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Sustainability Strategies Addressing Supply-Chain Air Emissions (2014)

Chapter: Chapter 1 - Research Objective, Method, and Context

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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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Suggested Citation:"Chapter 1 - Research Objective, Method, and Context." National Academies of Sciences, Engineering, and Medicine. 2014. Sustainability Strategies Addressing Supply-Chain Air Emissions. Washington, DC: The National Academies Press. doi: 10.17226/22383.
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7 Economic activity is driven by trade. Material flows, or sup- ply chains, are highly complex, dynamic, time-sensitive, and integrated systems. Freight transportation networks are used to move goods and must offer rapid, reliable, and efficient service to meet the demands of the global marketplace. If a trans- portation supply chain becomes uncompetitive, it quickly loses market share and suffers immediate economic consequences. Global supply chains also have significant impacts on the global environment and local communities, most notably as a result of air emissions from freight transportation activity. The increased recognition of the environmental and human impacts of supply chain activities has led to public pressure for rapid action, some- times resulting in fragmented, conflicting, and multi-layered regulatory structures. The complex nature of regulations can make compliance challenging, may impede supply chain inno- vation, and, ultimately, may not achieve the desired environ- mental outcomes. Because an efficient supply chain is a critical component for economic competitiveness at both the regional and national level, it should be a key consideration in the devel- opment of environmental policies and regulations. Otherwise, economic growth and job creation may be hampered. 1.1 Research Objective The objective of this research is to identify potential strat- egies for accelerating environmental improvement, enhancing performance, and promoting social responsibility of the sup- ply chain. It is intended to provide information to improve the understanding of decisionmakers regarding the impact of envi- ronmental policies and regulations on the supply chain, focus- ing on the interrelationships between economic drivers and air quality and greenhouse gas (GHG) policies and regulations. As such, the research addresses the interaction of supply chain sustainability regulations and private-sector actions. The questions posed aim to better understand the following: • What shippers and carriers are currently doing to integrate environmental goals into their business operations; • What drives private-sector players to implement sustain- able practices; • How industry and the supply chains they run are affected by regulations aimed at improving sustainability; • Opportunities for further improvement; and • Implications for policymakers in regard to achieving success- ful implementation and avoiding unintended consequences. Within the broad scope of supply chain sustainability, the research focuses on efforts to reduce criteria air pollutant (CAP) and GHG emissions. The goal is to explore how these efforts are addressed within the supply chain by public- and private- sector participants. The results of this effort are intended to be transferable to future studies that address other aspects of environmental and social sustainability in supply chain and transportation activity. 1.2 Research Method Approach The research was divided into two phases. Phase 1 identi- fied and assessed, at a high level, potential strategies to advance environmental improvement goals through supply chain man- agement. Phase 2 focused on in-depth case study clusters, illus- trating key themes uncovered during Phase 1 and providing further evidence of the impact of environmental regulations on the supply chain and its operators. Phase 1 Phase 1 consisted of five tasks. Task 1 was a literature review, aiming to scope out the broad range of existing knowledge about the impacts of GHG and CAP emissions policies, regu- lations, and programs. More than 100 sources were reviewed (including academic journals and research studies; public- sector data and monitoring sources; and published sources from the private sector, industry associations, and conference proceedings). C H A P T E R 1 Research Objective, Method, and Context

