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Green Supply Chain

Anna Deshko

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We can help our customers in becoming “greener” to satisfy stakeholders’ requirements and reveal potential for increasing efficiency of their supply chains

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Global warming is the result of increasing CO2

concentration in the atmosphere

Global warming is and will be one of the largest challenges of this century

Transportation activities are one of the main contributors to global warming

Carbon Emissions – a Global ChallengeWith global warming being recognised as one of the largest challenges of this century, carbon emissions are increasingly becoming the centre of attention

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Some examples of the carbon footprints when transporting goods

Transport of tuna from Spain to Japan

Spain Japan

7500 kg CO2

Transport of 1 pair of shoes

China North Europe

372 g CO2

450 kg CO2

20 KM 0 KM

3700 g CO2

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Change in CO2 emission in UE (1990-2004)

- 36%

- 33%

- 15%

- 13%

- 12%

- 11%

- 10%

- 5%

- 4%

- 3%

26%

-40% -30% -20% -10% 0% 10% 20% 30%

Transport

Energy industries

Residential

Average

Other (non-energy)

Services

Industrial processes

Agriculture

Industry (energy)

Waste

Fugitive emissions

Transportation - An important source of CO2 Due to

globalization and increased outsourced trends, transportation is the only sector that has increased CO2 emissions in the last two decades

Source: European Logistics Users Providers and Enablers Group ( ELUPEG)

EU

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Our response – SupplyChain CarbonCheck™ Maersk Logistics’ consulting service aimed at identifying carbon reduction potentials in supply chains

mounting pressure from stakeholders

ambitious CO2 reduction targets

untapped potentials in global supply chains

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SupplyChain CarbonCheck™ - comprehensive scopeThe scope can cover supply chain activities from the pick-up at the vendor’s factory until delivery to the point of sale

Load port

CFS facilities

FactoryTruck/Rail/

Barge

Ocean/Air

Discharge port

Truck/Rail/

BargeDC

Point of sale

Truck

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2

3

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Estimate current supply chain carbon footprint & costs

Simulate carbon footprint & costs of alternative scenarios

Implement solutions

Evaluate CO2 emission & cost reduction potential

SupplyChain CarbonCheck™ - a standardised approach4-step methodology based on internationally recognized emission standards

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Step 1: Estimate Current Carbon FootprintAs a first step, we map your current carbon emissions and provide you with a snap-shot of the carbon footprint of your supply chain

Carbon mapping of current supply chainwith Maersk Carbon Footprint Calculator

Result: Snap-shot of the supply chain’scurrent carbon footprint – the ‘AS IS’ scenario

Carbon Footprint Calculator

Global supply chain scope

Internationally recognised emission standards &calculation methodology

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Estimate Simulate Evaluate Implement

A B C D

A B C D

‘AS IS’

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A B C D

Simulation of alternative supply chain set-ups – ‘TO BE’ scenarios

Calculation of carbon emissions and total supply chain costs for each scenario

Comparison of ‘TO BE’ scenario with‘AS IS’ scenarios

Identification of CO2 reduction potentials

Step 2: Simulate Alternative Scenarios We then estimate carbon emissions for alternative configurations of the supply chain and compare the results with the current footprint

AS IS

A B C D

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TO BE 2

TO BE 1

TO BE 3

A B C D

A B C D

Estimate Simulate Evaluate Implement

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Evaluate carbon reduction potentials based on:

Step 3: Evaluate CO2 Reduction Potentials

Reduction potentials are evaluated under various aspects

Strategic fit

Impact on carbon footprint

Impact on total supply chain costs

Ease of implementation

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Concrete recommendations for implementation

?

Estimate Simulate Evaluate Implement

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Preparation of roadmap for implementation

Maersk Logistics assists in putting agreed solutions into practice

Estimation of actual achievements in reducing carbon emissions after implementation phase

Step 4: Implement SolutionsMaersk Logistics assists in implementing the agreed solutions, thus helping you tap the full potential of carbon footprint reduction in your supply chain

CO2 Reduction

Time

Solution A

Solution B

Solution C

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4Estimate Simulate Evaluate Implement

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What have we done so far?

Case Studies

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What have we done so far? – case study 1In this study, we have analyzed the environmental impact of alternative transportation modes

The Project

> An electronics company exporting goods from Barcelona to Denmark

> Environmental impact analysis of two scenarios: Truck vs. Multimodal

Results

> The analysis reveals that trucking alternative represents more than 3 times more CO2 emissions compared to multimodal transportation

Total CO2 (KGs)

Truck 197.120

Multimodal 65.224

Savings 131.896

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Alternative 1 – TruckTotal CO2 emissions: 197.120 KGs

Factory (Barcelona)

Warehouse (Denmark)

Alternative 2 – MultimodalTotal CO2 emissions: 65.244 KGs

RailDC (Spain)

Truck DC (Copenhagen)

TruckFactory (Barcelona)

Warehouse (Denmark)

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What have we done so far? – case study 2The aim of the study was to identify main drivers of carbon emissions in the supply chain and provide alternatives to reduce carbon footprint and costs

The project

> A leading health and beauty group – Alliance Boots

> Exports from Asia to United Kingdom

Load port

CFS facilities

Truck/Rail/

Barge

Ocean/Air

Discharge port

Truck/Rail

DC Point of sale

Truck

The Scope

Factory

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What have we done?

Estimated current carbon footprint & costs

Simulated carbon footprint & costs for alternative scenarios

Evaluated CO2 emission & cost reduction potentials with Boots

Helped Boots to implement solutions

Results

29% reduction in CO2 emissions

21% reduction in supply chain costs

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0

10

20

30

40

50

60

70

80

2004 2007

terminal handlingreductionincreased equipmentutilisationimproved weightefficiency (air)air shipment reduction

carbon emissions(kg/cbm)

Reduction

Results – 29% CO2 reductionThe supply chain improvement initiatives led to 29% reduction in CO2 (per cubic metre)

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without initiatives 2007

terminal handlingreduction

increase incontainer utilization

air shipmentreduction

USD / cubic meter

Reduction

Results – 21% cost reductionLower carbon emissions come along with lower logistics costs – a win-win situation for you and the environment!

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What have we done so far? – case study 3In this study we have estimated the carbon footprint from supply chain related activities

The project

> An American retailing brand

> Global supply chain with imports to USA

The Scope

Load port

CFS facilities

Truck Ocean/Air

Discharge port

Truck/Rail DC Point of

saleTruckFactory

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Results – 57,59 million CO2 for shipments in 2007On average, each cubic meter shipped had a carbon footprint of 101 kg

Rail

Truck

Air

OceanPor

t/Whs

What does this mean?*

57,59 million KGs of CO2 is equivalent to;

> 10,548 passenger cars not driven for one year

> 133,939 barrels of oil

* : http://www.epa.gov/cleanenergy/energy-resources/calculator.html

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Your guide to greener supply chains - SupplyChain CarbonCheck™

AGreenerSupplyChain

AGreenerSupplyChain

NetworkDistributionOptimization

TransportMode

Optimization

TransportMode

Optimization

TransportCarrierSelection

TransportCarrierSelection

EquipmentUtilization

Improvement

EquipmentUtilization

Improvement

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Typically, lower carbon emissions come along with lower overall logistics costs and maintained or improved service levels – a win-win situation for our clients and the environment!

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THANK YOU FOR YOUR TIME