. There is a lot of different ways to collect this data but the first thing is to be able to look for different partners, whether its internal partners to build your own system or external partners so that they can give you the data to measure your emissions first. 

The second step is to look for strategies to decarbonize. There has been a lot of conversation around decarbonizing the supply chain and specifically transportation. Typically, when we are working with different shippers, they are really centering it in two different ways. One is around trying to more efficiently bundle shipments because if you’re able to bundle shipments, you can actually reduce emissions by 45%. So, in that initial scenario, instead of trying to work with a person that is trying to get the best take or margin for the day, being able to really look at a wider network and more opportunities to find the best positioned truck for any given shipment. Because if you’re able to do that, you can actually reduce carbon emissions by 45%. And then the other way that a lot of companies are taking advantage of are offering more flexibility with deployment windows. When we’ve done some research and looked into this data, if you choose a green appointment window, meaning you have flexibility in pickup and delivery times, you can actually reduce emissions by about 36% as well because you are maximizing the carrier transit time, the carriers aren’t having a lot of time at the beginning or end of those runs so they can actually stay more efficient and they’re picking up more bundled shipments as well. 

And then finally, the third is to offset the rest. So, we know that you won’t necessarily be able to fully reduce every emission in your transportation network immediately but reduce what you can and then offset the rest because offsetting really makes an impact. And this is something that we believe should be considered throughout the entire scope three value chain. Some companies today are thinking about offsetting their own emissions, their scope one and scope two emissions, but because scope three has the biggest impact, we believe that scope three emissions should be counted and offset as well. So, it is something that we also offer. It’s through a partnership with carbonfund.org. It’s one of the largest, credible offset providers so a lot of our customers were already partnering with Carbon Fund to offset their emissions, so we also partnered with Carbon Fund to be able to give more data and insights to be able to offset their truckload transportation as well. So hopefully those are quick, actionable takeaways that you could consider when you are thinking about some next or small steps to be able to reduce the carbon emissions in your transportation. Thanks, Erin. 

Erin: Excellent. Thank you so much, Jen. Some excellent insights and really great research to share. So, next up we’re going to hear from Ron with The Home Depot about some of the strategies that they’ve been able to deploy and what’s been working. Ron, I’ll turn it over to you. 

Ron Guzzi: I am Ron Guzzi, I lead our carrier relations and sourcing team within Home Depot and 24 years with the company. You go to the next slide, Erin. So, I’m going to start with just giving a high-level overview of Home Depot. I think most of you, if not all of you, know who we are. We’re operating over 2300 stores, the largest home improvement retailer in world. Half a million employees that we have and as many of you know, and we appreciate your shopping at Home Depot, sales have been booming. Just in Q1 in this past quarter that we just announced, 32.7% sales growth over the prior year which is beating plan by over 9 billion dollars. So definitely keeping me and everyone else within transportation busy. A little bit about our supply chain, we have approximately 70 DCs, 19 of which are RDCs, so rapid deployment centers. And over 60% of everything we sell flows through those RDCs. We have over 5 billion dollars of total transportation spend across both upstream and downstream. So that includes our final mile delivery portion of our business and then within the world that I measure, or manage, it’s about 225 domestic carriers within our network. We do consider ourselves to be an asset based shipper, we still do business with third party and brokers but highly prefer to use or to benefit from the carriers that are investing and purchasing tractors and hiring their own drivers. A little bit about our sustainability efforts and some of the results, really proud of that fact that we reduced carbon dioxide emissions by 10% in 2019, that was despite about 4% more transportation volume. But to cut emissions by 10% was impressive. A lot of that came from increasing the amount of cube. So just really filling up trailers with that much more stuff that we move. It took about 10,000+ truckloads off the road and also eliminated about 15 million miles of truck roads. Sorry, as I turned off my phone while I was speaking. We also have been a multi-year winning of the large shipper SmartWay award from the EPA. So, we take a lot of pride in what we do tied to sustainability. And just an interesting fact is if you want to do business with Home Depot within the world of domestics trans, you have to be a SmartWay certified carrier. We will not onboard you or do business with you unless you are part of the SmartWay network, and you are staying current by submitting your data each and every year with putting efforts into truly doing everything you can to reduce your carbon footprint. 

So, just to give you a visual, this is our distribution network today. And you can see based on the different type of DCs we have, about 70 or so, there is a couple that are missing from here that support miscellaneous type business that’s inside of Home Depot. But the important part is the bottom right. You can see back before 2007, we were probably one of the most inefficient retailers in the country. By far the leading LTL shipper in the country with about 60% of our freight that was moving vendor direct to store, right? And most of that was happening obviously via LTL. About 40% of it flowed through our stocking and our bulk centers but then you fast forward to where we are today, over 60% flows through those 19 RDCs. 23% through our stocking and bulk location. And only 14% goes now direct to store. Things like live goods that will never go through a distribution center, makes up a good part of that 14%.

So, a survey question and you can answer as many of these that apply. So how many of you operate, you know, looking for dedicated fleets? And then of that, those dedicated fleets, you know, how many of you are focusing on filling empty miles and even purchasing or selling your empty mile? Or if you don’t know for sure, you can definitely respond back. So, if you could take a second, you can check all that apply. And just a little bit obviously about Home Depot, we are certainly a retailer that focuses a lot on the dedicated fleets that we have within the core business. We do not have a private fleet, but we run massive, dedicated fleets with a high priority on reducing or eliminating empty miles. We also do a good job of selling some of our empty miles when we can, and we do even a better job of purchasing empty miles from other shippers across the industry that run either dedicated or private fleets. So, let’s take a look to see where we end up. Okay, looks like a good part, 40% of you run either dedicated or private with the same focus on empty miles. Not many of you actually selling your extra miles and very few, it looks like zero of you are purchasing empty miles. So, we follow an anomaly within the call but let’s go to the next slide and we’ll talk a little bit about Home Depot both sells and buys empty miles. 

This is our dedicated network. You can see we run about 2600 total drivers. About 2300 tractors. So, there is some slip seating that we do, and we run just under 200 million total miles each year with the dedicated fleets. If you look at the total loaded miles, it is about 145 million which is about 73% but if you look at the cartoon or the graphic below, you can see from the DCs to the stores, that contributes to about 79 million miles. So, when we return back from those stores, about 25 million of those miles are loaded with pallets. So, pallets that are obviously being gathered from the stores with all the inbound freight and then they are loading up an empty trailer. And every couple three days or so, we’re going to bring that trailer back to the DC when one of the stores get one of their next deliveries. We also have about 2 million miles that we are selling our miles to third parties. So, our carriers are working with other potential shippers. So about 2 million miles are running in parallel. We’ll pick up from a vendor and maybe bring it back to another shipper’s distribution center. And then biggest bucket is the 39 million miles that after we drop off at a store, our driver is going to a local vendor picking up that vendor load and bringing that back to our DCs. So, when you tally all that up, it’s about 84% of our store loads that are coming back with freight. So, we do a pretty good job of maximizing out. The reason why the math doesn’t completely add up is because the dedicated fleets are often times driving empty to a local vendor and then brining that back, obviously driving empty is going to be part of the empty miles that make up the overall 73%. 

So, survey question number two, we do a lot with intermodal. Curious to know of the retailers that are on, how many of you also work with intermodal within your network. I can say for us, we certainly want to make sure that it’s the cheapest option. We do an annual bid each year in which we will bid both truckload and intermodal together. More times than not we’re going to award it to the better of the two cost options inclusive of fuel. And then the questions on service, we feel it is absolutely a better capacity option. We don’t feel, especially current state, that the service levels are as good. Not necessarily that it takes longer on transit, but even the very ability against that state of transit is less consistent than we see on the truckload side. There is some concern and risks that we face in terms of service levels and if you don’t know or don’t use intermodal, we can definitely check that. So, let’s take a look and see what results we see. Okay, so again, about 36% of you that are on the call use intermodal. Certainly, focus on whether or not it’s the cheaper option and no response really on the service concerns but we definitely have an active voice, and we are always trying to balance what makes sense in terms of that fine balance between cost capacity and service. So, you can go to the next slide. 

A little bit about intermodal, we are definitely one of the largest shippers. Intermodal is…I’m not sure if it is necessarily eliminating empty miles but it’s just eliminating miles in general because of the fact that you’re moving many 53-foot containers off the same train. So, the fuel and the emissions difference is huge between truckload and intermodal. We move about 150,000 intermodal loads a year and I would say everything from vendor going into DC probably makes up about 35 to 40% of our total spend, of our over the road is going to fall within the world of intermodal. So, anything that is over an 800-to-1000-mile distance is often times going to move intermodal for Home Depot. The other thing that I’d say three to four years ago that we’ve become very actively involved is working with either directly with other shippers or maybe even a company like Elaine Hub who now is run through Transplace and purchasing other major retailer or even shipper private fleet or dedicated fleet empty miles. Just talking about Pepsi and Frito Lay alone, we moved over 4,000 loads of theirs simply benefiting from their empty miles moving our freight via a one way. So, they are a part of our annual national bid and one of the bigger carriers now within our fleet. And their performance is actually very strong. We do some business with a few others that you see listed on there and we continue to look at other opportunities to either sell our 50 million empty miles, so as much as we move a lot of unloaded, we have plenty of opportunity to fill the rest of them and we are also looking at other shippers that have those same opportunities in which we can benefit from really good cost and at the same time, really look to reduce our carbon footprint. 

Floor loading is not new to the industry. We started floor loading from our DCs to our stores several years back and with that we got a benefit about reducing or eliminating about 25% of the loads that were moving from the DCs to the stores. Simply because we’re just putting more stuff in the trailers. You can see the before and after, right? When we were running about 2,000 cube and now fast forward to where we are now, we’re jamming everything to the gills, right? Very little pallet loading and literally floor stacking freight from floor up to ceiling and getting 2500 to 3000 cube. It’s also very efficient for the stores. It does take a few hours to unload the trailer but they’re loading on carts and brining that freight directly to the aisles to which they’re going to be packed out mostly at nighttime or so. So very efficient operation. The stores like it because they are actually now receiving less trucks per week. It has taken about 25% of the inbound truckloads away from the store each week and obviously, as you can imagine, saved us a lot of money in doing so. Okay, you can go to the next slide. 

