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        MENTAL PROTECTION AGENCY »
U.S. ENVIRONMENTAL PROTECTION AGENCY
Load  Optimization for Shippers
A Glance at Clean Freight Strategies
 Load planning and
 optimization within
 your company can
 substantially reduce
 shipping and fuel
 costs between five to
 15 percent. Co-loading
 strategies with
 other companies can
 reduce costs and
 fuel consumption by
 20 percent or more.
 Maximum savings are
 realized when employing
 optimization software
 as part of an overall
 Transport Management
 System (IMS)1 in addition
 to strategic use of 3PL
 services to coordinate
 with other shippers.
Proper load planning can help you manage transportation costs while reducing
the carbon footprint of your supply chain. Your company can maximize the
benefits by using optimization software as part of an overall Transportation
Management System (TMS).

What is the Challenge?
A shipper's goal is to put the  most freight on a trailer and move it safely, on time, damage-free,
and at the lowest cost.  Optimizing loads is a challenge because there are so many variables to
consider:
     •  Product weight and  dimensions.
     •  Truck and trailer dimensions, axle load distribution, center of gravity, and allowable
       weight limits.
     •  Special handling instructions, including temperature control, crushability, product
       orientation, tarping, hazardous material requirements, and compatibility with other
       products on board.
     •  Sequencing loads so freight moves on and off efficiently, reducing detention times
       and accessorial charges at each stop.
     •  Identifying and collaborating with other companies (even competitors) to maximize
       weight and cube utilization across routes and delivery schedules.
Perhaps the  biggest challenge for shippers is the status quo: the continued use of "gut feel" and
outmoded ways of configuring loads and managing supply lines.


What is the Solution?
Optimizing loads  and increasing trailer utilization involves a multi-faceted approach:
     •  Internal processes and policies: Review your own internal policies for lead
       times, minimum order size, and how you build loads now.
     •  Carrier equipment: In your requests for proposals (RFPs), require carriers to use
       equipment that's best suited to your supply chain demand and load planning.
     •  Pallets and packaging: Review pallet design and dunnage characteristics to
       further maximize available space per trailer.
             • Collaborative distribution  and co-loading: Collaborative supply
               chain logistics, utilizing empty backhaul capacity,  and consolidating loads
               across companies have the potential to reduce costs by 30 percent or
               more and increase carbon efficiency by 25 percent2. Look for opportuni-
               ties to collaborate with other shippers in warehousing and distribution.
                    •   Technology: Load optimization software can help you build
                       loads more effectively. The more sophisticated products work in
                       conjunction with your TMS to identify underutilized trucks and
                       flag opportunities to fill capacity earlier in the process. They can
                       also complement your warehouse management system (WMS),
                       helping to optimize each pallet during the pick, pack, and ship
                       process.
                                                                                             Continued
                                              U.S. EPA SmartWay | EPA-420-F-16-007 |  www.epa.gov/smartway

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         SmartWay*
         MENTAL PROTECTION AGENCY »
 U.S. ENVIRONMENTAL PROTECTION AGENCY
Load Optimization for  Shippers
A Glance at Clean Freight Strategies   continued
   Costs
   Implementing load optimization systems typically requires
   a thorough review of your supply chain planning and
   procedures, technology, equipment, and the capability of your
   carriers, each of which has a cost in terms of dollars and time.
   The cost and licensing of load optimization software will
   vary widely depending on the volume and frequency of your
   shipments, your existing IT infrastructure,  and other factors
   including the capabilities of yourTMS  (although stand-alone
   load optimization programs are available, most software is
   offered as a module in a TMS).
   Implementing successful co-loading strategies may include
   purchasing the services of 3PLs and/or compiling detailed
   operation data on weight and volume utilization rates, empty
   back hauls, and identification of shared supply lines. Much of
   this data should be obtainable through your TMS.


   Savings  and Benefits
   Shippers recognize the benefits of better utilization. When
   asked  what factor most positively affects their ability to manage
   freight, 23 percent of shippers said load  optimization (only
   "more competitive rates" ranked higher, at 34 percent)3.
   Potential benefits include lower transportation costs, increased
   productivity, greater control over how shipments are handled,
   and the potential to reduce your supply chain's carbon
   footprint. Some examples include:
      •  Daltile,  a ceramic tile manufacturer, typically weighed
         out its railcars leaving almost 4,000 cubic feet of
         available volume in each car. Alternatively  appli-
         ance manufacturer Whirlpool consistently  cubed out
         railcars  using the same line at less than 20 percent
         of their weight capacity. By combining loads each
     company improved their transportation efficiency
     substantially. Co-loading lighter freight from other
     shippers on top of pallets of heavy tiles enabled the
     company to cut transportation costs by up to 1 5
     percent per load. For example, Daltile's collaboration
     with Whirlpool and other shippers reduces their trans-
     portation costs by $3M per year, lowers their annual
     fuel consumption by 600,000 gallons, and cuts more
     than 5,300 metric tons of CO2 emissions per year4.
     Wal-Mart was able to reduce the amount of lost
     space per truck load simply by aligning  pallets side-
     ways. The new orientation of rectangular pallets
     increased the number that can fit in a truck by 1 5
     percent from 26 to 30 pallets. Optimizing delivery
     schedules and educating local routers has also con-
     tributed to the company's success of delivering "335
     million more cases while driving 300  million less
     miles" since 20085.
     A 3PL matched Ocean Spray's outbound supply route
     from New Jersey to Florida with empty refrigerated
     boxcars traveling inbound along the same route to
     Tropicana Products. The combined benefit of reducing
     empty backhauls and taking advantage of intermodal
     efficiencies reduced Ocean Spray's transport costs
     for that route by greater than 40 percent, and cut
     GHG emissions by 65 percent. The arrangement also
     defrayed Tropicana's costs for boxcar return6.
     According to EDF's Green Freight report, Stonyfield
     Farms, an organic yogurt producer, changed its com-
     pany policies to increase the required lead time and
     minimum size per order, which ensured  full shipping
     containers. The company also reduced the amount of
     dunnage used in cargo packing, increasing the space
     available for product in every truck load7.
                                    NI=X]   STEPS
1                                       Audit how your loads
                                       are built, taking into
                                   account the dimensions
                                   and any special handling
                                   characteristics of the prod-
                                   ucts you ship. Consider
                                   procedures and require-
                                   ments about loading and
                                   positioning shipments on
                                   vehicles, including
                                   compliance with state
                                   and federal rules.

2Based on your audit,
   establish the capacity
and other capabilities you
need from your carriers.
3Load optimization soft-
   ware can offer "what-
if" scenarios for loading
containers. Compile a list
of software with features
and benefits that best fit
your supply chain plan-
ning and IT needs.
4Identify 3PL services
   to assist with the
development of cost-
effective co-loading
strategies.

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