8The Task 2 objective was to obtain initial input from a broad range of stakeholders on current emission reduc- tion practices and areas of opportunity, as well as concerns regarding supply chain impacts of air quality, GHG, and other sustainability regulations. Stakeholders were selected from four categories: shippers, carriers, transportation agencies, and environmental agencies. The research team sought input from a sample of organizations, chosen for their leading- edge practices. Ultimately, 25 stakeholders participated in 26 interviews. The over-representation of progressive orga- nizations and the small sample size limits the applicabil- ity of the findings, which are indicative and directional in nature, and are not intended to be statistically valid. Nev- ertheless, the research team found the interviews crucial to understanding the practical realities facing different types of players. Task 3 considered the broad range of existing metrics of supply chain performance (as these relate to air quality and GHG emissions) in use by shippers, carriers, and public agen- cies. The research team also considered the effectiveness of the identified metrics in capturing linkages between environ- mental, economic, and social costs and benefits from various stakeholder perspectives. As part of Task 4, the findings of Tasks 1 through 3 were synthesized and key themes (Exhibit 1-1) emerging from the literature survey and stakeholder interviews were identified, to be explored as part of the Phase 2 research. Case study clusters that allow the themes to be explored further as part of the Phase 2 research were proposed. A met- rics map, by which to understand and assess the case studies, was developed. An interim report was produced in Task 5. Phase 2 Task 6 consisted of an in-depth assessment of the themes, condensed and restructured into five topic areas, explored Exhibit 1-1. Key themes emerging from Phase 1 research. Scope of Change, Change Tactics, and Successful Implementation Theme 1: ‘Win-win’ environmental-business improvements. This theme encompasses public-sector enabling initiatives and private-sector voluntary initiatives that aim to create win-win opportunities, supporting environmental gains that also are positive from a business perspective. Theme 2: Radical/transformational change. These initiatives include public- and private-sector participation in developing and testing visions for a non-oil-based future that overcomes conflicts between economic growth and emissions reduction, as well as tensions between CAP and GHG reduction efforts. Change Tactics Theme 3: Route optimization. Freight routing that minimizes fuel consumption is a major means of reducing costs, with the benefit of reducing GHG emissions and potentially CAP emissions, as well (although the concentration of freight traffic in populated areas can raise air quality concerns). What initiatives is the private sector undertaking? What impacts are these initiatives having? Theme 4: Transport mode shifting, from faster, more costly, higher emission modes. This refers to switching to potentially slower, but greener, and less emission-intensive modes—for instance, from air to truck, truck to rail, or air to ocean—and holds significant potential to reduce carbon emissions from transportation and to reduce freight costs. The limitations and lessons learned, as well as the outlook for mode shift was considered. Theme 5: Fuel-efficient equipment and technology. Fuel is a major cost for carriers who employ a range of equipment and technology-based measures aimed at reducing fuel use. How much can be expected to be gained in terms of cost savings and air emissions reductions? Theme 6: The sustainability brand. Supply chain sustainability initiatives are being used by shippers and carriers to improve their market share by promoting themselves as environmentally conscious companies. What can government, the not-for-profit sector, industry associations, and individual companies do to link air emissions reduction efforts to customer brand awareness, image, and loyalty? Successful Implementation Theme 7: Partnerships in supply chain sustainability. This theme explores ways in which regulators and industry can collaborate to ensure initiatives are optimally designed for impact, balance, and practicality. The aim is to raise the efficiency frontier of the benefit-cost equation through enlightened cooperation. Theme 8: Cross-jurisdictional consistency. Transportation is a uniquely cross-border activity, most often crossing multiple political jurisdictions within a single freight move. This gives rise to major concerns, particularly by the affected carriers, about meeting sometimes inconsistent regulations in the different jurisdictions served. What are the impacts of inconsistent approaches? Can the differing needs of individual cities, states, and nations be addressed in a rational and comprehensive manner? Theme 9: Unintended consequences. What unanticipated outcomes have arisen from well-intended regulatory initiatives, and how might adverse impacts be avoided?