And I think this is, okay, I’ve got two slides left. So, regional fleet has also been a big part of our network. Just to give you an understanding of how regional fleet differs from either one way over the road versus our dedicated fleet, the top two graphs or pictures show two separate one-way lanes, right? So, an RDC that was running to two separate stores and because of the distance, one of those stores was running dedicated. The 1059. And the other one was to a vendor running one way. The same thing with the picture in the top right, shows that we were running both of them with one-way carriers. So very transactional. Probably a lot of empty miles that was built within that and what we did is we turned those, what used to be one-way lanes, into a regional loop. So, it’s a driver who is obviously picking up form the RDC and running to the stores, in between picking up a vendor, and that continuous loop is an example of what we have scaled across the country in which we runt these regional fleets, about 200 trucks or so. Not only do they save money, they reduce empty miles. These fleets usually run with less than 10% empty miles. I refer to it as connecting the dots. It could be partial dedicated loads. It could be one-way lanes. In the end, the drivers are running very consistently. They are on the road for I’d say, five days at a time. Very predictable freight. They know where they are going to be each day of the week and for the most part, many of these drivers are going to have the weekends off. So, let’s say they are on a Monday morning by picking up a load, they get back Friday afternoon or early evening, they sit down, take their two-day break, and they are back out again on Monday morning. So very low driver turnover. Drivers love it. It’s a much more consistent over the road lifestyle. And then from a distribution perspective, really good with better service, right? Much more predictable and we can count on this capacity and then less trailers because we have so much of this freight running with the regional fleets that we manage and therefore less one way over the road carriers that clutter up the yards with a lot of trailer pulls within those already ceased. So, we have about 200 trucks and we expect to add about 50 trucks here in the next 12 months or so. So, a lot of growth within this area. 

A little bit about our final mile. You can imagine, especially during the pandemic, Home Depot final mile or delivery has been booming. So, everything from parcel to especially box truck, van delivery, and even flatbed, you can see there with the forklift on the back of it. So just to give you an understanding of how we are reducing tons of empty miles and running this business much more efficiently as we convert over the next couple of years going forward is the prior state was about 2000 stores in the US and every one of those stores delivering to residential or pro customer. So, you think about it, we’re delivering freight into the store, product is being put on the shelf, and then we take it off the shelf, load it on to a delivery truck, and deliver it to the customer, times 2000 stores so you can understand how inefficient it is. And then obviously the miles and the extra emissions that are happening because of the 200 stores that we’re covering. Fast forward to where we are now and over the next couple three years, we are creating these very large DFCs, direct fulfillment centers, and flatbed delivery markets. So, market delivery type operations and we’ll still be delivering to some remote stores that will still be delivering still to customers, but this will be a centralized delivery network. So instead of delivering from stores, we’re going to be delivering from these locations. So, things like lumber, and building supplies, appliances, patio furniture, and other big and bulky will go through this network and we expect over the next two to three years or so, we’ll be complete with this. It will be about 150 extra distribution centers or small delivery centers that will be opened up across the country. So, creating the fastest most efficient delivery network within home improvement. And I think Erin, that is the last slide that I have. But as you can all see, a lot of that happening with Home Depot and much of that is tied to our efforts in reducing our carbon emissions. 

Jess: Well, that was fantastic. Thank you so much Ron and Jen as well. So much good information. Okay folks, if you do have some questions, we’re rolling in on the Q&A. Jen, can you talk a little bit about, you know, working with the number of shippers that you and Convoy do. Can you talk a little bit about some of the trends you’re seeing in terms of where shippers and particular retailers are at in their kind of journey and looking at either beginning to assess, you know, what their impacts are on particularly empty miles. How far along they are in that journey and maybe some of the surprising lessons learned from that. I know we saw from the survey that people are in various stages with a significant number not necessarily knowing about empty miles. What do you see that kind of continuum of folks and what are those conversations? 

Jennifer: The poll questions during this webinar have been reflective of what I typically hear in direct conversations with shippers and specifically retailers where there is a big range in terms of where a company is at in their sustainability journey. Within the last year, more and more shippers are actually coming to us asking about sustainability, specifically because they’re now tasked to reduce carbon emissions. 55% say that they have responsibilities to reduce carbon emissions, that’s actually showing up in direct conversations as well. But because a lot of transportation leaders aren’t sustainability experts, they’re now given this initiative to kind of say, “Our corporate sustainability goal is to reduce carbon emissions by 50%.” And they’re like, “Great, we’re going to do this.” And they want to be on board, but they just don’t know where to start. It’s a great collaborative conversation that every business should have with all of their supply chain partners because supply chain is so interconnected, you can’t just work with one partner to provide that solution. You actually need to be able to have these conversations with all partners and really ask them how they can help you because the reason why companies haven’t addressed their scope three emissions with their supply chain is because they don’t have direct ownership over those emissions. So, they actually do need to rely on supply chain partners to ask for advice, or help, or some new ways to partner to be able to meet some of those goals. So, I’m really excited to see some of the progress in this area, to have a little bit more attention to reduce carbon emissions because I am seeing it come up more and more often just in conversations. 

Jess: Great, thank you for that. Ron, Jen touched kind of a little bit on collaboration aspect and where they’re seeing now noticeably more people coming to them to start having these conversations. From The Home Depot perspective, can you talk a little bit about internally from Home Depot how those collaborative conversations, you know, cross-functionally, how those collaborative conversations work and how you guys got started earlier on in the process and how that process evolved in terms of working within the sustainability function, looking at the corporate wide goals, and how that plays out on the operations side. Can you talk a little bit about how that process looks at Home Depot? 

Ron: Yeah, Jess. So, I’ll start by saying we do have a sustainability team, right. It’s not just about transportation or carbon emissions, but overall, we look at sustainability throughout the company. So, we work very closely with that team in terms of collaboration. One of our value wheels is doing the right thing and we do feel that obviously everyone kind of taking or doing their part within sustainability or reducing emissions is the right thing to do. We have a very large data analytics team within Home Depot. It was shocking I think when we did some of the analysis and showed that we had far over 50 million miles of empty miles that were coming back, right. And when you start putting maps to that and realize how much we were spending on simply moving air, or you know, dropping freight off and coming back empty. So, I think the collaboration, a lot of it was internal in what ways can we just within our own network benefit from those empty miles. And as a lot of you saw, a lot of it is simply brining back either return to vendor type freight or pallets, or everything we can do to maximize our vendor network within that 250-mile radius or. Over the past three years, I can say that we’ve taken that collaboration to some of the other shippers in the industry. You know, Pepsi as I mentioned, and Frito Lay are two of the biggest ones. You know, there is nothing easy about filling either their miles or your miles because there is some risk involved. I mentioned detention time. We were very nervous about the idea of using someone else’s miles because we’re at the mercy a little bit of maybe their network being inefficient, right. We move freight with their dedicated fleets and if they have detention time or delay, then we’re negatively impacted. So, there were some pessimistic folks that maybe didn’t want to necessarily go down that path. And the same thing with selling our empty miles. If we’re moving someone else’s freight that is not running as efficiently as we are, then there are the same risks. So, there was a lot of collaboration, we’re trying to work with other like type shippers that operate especially a drop and hook type network, so we don’t necessarily have to be at the same risk of the detention time that many have to endure. So, if we find other type like shippers, especially retailers that are moving time sensitive freight, it puts us in a much better position to be successful for them and for them back to Home Depot. So, a lot went into it, and we still have a lot of work to do. As I mentioned a couple times, over 50 million miles that are still empty so it’s a journey, it takes some time, and it definitely takes some effort. And we do have somebody within our analytics team that is more or less dedicated to this continued effort, so it keeps that person busy as we continue to find ways to expand. 

Jess: Yeah. Thank you for that. I recall a supply chain executive saying that empty miles are a great opportunity but it’s not for the faint of heart. Maybe if you can talk a little bit more about kind of how that relationship looks particularly in the case of the examples where you’re buying and selling those empty miles. You know that collaboration piece. How it looks around the relationship, the data exchange, and that aspect to it. How do you get started on these types of things? 

Ron: Yeah. I’ll start with, and maybe focus most on the very strong success that we have with Pepsi and Frito Lay. So, it definitely starts with what you just mentioned, right. It’s a data exchange and an NDA that we both understand that its sensitive information and it’s really just lying our network on top of theirs and looking for those synergies. And, you know, they participate in our national bid and vice versa and a lot of it is as simple as that. It could be looking at lane level opportunities for theirs in which we move 4000 loads with them. When we launch our national bid, which is a billion dollars of annual spend, they are one of the carriers that’s placing rates, no different than the other trucking companies that are out there in the country. So, it’s very easy for them to see all the opportunities that we have, compare it with all their empty miles, and find the right fit. I mentioned that we do work with Lane Hub, which is now part of the Transplace network, and they are serving as kind of the conduit between us and many other shippers, whether its Walgreens, Coca-Cola, whoever else that they may partner with. So, as we go to bid our entire footprint of freight, they can now participate on behalf of some of those other shippers to find ways of filling the empty miles that we have or filling some of the loads that we have within our network. So, the faint of heart sounds very familiar. Some believe that maybe it was at Home Depot at one point and like you said, there has been nothing easy with this. It sounds great on paper, but it takes a lot of collaboration and focus to make it work. And finding a lane or two, it might save 20,000 dollars a year, but that’s how it starts. And since that time, its built into multiple millions of dollars of savings and obviously tells a great story in terms of emissions reductions. 

Jess: Jen, I know that at Convoy you guys see a lot of this and work with a number of shippers. Can you talk about facilitating that type of collaboration and that communication and some of the wins that you guys have seen in working with shippers and how that has ultimately improved some of the operations on the shipper, retailer side? 

