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Published January 29, 2008 11:36 AM

SmartWay: It’ not just a clever name

The E.P.A.’s SmartWay Transport Program is helping shippers make drastic emission reductions without substantial monetary investments

Although shipping emissions are one of the largest contributors to total CO2 emissions in the U.S. and beyond, they have only been recently studied in depth. Part of the recent interest in shipping emissions and methods to mitigate them has been sparked by the creation of the Environmental Protection Agency’s SmartWay Transport program.

Launched in 2004 after a year of study and dialogue with various research groups and consultants, the program engages trucking companies, retailers, rail companies, and individual truckers interested in reducing their emissions and helps them with everything from practical everyday fixes such as proper tire maintenance to financing for new equipment that greatly improves fuel efficiency.

We spoke with Mitch Greenberg, Program Manager of the EPA’s SmartWay program to find out how it works, what companies and shippers can do to get involved with the program, and what it has planned for the year ahead.

ShipGreen: What prompted the EPA to launch the SmartWay program way back when?

Greenberg: About 4 years ago the EPA recognized that we had no fuel efficiency programs aimed at freight systems. We were talking to American Trucking Association members, companies and shippers that were doing a lot.
There were some who were doing a lot about emissions, others who were doing nothing, and not all shippers were equal. We agreed that it was a good idea to create a formal program where the environmental performance of freight companies could be showcased and shippers could be encouraged to improve. We formed a study group and worked for a year, and finally launched the program in February, 2004.

ShipGreen: Can you walk us through the structure of the SmartWay program?

Greenberg: First, we developed what we call the fleet model — software that allows trucking companies to measure their environmental performance, in terms of such things as fuel efficiency and emission reductions.
It provides quantitative data on emissions per truck, per mile per ton mile, and overall emissions. Then, we grouped companies into three categories depending on their performance: best, medium, and up and coming. We also invite companies such as WalMart and Home Depot that move goods not just with their own trucks but with a lot of contract carriers to join, and they too make a commitment to reduce emissions. We provide a performance list to these companies so they can choose carriers that are working with us to reduce emissions. All companies, whichever side of the shipping process they are on, agree when they join SmartWay to improve their performance. Everyone is always moving forward and getting better, and today we have about 650 companies involved, the majority of which are trucking companies.

ShipGreen: How does SmartWay help shippers finance capital investments?

Greenberg: Obviously the very large companies are flexible with what they can do in terms of capital investments and they don’t need much capital help from us. But the majority of carriers are small companies that don’t have the flexibility to upgrade their equipment to include such things as auxiliary power units or generators that will allow drivers to turn off their engines and still use their heater in the winter or their air conditioning in the summer. So, we worked with the Small Business Administration and other partners to create an innovative loan program designed for these sorts of companies.

The thing is, what we have seen in terms of adding fuel-saving technologies to a fleet vs. how much it costs up front, is that not only does the technology pay for itself over time, but in almost every case, monthly fuel savings are greater than monthly loan payments. So, for example, if you invest in idling control, and you get a SmartWay loan to pay the $6,000 to $8,000 for it, your monthly fuel savings are going to be $100-$200 more than your monthly loan payment. Some people don’t understand that these technologies actually make companies more profitable from the very first month they are employed. We’re also currently building in another finance mechanism to build the loan program up another level.

We want to provide lower-cost financing for pre-owned trucks that have already been upgraded with emission-control technologies showcased in our program. This saves companies and independent truckers money by reducing the burden of improving a conventional truck. We think this will really help a lot of small companies and drivers—the program will provide them loans at lower interest rates and with longer pay-back periods than they could get on their own. This program has just been launched — people can begin contacting us now to take part in this initiative.

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ShipGreen: SmartWay also exists to disseminate information and vet new technologies. Can you tell us a bit about that aspect of the program?

Greenberg: Certainly part of our role is to disseminate best practice info — technology that has worked, new information as it becomes available, those sorts of things. Another thing we do is to work with trucking and shipping companies to help them understand how to measure performance and what might work best to improve their performance.

We have a lot of partners, and have made a big investment in teaching companies to measure emissions, which is not something that the industry has typically done. We also evaluate the potential of new technologies to reduce shipping emissions — we have a system that allows us to, on a level playing field, evaluate the performance of emerging technologies so that each company doesn’t have to invest the same way in new technology.

ShipGreen: In addition to your finance programs and the advice and information you provide, what attracts shipping companies to the SmartWay program?

Greenberg: One thing that is very unique to SmartWay is our marketing program. We really market the companies in our program, and we provide tools for them to market their own participation. When you look at the system that we set up, which is essentially to marry shippers and carriers through our program, it’s very attractive for them. Through our brand, carriers can showcase themselves as SmartWay partners and it helps them win more customers.

ShipGreen: What are some of the things carriers can do, without any capital investment, to reduce their shipping emissions?

Greenberg: Literally for no investment at all, companies can dramatically reduce their emissions. A lot of companies are already doing these things, but just to provide a simple list, I’d say: Tire inflation — Companies need to maintain and inflate tires well; this saves a lot of fuel. The inner tire is sometimes difficult to maintain and can go lower easily, so maintaining those can save a lot of fuel and save tire money as well. Speed control — A lot of companies will not allow trucks to go over 62 to 65 mph, which saves a huge amount of money.

Idling control — Federal regulations require drivers to rest a certain amount of hours after driving a certain amount of hours. During that rest, many will idle their engines in order to keep the air conditioning, heating or TV going. Not idling saves 1 gallon of fuel an hour. You can accomplish each of those if you invest in technology as well — fuel —operated heaters, auxiliary power units that sort of thing. Obviously, you don’t want truckers suffering through a cold night; that’s not appropriate and it’s not rest. Shipping companies should also really take a look at modal choices.

If their products will arrive only a half day later by rail than truck, for example, but have far less environmental impact, companies should look at making those choices.

ShipGreen: Have you seen increased interest in the program recently?

Greenberg: There has been a huge increase in interest in the last year or two. Fuel efficiency is very topical today and plus our marketing is really working. We launched a series of formal campaigns that has produced a lot of interest. We’re getting twice the calls we got last year and last year we had twice as many calls as the year before.

ShipGreen: How can companies join SmartWay?

Greenberg: There’s no charge to be a SmartWay partner — but companies must fill out a one-page partnership agreement that establishes an official partnership with EPA. They then evaluate their environmental performance with our fleet model and commit to improve. That’s it. Our member companies decide which improvements work best for them and all we require is improvement. For shippers who don’t own trucks, we ask them to ship more and more of their goods with carriers that have joined our program.

ShipGreen: Are you planning any new initiatives for 2008?

Greenberg: Throughout 2008 we hope to build a more robust supply chain tracking tool; right now we measure trucking performance, but company’s supply chains are broader than just their truck transport lines — most use sea, air, rail, as well, and usually a combination of those modes, plus trucks. Typically overall supply chain emissions are a combination of those modes, and we want to give shippers a tool to pull all that info together to see what the overall transportation emissions are for moving a particular product or for global emissions over time. Brought to you by ShipGreen: ShipGreen was launched in 2007 with the mission of becoming the leading market solution to the environmental impact of the shipping industry. By emphasizing simplicity, accuracy, scalability, and ease of use, ShipGreen provides a service that addresses a global need while helping businesses gain increased customer loyalty and satisfaction. Learn more at www.shipgreen.net

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