9 through the use of case study clusters. The five themes are as follows: 1. Partnerships and win-win opportunities, 2. Operational optimization, 3. Equipment and technology, 4. The sustainability brand, and 5. Unintended consequences of air emissions regulations. The following five case study clusters were investigated to provide the raw material for the themes: 1. International/non-U.S. case studies, 2. U.S. national initiatives, 3. Ports and coastal states, 4. Inland perspectives, and 5. Corporate programs. In total, 30 interviews were carried out during Phase 2 with port authorities, regulatory agencies, public-sector freight planners, public agencies with responsibility for air emissions, shippers, carriers, industry associations, and the nonprofit sec- tor. Summaries of these cluster case studies are provided in the appendices to this report. As part of Task 7, these case study clusters were assessed. Because of variations in the availability and currency of data, differences in the metrics employed among agencies, and varia- tions in the circumstances under which the initiatives have evolved, like-for-like comparisons of quantitative data on the impacts of emissions reductions efforts (e.g., $/ton of emis- sions reduced) between case studies is difficult. In many cases, due to differences in local circumstances and assessment methods, such comparisons are not meaningful and can be misleading. The research team has, therefore, employed the broad range of indicators as identified in the supply chain sustainability metrics map to explore different approaches, relying on anecdotal and qualitative data where quantitative data were unavailable or unreliable. In Task 8, the research team developed a communications strategy for relaying key findings to decisionmakers. Task 9 consisted of the development of a final report. 1.3 Supply Chain Emissions Context Need for a Sustainable Approach to Freight Transportation Air Emissions Freight transportation is an essential part of the country’s economy, and the U.S. freight sector is forecast to grow sig- nificantly in the coming decade. By 2020, 90.1 million tons of freight are expected to move across the country by road, rail, water, and air daily, representing a 70% increase over 2002 freight flows (U.S.DOT, 2006). The movement of goods never- theless contributes to a range of negative externalities includ- ing air pollution (which, in turn, affects human health), climate change, noise, accidents, vibration, and adverse visual impacts. The significance of such external impacts is highlighted by the fact that emissions from the freight sector account for more than a quarter of the transportation GHG emissions in the U.S. (or about 9% of total GHG emissions) and are a nota- ble contributor to climate change. Fine particle pollution from diesel engines—the most common engines used in freight—is estimated to shorten the lives of nearly 21,000 people each year (Denning, 2010). Future escalation of growth in demand for freight transportation is likely to place even greater strains on infrastructure, public health, and the environment, unless measures are put in place to address these impacts. Impacts of the Global Economy on Supply Chains and Freight Transportation Air Emissions Advances in logistics have enabled the globalization of the economy whereby materials and components are shipped worldwide. Products may now be produced offshore and sold in different countries. Economic restructuring and globaliza- tion have lengthened supply lines, resulting in more freight being carried over longer distances, with high levels of demand at key nodes (typically ports, airports, and intermodal facili- ties) within this transportation network. The combination of increased distances and concentrated activity has profound implications for freight transportation air emissions. This globalized economy is characterized by high levels of freight transport intensity and increasingly complex supply chains. Freight transportation is intimately connected to pro- duction, procurement, inventory management, warehousing, and sales activities. These activities may be given priority over freight transport efficiency or emissions considerations by shippers and third-party logistics (3PL) providers. For exam- ple, as a result of reduced inventory (which reduces work- ing capital and costs), a growing number of companies apply just-in-time delivery practices. Such practices require reliable, fast, and flexible transportation services to reduce the risks of a mismatch between supply and demand. Just-in-time deliv- ery tends to favor less environmentally friendly modes such as road and airfreight, while savings from just-in-time prac- tices can exceed the additional cost of running trucks only partly loaded (McKinnon, 2010). Unlike passenger trips, freight trips are not discretion- ary. Producers need to move their goods to market. Global freight ton-miles had been forecast to grow at 2.3% per annum between 2000 and 2050, as a result of the expansion of produc- tion and consumption and of the increase in average distance that each unit of freight is transported (World Business Council

