Just the facts transport oct 2011

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Our vision for sustainable transportat InterfaceFLOR Europe

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Just the facts our vision for sustainable transport at InterfaceFLOR Europe

1. Eliminate wasteEliminating the concept of waste, not just incrementally reducing it.

2. Benign emissionsFocusing on the elimination of molecular waste emissions. Eliminating waste streams that have negative or toxic effects on natural systems.

3. Renewable energyReducing our energy demands while substituting non-renewable sources with renewable ones like solar, wind and landfill gas.

4. Closing the loopRedesigning processes and products so that all resources used can be recovered and reused, closing the technical or natural loop.

5. Resource-efficienttransportationTransporting all of our people and products efficiently and with minimal waste and emissions. This includes plant location, logistics and commuting.

6. Sensitising stakeholdersCreating a community within and around InterfaceFLOR that understands the functioning of natural systems and our impact on them.

7. Redesign commerceRedesigning commerce to focus on the delivery of service and value instead of material. Encouraging external organisations to create policies and market incentives.

InterfaceFLOR’s sevenfronts of sustainability

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Transport atInterfaceFLOR Europe

Our transport can be dividedinto two main categories:international transport andnational distribution.

International transport

• Inter-company transport of semi-finished products from factory to factory.

• Line-haul transport of finished carpet tiles from factory to national distribution centres.

National distribution

• Transport of products from national distribution centres to our customers

InterfaceFLOR has threefactories in Europe andnational distribution centresin all our major markets.

• Craigavon, Northern Ireland

• Shelf, England

• Scherpenzeel, the Netherlands

London and Paris are our two largest city markets and account for the most significant proportion of our transport impact due to the high volume of distribution. Peripheral regions such as Spain or Scandinavia also have a relatively high impact on international transport due to the relatively long distances from our factories.


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Understanding ourtransport impacts

We conducted a study in 2008 to establish an accurate baseline for our current performance and quantify opportunities to reduce our transport impacts. The main aim was to develop a tool to measure and monitor transport emissions.

Monitoring our impacts gives us a better understanding of the factors that influence our transport emissions levels and enables us to work with our logistics partners to identify areas where we can improve our performance.

To calculate the environmental impact of our distribution we collected data on the amount of goods transported, the total distance travelled by our goods and the environmental performance of each mode of transport. We collected data internally and from our logistics partners to calculate transport impacts per m² of carpet delivered.

Our current performance is 0.3kg CO2/m² of carpet delivered.


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1. Manufacturing regionally

Cutting the distance that our products have to travel is one of the most effective methods of reducing our transport impacts.

In Europe over 99% ofthe products sold aremanufactured in Europe.

In addition, the majority of our raw materials by weight are sourced from suppliers close to our factories. This is especially important for heavier raw materials such as limestone.

Our commitment to regional manufacturing is not limited to Europe. As we expand into emerging markets, where

How to reduce ourtransport impacts

Following a review of ourentire distribution network,we have identified severalareas where we can reduceour transport impacts:

In the Netherlands, wherewe have switched fromdedicated to groupeddelivery, the fill rate of ourtrucks have increasedfrom 38% towards 60%.

Our international line-haul transport uses Groupage, a service that enables us to share space with other goods for international shipping from our factories to national distribution hubs.

Load factors are one of the criteria in the annual questionnaire sent to all our logistics partners, and we welcome ideas on how to improve these.

We are also looking for ways to pack more products per truck. This is challenging because our products are heavy and their size means the pallets we use are not the standard dimensions (1,06m x 1,06m).


demand is growing, we are developing local manufacturing facilities. For example, new factories were recently completed in China and Uruguay.

2. Improving load factors

Empty and underutilised vehicles dramatically reduce transport efficiency. A 2009 report by the World Economic Forum found that 24% of freight vehicles in the EU run empty. The research also found that the rest run with an average load of only 57% of capacity (load factor), giving an overall efficiency of just 43%. The report estimates that this inefficiency costs the 27 EU countries 22 billion a year – 1.2% of GDP.

Sharing transport space with goods for other companies rather than sending dedicated trucks or containers for our products can significantly increase efficiency, particularly for national distribution where freight capacity is typically used less efficiently. This also helps to avoid trucks delivering our products coming back empty.

