Ocean Spray has implemented two distribution initiatives that combined have led to a 20 percent reduction in transportation CO2 emissions, while achieving comparable cost savings across the transportation network.
The first initiative was an intermodal shift from road to rail. The company, rail operator CSX and fruit shipping companies partnered to enable Ocean Spray to ship more products intermodally from its New Jersey distribution center to its Florida facility, according to a case study published by MIT.
Shipments that shifted to intermodal generated 65 percent less emissions while saving over 40 percent of transportation costs. To facilitate this transition, Ocean Spray had to increase load planning to accommodate the increased size of the rail boxcar compared to the traditional truck container. Ocean Spray also set up a new arrangement with a third-party logistics provider for the delivery and collection of rail boxcars.
CSX and the fruit companies had been transporting fresh fruit in boxcars from Florida to New Jersey, and then sending the empty boxcars back to Florida. Ocean Spray was ideally placed to use this backhaul capacity because its Bordentown, N.J. distribution center is just 60 miles from the CSX rail terminal where the empty boxcars were stored, and its Lakeland, Fla., distribution center is just 65 miles from the destination rail terminal in Bradenton, Fla.
Ocean Spray’s second innovation was a redesign of its distribution network. The company added new manufacturing and distribution capabilities at its Florida site to support a growing customer base and then reviewed its network to determine what proportion of its deliveries could be processed by the Florida site.
Ocean Spray projected that over 17 percent of its total shipments will be served from the new Florida facility. This network redesign will deliver the same amount of product as its predecessor but in 4.5 million fewer delivery miles. The company estimates that the reduced mileage will save 14,000 metric tons of CO2 per year, a 17 percent reduction, with over 70 percent of these savings coming from the southeast region of the United States. The redesign should also save an estimated 10 percent associated with shipping costs by combining and reducing the number of shipments and distance travelled, Ocean Spray says.
A report released by BNSF in March last year showed that the rail company’s customers avoided 30 million metric tons of CO2 emissions in 2011 by shipping their freight by rail instead of moving their products entirely by road.