Jennifer: One that comes to mind is one of our larger retailers that we work with, during their RFPs, when they submit the RFP, we take a look at their lanes and similar to what Ron said, we actually look at a lot of their lanes we feel like we have a high confidence level to batch. And we know this because we are running freight for other shippers in the network. So if we see an opportunity to be able to batch that potential lane, we’ll actually flag that in a freight RFP and take a look at those specific set of lanes which will be a percentage of their entire RFP and a percentage of what we actually win on, and flag them to say if we actually win these specific lanes, we’ll be able to save you this amount of carbon emissions and well as this amount of potential savings on the freight because we’ll be able to run it more efficiently. So, it’s a similar kind of lane network overlap but it’s done a little more anonymously because for us, we aren’t looking at specific other partnerships. We’re actually just looking at other lanes that we’re also running to be able to pair those together. So, for the direct shipper that we work with, we don’t have to look for round trips, but we actually look for that other leg of the round trip for them. And that’s been pretty helpful just to be able to give that visibility so that as their making choices in carrier selection, they can take that into account as well especially if they are, this year, kind of bonus on reducing empty miles and this specific retailer that I have in mind, their transportation team actually receives incentives, so personal bonuses, that they are able to reduce empty miles with in their own transportation network. And this also happens pretty effectively for ongoing mini bids, if they have other lanes throughout the year, just always being able to give that extra data to not only show the operational metrics and service levels we provide, but where the areas that we can help them be more efficient, which just have more mutually beneficial outcomes as well. 

Jess: That’s great. Thank you. Sorry, was there a question? 

Ron: Sorry, Jess. I was going to chime in and just not necessarily give Jennifer a plug, but we do business with Convoy and I can say that, you know, the way that they freight match and try to find whether, its moving our loads and then pairing up with maybe other shippers within their network, the thing that I can say with complete confidence is that they do it very successfully in terms of very consistent capacity and very strong on-time deliveries. So, when they are pairing that up, they’re obviously finding those matches. We know that about 35% of drivers across the country are experiencing waste, whether its detention time or just not having freight to kind of connect those dots efficiently. So, I will tell you that we’re working with Convoy and a couple of the other digital carriers, we see some very good success in some of the examples that Jennifer mentioned. 

Jess: Yeah, that’s great and to your point around, you know, the consistency and around capacity and on-time delivery, those are pretty important things. So, something that is definitely a big factor in decision making around them for sure. And Jennifer, you highlighted a couple of great kind of leading practices or lessons learned around looking at kind of how to incentivize this type of activity and then also from the shipper’s side, try to think about incorporating this into that RFP process and things to be thinking about on that side. Anything you’d like to add on that, or other things shippers can be thinking about if they’re kind of coming into the process or getting started on these things? Jennifer, did you? 

Jennifer: For us it’s really just being able to use data in this new way. I think what showed up in poll survey is just showing that a lot of people don’t have visibility into this data today. But if you are working with carriers that use data as a part of the way that they’re doing business that they’re operating, they should be able to provide you metrics as well. So, sometimes it’s as simple as asking for those additional insights but it’s helpful to make a little bit more informed decisions for your business. So, I’d say that would just be my additional tip to be able to look at the data or ask for the data because it should be available for you today. 

Jess: Great, thank you. Ron, I don’t know if you know, in terms of the conversations with the carriers and how those conversations happen, how do you the carriers feel about this work? Are they generally positive on this and a lot of good feedback, it benefits them as well? 

Ron: Yeah. I mean, a lot of what I talked about, Jess, is definitely things that I think put us in that shipper of choice category, right. You think about just the drop and hook network and how that helps drivers to be much more efficient, right. Burning less emissions, kind of running idle while we’re waiting for loads. And the other thing I didn’t mention but it’s probably a good time to do so, we find ways of incentivizing carriers and obviously a lot of that ties to what we call our Carrier Rack and Stack. One of the elements that we consider is that carrier’s scoring by SmartWay or within the EPA. So, if that carrier is scored best in class, we factor that in, and that carrier gets a bonus or a bidding advantage because they are running best in class in the EPA. So, there’s different ways that we work to make sure that it is very clear to the carriers that we are a shipper that highly focuses on sustainability, and we are looking for best in class carriers and when you give them kind of an extra incentive in the bidding and kind of monetize that, it certainly helps to get the support of our carriers within your network. 

Jess: Excellent. Thank you for that. Also, a question on floor loading which you have done, an audience question around what you saw in impact of the carbon emissions because of having heavier weights on the trucks that you were shipping. Did you see any impacts or changes there when you ramped up on the floor loading? 

Ron: You know, I’m sure there is because you are running heavier weight. I don’t know the specific data or statistics to it, but I would say the heavier weight that you are running, considering we offset that by give or take 25% plus loads that you take off the road, so I am sure that there is an impact because you are shipping more weight. Right. There is legal limits, 30,000 pounds full in many states and as much as we are shipping more weight, we’re not going over that obviously that state limit. But I think more, by far, more offset by the number of miles and loads that we were able to take off the road. 

Jess: Excellent. Thanks for that. And there was also another question around free shipping, and I know you talked a little bit about last mile, maybe if you could just go on for a minute or so into the impact of free shipping and ecommerce. This is also a great plug for our next webinar coming up which I mentioned on the 16^th around ecommerce and the impact to emissions goals there. Maybe you could speak a little bit more about kind of that last mile piece and free shipping and the impact there and any of the store replenishment and how that balances out or how you may work with providers like UPS and FedEx of the world on that piece. 

Ron: Yeah, and I’m more on the core side but I spent my first ten years or so on the final mile side. I’ll tell you that a lot of the growth that we’ve seen, it was established prior to the pandemic. We had just accelerated never expected the virus from having the affect that it did. So, it’s amazing how we saw that vision of how we needed to get to far before the start of the pandemic. So, when I talk about growth of 20% up to 30 plus percent that we’ve seen, needless to say, our ecommerce business has been looking at 50% or more type growth, right. We have probably close to doubled where we started in terms of the percentage of our company sales that were through ecommerce to where we are now, right, with the huge acceleration in that area. Everything from parcel to car delivery, to van delivery, box truck, flatbed, you name it. So, all these plans were in place but it obviously, it’s helping us across the board in terms of our overall sales as you can imagine because it has become the new normal for many customers, right. Now, instead of going to a local Home Depot store, have gotten very comfortable with having product that’s being delivered. Whether its cleaning supplies from Home Depot or whether its things that…we sell about a million different SKUs through ecommerce verses about 40,000 individual SKUs in a store. So obviously, as you can imagine, a lot of people now have made getting deliveries part of the way that they do business whether it’s in home improvement or any other retailer in the country. So, it just kind of makes the point or proves the point that where we’re going definitely works and its what consumers are looking for. 

Jess: Jennifer, Convoy works with obviously many, many carriers. I’d be interested to know where you see kind of carrier conversations around fleet electrification and kind of the trends there and other sorts of alternative fuels and that type of thing. What are you seeing out there? 

Jennifer: Convoy works with primarily owner/operators on the smaller side. These carriers typically have less than five trucks with them. So today, the trends are really starting with the larger carriers, even the larger shippers that can really make the investment in alternative fuels whether it’s hydrogen or electric and they’re really starting to run those tests to understand how they can bring those new truck types into their transportation system. And it is a really complex problem to solve because you have some of your freight being run by electric trucks, some by hydrogen, some still by diesel, now there is just a lot of complexity to be vantaged by what truck runs what freight. But for us, we really want to make sure that this truck technology really gets adopted by the long-tailed industry because most of the truck capacity is run by these owner/operators. Typically, your owner/operator, they are not buying the newest truck on the lot. They are typically buying a used truck, but we want to really help with the acceleration of that to make sure that they have access to these new type of truck technologies to be able to drive a lot of the change of what people want to see as the output of these truck electrification that is happening today. 

The post Cut Costs, Increase Efficiency, and Reduce Emissions appeared first on Convoy.

Seeing sustainability and a commitment to social impact baked into a brand from the start is very inspiring, and it was a treat for me to speak with Kyle Polansky, CEO of Blue Dog Bakery. For anyone with a dog, Blue Dog Bakery is pretty well known for offering a variety of natural treats sold through some of the nation’s largest retailers.

Kyle walked me through how Blue Dog Bakery approaches everything from social impact to its commitment to non-profit support, employee health, product quality, environmental impact, and more. 