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3. Optimising delivery routes

Our products do not travel in a straight line from our factories to our customers. Their journey is determined by transport networks and the location of national distribution hubs. The amount our routes deviate from a straight line is called ‘de-touring’. Reducing de-touring can cut environmental impacts of transport, especially for larger orders.

We are working to cut the amount of de-touring in our distribution network. In France, for example, all our goods used to go via our hub in Paris because the Paris area accounts for around half our sales in the country. However, this often added unnecessary mileage.

4. Using cleaner fuels and more efficient vehicles

Cleaner, more efficient and alternative vehicles are the most effective way to reduce our transportation impacts. Improved vehicle efficiency, alternative vehicles and the use of biofuels will bring the biggest reductions in CO2 emissions, according to the European Commission.

The table on page 14 shows the potential savings that could be achieved by implementing a range of new technologies or fuels in trucks. It shows the

potential reductions in CO2 and NOX emissions which affect climate change, as well as particulates which contribute to local air pollution.

‘Megatrucks’ can improve the efficiency of transport by moving more goods per trip, reducing the overall number of trips needed. However, they are not accepted in all European countries and weight restrictions on individual vehicles make the use of megatrucks difficult for InterfaceFLOR because our carpet tiles are heavy.

Manufacturers are continually improving the efficiency of regular trucks and improvements in aerodynamics and rolling resistance are expected to make new vehicles 30% more efficient by 2020. But there are limits to what can be achieved through efficiency gains while still using fossil fuels.

Scherpenzeel, Netherlands

Lille, France

Paris, France

Optimised delivery route

Delivery route

Now, orders heavier thanthree tonnes (around threepallets) are transporteddirectly to the customerfrom our factory inScherpenzeel,the Netherlands.

There will still be some detouring for small orders (for example, from Scherpenzeel to Paris and back to a customer in Lille or Strasbourg), but a balance needs to be made in order to avoid small orders travelling long distances on potentially empty trucks.

Since 2009, deliveriesof over 1.5 tonnes alsodispatched directly fromScherpenzeel to customersin Germany and Austria

In our other major markets, such as the UK and Spain, we are looking for similar opportunities to reduce detouring and encourage our logistics partners to help us meet our goals.


Once vehicle efficiency is optimised, the biggest opportunities for InterfaceFLOR are the use of second generation biofuels and hybrid or electric vehicles. These are areas where we expect our logistics partners to innovate to cut impacts dramatically. We look forward to new ideas and projects to improve efficiency and emissions of vehicles. For example, we are exploring options with our transport company in the UK to test trucks that run on bioethanol. We are also in discussion with our logistics partners to invest in hybrid delivery vehicles in Paris and London in the future.

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Measures to reduce the environmental footprint of truck transport

Fuels 2010 (source EUCAR/CONCAWE/JRC

1 Natural gas

Effect on carbon dioxide (CO2) emissions

Effect on nitrous oxide (NOX)

-3% to -10% -80% -40%

-65% to -70%- -80% to -95%

+1.5% - -20% to -40%

-22% -25% -25%

-15% to -40% Locally - 100% Overall 0%

Locally - 100% Overall 0%

-3% to -10% Locally - 100% Overall -70% to -90%

Locally - 100% Overall -90% to -95%

+10% to -140% - -

Effects on particulates (PM10)

2 Replacement of Euro 1-3 by Euro 5

3 Retrofit particulate filters on Euro 2/3

4 Megatrucks/ Ecocombi

5 Hybride drive

6 Electric drive (for distribution)

7 Biofuels

Material

020

040

060

080

100

120

140

160

180

0 200100 300 400 500 600

WTW

GH

G e

miss

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s 9g

CO

2eq

/ k

m)

Total WTW energy (MU / 100km)

Key Conventtional gasoline Conventional diesel Syn-diesel: Farmed wood Syn-diesel: Waste wood, Black lquor

EtOH: Sugar cane (Brazil) EtOH: Wheat straw EtOH: Wheat, NG GT+ CHP, DDGS as AF RME: Gly as chemicals DME: Waste wood, Black liquor

The use of hybrid vehicles reduces the amount of diesel used by running off a battery which is recharged using energy lost in braking. When running in electric mode, there are also no particulate emissions. This reduces local air pollution, especially important in populated areas.

