A growing push by automotive manufacturers around the world to highlight the "green'' features of their new vehicles in order to better meet changing consumer expectations is increasingly influencing the way they manage their logistics operations. Both manufacturers and logistics providers believe that while environmental considerations have not to date had much, if any, real impact on the business and contract negotiations between them, they are increasingly going to do so over the next few years. The likelihood of that trend developing was stressed by the director of material planning and logistics for UK automotive manufacturing group Jaguar and Land Rover, Kevin Wall, at a recent environmental seminar in London. Wall said environmental issues were likely to become "a significant element of the specifications in the next round of our contract negotiations with logistics providers". Further evidence of the increasing importance automotive industry companies are attaching to developing environmentally-friendly logistics operations was provided by the head of global market development for German aircraft charter organisation Lufthansa Cargo Charter, Heide Enfield, when she pointed to a general air cargo industry trend towards using more fuel-efficient freighter aircraft with lower emissions. "Cost is still the prime factor behind that move at the moment but I think the more pressure comes on from the outside, for instance from governments, the more the environmental side of things will become a point of discussion," she said. "One example is the automotive industry where the talk now is increasingly not only about whether the vehicles being manufactured are environmentally safe but also about the production and transport aspects." Jaguar/Land Rover's Wall provided examples of environment-related developments by that group on all those fronts. When it came to actual vehicle production, for instance, he said the group had last year announced a near US$1.4 billion joint investment in new technologies designed to improve the environmental performance of its cars, while emissions at one of its UK plants has been reduced by 30 percent since 1997. Talking specifically about Jaguar/Land Rover's outbound logistics operations, where it works with Norway-based Wallenius Wilhelmsen Logistics (WWL), he said the automotive group had to date managed to switch around one-third of its annual finished vehicle traffic, some 100,000-120,000 units out of a total of almost 300,000, from road transport on to the railways. That move, said Wall, was saving around 5.5 million UK road miles a year. "We talk at length to WWL about how we can move further ahead with this sort of development and how they can help us go forward with environmental issues," he added. WWL, which claims to be the leading independent provider of outbound logistics solutions for manufacturers of automotive and rolling equipment, with offices in Asia as well as in Europe and North America, has been making a big play of its environment credentials. The company is certified according to ISO 14001 environmental management standards for the commercial operation of its worldwide shipping services and is the sole sponsor of wildlife and nature protection group WWF International's high seas conservation programme. On the inbound logistics side of Jaguar/Land Rover's operations, Wall said the average road freight vehicle fill had been improved from 60 percent to 94 percent, reducing by 50 the number of road trailers crossing the English Channel each week from Continental Europe. The group had also achieved a more than 50 percent cut in the average total weekly miles covered by vehicles supporting its inbound logistics operations, helping to reduce carbon dioxide emissions by over 1,700 tonnes a year. "Our suppliers are predominantly based in the UK and mainland Europe although one of the features of that side of our business is an increase in the number of suppliers based in Eastern Europe and beyond. One of the challenges we face as we move more and more towards low-cost country sourcing is how to take into account the environmental aspect of bringing in supplies from further afield - how to resolve the dilemma of product cost versus freight cost and the 'invisible' cost to the environment. That issue is very high on our agenda at the moment."
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