• How Sustainability Is Integrated Into The Business Strategy: When the business started, the original vision was providing a healthy option for pet parents and their animals. We stand for all natural, no artificial colors, flavors, or ingredients. And it evolved from there. We’ve worked hard to both provide nutrition and health in the product but also support the broader dog community. We have a “never say no” policy to non-profits. We find a way to make a donation to any dog oriented non-profit that reaches out whether that be treats or ways to support events they’re having. And as the business evolves and as you grow, you find other areas and things to focus on. We have been really diligent about continuing to do that to hold up our end of the bargain on the support for sustainability and health of both the animals, their humans, and the broader pet community.  (1:22)
• How Blue Dog Bakery’s Sustainability Commitments Continue To Evolve: As you get more into the detail of the product and as you build out your product portfolio, you recognize there are challenges you might face. With ingredients, for example, our product started out as a baked product, and we originally used vegetable oil or canola oil and we learned that palm oil actually has better shelf stability than canola oil. So, to make sure that product quality was maintained, we moved over to using palm oil, but as we did that and we researched our options, we recognized there were some sustainability issues around palm. There’s a lot of news you can read about palm oil causing issues with rainforest deforestation, particularly in Southeast Asia. This was exceedingly important to us and so we’ve gone out of our way for nearly 20 years now to source sustainable palm oil from producers that we believe are approaching the environment and their production in the right way. Over the last number of years, we’ve actually transitioned our baking facility and moved it so that we are closer to local wheat producers. In the baking world, one thing that is really interesting is that one of the most important factors in the quality of baked products is the freshness of the wheat that goes into that product. Today, we’re actually really productive. We actually have some of the freshest milled wheat in any baked product in America. Our wheat mill is less than a mile from our bakery facility and we get 4 to 6 truckloads of wheat every single day. So, when it goes into our baked products, it’s less than 48 hours milled. (2:43) 
• Taking A Look At Sustainability Through The Entire Product Cycle: We’ve always had a really strong position on sourcing our materials — both our ingredients for the product and our packaging — from the United States. We think that’s an important stance for us to take and so we still do that today and that’s not always as easy or cost effective as you might hope it is, but we find ways to do it and we do it very competitively. We do things like make sure that the packaging on our products is recyclable so that people can feel good that when they go through a box of dog treats, one, it was produced with recycled material and two, it is recyclable. We try to look at every facet of the business and see how we can do a better job to make sure that we are socially responsible and to ensure we’re listening to the interest of our consumers, too. Some of these things come through the pet parents that are buying our products saying, ‘Hey, have you thought about this?’ And so, we try to dive in and do a good job. (5:00) 
• Determining What To Focus On First: We start first and foremost with the product and what goes into the product and delivering the best product to the consumers and their animals. That allows us to exist. But after that, we really think about it as they come to us. One thing I haven’t mentioned so far is sustainability from a business culture and employee perspective. We really try to support the people here and make this a good positive working environment for them and address the things that are important to keeping them healthy. We have always paid for 100% of healthcare for our employees. We help support retirement plans for our employees. Almost 10 years ago we instituted a healthy lifestyle benefit here at Blue Dog, so if you want to get a new bike or new running shoes or join a gym, we’ll reimburse a meaningful portion of that for you because we recognize that your ability to come here and do a great job is contingent on you being healthy and happy holistically. So that’s one step past the product and things that you think about as maybe typical business sustainability practices. We take them on as we see them and try to continue to make progress. (6:19) 
• How Blue Dog Bakery Looks At The Future Of Sustainability At The Company: We don’t set hard lines and look out and say, we want to accomplish this or that. We generally hold ourselves to a non-GMO ingredient list. And that’s really hard to do so that was something that we’ve maintained for a really long time and as you expand your product portfolio and as you grow, it can be harder and harder to do that. There is a cost associated with that and you have to be really resourceful to go chase the solutions down. Do we have big long-term goals that we set up and say, hey, we’re working toward this? Maybe not. But we try to set very high standards and hold ourselves to them as we make progress. As life evolves and business evolves and you have success, that becomes harder and harder to do. So, I think really holding dear to those core values that we started with — healthier options for pet parents and their animals and doing it in the most sustainable, world healthy way — is what keeps us pushing the envelope. (8:38) 
• What Value Investing In Sustainability Brings To Blue Dog Bakery: Consumers will tell you what they want and what’s important to them, but when they get in the shopping environment, the bottom line is that price matters. So, you have to walk a very careful path on delivering the quality or value standards they expect, but also delivering a product that’s not outrageously expensive. We’re not the cheapest option out there. But by communicating the standards and values to our shoppers and the people that love our brand, the fact that those are their values too, that’s why they like us and buy the product, it allows us to have that modest premium in pricing so we can afford to do these things. (10:35) 
• What Consumers Should Know About Blue Dog Bakery: They should know that we’re committed to the health and wellbeing of their animal. That’s first and foremost to us and also that our brand and our products are really there for them to have a better, more positive experience with their dogs. That’s what it’s all about. Dog treats are all about fun and reward and health is how we deliver that. But that’s really the takeaway is sustainability is at the forefront for us. Product quality and all of that leads to quality time with their animals and a better relationship and more fun with their animals. That’s really it. (12:14) 

TRANSCRIPTION

Jennifer: Tell me about the founding story of Blue Dog Bakery and how you became CEO. 

Kyle: Yeah, it’s a pretty fun story and pretty Seattle story, frankly. My business partner, Margot Kenly, started the business on her houseboat which is just a few blocks from our current office here, what, 23 years ago now. And I joined her a little over 12 years ago to help her lead the business, you know, it has turned out to be a wonderful ride and a lot of fun and we’ve had a lot of success. 

Jennifer: I’ve been all over your website and it’s so clear that community and social impact is really important to your business. Can you share more about how sustainability is integrated into your business strategy? 

Kyle: Absolutely. I think, you know, when the business started, Margot’s original vision was providing a healthy option for pet parents and their animals. And I think that’s a great foundational pillar to begin with. You know, so we stand for all natural, no artificial colors, flavors, or ingredients. And it really went from there. You know, since the business started, we’ve worked hard to both provide nutrition and health in the product but also support the broader dog community. So, we have a never say no policy to non-profits. [2:00] So, any dog-oriented dog non-profit that reaches out, we find a way to make a donation whether that be treats or ways to support events that they’re having. And, you know, we’ve been doing that for over 20 years now. So, I mean, those are some of the things that we started out with and as the business evolves and as you grow, you find other areas and things to focus on. I think we’ve been, you know, really diligent about continuing to do that to hold up our end of the bargain on the support for sustainability and health of both the animals, their humans, and the broader pet community. 

Jennifer: Awesome. Well, what are some of those newer things that you’ve been focused on as you’ve evolved sustainability over the years? 

Kyle: One of them is as you get more into the detail of the product and as you build out your product portfolio, you recognize that there are challenges that you might face. With ingredients, for example, we have used, you know, our product started out as a baked product, and we originally used vegetable oil or canola oil and we learned that palm oil actually has better shelf stability than canola oil. So, to make sure that product quality was maintained, we moved over to using palm oil but as we did that and we researched our options, we recognized that there were some sustainability issues around palm. There’s a lot of media and a lot of news you can read about, about palm oil causing issues with rainforest deforestation, particularly in Southeast Asia. And that was exceedingly important to us and so we’ve gone out of our way for nearly 20 years now to source sustainable palm oil from producers that we believe are approaching the environment and their production in the right way. So that’s one very good, detailed ingredient example. Over the last number of years, we’ve actually transitioned our baking facility. We’ve moved it so that we [4:00] are closer to local wheat producers. I mean, as you, the baking world, one thing that is really interesting is that one of the most important factors in the quality of baked products is the freshness of the wheat that goes into that product. 

Today, we’re actually really productive. We actually have some of the freshest milled wheat in any baked product in America. Our wheat mill is less than a mile from our bakery facility and we get 4 to 6 truckloads of wheat every single day. So, when it goes into our baked products, it’s less than 48 hours milled. 

That’s just really neat stuff. So, you’re supporting, you know, the local agricultural community to make sure that you’re bringing ingredients and supply components from the area, you’re working on the quality of the product that you’re delivering to the consumer, or in this case, the dog. So that’s really neat. And then we do other things, you know, we’ve always had a really strong position on sourcing our materials, both our ingredients for the product and our packaging from the United States. We think that’s an important stance for us to take and so we still do that today and that’s not always as easy or cost effective as you might hope it is, but we find ways to do it and we do it very competitively. And then we do things like make sure that the packaging on our products is recyclable so that you people can feel good that when they go through a box of dog treats, one, it was produced with recycled material and two, it is recyclable. So, we try to look at every facet of the business and say what can we do to, you know, do a better job. To make sure that we are socially responsible and to make sure, you know, that we’re listening to the interest of our consumers too. Some of these things come through, you know, the pet parents that are buying our products saying, ‘Hey, have you thought about this?’ And so, we try to dive in and do a good job. 

Jennifer: How do you determine what to focus on first, especially when they’re all great areas to make progress against? 

Kyle: I think it starts first and foremost with the product and what goes into the product and delivering the best product to the consumers and their animals. So, we certainly start there. That allows us to exist. But after that, we really think about it as they come to us. I mean, one thing that I haven’t mentioned so far is sustainability form sort of a business culture and employee perspective. We really try to support the people here and make this a good positive working environment for them and address the things that are important to keeping them healthy. So, it’s a little bit more esoteric in terms of business sustainability. But, you know, we’ve always paid for 100% of healthcare for our employees. We help support retirement plans for our employees. We have a…I remember learning from a family member of mine that at their job, they received a healthy lifestyle benefit just to keep them healthier and happier and they got reimbursed for things like buying a standup paddle board, or something like that and I thought that was really cool. So, you know, almost 10 years ago now we instituted a healthy lifestyle benefit here at Blue Dogs so if you want to get a new bike or you want to get new running shoes or you want to join a gym so you can go to a spin class or something, you know, we’ll reimburse a meaningful portion of that for you because, you know, we recognize that your ability to come here and do a great job is contingent on you being healthy and happy just, you know, holistically. So that’s, you know, one step past the product and sort of things that you think about as maybe typical business sustainability practices [8:00] but, you know, those are the sorts of things we do. So, we sort of take them on as we see them and try to always just continue to make progress. 

Jennifer: Do you have sustainability goals that you’re focused on today or how do you think about future looking sustainability efforts? 

Kyle: We don’t set hardlines and look out and say, hey, we want to accomplish this. But I’ll pick another example. We generally hold ourselves to a non-GMO ingredient list. And that’s really hard to do so that was something that we’ve maintained for a really long time and as you expand your product portfolio and as you grow, it can be harder and harder to do that. You know, there is a cost associated with that and you have to be really resourceful to go chase the solutions down. And so, that’s an interesting question, do we have, you know, big long-term goals that we set up and say, hey, we’re working towards this…you know, I guess, maybe not. But we try to set very high standards and hold ourselves to them as we make progress. And, you know, as things get…as life evolves and business evolves and you have success, that becomes harder and harder to do. So, I think really holding dear to those, you know, core values that we started with is, you know, healthier options for pet parents and their animals and doing it is sort of the most sustainable, you know, world healthy way that we kind is what keeps us sort of pushing the envelope if you will. 

Jennifer: I love that you’ve incorporated sustainability into your values [10:00] and culture as a way to keep it a priority for your business. One thing that you’ve mentioned a couple of times is that there have been some cost implications whether you’re trying to find non-GMO ingredients or better packaging produced here in the United States. What value are you seeing in terms of investing in sustainability in this way? What values is it bringing to your business? 

Kyle: It’s hard because consumers often will tell you if you ask them. But that’s really, really important to them. But when they get in the shopping environment, price matters. So, you have to walk a very careful path on, you know, delivering the quality or value standards that they expect, but also delivering a product that’s not outrageously expensive because you’ve had to, you know, get over these hurdles to meet their standard. So, I think by communicating the standards and values to our shoppers and the people that love our brand, we’re not the cheapest option out there. I mean, if you go look at the traditional, national brands that are broadly available, they are a little bit more expensive but our promise to the consumer is only a little bit more. And I think, you know, the fact that those are their values too, that’s why they like us and buy the product, allows us to have that modest premium in pricing so that we can afford to do that stuff. 

Jennifer: As someone [12:00] who is picking up their next Blue Dog Bakery product, what should they know about sustainability for you and the company? 

