Transcription
TRENDS SHAPING THEFUTURE OF FREIGHTFREIGHT MATTERS webinar seriesMarch 29, 2017
Webinar Housekeeping Submit a question via theQuestions box on yourGoTo control panel. After the presentation, as timepermits, our EPA presenter willanswer questions submitted via the Questionsbox. Please complete the survey at the end of today’swebinar. Your feedback is important to us!2
Webinar HousekeepingThe presentation slides and recording will beavailable vents(select the “Past Webinars/Events” tab)3
SmartWay home page4
5
Denise KearnsEnvironmental Protection SpecialistU.S. Environmental Protection AgencyDenise is a key member of EPA’scommunications team that supports theagency’s SmartWay program, a public-privatepartnership that since 2004 has reduced fueluse by over 170 million barrels of oil,lowered fuel costs by almost 25 billion, andachieved significant reductions in carbon,NOX and particulate.6
TODAY’S TOPICS Emergence of clean freight & efficiency in the U.S.Current trends in freight transportationSupply chain logistics and the e-commerce BOOM!Green retail in an era of change7
U.S. transportation energy use & emissions Transportation consumes roughly 2/3 of all petroleum-basedfuel use & emits almost 1/3 of all carbon and other harmfulemissions in the U.S. Freight sector accounts for over 25% of all fuel consumed andair emissions from transportation For trucking companies, fuel is second high operational cost Freight sector is the fastest growing source of transportationemissions globally8
U.S. leadership in clean freight & efficiency NEW EQUIPMENT- Emissions and fuelefficiency standards formedium and heavy duty trucks ‘LEGACY FLEET’- Clean diesel grant, loan& community programs EQUIPMENT, TECHNOLOGY, COLLABORATION, SUPPLY CHAIN9
SmartWay, transportation efficiency,collaboration and clean air Improve U.S. freight efficiency and competitivenessHighlight industry efforts to improve sustainabilityProvide a standardized benchmarking andperformance assessment systemFacilitate collaboration between freight carriers, 3PLsand shippersAddress trends, future opportunities for freightsustainability10
Bob CostelloChief Economist & Senior Vice PresidentAmerican Trucking Associations (ATA)As chief economist for ATA, Bob manages ATA'scollection, analysis and dissemination of truckingeconomic information, regularly producing severalreports about trucking economic activity, an annualfreight transportation Forecast, driver wage studies,weekly diesel fuel price and economic reports and ayearly trucking almanac.Bob is often cited in the news media as an expert ontrucking economics, including the Wall Street Journal,Business Week, CNBC, FOX Business Channel andNational Public Radio.
Trucking’s Importance to the Economy Has Surged Over theDecadesBillions of TonsTruckRailSource: U.S. Freight Transportation Forecast to 2027, Eno Foundation,ATA
Distribution of Tonnage by Mode: 2015TL34.9%LTL1.0%Pipeline10.5%TL, 49.2%Private, 49.4%Water5.3%Air0.1%Rail Carload11.8%Rail Intermodal1.3%Private35.0%Total Trucking: 70.1%2015Source: U.S. Freight Transportation Forecast to 2027LTL, 1.4%Truck Tonnage Only
Trucking Is a Diversified IndustryTonnage Moved(2015)Distribution of Carriers byPower Units OperatedLargeBusiness 3%TL, 49.2%Private, 49.4%LTL, 1.4%Small CarriersDominate theIndustrySmallBusiness97%Fact: In 2015, the top 20 for-hire TL carriers accounted for just 11%of total TL industry revenue.Sources: U.S. Freight Transportation Forecast to 2027; American Trucking Trends
Trucking is Ultra Competitive, Leading toSmall MarginsNumber of For-Hire Firms25%Operating Margins ,000200,000 5%5%100,0005750Motor Carriers*Rails**0%Motor Carriers*There are over 500,000 private fleets as well, some which are beginning to do somefor-hire (back hauls).**There are 7 Class I railroads and the remaining are short-lines.Sources: FMCSA, AAR, ATARails
Trucks vs TrainsMore Fiction Than Fact
All Modes of Freight Transportation Will GrowTotal Increase in Tonnage from 2015 to 2027Source: U.S. Freight Transportation Forecast to 2027
Tonnage Growth 2015 to 2027& Market Share in 2027(Baseline Forecast)Sources: ATA & U.S. Freight Transportation Forecast to 2027
Tonnage Growth 2015 to 2027& Market Share in 2027(Alternative Forecast #1)Sources: ATA & U.S. Freight Transportation Forecast to 2027
Tonnage Growth 2015 to 2027& Market Share in 2027(Alternative Forecast #2)Sources: ATA & U.S. Freight Transportation Forecast to 2027
