“Empty miles” sounds like a lament from a Country and Western tune, and it is a theme that tugs at the heart strings of supply chain and sustainability managers alike. The elimination of empty and underutilized miles is an important way to slash supply chain costs and kick start positive sustainability outcomes in the supply chain.
So what exactly is an “empty mile?” Say, for example, a truck makes a delivery to a receiver and then drives empty back to the original shipping point or at some length to another pickup location. In the transportation sector, this practice is referred to as deadheading, and the distance traveled when empty is known as empty mileage. Empty miles not only fail to generate revenue, but they also incur transport operating costs and result in unnecessary greenhouse gas emissions. Given the importance of transportation in supply chain operations, a reduction of empty miles can go a long way towards helping companies achieve their financial and environmental goals.
Here are three approaches used to help avoid empty miles:
- Find revenue opportunities. When looking at your business in isolation, the availability of revenue-generating loads for otherwise empty mileage may not be apparent. One way to identify such possibilities is through collaboration with other companies. Case in point, through its Solutions Portfolio offering, CHEP (like IFCO, a Brambles company) has found $13 million in load revenue opportunities for participating businesses over the last 12 months. CHEP overlays its transportation network with that of its customers to identify freight opportunities for the latter.
- Load consolidation or sharing. There are several possibilities for eliminating transportation inefficiencies through collaboration or consolidation. Through collaborative efforts, partial loads can be combined to improve the payload, which ultimately translates into fewer trucks needed to move the same amount of freight. In produce, the consolidation of freight from various shippers is an established practice for delivery to distribution centers or wholesalers. But the same point of view could hold true for retail delivery. For example, competitors may run partial loads to competing stores in the same area, while there might be significant mileage reductions possible by combining freight.
Another consolidation opportunity pertains to the return of distribution residuals such as empty pallets, containers, cardboard bales and stretch wrap, which typically constitute much less freight than the inbound load to the retailer. While supermarkets typically do not have room to store this material for an extended time, some retailers are relying on other local service providers to pick up and consolidate these residuals until they reach full load quantities, thereby freeing delivery vehicles from reverse logistics duties to take revenue-generating loads.
- Unit load optimization. Mileage can also be reduced by improving the cube utilization of loads. RPCs, for instance, can be securely stacked without voids to increase load height, resulting in fewer pallets required for retail delivery. Likewise, other packaging redesign efforts can lead to unit loads being built higher or more densely, again resulting in fewer unit loads and ultimately fewer trucks on the road. As part of its Solutions Portfolio, CHEP helps customers ensure that their unit loads are optimized.
Don’t let empty miles be your supply chain lament. Overall cost savings and greenhouse gas reductions are typically the benefits of such an approach when viewed from a transportation or social responsibility perspective.