Kyle: They should know that we’re committed to the health and wellbeing of their animal. I mean, that’s first and foremost to us and also that, you know, our brand and our products are really there for them to have a better, more positive experience with their dogs. I mean, that’s what it’s all about. Dog treats are all about fun and rewarding and, you know, health is how we deliver that. But that’s really the takeaway is sustainability is at the forefront for us. Product quality and all of that leads to quality time with their animals and a better relationship and more fun with their animals. That’s really it. 

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Since 2007, World Finance, an acclaimed magazine which provides comprehensive coverage and analysis of the financial industry, international business and the global economy, has recognized and celebrated achievement, innovation and brilliance through its annual awards. 

In 2019, the magazine launched its Sustainability Awards to recognize companies for their commitment to implement significant Environmental, Social and Governance (ESG) measures while continually looking for ways to improve their sustainability efforts.

It is an honor for Convoy to be recognized for our commitment to ESG matters through the 2021 World Finance “Most Sustainable Company In The Logistics Industry” Award. Convoy achieved this accolade as a result of our dedication to consistently reducing empty miles through improvements in efficiency of our optimized digital freight network of carriers. As a result, this enables us to efficiently move millions of truckloads of freight while eliminating unnecessary carbon waste for our planet. 

The previous winner in this category was CSX, a leading supplier of rail-based freight transportation in North America, which received the award in 2019 and 2020.  

As a company whose mission is transporting the world with endless capacity and zero waste and where sustainability is at the heart of everything we do, it has been interesting for us to bear witness over the past six years as the financial community has increasingly adapted to a sustainability-focused mindset. For most investors, the primary and, quite often, sole focus, was to make a profit. When it became fashionable to worry about risk factors to the planet and people — and the negative impact which businesses can have on both — many organizations began to align their operations to focus on these issues. The movement toward sustainability became even stronger when many companies signed up to align their strategies with the United Nations Sustainable Development Goals (SDGs), recognizing they have significant sway in deciding which businesses receive funding.  

According to World Finance, “The majority of businesses are well aware of the importance of sustainability to their customers, employees and shareholders. The ones that are taking this responsibility truly seriously, however, are not simply creating an ESG page on their website: they are implementing significant measures, analysing them and continually looking for ways to improve them. These are the exemplary organisations that have been recognised by the World Finance Sustainability Awards.”

Convoy looks forward to continuing to innovate and to develop sustainable solutions, while enabling our customers to make sustainable choices.

For additional information, see Convoy’s most recent Sustainability Report, which defines our objectives and approach to embedding sustainability within the freight industry, our operations, and the communities within which we operate.

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To build this report we gathered insights from over 200 companies to find out how they are approaching sustainability. Companies such as Honda, Zound Industries, Valken Incorporated, and Haworth face a multitude of sustainability risks and opportunities in their supply chains. This report will highlight the viewpoints of these companies, along with others, about how they and their transportations departments are structuring their approach to supply chain sustainability.

THE VAST MAJORITY OF COMPANIES UNDERSTAND THAT IMPROVING SUSTAINABILITY IN THE SUPPLY CHAIN IS A VITAL TASK. 

More than 85% of the companies we surveyed said that sustainability was important or very important to their business. There was, however, less cohesion around how to define and manage sustainability. We will outline and compare the different approaches to managing sustainability risk and offer insights into how best to get started or continue progressing. 

SOLVING THE PROBLEM OF EMPTY MILES

One of the largest sustainability risks in the transportation industry comes from the emissions associated with transporting products through the value chain. Some emissions are unavoidable, especially as the world continues to rely on fossil fuels to power transportation, but even without the mass adoption of EV or alternative fuel vehicles, there are many strategies to improve transportation efficiencies. One clear strategy that came to light during our investigation was the capability to reduce the number of empty miles driven by carriers. Almost three-quarters of our surveyed companies said that reducing empty miles was important or very important. 

“The empty mile is the dirty secret and elephant in the room no one wishes to discuss in most organizations. This unacknowledged expense or as some will call it “amortized expense” costs between $5-10 per mile when you truly examine the cost of ownership of your transportation units. Most companies use averaging formulas to soft peddle or bury this issue by looking at overall miles traveled, and weight or volume of goods transported. That was acceptable in our grandfather’s day however today based on the effort to move to a green future and to reduce greenhouse gasses we need to rethink this antiquated outlook. We need to move forward with a goal of making every mile be a productive mile and optimize load configurations to maximize the overall yield of goods transported.” Michael Lukas, Director of Global Supply Chain at Valken Incorporated 

Respondents even shared the dollar value they attribute to reducing empty miles. Interestingly, 39 percent of respondents would not pay more to reduce empty miles. Another 26 percent would pay $5 or less, 36 percent of all respondents would pay more than $5 to save an empty mile, and 4 percent would be willing to pay more than $50.

The Council of Supply Chain Management Professionals defines supply chain sustainability as “the management of environmental and social impacts within and across networks consisting of suppliers, manufacturers, distributors, and customers in line with the UN Sustainable Development Goals”. Using this initial framing, this report will identify the biggest levers that transportation companies can use to have a positive impact and increase their sustainability. For some companies, this includes reductions in greenhouse gas emission through the reduction of empty miles or other efficiency improvements. For others, implementing policies that improve carrier safety and diversity, or increase driver quality of life, will have a lasting impact upon their sustainability performance and reputation.

Download this State of Sustainability in Transportation report here to see how businesses are prioritizing sustainability in their supply chain.

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I was excited to take a deeper dive into plastic packaging with Altium Packaging’s Brian Hankin, SVP Strategy, Innovation, Marketing at Altium Packaging and Sarah Dwyer, Sustainability Associate. Altium is a leading producer of creative packaging solutions for dairy, water, beverage, food, nutrition, chemicals, automotive, personal care, and healthcare.

Brian and Sarah walked me through what sustainability looks like for the company, how they are helping customers achieve sustainability goals, innovative ways plastic is being recycled for packaging, and what the future of plastic packaging looks like. Their key takeaways are featured below. 

• What Sustainability Looks Like At Altium Packaging: Sustainability is absolutely critical to who we are and what we do. We are a large manufacturer of rigid plastic containers — anything you would buy in a grocery store, Costco, etc. It might be your laundry detergent bottle, your oil bottle, shampoo, beverage, etc. But sustainability has always been important to us and we try to be an efficient steward of those resources. We also own the second largest recycling company of HTP, which is one of the types of plastics you buy these products in. We are very much part of that circular chain and work with our customers to become more sustainable and encourage them to use these resources efficiently. (1:27)
• How Altium Partners With Customers To Help Them Achieve Their Sustainability Goals: A lot of our customers have targets where a certain amount of recycled content has to be in their portfolio by a certain date. We also very proactively work with customers and encourage them to lighten weight. Let’s take the standard package that you might buy a gallon of water or milk in. We’ve been working for years to lighten that package. We’ve expanded that light weighting science to other package forms. We have about 10 in the family right now. Take for example a canister, something you might buy wipes in. What we’re able to do is take about 15 to 20% of the weight out. So, it’s using that much less plastic, at the same time, maintaining or improving the product performance so it doesn’t fail at the shelf or in the home as the consumers are using these products. That’s the basic value proposition: how can we take weight out, use less plastic, and, at the same time, improve or maintain performance. (2:30) 
• How To Determine What Efforts To Focus On: Some of it is driven by our own initiatives and things we think are important in terms of lightweight packaging. At other times, customers will come to us with the desire to meet their sustainability goals. So, we will work with them on that. We’re also doing a fair amount of experimentation and development with biomaterials — additives to make our packaging effective using less virgin resin (virgin plastic). We track all activities and try to assess what is the value add to our company, to our customers, and to our society in terms of helping us to focus on what is most important. We focus on three main pillars to drive our value. The first being optimizing design within our packaging with an entire team dedicated to product design, whether it is light weighting or ensuring these products are suitable for the recycling streams. Our second one is sourcing sustainability. We have 64 manufacturing plants and two of them are recycling plants across North America, to ensure we are close to our customers, which also reduces transportation costs, fuel, as well as carbon emissions. Our last pillar is to support recycling and ensure all of our products are recyclable. Altium currently has a 97% recyclable portfolio. Every day we are striving to increase that number. Under Envision, we process over 100 million pounds of mixed resin to supply to the industry whether it is our customers or even Altium’s plants. Our differentiated product portfolio allows Altium to really build on our sustainability goals and initiatives. (4:32) 
• How Sustainability Is Embedded Across The Company: Altium definitely sees sustainability as an opportunity for organic growth. Whether it is across our product portfolio or even across the entire organization. We recognize that in order to succeed as a company which strives for sustainability, everyone across the company must work together under one vision and one goal. In order to do that, we set accountability at the forefront and measure success as to how well we are implementing our sustainability initiatives. (7:17) 
• Altium’s Favorite Sustainability Initiative Currently: As a consumer, hopefully if you recycle, you put the materials in a bin and it gets shipped off to a sorting facility where it is sorted, and we buy that material. Envision, our fully-owned subsidiary, is a mechanical recycler. We put the used plastic through a process, sort it again, create flakes, clean it thoroughly, and then extrude it into new resin pellets purely made better of recycled material. We are essentially taking this trash and turning it into material that is clean and can be used across a variety of applications including food applications. Our recycled material can make its way back into food packaging which is currently being legislated in states like California and Washington. We also have a product out of Envision called Ocean Bound. Ocean Bound is material that we collect close to the shores of developing areas of the world. We take that material, reclaim it, and put it through that same process, so we’re diverting material that might have ended up in the rivers and in the oceans. It is pretty exciting. The supply chain has a lot of pieces to it, the costs aren’t ideally where we’d like them to be, and it is more expensive to use this recycled material. But it’s pretty exciting that we are able to construct a system to enable our customers to build in this PCR (post-consumer resin), or recycled material into their products. (8:20) 
• The Value Sustainability Has Brought To The Business: For one thing, customers are now significantly committed to sustainability. There has always been a lot of talk, but only in the last several years have large companies, medium-sized companies, and some small companies said we’re actually going to set goals and try to meet those goals. We’ve heard things like we want 25% of our packaging to be…. we want 100% recyclable and X percent from recycled content. So, these goals have been set and companies are finally taking them seriously and we’re very happy to work with those companies to meet those goals. There is a fair amount of consumer interest and interest from NGOs, not for profits, etc., which have also expressed the desire for a more sustainable circular economy so we’re happy to play a role in bringing that product to market. (11:10) 
• The One Thing People Should Know About Sustainability In The Packaging Industry: There’s a little bit of an anti-plastic sentiment out there. And we’re very much aware of it and concerned about it. Plastic is a good thing. For one thing, it meets essential needs better than any other material can in certain industries like healthcare delivery. In the food industry, food preparation and preservation and getting foods to areas where they need it. And also with consumer products, we think it is the best material and that is why there is so much of it and why it has grown so quickly. We need to do a much better job recycling and making sure there is enough supply in our recycling stream so we can meet these goals and be an efficient user of this material which we feel is an excellent alternative. Plastic right now is the suitable choice of material as it provides significantly less carbon dioxide emissions. We have the infrastructure to support the recycling stream and recycle materials back into new packaging and products. In order to move the industry forward, there needs to be a higher level of consumer engagement with brands, and Altium, as well, can play a part in educating consumers on how to recycle and the benefits of plastic versus alternatives. (13:00) 

TRANSCRIPTION

Jennifer: Tell me about your roles leading sustainability at Altium. Sarah, would you like to go first?

