1. Observations and Strategies for South Africa
Green Freight
Observations and Strategies for South Africa
RFA Annual Convention
Buddy Polovick, USEPA
May 24, 2016

2. Today’s Discussion Common Challenges:
USA and SA, Public Sector & Private Sector
Transportation and Freight Sectors in US & SA
Impacts and Drivers, Marketplace Changes, Challenges
Green Freight Programs
Global Movement
The SmartWay to advance freight efficiency
Supply chain performance benchmarking
SA Green Freight Program Foundation
SMART Truck
Industry leaders on Green Freight
Where to go from here

3. Common Challenge: Freight Environmental Impacts
Transportation:
Over 25% total GHG emissions in US
13% of total GHG emissions in SA
Transport is 2nd to power
Within Transport Sector Road accounts for:
84% of GHGs in US
86% of GHGs in SA
Road Petrol emissions about 64% of transport GHGs
Road Diesel emissions about 30% of transport GHGs 3
2014 Data - Inventory of U.S. Greenhouse Gas Emissions and Sinks (EPA 2016)

4. Common Challenge: Climate Awareness
The February 2016 average temperature across land and ocean surfaces was 2.18°F above the 20th century average.
This was not only the highest for any February (since record keeping began in 1880) (surpassing previous record set in Feb 2015), but surpassed all-time monthly record set two months earlier in December 2015.
February 2016 also marked 10th consecutive month a monthly global temperature record has been broken.
Source: National Oceanic and Atmosphere Administration

5. Common Challenge: Freight Public Health Impacts
Diesel Particulates:
PM10 and PM2.5
Permeate lungs, bloodstream
Aggravates asthma, lung function, heart conditions
Likely carcinogen
SA estimates R12 billion in emissions cost externalities

6. Common Challenge: Freight Public Health Impacts
Dallas Region
Diesel NOx:
Forms ground level ozone
Ozone: significant effects on elderly, asthmatics, children
(Heavy Duty Trucks 48%)

7. Common Challenge: Economic Impacts of Freight
Freight transportation is cornerstone of our economies
Trucking & rail deliver goods that drive our economic growth
Domestic freight and exports and imports
Our freight systems move:
20 billion tons of freight yearly (US) (truck is 14 billion tons)
1.7 billion metric tons (SA) (road is 1.5 billion mt)
$4 trillion exports/imports (US)
$212 billion exports/imports (SA)
Transportation logistics costs
$1.4 trillion in US (8.6% of GDP)
R423 billion in SA (12.8% of GDP)
growing with increased fuel costs
US DOT Freight Facts and Figures Annual Report, 2015
10th State of Logistics Survey for SA, CSIR 2013
WTO trade statistics 2013

8. Common Challenges: Heavy Duty Truck Freight Tonnage
Total: 20 billion tons (domestic and trade)
US DOT Freight Facts and Figures 2015

9. Common Challenges: Heavy Duty Truck Freight Tonnage
SA Weight of Freight by Mode 2013

10. Common Challenges and Opportunities
Public awareness
Private sector under pressure from customers, stakeholders to report carbon footprint and reduce emissions
Policy makers pressing for efficiency gains
SA Green Transport Strategy
Rising and volatile energy prices
US fuel and driver wages (about equal) are largest cost centers for truck carriers: 64% of operating costs
SA fuel and driver wages (fuel almost 3 x driver wages) are largest cost centers for truck carriers: 56% of operating costs
Fuel price volatility especially challenging in South Africa which has seen a 339% increase in last decade
Globalization of supply chains
Opportunities to impact and compete in global marketplace
Fuel price volatility is significant in SA
NMI (Natural Marketing Institute)
ATRI: An Analysis of the Operational Costs of Trucking: A 2014 Update
Car.co.za

11. Global Freight Growth
ITF Transport Outlook 2015

12. Solution: Green Freight Program
Green freight programs: promote and enable application of energy-saving and emission reducing strategies technologies and practices, including:
Performance benchmarking and tracking
Carbon accounting, disclosure and reporting
Technology verification
Capacity building, education and training
Recognition, branding and incentives
Successful Green Freight programs: leverage market mechanisms and create business case for investing in efficiency efforts, including:
Key shippers, carriers, logistics and other stakeholders
Multi-modal supply chain applications
Public-private collaboration

13. Green Freight: Global Movement

14. How to Address Supply Chain Carbon
Measure Supply Chain Footprint
Benchmark
Performance
Report
Results
Innovate Operations
Improve
Efficiency

15. SmartWay Snapshot
Since 2004, SmartWay has grown to about 3,000 partners in U.S. with broad freight industry support in U.S. and Canada
Top 100 U.S. truck carriers and all Class 1 rail lines
Fortune 500 shippers from key economic sectors
Major logistics firms
Since 2004, SmartWay Partners saved:
72.8 million metric tons of CO2
1,458,000 tons NOx and 72,000 tons PM
170.3 million barrels of oil and 7.2 billion gallons of fuel
$24.9 billion dollars in fuel costs
Equivalent to eliminating annual energy use in over 6 million homes

