SmartWay
U.S. Environmental Protection Agency +
Route & Network Optimization for Shippers
A Glance at Clean Freight Strategies
CASE STUDY: TRUCKS
FOR ASSOCIATED FOOD
STORES
Trucks for Associated Food
Stores travel nearly 8 million
miLes annually, network
optimization software indicated
that it should move its
distribution center 50 miLes north
of its location. By relocating and
using route planning, the
company reduced its fleet size
by 38 percent.
reduction in
fleet size
It also reduced annual travel
by 400,000 miLes, eliminated
two to three routes daily, and
improved on-time performance
by 96 percent1. A reduction of
400,000 miLes, assuming about
6.5 miles per gallon for tractor/
trailer combinations, would
save about 62,000 gaLLons
of fuel annually and reduce
carbon dioxide by
626 metric tons.2
96%
on-time
improvement
Route and network optimization can help you manage transportation costs, lower carbon
emissions, and move goods more efficiently.
WHAT IS THE CHALLENGE?
Shippers establish inbound and outbound lanes and continually adjust the routing of
freight as marketplace conditions change. Fuel availability and cost considerations are key
determinants for establishing routes. By keeping abreast of fuel supply and price within your
delivery and pickup areas, you may lower fuel costs while ensuring that fuel is available for
your vehicles with minor route modifications. Weather, traffic, construction, and last-minute
customer requests are also reasons why you might alter a route in order to eliminate empty
miles, maximize driver and equipment utilization, improve service levels, and lower fuel
consumption and emissions.
Similarly, the design of your distribution network is influenced by conditions including
proximity to customers, inventory requirements, and access to highways, rail yards, and ports.
A new inventory strategy, the relocation of a customer, changes in freight infrastructure, or
rules that affect the distance a driver can cover in a certain time period may require a change
to your distribution network. Unlike route optimization, which is sometimes done on the fly
for short-term benefits, optimizing a distribution network typically requires substantially more
planning and financial commitment.
WHAT IS THE SOLUTION?
Both route and network optimization can help reduce vehicle miles, resulting in reductions of
greenhouse gases (GHGs) and other pollutants, as well as fuel savings.
The key issues to analyze include the location of end users, suppliers, and your partners within
the supply chain; the origin of orders; the location of distribution centers and warehouses; and
your fulfillment and delivery capabilities.
Perhaps the most effective tool for both route and network optimization is a Transportation
Management System (TMS)3 working in concert with Enterprise Resource Planning (ERP)
software. These systems can help you optimize your routes, procure the most resource-
efficient carriers and modes of transportation, and make decisions based on meaningful data.
For example, an ERP allows you to maintain records of actual weight, dimensions, and volume
for all the products you ship (including the packaging). You can record actual payload (i.e.,
gross weight, including product, package, and pallet weight), not just an estimate. Using your
TMS, you can check invoiced miles against the route/mileage software, compare invoice
payload against product weight in the ERP, and compare actual payload data from the carrier
against product weight recorded in the ERP. As a result, you can design routes and orient
elements in your supply chain to be more efficient and productive.
In response to shippers who state that GHG emissions are a factor in their transport decisions4,
TMS providers now include functions that can help you collect, manage, and verify the quality
of your supply chain data. This TMS-verified data can be used in a complementary fashion
with the SmartWay Tool. These functions further extend the value of your TMS to include
greater utilization of equipment and more control over your supply chain's carbon footprint.
EPA-420-F-19-016 | March 2019 | SmartWay Transport Partnership | epa.gov/smartway
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Route & Network Optimization for Shippers: A Glance at Clean Freight Strategies (continued)
COSTS
The cost to license and deploy a TMS with routing and network
optimization features will vary widely depending on the scale
and complexity of your supply chain, the type of goods you
move, and your existing IT infrastructure.
SAVINGS AND BENEFITS
The intended benefits of route and network optimization are
the same: they're tools to help you manage your supply chain
with greater efficiency and lower cost. Concurrently, utilizing
both strategies assists with the goal of reducing vehicle miles,
resulting in reductions of greenhouse gases and other pollutants.
Some examples include:
Subway reevaluated its distribution network and made a
series of changes that saved more than 9 million truck
miLes, 1.6 million gallons of diesel fuel, and nearly 17,000
shipments per year. For example, rather than send one
pallet of ham from one supplier to 60 distributors, the
company created redistribution points to consolidate
outbound shipments. It now sources truckloads of
ham, consolidates them with other proteins, and sends
full truckloads of mixed goods to regional locations. It
collaborates with suppliers to make distribution more
efficient. For instance, a supplier of salad packaging moved
a facility 1,000 miles closer to the company's redistribution
center, annually saving more than 1 million truck miLes
and reducing carbon emissions by 1,663 metric tons5.
United Parcel Service (UPS) devised route-optimization
plans to be more efficient, reduce fuel consumption, and
enable drivers to get back to their distribution centers
earlier. By minimizing (and in some cases eliminating)
left-hand turns, the company was able to more than meet
its goals. Since 2004, the company has saved an estimated
10 million gallons of gas, and reduced carbon emissions
by 100,000 metric tons. That's the equivalent of 5,300 cars
off the road for an entire year6.
Ocean Spray and Tropicana added new manufacturing and
distribution centers in Florida and reevaluated its national
distribution network given the new facilities. By re-routing
existing delivery paths, the company reduced driving by
4.5 million miLes annually, saving 14,000 tons of carbon
dioxide emissions-a 17 percent reduction7.
According to EDF's Green Freight report, the retail
company Tuesday Morning changed its goods movements
and is reaping the benefits. Previously, all containers were
moved from the Port of Los Angeles to the company's
Dallas distribution center and then distributed to the
company's over 800 store Locations. Now, a portion of
the product gets shipped directly to nearly 40 percent of
its store locations instead of being routed through Dallas.
The distribution network changes saved time, cost, and
prevented the emissions associated with the Los Angeles
to Dallas trip8.
NEXTSTEPS
1
2
3
Audit your routes and network to determine a baseline performance level for services and costs.
Seek out TMS vendors for product demonstrations. Determine the suitability, return on investment,
and potential impact on the efficiency of your operations.
For the routing module, conduct a trial to see how it performs in everyday conditions and
extraordinary situations such as heavy traffic, bad weather, and route closures. For the network
module, compare your current network to alternatives using "what-if" scenarios to determine
potential benefits of using the software.

Please visit the SmartWay website at www.epa.gov/smartway
to access more tech bulletins.	U.S. Environmental protection agency^

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