Sarah: I recently joined Altium as a sustainability associate. Right now, I am working to spearhead Altium’s sustainability initiatives across the company and our portfolio. I am monitoring the external industry, analyzing how Altium can help customers meet their sustainability goals as well as meet increased government regulations such as PCR requirements, which is post-consumer resin, for active, innovative design solutions. 

Brian: I’m working with Sarah and the team that reports up to me. Sustainability is absolutely critical to who we are and what we do. We are a large manufacturer of rigid plastic containers. So, anything that you would buy in a grocery store in a Costco, that kind of thing. It might be your laundry detergent bottle, your oil bottle, shampoo, beverage, etc. But sustainability has always been important to us and so we try to be an efficient steward of those resources. We also own the second largest [2:00] recycling company of HTP, which is one of the types of plastics that you buy these products in. So, we are very much part of that circular chain and work with our customers to become more sustainable and encourage them to use these resources efficiently. 

Jennifer: How do you partner with your customer in helping them achieve their sustainability goals? 

Sarah: A lot of our customers, especially now they have large sustainability goals across our packaging design. So, a lot of our customers have these targets where a certain amount of recycled content has to be in their portfolio by a certain date and Altium can provide that as we have two plants under envision where we recycle plastics and are able to provide that post-consumer resin in our packaging. 

Brian: We also very proactively work with customers and encourage them to light weight. So, you can imagine, lets take the standard gallon package that you might buy a gallon of water in or milk. We’ve been working for years to lightweight that package. We’ve expanded that approach if you will, that light weighting science to other package forms. We have about 10 in the family right now. A canister, something you might buy wipes in. What we’re able to do is take about 15 to 20% of the weight out. So, it’s using that much less plastic, at the same time, maintaining or improving the product performance so it doesn’t fail at the shelf or in the home as the consumers are using these products. So, we’ve been very successful building that [4:00] franchise. We call it the Duralight Franchise and that’s the basic value prop. How can we take weight out, use less plastic at the same time, improve or maintain performance. 

Jennifer: That’s great to hear. Thanks for sharing a couple of those initiatives. When you look at the world of opportunities to look at packaging and help make progress against some of these sustainability efforts, how do you determine what efforts to focus on? It seems like there are a lot of opportunities because the industry is really starting to gain momentum right now. 

Brian: I’ll start and then, Sarah, feel free to contribute. So, some of it is driven by our own initiatives and things we think are important in terms of lightweight packaging. Often times, customers will come to us with the desire to meet their sustainability goals. So, we will help work with them on that. We’re also doing a fair amount of experimentation and development with biomaterials, additives to make our packaging effective using less virgin resin, it’s the virgin plastic. So, a variety of initiatives. We track them all, we try to assess what is that value add to our company, to our customers, and to our society in terms of helping us to focus on what is most important. 

Sarah: Yeah, and I’ll build off of what Brian said. We really focus on three main pillars to drive our value and first one being optimizing design within our packaging. We have a whole team dedicated to product design whether it is light weighting, like Brian was referencing to, our material reduction. And ensure these products are suitable for the recycling streams. Our second one is sourcing sustainability. So, we have 64 manufacturing plants [6:00] and two of them are envision recycling plants that are across North America, and this ensures that we are close to our customers, which also reduces transportation costs, fuel, as well as carbon emissions. And our last pillar that we focus on is we support recycling and ensure that all of our products are recyclable. Right now, Altium has a 97% recyclable portfolio. And every day we are striving to build that number and increase it. Under envision, we process over 100 million pounds of mixed resin to supply to the industry whether it is customers or even Altium’s plants. Our differentiated product portfolio allows Altium to really build on our sustainability goals and initiatives. 

Jennifer: That’s great to hear. Kind of those three main areas where you’re starting to make a lot of progress. You’ve mentioned that you’ve worked with teams across the company as well. Could you share more about how sustainability shows up across Altium? It sounds like you’ve developed a way to be able to embed sustainability across multiple places in the organization. 

Sarah: Yeah, so, I’ll start with that. Altium definitely sees sustainability as an opportunity for organic growth. Whether it is across our product portfolio or even across the entire organization. We recognize that in order to succeed as a company that strives to sustainability, everyone across the company must work together under one vision and one goal. In order to do that, we set accountability at the forefront and measure success as to how well we are implementing our sustainability initiatives. [8:00]

Jennifer: Awesome. And then one thing I’d love to hear more about too, maybe from you Brian, especially since your role is spanning across strategy, innovation, as well as sustainability, what is one of your favorite initiatives that your team is working on right now? 

Brian: I’ll talk a little bit more about envision because when you visit these plants its truly remarkable. As a consumer, hopefully if you recycle, then you put the materials in a bin and it gets shipped off to a sorting facility where it is sorted, we buy that material. So, it’s basically bales of what looks like trash and what sometimes smells like trash, we then put it through a process, and what envision does, which is our fully owned subsidiary, is it’s a mechanical recycler. So, what we do is we put it through a process, we sort it again, we create flakes, clean it thoroughly, and then extrude it into new resin pellets purely made better of recycled material. So, we’re taking this, essentially, trash and turning it into material that is clean, that can be used across a variety of applications including being put back into food applications. So, we have a letter of non-objection from the FDA for a very wide use of reign. So, our recycled material can make its way back into food packaging which is currently being legislated in states like California and Washington. So, it’s pretty amazing to watch. We also have a product out of envision called Ocean Bound. Ocean Bound is material that we collect close to the shores of developing areas of the world. We take that material, reclaim it, and put it through that same process and so we’re preventing material that might have ended up in the rivers and in the oceans. [10:00] So, it’s pretty exciting. It’s a little bit…the supply chain there is a lot of pieces to that, the costs aren’t ideally where we’d like them to be, it is more expensive to use this recycled material. But it’s pretty exciting that we’re able to build a system to enable our customers to build in this PCR, post-consumer resin, or recycled material into their products. 

Jennifer: That is exciting. Is some of that material out already used in consumer products or is this something that is just about to hit markets? 

Brian: No, we’ve been doing this for a long time. We’ve owned Envision for seven years and they were around for five or ten years before that. So, we’re very much in the marketplace with a variety of products.

Jennifer: That’s exciting. Well, one question that I have for you as well in relation to the theme of the series, you’ve clearly invested a lot in sustainability, so it has some value to the business. Could you share more about what value it brings to your business? So that others, as they are evaluating sustainability can really recognize why they would make an investment like you have today. 

Brian: Sources of value. For one thing, customers are now, I would say, significantly committed to sustainability. So there has always been a lot of talk but only in the last several years have large companies, medium size companies, and some small companies said we’re actually going to set goals and try to meet those goals. So, you’ve heard things like we want 25% of our packaging to be…. we want 100% recyclable and X percent from recycled content. So, these goals have been set and companies are finally taking them seriously and we’re very happy to work with those companies to meet those goals. There is a fair amount of consumer interest and interest [12:00] from NGOs, not for profits, that also have expressed the desire for a more sustainable circular economy so we’re happy to play a role in that and bring that product to market. And then, you know, another change recently is the legislation that has been passed and Sarah has become our expert on that. But, you know, legislation passed in California that will require recycled content in beverage containers and passed in Washington that’s even broader in terms of the product portfolio that will include recycled material. And then the legislation is pending in other states as well. So, we’re happy to enable that circularity if you will. 

Jennifer: What do you think is one thing that someone should know about sustainability in the packaging industry that they don’t know today? 

Brian: There’s a little bit of an anti-plastic sentiment out there. And we’re very much aware of it and concerned about it. Plastic is a good thing. For one thing, it meets essential needs better than any other material can in certain industries like healthcare delivery. Think about how you get…there’s medical supplies and pharmaceuticals. In the food industry, food preparation and preservation and getting foods to areas that they need it. And also, consumer products, we think it is the best material that’s why there is so much of it and why its grown so quickly. But we need to do a much better job recycling and making sure that there is enough supply in our recycling stream so that we can meet these goals and be an efficient user of this material that we feel [14:00] is an excellent alternative. 

Sarah: I completely agree with Brian. I believe that plastics right now are the suitable choice of material as it provides significantly less carbon dioxide emissions. We have the infrastructure to support the recycling stream and recycle materials back into new packaging and products. Also, I believe that in order to move the industry forward, there needs to be a higher level of consumer engagement and brands, and Altium as well can play a part in educating consumers on how to recycle and the benefits of plastic versus alternatives. 

The post A More Sustainable Future For Plastic Packaging With Altium’s Brian Hankin And Sarah Dwyer appeared first on Convoy.

Mokhtar Alkhanshali, CEO and Founder of Port of Mokha, is the antithesis of your typical entrepreneur. In his path to find himself, he discovered a way to revitalize the ancient coffee trade in Yemen. At the same time, he created a product which is ethically sourced, farmers are well paid for their labor, and consumers enjoy coffee which tastes far superior than most beans on the market today.   