For the same reason, electric vehicles can significantly reduce local air pollution. However, their potential to cut carbon emissions depends on the source of the grid electricity used to charge them. Based on the average carbon intensity of EU electricity production, electric vehicles can achieve savings of about 40% compared with fossil fuels.

The EU road transport sector accounts for more than 30% of the total energy consumption in Europe. It is currently 98% dependent on fossil fuels and the EU has set a target for 25% of transport fuel needs to be met by biofuels by 2030.

Biofuels are a renewable energy source and a lower-carbon alternative to fossil

fuels. The key to achieving these targets lies in what are known as ‘second generation’ biofuels as they require less chemical and energy input and typically produce more fuel per unit of agricultural land used. These are produced from cellulosic materials (such as straw or plant waste) rather than the starchy part of plants which could compete with food crops.

InterfaceFLOR supports theuse of second generationbiofuels such as:

• Biomass to Liquid (BtL)• Cellulosic ethanol• BioDME/Methanol• BioSynthetic Natural Gas

(BioSNG)• Bio-oil/Bio-crude• Algal biofuels• Hydrocarbons from catalysis

of plant sugars• Biohydrogen• Bioelectricity/CHP• Biobutanol


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5. Shifting to lower carbontransport (multimodal)

Shifting loads from trucks to other modes of transport – such as trains, inland barges and short sea shipping – for part of the journey can reduce CO2 emissions. The EU goal is for 30% of road freight travelling over 300 km should shift to other modes such as rail or waterborne transport by 2030.

CO2 (g/tonne-km); containers/non-bulk; short distance; 2010

CO2 (g/tonne-km); containers/non-bulk; long distance; 2010

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Note: Short distance transport applies to trips of around 150 km

Rigid

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(32T

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Train

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Train

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(150

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Articula

ted

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Articula

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transported to the port at Rotterdam by road.

By transferring goods to abarge for part of this journey(between Rotterdam andUtrecht), we have cut CO2

emissions by 39%

We are looking for more opportunities to reduce road mileage by shifting to multimodal transport. We are investigating opportunities to use rail for international

transport to several countries in Eastern Europe. We are also looking into the possibility of using ships from the port of Rotterdam to places such as Bilbao in Spain or Saint Petersburg in Russia.

Our goal is for 10% of ourproducts (by volume) to bedistributed using multimodaltransport by 2015.

We have already made a number of changes to the way we transport goods.

In Italy, for example, wehave transferred 98% of ourshipments from road to rail,reducing CO2 emissionsassociated with thejourney from Scherpenzeelto Italy by 69%.

In the Netherlands, products from our site at Scherpenzeel have traditionally been


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6. Promoting regular training for drivers

Training truck drivers in fuel efficient driving can cut emissions by up to 5%. We encourage our logistics partners to provide such training for their drivers. This is one of the criteria in our supplier questionnaire and most of our partners already train their drivers regularly. We will continue to raise awareness on this.

7. Understanding theimpacts of every m2 ofour products

Introducing the Eyefreight system will allow us to track, among other things, the environmental footprint of each individual delivery. The system will act as a portal for our European distribution and will track order intake, service level, freight costs and environmental footprint. This granularity of information

there is not demand for green solutions by bigger companies. Influencing other companies is a key part of our Mission Zero and our transport strategy.

We are working with other multinationals to develop and share ideas on sustainable transport as well as creating market demand through the Duurzame Logistiek (Sustainable Logistics) programme, which supports 250 leading companies in the field of sustainable transportation of goods. Its aim is to increase the profitability of companies and simultaneously reduce CO2 emissions by more than 20% by 2012.

More information on how InterfaceFLOR is working with other companies to reduce the impact of our product transportation is available at www.duurzamelogistiek.nl.


will allow us to make better and faster decisions on our transport to optimise efficiency. This will help us monitor and reduce environmental impacts.

