Features
Green Profits
Ways to make some green while becoming green
By Tony Seideman
Driven by a rapid and seemingly permanent shift in fuel costs, fundamental changes are coming to the logistics industry. Though some of the recent run-up in prices may be due to speculation, the basic reality is that countries are competing more aggressively than ever before for an inventory of oil that seems increasingly limited.
At the same time, reducing the pressure on the world’s environment is now a matter of priority policy in many places in the world. This means going green isn’t a choice. It’s a necessity.
Changing the “environmental = expensive” mindset
For many members of the logistics community, this is a scary situation. That’s because for a long time, environmentalism has been synonymous with expensive. There’s a reality to modern-day green approaches, however, that hasn’t received much publicity yet: It is possible to improve profits at the same time that you reduce your impact on Mother Nature.
This can seem counterintuitive, because one of the basic realities of a lot of clean technology is that the precision and sophistication needed to make engines more efficient and less damaging to the environment often make them a lot more expensive as well.
But one rule of dealing with environmental engineering is that conventional financial parameters often don’t apply. This situation might be called “the triumph of the commons,” after one of the most common environmental phrases, “the tragedy of the commons.”
In short, the tragedy of the commons is the fact that if you have something that everybody uses and nobody owns, that resource often winds up over-utilized and destroyed. Think of a village green grazed bare by too many cows — or the air over a crowded city polluted by fuel emissions.
Putting more green in the bank
Increasing attention and new rules are changing that situation. People are realizing that, since so many can be damaged by pollution or global warming, it’s worth targeting significant societal resources at solving such problems. Given this and other factors, following a few basic rules can be a big help in putting people in a positive financial position:
1. Explore the tax advantages.
One of the most powerful tools for sharing costs and transferring expenses is the tax system. Tax breaks are playing a crucial role in allowing New Jersey transportation companies to purchase low-emission, high-efficiency truck engines. They’re also playing an important role in getting solar cells on track as an economic energy alternative. Warehouses are finding that their large, flat roofs can support enough solar cells to significantly cut energy costs.
2. Find out what initiatives are underway and tap into them.
Ports all over the country are putting together programs dedicated to reducing the environmental impact of the logistics worlds. Some of these efforts are vast in scope — a project underway at the Port of Los Angeles may end up transforming everything from the types of trucks companies use to the wages and benefits drivers get. Plugging into efforts like these can provide quick and effective payoffs.
3. Look for potential niches in the global transportation system.
Sometimes even simple approaches can provide a big payoff. American President Lines is claiming that’s exactly the case with its new 53-foot container. These boxes are far larger than those currently used for maritime work; the consensus had been that it was too difficult to build a container that was both long and strong.
That’s no longer the case. And because 53 feet is now the standard length for much ground travel in the United States, time and energy will no longer have to be wasted transshipping items. Instead, one box can make the whole trip. The most important thing about APL’s effort is not the technology, but the way in which the carrier saw an opportunity and jumped to take advantage of it.
4. Take advantage of the marketing opportunity.
Green is so hot that an entire cable channel threw out its old programming and created an entire lineup dedicated to green products and strategies. Though the impact of such approaches may be harder to measure than those generated by improved insulation or other activities, a good brand image is worth a lot of money. Thus every green step a company takes should be documented and promoted.
As the green movement gathers momentum, its impact will increase — and so will the chances to turn it into an opportunity to increase profits and outflank competitors. One thing is certain: Though commodity prices may eventually go down, enough rules and regulations are on the books that going green and staying that way are now part of business life — and the company that understands that will create an environment of its own for success.
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