Mokhtar recently sat down with me for some coffee talk. He shared the ways in which his heritage impacted his future, the most challenging aspects of creating and running a business oriented toward social impact, and how he uses coffee to help empower people economically. Grab a cup of coffee and listen in.

• The Path To Social Impact Through Business: I grew up as a third culture kid somewhere between San Francisco and my family’s homeland in Yemen. As a kid, you’re always trying to negotiate and figure out what your identity is from two different cultures. Growing up in the Bay Area, it’s hard to not be someone who cares about social justice and someone who is a bit of a foodie. And on that journey, I stumbled upon specialty coffee. I was really interested in the idea of social impact through business. My journey started around 2013 and this is where I am now. (0:45)
• Why The Port Of Mokha Plays An Important Role In The Ancient Trade Of Coffee From Yemen: I love history. I love to look at where we came from, understand our journeys. There is actually a city in Yemen called Mokha. It’s a port called Mokha. And it was the first place to commercialize coffee and introduce coffee to the world. I was really intrigued by that history and I wanted to reclaim that narrative and try to revitalize this ancient trade in Yemen. When coffee began being taken from Yemen and grown in other countries, including Indonesia and then straight to the western hemisphere, it made its way to countries like Colombia. There’s a particular type of chocolate flavor some cultivators have, usually mixed with some kind of fruit. So, as you drink the coffee, you’ll taste those chocolate notes. And when they began to grow coffee in other countries, it didn’t have the same flavor, and so what they began to do in cafes would be to make a cup of coffee and put chocolate in the cup to make it taste like the chocolate flavor which came from the Port of Mokha — those Yemen beans. So that’s where the mocha drink finds its name. Most of us know the word mocha through the chocolate-flavored coffee drink. (2:32) 
• What Sustainability Looks Like At Port Of Mokha: The way our goods, our foods, our electronics are being produced, distributed, and consumed, is not really sustainable for our environment and it’s up to us to try to re-envision how we produce and consume things every day. The supply chain for coffee is really pretty broken, where you have the farmers who do all this work, they get the least amount of the profits. You end up having a very cheap product — kind of like fast food, fast fashion, and in our case, fast coffee. I was really interested in specialty coffee. This new market where it was about transparency and traceability — where certain knowledge was sent to farmers to produce things of better quality, and in exchange for that added quality, they would be able to get paid more. I really thought it was an interesting model which would be sustainable and it’s basically teaching people how to fish. At the end of the day, you have a product which is ethically sourced, the producers are paid well for their labor, and we as consumers get to benefit from something which tastes far superior and much better. This was what I loved about this idea of specialty coffee and why I wanted to create this business. (4:28) 
• The Most Challenging Aspect In Redefining The Coffee Model: I saw this opportunity and I was trying to find my path in life. I was trying to figure out how to do this and I discovered business was a way to address it. In creating a company that could achieve this, my biggest issue was actually not external, it was internal. I did not have any business knowledge. I did not know anything about supply chain management, marketing, etc. I didn’t know anything about quality control. I had to invest heavily in understanding coffee — understanding sensory impact and how we evaluate coffee by becoming a coffee Q-grade, which is a certified coffee taster. I had to learn how to be a farmer. I had to learn these things in order to be able to produce this product. You just jump into a new world. You get to read books. You get to go to conferences. You get to meet people, and so I’m very fortunate to have been around some incredible teachers in business and in coffee. The other thing was Yemen is a difficult place to source coffee from. There is active war. There are these mountains. It’s so far away. And I grew up in San Francisco, so it’s so different from beans here. You’re facing a lot of obstacles and challenges, but we live in a world with a lot of problems and if we try to think about what is something I can solve, it gives you a lot of motivation to get through those hurdles, both internally and externally. (6:47) 
• How Port of Mokha Set Sustainability Goals: Sustainability is a really big catch phrase nowadays. Companies have CSR programs, and they have impact reports, and, at least for me and my company, I didn’t want to create an enterprise that made money which just had a social impact arm or extension. I wanted to build a company with an essence that was socially impact driven. That’s what we do. Maybe if you look at our website, it might seem like we are a very high-end, luxury business, but that’s the way we market and tell our story. But really at the core of it is trying to use coffee to help empower people economically. I believe farmers around the world are some of the most exploited and disenfranchised people, and they work really hard to produce things for us each day. And we might not see them when we buy that cup of coffee or a product. But these small actions we do every day, if we change our habits as consumers and are more conscious of the power that we have, when millions of people buy coffee more ethically, it affects farmers around the world. So, my goal is trying to help farmers live a dignified life and I try to do that by cutting back as much as possible from the middlemen involved in our value chain so the value goes back to farmers. And at the same time, I try to educate consumers on what it really costs to produce this for them and that there’s a whole world of flavors they don’t know about because they’ve been taught to drink cheap coffee. (9:51) 
• The Value Sustainability Has Brought To The Business: For us, it’s two-fold. One is it’s really incredible seeing people, consumers, enjoy our coffee. When we first launched at The Blue Bottle in 2016, they charged $16 for a cup of our coffee, which, at that time, was the most expensive coffee they had sold. Some people were interested and intrigued by this price point, and when they tasted it, they understood like, wow, I didn’t know coffee could taste this way. It was a way to elevate that experience on the consumer side. On the producer side, I think it’s important when you build a brand, you should always recognize it’s not just about the consumer, you think about your producers, you think about your employees, think about the people around you, and your company culture. It’s pretty important on the producer side that you build that strong connection with people there. And so, for us, our farmers, to see their lives being changed by being able to earn more. They can now afford school for their children or hospital bills, or whatever it is that they need in their lives that they have their needs taken care of and they have a way to connect to markets they never would have thought possible. So, I see myself as almost a bridge in that regard. (11:48) 
• How To Ingrain Sustainability Into Your Day-To-Day Operations: We have so many problems in our world today. There are so many issues. Environmental issues, social issues, etc. I think we can all think about one problem we can solve. What is a problem or service I can curate that can help alleviate some of these problems? We all need to try to be problem oriented as opposed to just revenue oriented. The money will come eventually. There is always a business around something. This is really important for young people out there to think about something they care deeply and passionately about. We only have a few years to live. What are we going to leave behind for our children and grandchildren? What do we want to do? There are moments at our company where we are in a difficult place and it’s reassuring to know that, at least I’m doing something bigger or greater than I am. That’s one thing. The other is to make sure that you have this vision, you have others around you that have the same vision. And particularly investors. Just because someone gives you a check, think about that person’s values. Do they have the same vision as you or do they just want to get acquired or go public down the road? This is important because investors who are focused are going to stay with you for a long time. And there are a lot of wonderful investors out there, but there are, unfortunately, a lot who don’t align with your values or your vision. And third, whatever vision you have, make sure that you have the right team and be sure your team members are being compensated and treated like team members. In my experience, the best businesses I’ve seen are ones where there’s been a strong company culture and there is a strong team behind you. And whatever problems come, they can come, and they can support. And that usually means they’re aligned, not just for compensation, but also values. They need to feel that they’re part of something that they’re proud of. So those are my 3 go-to’s for advice I can give people. Even if your company is not doing something “sustainable”, there are practices you can do. Make sure you have compostable garbage, make sure your company is doing things sustainably for the environment, for their employees, and making sure there is adequate mental health support. There are so many things that are sustainable which you can incorporate into your company. Companies should have internal audits or bring people on to see how they can improve their company to be able to use that word sustainable. (13:35) 
• The One Thing Everyone Should Know About Port of Mokha And Coffee In General: We just launched a new product: the single-serve pour over pouch. I was in Japan when I first saw this invention. Usually when you make a pour over coffee, you have to have a grinder and a scale, and a brewer, and it’s a whole process. And so oftentimes, people don’t want to do that. So, I tried to figure out how I could get more of my coffee farmer’s coffee into people’s hands. This is a great way to do that because it gets rid of all the stuff. It’s actually a completely recyclable, sustainable product where you just put it on your cup in a very ingenious way and you add your hot water. It’s great for traveling or outdoors or in hotels. For the consumer, it is important whether you buy coffee from our company or go to any coffee shop in your local area, to try to buy as local as possible. Support local businesses and local grocers who really need your help because they do incredible work trying to source great coffees. And just ask the barista, where is this coffee from? If they tell you, “This coffee is from Ethiopia, grown at 1800 meters and has these beautiful notes of this and that, etc.” The more intimate knowledge they have of the coffee, the more you’re in the right place. I always tell consumers, when you go in and buy coffee, try to understand where the coffee came from and that journey. Try to buy as local as possible and try to understand where your food comes from. (17:15) 

TRANSCRIPTION

Jennifer: Tell me about yourself and the Port of Mokha. 

Mokhtar: I grew up as a third culture kid somewhere between San Francisco and my family’s homeland in Yemen. And as a kid, I guess, you’re always trying to negotiate and figure out what your identity is from two different cultures. And growing up in the Bay Area, its hard to not be someone who cares about social justice and someone who is a bit of a foodie. And in that journey, I stumbled upon specialty coffee, and I was really interested in the idea of social impact through business. And I began my journey around 2013 and this is where I am now. 

Jennifer: I picked up a box of the pour overs. I love this style of coffee, I think its really great. I only have a few left, but I think these are great. Had a couple this week. Also picked up some of the Mokha Beans. I haven’t tried these yet, but I am very excited to try these as well. 

Mokhtar: Those are really, really great. One of my favorite collaborations. We worked with an amazing chocolatier here in San Francisco called Dandelion Chocolates on the mission [2:00] and those Mokha Mokha beans, they are the most incredible chocolate espresso beans you’ll ever have. My only warning is, I usually have them after lunch. I’ll have one or two, you know, and they’ll give you enough caffeine to last out the day. So just eat them cautiously. 

Jennifer: Tell me about the name part of Mokha. 

Mokhtar: Yes, part of the story, and I am a big fan of history. I love history. I love to look at where we came from, understand our journeys and so, coffee, there is actually a city in Yemen called Mokha. It’s a port called Mokha. And it was the first place to commercialize coffee and really introduce coffee to the world. So as someone who loves history, I was really intrigued by that history and I kind of wanted to reclaim that narrative and try to revitalize this ancient trade in Yemen. 