10 for Sustainable Development, 2004). With the downturn in the economy, annual growth has been substantially less than predicted since 2008. Nevertheless, air emissions from freight transportation remain an environmental and health concern. Types of Freight Transportation Air Emissions This study is concerned with two categories of air emissions, both of which are byproducts of fossil-fuel combustion. • Criteria Air Pollutants (CAPs) consist of six main pollut- ants for which the EPA establishes National Ambient Air Quality Standards (NAAQS). Exposure to these pollutants can result in adverse impacts on human health. Symptoms include chronic heart or lung diseases and even premature death (Exhibit 1-2). EPA establishes human health-based and/or environmentally based criteria for permissible levels of CAPs, including carbon monoxide (CO), nitrogen diox- ide (NO2), ozone (O3), particulate matter (PM), sulfur diox- ide (SO2), and lead. Diesel exhaust contains nitrogen oxides (NOx) and several other toxic components and chemicals that, combined, pose a cancer risk greater than that of any other air pollutant, according to the American Lung Association (U.S. GAO, 2004). Diesel exhaust from freight vehicles is a primary source of PM and NOx emissions (one of the precursors to O3), all of which have potential health implications (FHWA, 2010). • Greenhouse Gases (GHGs) are emitted from burning fos- sil fuels. They trap heat in the earth’s atmosphere and con- tribute to global climate change. Carbon dioxide (CO2), methane, NOx, and three groups of fluorinated gases (hydro fluorocarbons, perfluorocarbons, and sulfur hexafluoride) are the major GHGs and are the subject of the Kyoto Pro- tocol. CO2 is the primary GHG emitted by freight vehicles. Freight GHG emissions have grown by more than 50% since 1990 (FHWA, 2010). Because various GHGs have different impacts on climate change, they are often measured in terms of their carbon dioxide equivalent (CO2e). Throughout this report, GHG emissions are referred to as an emissions cate- gory, while actual quantities of GHG emissions are provided in terms of CO2 or CO2e. Although both GHG emissions and CAP emissions are a byproduct of fossil-fuel combustion, these groups of gases behave in different ways: • CAP emissions have the greatest effect in the local area around the emissions source, with the significance of their impact determined by the quantity of emissions, meteo- rological conditions, and proximity of sensitive receptors. Most CAPs remain in the atmosphere for relatively short periods of time. Thus, their impacts can vary significantly over time and between geographies. • GHG emissions, by contrast, remain in the atmosphere for long periods of time (up to 200 years in the case of CO2). Their impacts are global rather than local. • GHG emissions are combustion-based and directly linked to the amount of fossil fuel consumed, but CAP emissions can vary greatly depending on fuel quality and end-of-pipe emission controls. Exhibit 1-2. Summary of health impacts associated with transportation CAP emissions. Criteria Air Pollutant and Impacts Freight Transportation Source Particulate Matter with an aerodynamic equivalent diameter of 10 microns or less (PM10) aggravates asthma symptoms and has been linked to cancer and heart disease, chronic bronchitis, irregular heartbeat, nonfatal heart attacks, and premature death in individuals with heart or lung disease. The transportation sector (including road dust) is responsible for about 54% of PM10 emissions. Freight movements produce 51% of transportation emissions, with marine vessels accounting for 29% of transportation emissions, heavy-duty trucks and buses for 17%, and locomotives for 5%. PM2.5 is smaller and considered more hazardous to human health than PM10, these particles can travel over very long distances, remain in the lungs if inhaled, and can enter the bloodstream. On-road vehicles and non-road equipment (including rail and marine sources) contributed about 10% of total PM2.5 emissions in 2005, or about 550,000 tons. Road dust made up another 1.2 million tons (21%). SO2 combines with water vapor in the atmosphere and contributes to the formation of acid rain; is associated with breathing difficulties and respiratory illness. Burning of high sulfur-containing fuels by locomotives, large ships, and non-road equipment is a source of SO2 emissions. All transportation sources combined accounted for 11% of the total SO2 emissions. NOx contributes to air pollution in urban and rural areas; reacts with volatile organic compounds to form O3 (the primary component of smog); and is linked to respiratory problems, asthma, and bronchitis. Freight transport (heavy-duty trucks, marine, rail, and air cargo) account for approximately 57% of transportation NOx emissions, with heavy-duty trucks and buses accounting for 26%, marine vessels for 22%, locomotives 9%, and freight aircraft less than 1%. Source: FHWA, 2010