8. Collaboration withother companies

Our impact on transport is very small in comparison with other multinational companies. We cannot achieve our vision for sustainable transport if

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Our goals forsustainable transport

By 2015, our vision forInterfaceFLOR in Europeis this:

• Efficiency is down from an average of 0.3kg CO2 /m2 of carpet delivered to 0.2kg CO2 /m2

• 10% of our total volume is intermodal

• 90% of vehicles used in our transport is in top Euro Class for tailpipe emissions

• 85% of our transport suppliers are ISO 14001 certified

• All forwarders regularly train their drivers on efficient driving

These are the targets set up by the preliminary transport vision of the European Union. Our goals do not stop at 2015. The table outlines the vision of the European Union on transport for 2020, 2035 and 2050. We seek to be well ahead these targets, and demonstrate to other companies that it is feasible to reduce environmental impacts from transport significantly.

To achieve our vision on sustainable transport, we need the support of all our stakeholders. We encourage our logistics partners to develop more sustainable transport solutions and we are continuing to work with industry and other companies to help drive change within the sector.

2020 2035 2050 GHG

1 Stabilizing the increase of tkm Max. +30% Max. +43% Max. +44% N / A N / A

FFS

19% 22.5% 25%Rail Rail Rail

6% 7.5% 10%IWW IWW IWW

66% 75% 80% 3% -Increased share of electrical rail

8% 24% 33% 38% 30%Increase share biofuels

-20% -40% -50% 88% -Decreasing vehicle energy demand

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-37.5% -61% -88% 55% 22%Reducing carbon emissions in electricity production

3

0% 10% 25% 41% 5%Electric engines in road transport4

5a

-35% -83% -83%Biofuels upstream emissions5b

+8% +30% +50% 25% -Increased efficiency in usage of veh

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+21% +40% +45% 21% 2%Improved engine efficiency7

-75% 70% 65% 7%Road Road RoadHigher modal share of rail ad IWW

8

9

2% 8% 10% 2% -Usage of larger trucks10

Influence factors Target for Sensitivity


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How does Mission Zero affect ourrelationship with transport companies? Q&A with David Kers, EuropeanDistribution Manager

How would you like tomanage your suppliers?

The relation with our logistics service providers is based on a performance partnership, where we focus on continuous improvement projects. We challenge our logistics service providers to do better every day. Our transport management system “Eyefreight” enables us to monitor our KPI’s on (Service) Performance, Profit and Planet. Annually targets for KPI’s will be agreed and the progress on these KPI’s is reviewed in our quarterly review meetings.

What would be yourperfect supplier?

The perfect supplier would be the supplier that will help us in realising our Mission Zero. Besides focusing on Service and Quality, this supplier will have a strong focus on innovation (technological and social), can adapt to short and mid-long term changes in the market place and is demonstrating commitment to become a sustainable partner. Sustainability should be a key element in their strategy. Our perfect suppliers will be or become leaders in the sustainable European transportation market, implementing new sustainable logistics concepts, for example: multi modal transportation and trucks using alternative fuels.

As a transport company,how can I do business forInterfaceFLOR?

We select logistics service providers who can help us in our quest to launch a sustainable European distribution organisation and eliminate any negative impact our distribution activities may have on the environment by 2020, in order to reach Mission Zero.

Our European distribution model is based on the 4 P’s; Performance (service), Planet, People and Profit. We have developed a supplier assessment model in which our suppliers are assessed on criteria linked to these 4 P’s. Examples of these criteria are: Green Fleet composition, driver training programmes, experience with alternative fuels, profitability etc.

How do you ensure theeconomic sustainability ofyour transport suppliers?

Being financially healthy in terms of profit and cash flow is important for a logistics service provider, to become and stay a sustainable company. In close cooperation with our logistics partners we want to change the European transportation market from a short term leverage market to a long term sustainable market focusing on the 4 P’s. Market developments and financial performance of our logistics service providers are reviewed on a quarterly basis. Through collaboration we focus on eliminating supply chain costs.


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If you want to know more, please go to www.interfaceflor.eu/transport

For more information about our products please visit www.interfaceflor .eu

Just the facts transport oct 2011

Business

Transcript of Just the facts transport oct 2011