When coffee began being taken from Yemen and grown in other countries, Indonesia and then straight to the western hemisphere, it made its way to countries like Columbia and people…there’s a particular type of kind of chocolate flavor some cultivators have, usually mixed with some kind of fruit. So, as you drink the coffee you have, you’ll taste those kind of chocolate notes. And when they began to grow in other countries, it didn’t have the same flavor and so what they began to do is in cafes, they would make a cup of coffee and they would put chocolate in the cup to make it taste like a chocolate flavor that came from the Port of Mokha, those Yemen beans. So that’s where the Mokha drink finds it name from. And so, most of us know the work mocha through just chocolate covered, [4:00] or chocolate flavored coffee drink. 

Jennifer: What does sustainability look like for the company today? 

Mokhtar: I think that the way our goods, our foods, our electronics are being produced, distributed, and consumed, it’s not really sustainable for our environment and its up to us to really try to re-envision how we produce and consume things every day. And so, for coffee, the supply chain for coffee its really pretty broken where you have the farmers who do all this work, they get the least amount of the profits as it goes up in that. So, you end up having a very cheap product, you know, kind of like fast food, fashion, and in our case, fast coffee. So, for us, I was really interested in specialty coffee. This new market where it was about transparency and about traceability where certain knowledge was sent to farmers to produce things at better quality in exchange for that added quality, they would be able to get paid more. And so, for me, I really thought it was an interesting model that would be sustainable and its really teaching people how to kind of fish and at the end you have a product that is ethically sourced, the producers are paid well for their labor, and we as consumers get to benefit from something that tastes much superior, much better. So that was kind of my…what I loved about this idea of specialty coffee and why I wanted to create this business. 

Jennifer: What was one of the most challenging aspects of trying to change the model in this way? 

Mokhtar: Definitely there is the Blue Ocean Theory, which is great. It is a book but it’s also great when you are looking at business. When you have people that are kind of doing things…its kind of repetitiveness. And its sometimes good to zig when people zag. And so, for me, I saw this opportunity and I was really…as a young person, you’re trying to find your path in life. I was trying to figure out how to do this and I found out business was a way to do this. Creating a company that could do this and my biggest issue first was actually not external. It was actually internally I did not have any business knowledge. I did not know anything about supply chain management, marketing. I didn’t know anything about quality control. I had to invest heavily in understanding coffee. Understanding sensory and how we evaluate coffee by becoming a coffee Q-grade, which is our version of [inaudible  7:24] to be able to be a certified coffee taster. I had to learn how to be a farmer. I bought argentamine [7:29] I had to learn these things in order to be able to produce this product. So, there was that and on top of that…and that’s always, like, the most difficult. But that’s also the most exciting part of the business. You just jump into a new world. You get to read the books. You get to go to conferences. You get to, you know, meet people, and so I’m very fortunate to have been around some incredible teachers in business and in coffee. And so…you’re only as good as your teachers, [8:00] right? So, that was for me. The other thing was Yemen is a difficult place to source coffee from. There is active war. There are these mountains. It’s so far away. And I grew up here in San Francisco so it’s so different from beans here. So, for me, I had a personal stake in this bean that my family was from, this origin, and when I started bringing back coffee samples, the results were astounding how these coffees tasted. And so, yes, in the beginning, my family…talked about issues, I was supposed to finish law school and so for me to throw that away and go to become a farmer. Like, they risked their lives to come to America for the American dream. And as a kid, my parents were actually telling me, they would warn me and threaten me and tell me if I did not do good in school, they would take me back to work on the farm in Yemen. Which is what I do now. And so, you’re going to be facing a lot of obstacles and challenges, but I think that we live in a world with a lot of problems and if we try to think about what is something I can solve, it gives you a lot of motivation to get through those hurdles, internal and external problems. 

Jennifer: What are some sustainability goals that you’ve set for yourself or for the company, I guess on a regular basis? How do you know that you’re meeting commitments that you want to make around sustainability or knowing that you want to be doing more? 

Mokhtar: Sustainability is a really big catch phrase nowadays. And companies have CSR programs, and they have impact reports and I think, [10:00] at least for me and my company, I didn’t want to create an enterprise that made money that had a social impact arm or extension, you know. I wanted to build a company with an essence that was socially impact driven. That’s what we do. Maybe if you look at our website, it might seem like we are very high-end, luxury, but that’s the way we market and tell our story. But really at the core of it is trying to use coffee to help empower people economically. I believe farmers around the world are some of the most exploited and disenfranchised people and they work really hard to produce things for us each day. And we might not see them when we buy that cup of coffee or a produce. But these small actions we do every day, if we change our habits as consumer and are more conscious of the power that we can do. You know, when millions of people buy coffee more ethically it affects farmers around the world. So, my goal is trying to help farmers, you know, live a dignified life and I try to do that by cutting back as much as possible for the middlemen involved in our value chain so that the value goes back to farmers. And at the same time, I try to educate consumers on really what costs produces for them and that there’s a whole world of flavors and stuff that they about because they’ve been taught to drink cheap coffee. And so, its kind of like where I am right now. 

Jennifer: What value has sustainability brought to your own business to want to invest in a pretty significant way like you have? 

Mokhtar:For us, it’s two-fold. One is it’s really incredible seeing people, consumers, enjoy our coffee. When we first launched, I think it was the first…the blue bottle [12:00] in 2016. They charged 16 dollars for a cup of our coffee, which at that time was the most expensive coffee they had sold. But people, you know, some of them were interested and intrigued by this price point but when they tasted it, they understood like, wow, I didn’t know coffee could taste this way. It was a way to elevate that experience on the consumer side. On the producer side, and I think it’s important when you build a brand, you should always…it’s not just on the consumer, you think about your producers, you think about your employees, think about the people around you, your company culture. And it’s pretty important on the producer side that you build that strong connection with people there. And so, for us, you know, our farmers, to see them, their lives being changed by being able to pay more. That they can afford now, you know, school for their children or hospital bills, or whatever it is that they need in their lives that they have their needs taken care of and that they have a way to connect to markets they never would have thought possible. So, I see myself as almost a bridge in that regard. 

Jennifer: What advice would you give for other business leaders, business owners to start incorporating sustainability into their business like you have? Not just with a corporate social responsibility arm but really ingrained into the actual day to day operations. 

Mokhtar: We have so many, that’s really a great question. I don’t know if I can fully answer it, but I’ll try. We have so many problems in our world today. There are so many issues. Environmental issues, social issues, [inaudible 13:42]issues. And so, I think that we can all think about one problem we can solve. What is a problem or service I can curate that can help somehow get, you know, alleviate some of these problems. And try to be problem oriented as opposed to just [14:00] revenue oriented. The money will come eventually. You know, there is always a business around something. And so, I think that’s really important for young people out there to think about something that they care deeply about, passionately about. We only have a few number of years to live. You know, what are we going to leave behind for our children, grandchildren, what do we want to do. And I think, it just feels, you know, there are moments at our company where we are in a difficult place within our company and it’s reassuring at least to know that, at least I’m doing something bigger or greater than I am. That’s one thing. The other is to make sure that you have this vision, you have others around you that have the same visions. And particular investors. You know, just because someone gives you a check, you know, think about that person’s values. Do they have the same vision as you or do they just want to get acquired or go public, you know, down the road and its important because investors who are focused are going to stay with you for a long time. And there are a lot of wonderful investors out there but there are unfortunately a lot of ones that don’t align with your values or your vision. And third, I think that whatever vision you have, making sure that you have the right team and making sure that your team members are being compensated and treated like team members. I think that, at least in my experience, the best business I’ve seen are ones where there’s been a strong company culture and there is a strong team behind you. And whatever problems come, they can come, and they can support. And that usually means that they’re aligned, not just for compensation but also values. That they feel that they’re part of something that they’re proud of. So those are kind of my 3 go-to’s for some advice I can give people because I am still, you know, needing advice myself. 

Jennifer: I think that’s great advice. And one that really kind of struck a chord with me was around making sure that the culture is really about sustainability as well because I think all employees at a company have to [16:00] be aligned with that culture and that vision and it just really has to be about, or I guess it has to be incorporated into the day-to-day mindset of every single person on the team. It can’t just be a single person thinking about sustainability or you, yourself thinking about sustainability. 

Mokhtar: Yeah, I mean, even if your company is not doing something, you know, “sustainable”, there are things around for practices. Making sure you have compostable garbage there, making sure that your company is doing things as sustainable for the environment, for their employees, making sure that there is adequate mental health, you know, support. There are so many things around that are sustainable, sustainability that you can incorporate into your company. And so, I think that companies should have like internal audits and, you know, or bring people on to see like how can we improve our company to be able to use that word sustainable. 

Jennifer: If I was drinking my cup of coffee this morning, what is the one thing I should know about sustainability with the Port of Mokha? What would be that one takeaway that I should be thinking about? 

Mokhtar: So, actually, that’s a new product that we just started to launch.I saw that, I think it was in Japan when I first saw this invention. Basically, what it is is usually when you make a pour over, which is for coffee, you have to have a grinder and a scale, and a brewer, and it’s a whole thing. And so oftentimes, people kind of just like, I can’t. You know, I’m not into coffee that much. So, I tried to figure out how I could get more of my coffee farmer’s coffee into people’s hands. So, this is a great way to do that because it gets rid of all that. It’s actually a completely recyclable, you know, sustainable product where you just put it on your cup in a very ingenious way [18:00] and you add your hot water. So, it’s great for traveling, or outdoors, or in hotels. So, for the consumer, you know, I think if you buy, you know, from our company, part of Mokha.com or if you go to any coffee shop in your local area. First of all, try to buy as local as possible. Support local businesses and local grocers who really need your help because they do incredible work trying to source great coffees. And just ask the barista, you know, where this coffee is from. You know, if they tell you, “This coffee is from Ethiopia. From an [18:30 inaudible]phase, grown at 1800 meters and has these beautiful nodes of this and that.” And the more intimate knowledge they have of the coffee, the more you’re in the right place. So, I always gauge, and I always tell consumers, you know, when you go in and buy coffee, try to understand where the coffee came from and that journey. That’s pretty much it. Just try to buy as local as possible and try to understand where your food comes from. 

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