2015 Competitive Freight Among Truck and Rail TonnageCompetitiveRail Freight ,0.5NonCompetitiveRail, 1.6Note: Maximum competitive freight is 1.2billion tons in a total market (truck and railonly) of 12.6 billion tons, or less than 10%.Competitive freight includes all freighttraveling at least 500 miles, but excludes coaltonnage. There is a significant amount of timedefinite freight in this category that really isn’tcompetitive, but it is included. So in reality,the competitive market is even smaller thansuggested here.CompetitiveTruck Freight ,0.7Non-Competitive Truck,9.8Billions of TonsFACT: Trucks and TrainsCompete on a VeryLimited BasisSource: ATA Analysis based on Commodity Flow Survey (US Census Bureau) data andUS Freight Transportation Forecast to 2027
Recent Trends Impacting the Industry
Growth in Truckload Loads vs Real GDP8%TL Loads7%It is now difficult for loads to grow as fast as GDP for a host of reasons, including:- Miniaturization of freight (products and packaging)- Services are a growing part of our economy, and we don’t put services in trailers- We are buying more “experiences”, which generate less freightReal .9%1%1.7%0.1%0%Avg 1995-1999Source: ATAAvg 2000 - 2007Avg 2010 - 2014201520162017
Dry Van Average Length-Of-Haul is Down796 milesSource: ATA
Patrick BrowneGlobal Sustainability DirectorUPSPatrick Browne serves as Director of Global Sustainabilityfor UPS, a global leader in logistics, offering a broadrange of solutions including the transportation ofpackages and freight. He is responsible for managingvarious sustainability initiatives and strategies’ workingwith cross-functional teams from various business unitswithin the company. Patrick has been managing UPS’ssustainability programs since 2008, which includescalculating and reporting UPS’s global GHG inventoryand reductions. Patrick joined UPS 28 years ago and hasheld various assignments throughout the company.Patrick is active with many agencies and organizationsfocused on advancing sustainability practices around theworld. He resides in Atlanta Georgia with his wife.25
Supply Chain Logistics & the ecommerce BoomPatrick Browne – Director, Global SustainabilityMarch, 2017
Global Trends Impacting Supply Chain LogisticsClimate ChangeUrbanizationGlobalTradee-commerce27
MoreResidentialDeliveriesMoreStopsMoreMiles,Fuel andEmissions28
29
30
31
32
Thank you
Carla SticklerSenior AnalystCarrier Relations and SolutionsHome Depot Supply ChainWith over 9 years of experience inprivately owned and global multi-billiondollar corporations , Carla hasdeveloped an in depth knowledge ofintegrating transportation sourcingsolutions and process improvementstrategies across various Supply Chainplatforms. In her current role at TheHome Depot, she also serves as Mentorfor the EPA to ‘coach’ new suppliers onthe SmartWay Program.34
Mode by Spend for Domestic and OnlineChannelsTHD Moves 9 Million Shipments/Loads Each Year35
Supply Chain CarbonEmissionSix Year Results: Reduced Emission by over 30% Increased shipped inventory by 50% Network Optimization Efforts Improved Cube utilization Shifting LTL to Truckload Truckload Conversion to RailResults:Eliminated200 Million TravelMilesEliminated over 1Million Metric Tonsof Carbon36
Supply Chain Transformation37
Synchronize Flow and Manual Floor LoadFullTruck38
Transportation Modal Shifts 2014 22K truckloads to Intermodal Rail Inbound Freight Consolidation - LTL to Truckload Removed 22 million miles of truck travel 2015 5K truckloads to Intermodal Rail Removed 4.8 million miles of truck travel 2016 Multi-Stop Truckload from Vendors Removed 18 million miles of truck travel39
Direct Fulfillment-OnlineDF DC Network40
SmartWay EPA’s SmartWay Excellence Award in 2016, 4th year in a row! SmartWay Partner since 2004 THD has won SmartWay Excellence Award in2009, 2013, 2014, 2015, and 2016 Score our carriers based on compliance toSmartWay program requirements Serving as a Mentor for the EPA to ‘coach’ newsupplier on the SmartWay Program41
Questions?42
collection, analysis and dissemination of trucking economic information, regularly producing several reports about trucking economic activity, an annual freight transportation Forecast, driver wage studies, weekly diesel fuel price and economic reports and a yearly trucking almanac. Bob is often cited in the news media as an expert on