16. SmartWay Success Factors
SmartWay provides balanced approach
Simplicity – standard benchmarking tools and methods
Accuracy – performance based assessment of CO2, NOx, PM
Flexibility – multiple metrics, multimodal, multi-fleet, multi-categories
Transparency – manageable granularity, protects sensitive info
EPA lends credibility and neutrality
Facilitates exchange of performance data to inform marketplace
Data QA/QC program ensures rigor
SmartWay triggers market mechanisms
Based on business case for freight sustainability
Partner incentives, e.g., shipper demand for cleaner/greener carriers
SmartWay provides supplemental value for Partners
Technology verification
Operational best practices
Goal: Ensure data submitted by SmartWay partners are accurate and secure
Credibility and integrity of program rests on integrity and quality of the tools, data and data processes
Data quality enhances results, brand credibility
Rigorous data protection part of Partner Account Management process
Partner data stored in secure database
Partner data never disclosed (unless permitted)
Carrier ratings/factors based on bins (not actual)
Partner data aggregated for total program results

17. The SmartWay Benchmarking System
Carrier Data Collection Tools
Truck, Logistics, Barge, Rail, Multimodal Suite
Air Tool launch 2016
SmartWay “Process”
Data collection & processing, benchmarking
Quantifies emissions
SmartWay Database
Stores, manages data
Allows industry benchmarking
Shipper Tool
Calculates carrier emission footprints for Shippers
SmartWay Website
Tools, guides, resources, webinars

18. Carrier Data Collected
Short Haul vs. Long Haul
Fuel types and gallons consumed
Particulate Matter Reduction (pre-2006)
“Cube Out” Percentage
Model year and truck class
Miles (revenue and empty)
Average Payload (Tons) – Cargo Weight Only
Average Capacity Volume (Cubic Feet)
Percent Capacity Utilization (Excluding Empty Miles)
Road Type / Speed Categories
Average Annual Idle Hours per Truck

19. SmartWay Carrier Rating and Ranking
15 Carrier Categories
- TL, LTL, Refrigerated, Tanker, etc.
6 Emission Factors
- 2 metrics x 3 pollutants
Quintile Rankings
(ex: Truckload CO2 g/mile)
1480 g/mile
Top 20% TL Dry Vans
g/mile
1560 g/mile
Second 20% TL Dry Vans
g/mile
1640 g/mile
Middle 20% TL Dry Vans
g/mile
1720 g/mile
Fourth 20% TL Dry Vans
g/mile
1800 g/mile
Bottom 20% TL Dry Vans
g/mile 19 19

20. Shipper Data Collected
North American Industry Classification System (NAICS) code(s)
Accounting of all SmartWay carriers utilized
All truck, rail, multimodal and logistics providers
Activity data for amount of freight, distance shipped
Total miles contracted and/or ton-miles contracted by SmartWay carrier and non-SmartWay carrier category
Freight characterization (avg density, avg payload)
Mileage and ton-mileage data recommended
Flexibility for other data types
Optional data on operational, mode shift strategies

21. SmartWay for Carbon Reporting
Step 1- Complete the Shipper Tool
Step 2 - Generate SmartWay Data Reports
Step 3 - Use results in:
Benchmarking and Operations
Environmental Reporting
Carbon Disclosure Submittals

22. SmartWay for Carbon Optimization
Step 1- Complete Shipper Strategies analysis
Step 2 - Generate SmartWay Data Reports
Step 3 - Use results in:
Performance tracking
Progress reporting
Case Studies

23. SmartWay Snapshot

24. Where can SA go from here?
Develop a SmartWay Green Freight Program, start with:
SA SMART Truck program
Performance based standards
Driver training, speed control, maintenance
Data collection and reporting
Average 14% fuel economy improvements
Could achieve 15% - 20% with full scale adoption
SA Road Freight Association, SA DOT, DEA
Build partnership approaches with government and industry
SA Industry leaders
Carriers and logistics leaders like Barloworld
Advanced aerodynamics and super-single tyres saved 10%
Multinational shippers focused on Scope 3 carbon footprint
Advanced aerodynamics and singlewide tires lowered Barloworld fuel consumption by 10% and accrued a saving of 13 tonnes of carbon over a six month period (measured over 2010/2011), thereby reducing costs for Barloworld Logistics and its customers. In addition to cost savings and carbon emission reductions, the truck, due to increased stability, is also safer on the roads for both driver and other road users.
Frost & Sullivan 2015

25. Resources to help SA move forward
EPA SmartWay program training curriculum
200 page program development guide and interactive workbook
100 page Teacher Trainer Guide
85 – Powerpoint slides
Technology Verification training in development (ready summer 2016)

26. SmartDriver E-learning

27. Global Green Freight Action Plan
Blueprint and roadmap to develop Green Freight Programs
Technical Background Report
Catalogues applicable technologies and strategies
Summarizes global program status, features and key info
Global Logistics Emissions Council
Standard methodology framework
Numerous other resources
Build capacity
Share information
Coordinate efforts

28. Why Should SA Implement SmartWay?
Standardized approach to assess supply chain efficiency and emissions in SA freight sector
Applicable to any organization that ships, carries or receives goods
Can be adopted by private sector, vendors, providers, suppliers
Designed for the freight sector
Can deliver solutions to marketplace needs and challenges
May be voluntary and no-cost
Proven benefits
Shippers can identify greener carriers
Carriers gain competitive advantage for leading shippers
Policy makers drive environmental, economic & societal benefits
SA can enhance competitiveness and lead the way for Africa
Position the nation and the region as global leader

29.
SmartWay Helpline
Buddy Polovick