Environmental Innovations

Innovations: Environmental

Environmental Innovations


Overview

Freight transportation, whether by truck, rail, or ship, is widely perceived to be among the most environmentally damaging activities in contemporary supply chains. Much of the environmental impact is attributed to greenhouse gas (GHG) emission, especially harmful carbon dioxide that accounts for more than 90 percent of GHGs.

Globalization, short product lifecycle, and dynamic consumer demand are key areas defining modern supply chains that involve movements of freight many times around the world in various stages of production. The fact that the freight transportation sector depends heavily on fossil fuel resources that are not only damaging to the environment, but also increasingly expensive makes the move to find cleaner, more cost-efficient methods of transport more challenging.

Recent research from a research team at the Penn State Smeal College of Business examines current strategies used by organizations in both private and public sectors in order to develop a strategic framework of environmentally and economically sustainable freight transportation.


Background

Recent improvements in diesel engine technology allow modern automotive diesels to be quiet, powerful, and clean enough to meet California’s emission standards. The introduction of ultra-low sulfur fuel in 2006 which is required in California by the Air Resources Board, opened the door for diesel engine control systems to advance and substantially reduce emissions, using technologies such as particulate filters and catalytic reduction systems.

Availability
A few manufacturers are introducing diesel vehicles in California with more coming in the future.

Cost
Because of the extra technology that goes into making diesels perform well on the road and comply with emissions standards, they can be an expensive option compared to similarly powerful gasoline engines.

Historically, the average price of diesel fuel has been lower than the average price of gasoline. However, this is not always the case. Worldwide demand for diesel fuel and other distillate fuel oils has been increasing steadily, with strong demand in China, Europe, and the United States, putting more pressure on the tight global refining capacity. In the United States, the transition to ultra-low-sulfur diesel fuel has affected diesel fuel production and distribution costs. Also, the Federal excise tax on diesel fuel is 6 cents higher per gallon (24.4 cents per gallon) than the tax on gasoline.

Fueling
Many gas stations offer diesel fuel as well. Here are some resources for finding diesel fuel:

•Diesel Forum Fuel Locator
•Gas Price Watch
•U.S. Department of Energy Alternative Fuel Data Center: A site developed by the Department of Energy that provides maps to refueling stations in the US for CNG, LPG/propane, ethanol, electric, biodiesel, hydrogen, and liquefied natural gas (LNG).
Performance
Diesel engines provide more power and more fuel efficiency than alternatives such as gasoline, compressed natural gas or liquified natural gas. Fuel combustion is the primary difference between gasoline and diesel engines.

Benefits
A growing number of these “clean diesels” are coming to market, offering 20-40% better fuel economy and reduced greenhouse gas emissions compared to gasoline vehicles. While diesels still have room to improve when it comes to smog emissions, they are expected to meet more stringent emission standards over the next few years.

To compare the environmental benefits between cars you are shopping for, remember to look for higher Global Warming and Smog Scores on the Environmental Performance Label.

Additional Resources
•Diesel Technology Forum
•U.S. Department of Energy Alternative Fuel Data Center

Famed entrepreneur Elon Musk introduces his revolutionary new approach to environmentally friendly fuel systems for transportation. After cashing out of Paypal, Musk turned his attention and fortune to building pioneer transport manufacturers Tesla Motors and Space-X.

A Shift in Supply Chain Strategies

Evelyn Thomchick, associate professor of supply chain management, and Kusumal Ruamsook, research associate at Smeal, conducted an extensive literature review in order to develop a conceptual framework outlining strategic and operational approaches to promote sustainable freight transportation.

The researchers propose a framework encompassing technology, people, and process initiatives that range from individual organizational efforts to those that harness public-private sector partnerships and collaborations. These initiatives are aimed at balancing technological innovation and market demand to ensure long-term environmental and economic success.

Commonly used practices employed by private firms include the adoption of more fuel-efficient technology, shifting to cleaner energy sources, and improving transport operation efficiency.

“There is a growing recognition among private companies that reducing freight-related GHG emissions can also drive improvement in efficiency and competitiveness,” write the researchers.

However, the researchers maintain that in order to achieve long-term benefits of costs and customer services along with environmental sustainability, a strategic shift is required.

“Strategies may involve a shift in supply chain configuration, such as re-locating manufacturing sites and warehouses, modifying a company’s governance and control systems, and strengthening employee training programs,” the researchers write.