11 Impacts of Freight Mode on Air Emissions Air emissions vary by freight mode. The variation in CO2 emissions between modes is described in Exhibit 1-3. Note that there is a considerable range in estimates of emissions within each mode, making generalization difficult. The carbon inten- sity of maritime shipping and rail freight modes is substantially less than that of air freight and road freight. However, this car- bon advantage is dependent on technologies employed, fuel and power source, operating conditions, and other factors. CAP emissions also vary by mode, with the range in emis- sions within each mode dependent on vehicle technology, age, operation, after treatment, etc. Generalization is particu- larly difficult, and the impact of CAP emissions (particularly on human health) is largely dependent on factors such as the proximity of sensitive receptors, background concentrations, and weather patterns rather than on mode alone. • Although maritime shipping is the most efficient freight mode by ton-mile in terms of fuel use (and GHG emissions), ocean-going vessels typically burn heavily polluting bunker fuel. This dirty fuel, combined with high volumes of port traffic and the extensive freight movements associated with port activity, can negatively affect the local environments surrounding ports, which are often subjected to dispro- portionately adverse impacts associated with congestion, air pollution, and noise (Denning, 2010). The North American Emissions Control Area (ECA) effective in 2012 applies to ships operating in U.S. (and Canadian) waters and requires ships operating within 200 nm of the coast to use fuel oil with a sulfur content that does not exceed 10,000 parts per mil- lion. This is intended to reduce NOx, SOx, and PM emissions, primarily from large marine engines. • In the United States, rail accounted for 12% of freight tonnage in 2007 (Mintz, 2010). Rail freight is typically more fuel efficient than trucking. It is a cheaper and more efficient way to move containers long distances, given that contain- ers can be moved from ship to rail to truck relatively easily, where facilities exist. On average, rail locomotives can move a ton of freight more than 400 miles on a single gallon of fuel (U.S. EPA Office of Transportation and Air Quality, 2009). However, despite recent improvements in diesel locomo- tive emissions standards, fleet turnover is typically slow. CAP emissions from diesel locomotives at ports and inter- modal yards can adversely affect air quality and human health at these freight nodes. • Trucks inevitably play a role in some part of every supply chain journey. In the United States, trucks moved an estimated 75% of freight tonnage in 2007, and various intermodal com- binations moved an additional 7% (Mintz, 2010). Despite significant progress made in fuel efficiency and emissions reductions from heavy goods vehicles, trucking remains the most polluting and least GHG-efficient of the surface freight modes. However, it is also the most flexible, well suited to just- in-time and last-mile deliveries. The Environmental Defense Fund (EDF) reports that more than 80% of U.S. towns and cities are served exclusively by trucks (EDF, 2010). Trucks are thus a critical component of the logistics system. • Sources differ as to estimates of freight tonnage moved by short sea shipping and inland waterways in the United States. For example, Denning (2010) estimates that the United States moves just 2% of freight by water, while Mintz (2010) estimates that 4% of U.S. freight tonnage was moved by short sea shipping in 2007. Short sea and inland waterway shipping is promoted as being greener than other types of freight transport, with similar benefits as those of long-haul ocean shipping. However, the full assessment of environmental benefits has been limited. Organizations such as Friends of the Earth contend that threats related to expanded operations—such as air emis- sions, ocean noise, and strikes of marine mammals—have yet to be thoroughly addressed (Kaltenstein, 2010). Exhibit 1-3. CO2 emissions by mode. Mode Emissions (kilograms CO2 per ton-km) Emissions (kilograms per ton-mile) Air freight (U.S. EPA) 0.6649 1.7005 Trucking (U.S. EPA) 0.1845 0.297 Railroad (U.S. EPA) 0.0156 0.025 Maritime shipping (U.S. EPA) 0.0497 0.08 Maritime shipping (BSR, assuming an 11-tonne load per TEU) 0.008 0.0049 Source: U.S. EPA, 2008b; BSR Clean Cargo Working Group

12 • Air freight accounts for a small proportion of overall freight volumes. However, on a ton-mile basis, air freight is the most polluting of all freight modes. Aviation (encompassing pas- senger and air freight) accounts for an estimated 2% of GHG emissions. The integration of passenger and freight services makes such differentiation between freight and passenger GHG emissions extremely difficult, but freight emissions from belly cargo and freighters are estimated to account for up to 20% of aviation emissions (McCarthy, 2010). Aircraft engines and airport equipment generate noise and air pollu- tion, while emissions from road vehicles bringing passengers and freight to the airport also affect the environment and health of surrounding communities. 1.4 Defining Supply Chain Sustainability In pursuing the research, a working definition of supply chain sustainability was developed, as follows: Sustainable supply chains connect a competitive econ- omy in an efficient manner, consistent with human and eco- system health, at the same time reducing reliance on fossil fuels. Specifically, they • Enable efficient, safe, reliable, and cost-effective freight distribution by a choice of transport modes; • Reduce unnecessary freight movements, minimize dis- tance traveled, and maximize loads with effective planning; and • Are supported by public policy, regulation, infrastructure, and financial incentives that optimize land-use configura- tions, promote promising technologies, and minimize the impacts of harmful air and noise emissions on communities. 1.5 Supply Chain Sustainability Metrics Map As part of the research, the team developed a supply chain sustainability metrics map intended to provide a framework to assist in the assessment of different approaches to managing supply chain air emissions by placing them in context. The map is intended to provide a quick reference to illustrate the multiple considerations that affect supply chain air emis- sions (e.g., mode shares, congestion, fleet composition, fuel use, facility location, and vehicle miles traveled). These, in turn, affect GHG and CAP emissions outputs and air emissions out- comes (e.g., in terms of ambient air quality and human health, as well as energy security and ultimately global warming). Given the complexity of the relationships and considerations within supply chains, the plethora of metrics used by various agencies and companies, together with gaps in data, the research team used this metrics map as a guide to infer causal relation- ships and linkages between different parameters. The metrics map also assisted in the development of case studies where the research team used qualitative assumptions in the absence of quantitative data. The metrics map is shown in Exhibit 1-4. The identified categories incorporate supply chain performance measures, as well as sustainability considerations. The categories build upon what is currently being measured by different agencies, and what the analysis has shown to be salient to supply chain sustainability. 1.6 Report Structure The remainder of this report is structured as follows: Chapter 2 explores the ways in which regulators and the private sector, together with nonprofit organizations and affected communities, can collaborate so that initiatives to address supply chain air emissions are optimally designed for impact, balance, and practicality. It considers the fundamentals of a sustainable approach and key components of public-private collaboration at the state and local levels, providing examples of good practice from the case studies. Chapter 3 considers how private-sector operational improve- ments are benefitting supply chain sustainability. The research explores the main elements of operational optimization, with examples drawn from case studies of shippers and carriers, covering historical results and anticipated future impacts. Key questions addressed are (1) to what extent is operational effi- ciency (cost savings, especially due to reduced fuel use) synony- mous with emissions reduction, and (2) to what extent are these changes purely private-sector driven versus being influenced by public policy? Chapter 4 outlines key new technologies that shippers and carriers are using to achieve greater fuel efficiency, sus- tainability, and cost savings. The research touches on the interaction between these private-sector initiatives and public policies that either promote or potentially impede the implementation of more efficient technologies. Addi- tionally, comments on those advances that seem most likely to enter the freight transportation mainstream in coming years are provided. Chapter 5 looks at the sustainability brand. Many U.S. cor- porations are actively working to improve the sustainability of their supply chains. The particular focus in this chapter is the efforts made by selected companies to promote their sus- tainability efforts as a core part of their brand, as well as the motivation for and the components of such initiatives. These examples serve as encouragement for others. Cited are several

13 cases of shippers and carriers that can be said to have suc- cessfully achieved a sustainability brand based on their green supply chain initiatives. Chapter 6 focuses on unintended consequences. Demand for freight transport and resulting air emissions are affected by a broad range of public policies and regulations (e.g., economy, industry, regional development, energy, land use, safety, recycling, the environment, and air emissions). These poli- cies and regulations can have a range of unforeseen impacts. This chapter provides cautionary examples of unintended and suboptimal impacts of regulatory initiatives aimed at curbing emissions, as well as some surprising outcomes. It is important that public-sector regulators take heed of such factors when developing future regulations in order to ensure that the sus- tainability and economic viability of supply chains is supported by regulatory efforts. Chapter 7 offers suggestions on how best to promote air quality and broader sustainability in the nation’s supply chains. These suggestions were developed with the help of interviews of public agencies, shippers, carriers, and others, and from an extensive literature review. Supplemental information is provided in the appendixes, as follows: Appendix A: International Case Studies considers the Fair Winds Charter, the New Zealand Emissions Trading Scheme, and the impacts of the extension of the European Union Emissions Trading Scheme to Airline Emissions. Appendix B: National Initiatives focuses on U.S. EPA’s SmartWay Program and Cascade Sierra Solutions—a non- profit operating across the United States. Appendix C: Ports and the Coastal Context compares air emissions reduction initiatives at the Port of Charleston Exhibit 1-4. Supply chain sustainability metrics map.

14 with those at the Port of Houston and contrasts these with approaches taken at the Port of Los Angeles. This case study also explores California air emissions regulations, their unintended impacts, and lessons learned in detail, which is warranted given the amount of regulatory activity in the state (surpassing any other location in terms of quantity and reach), and the possibility for other states to introduce “copycat” regulations under the Clean Air Act. Appendix D: Inland Perspectives considers the experiences of the Chicago Region Environmental and Transportation Efficiency Program in Chicago and various experiences in Kansas City. Appendix E: Corporate Programs looks at the range of (largely voluntary) sustainability initiatives adopted by the private sector, including individual shippers and carriers as well as industry associations. Appendix F: Supply Chain Sustainability Metrics presents a broad range of existing metrics for supply chain performance used by shippers and carriers and required or proposed by public agencies.

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TRB’s National Cooperative Freight Research Program (NCFRP) Report 28: Sustainability Strategies Addressing Supply-Chain Air Emissions identifies potential strategies for accelerating environmental improvement, enhancing performance, and promoting social responsibility of supply chains.

The report is intended to help improve decision makers’ understanding of the impact of environmental policies and regulations on the supply chain, focusing on the interrelationships between economic drivers, air quality, and greenhouse gas policy and regulations.

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