A set of environmental KPIs for monitoring logistics processes was identified and adopted by Fiat Group Automobiles (FGA) in 2009, and extended to all Group sectors in 2011. In 2012, the environmental KPIs monitored will be broadened further and adopted also by Chrysler Group, adapted to specific US circumstances. The KPIs were defined on the basis of GRI-G3.1 guidelines and adapted to the specific characteristics of the various logistics processes. The KPIs are monitored to enable greater coverage and in-depth analysis of the impacts of distribution flows; in 2012, the results from this monitoring will be used to set additional improvement targets.
In total, CO2 emissions recorded in 2011 relating to logistics processes managed directly by FGA in Europe were reduced by around 4% compared with the previous year and by 9.5% compared with 2009. The improvement in FGA’s environmental performance was driven by a series of projects and actions, ranging from the use of eco-efficient vehicles to the utilization of intermodal solutions and the optimization of transport capacity.
The Group also contributes to reducing emissions linked to the transportation of finished goods by continuing to promote the use of low-emission road vehicles.
For inbound transport in Europe managed directly by the Group (excluding Chrysler Group), access to plants is already prohibited for vehicles with emission levels worse than the Euro III standard. In 2011, contractual clauses began to be progressively introduced requiring that at least 50% of supplier fleets consist of Euro IV compliant vehicles or stricter standards.
Emission standards are currently being monitored on the vehicles used by material and component suppliers for inbound transport managed directly by them. The objective is to extend the same standards required for transportation managed directly by the Group to these fleets.
Also this year, Chrysler Group Transport developed and launched a green sustainability program called NEW GEN 7 targeted at truck routes that return to the terminal each day. This program successfully improved fuel economy and reduced the company’s carbon footprint, resulting in a decrease in CO2 emissions of 7,000 tons and saving about €7 million in operational costs.
In 2012, the Green Logistics Principles will be extended to Chrysler Group, potentially with adaptations.
For outbound Fiat Group Automobiles transport, 80% of the i-FAST fleet (which in 2011 managed around 25% of vehicle transport in Europe) already consists of Euro V vehicles, with the remaining 20% made up of Euro III vehicles. i-FAST has committed to purchasing Euro V vehicles for any fleet renewals and expansions. Overall, 81% of the entire fleet used for FGA’s outbound transport in Europe is Euro III compliant or higher.
Fiat Group also promotes the use of alternatives to road transport. The key benefits of this strategy are reduced traffic congestion and CO2 emissions.
Although inbound and outbound transport of materials can require a significant percentage of road transport, depending on geography, infrastructure and production volumes, the Group has continued to explore solutions using a variety of transport options such as road, rail and sea.
Despite the drop in production volumes in some areas which limited the use of alternatives, efforts were made in 2011 to proceed with the intermodal solutions introduced in recent years. Potential new rail routes were evaluated for both the transport of materials and the distribution of vehicles.
In the US, Chrysler Group vehicles were co-loaded with the products of other automakers to optimize railcar density and minimize CO2 impact. The outbound network continues to reduce truck congestion by increasing the usage of environmentally friendly railcar alternatives.
In 2011, road transport (42%) and rail transport (37%) were the main modes used for Fiat Group Automobiles (FGA) outbound transport in Europe.
In 2012, the use of alternative transport modes for outbound transport will be extended in Italy with the introduction of new rail routes for the distribution of vehicles, replacing the road routes formerly used between Melfi and Turin, between Pomigliano and Turin/Arese/Verona, and between Atessa and Turin/Verona.
In the US and Canada, Chrysler Group outbound transport is primarily by rail (75%) with the remaining 25% representing road transport.
In 2011, the use of railways for FGA European inbound transport decreased slightly, mostly due to renovation work at the plant in Serbia, which resulted in production downtime (materials are delivered to the plant mainly by train via the Villanova-Kragujevac route).
Maximum utilization of transport capacity is another tool used by the Group to reduce the environmental impact of logistics operations and simultaneously contain shipping costs.
With the Streamlined Delivery Project (SDP), launched in 2001 by Fiat Group Automobiles (FGA), inbound flows have been contracted to a coordinated pool of logistics providers who organize the collection of material from a number of suppliers in order to maximize utilization of transport capacity and increase efficiency, compared with transportation by suppliers shipping individually.
The project, currently covering approximately 70% of volume shipped in Europe to Fiat Group Automobiles plants, continues to be expanded to other sectors. At Fiat Powertrain, for instance, the Streamlined Delivery Project covers 79% of the volume of material shipped in Europe. In 2011, the program reduced the total distance shipped by 4.9 million kilometers, decreasing CO2 emissions by 4,400 tons.
In 2011, Chrysler Group reduced road miles and fuel consumption through high cube utilization on inbound deliveries. This action achieved 92% utilization on direct truckload deliveries, 100% utilization on rail deliveries and 97.6% utilization on inbound ocean deliveries. Moreover, through the inbound “milk run” approach, more than one million miles were eliminated in 2011, an 8% improvement. The “milk run” refers to a process whereby transport pickups are organized to optimize truck routes, ensure full truckloads and minimize the time required to make all supplier pickups in a specific geographical area.
Although handled by external logistics operators, outbound shipments of service parts to dealers represent an additional opportunity to reduce CO2 emissions. Mopar strives to reduce the number of miles driven in order to realize benefits from both an environmental as well as cost-savings perspective. In 2011, Mopar focused on reducing CO2 emissions by expanding an existing initiative which consists of sharing outbound dealer route services. Mopar freight is combined with other OEM or non-automotive companies’ freight to be delivered to dealers on one consolidated route, sharing the cost of the equipment, driver, mileage and fuel among the participating shippers. Total miles driven were reduced by more than four million miles (6,586 tons CO2 emissions) resulting in a decrease of 30% compared with the planned miles for the year. Shared service routes are being used by 26% (832 dealers) of all Mopar North American dealers.
Within the Group, the environmental impact of logistics activities is also reduced by minimizing packaging and protective materials and increasing the use of reusable containers, while maintaining standards and satisfying quality requirements. Where this is not possible, the Group ensures that standard recovery processes are applied.
The Group company i-FAST Container Logistics S.p.A., which is also responsible for the efficient management of standard shipment containers, continued to work with its suppliers to gradually replace disposable cardboard packaging with reusable containers.
In 2011, the use of cardboard packaging at Fiat Group Automobiles (FGA) plants in Europe was cut by 2% over the previous year (from 6.0 to 5.9 kg/vehicle). The level of reduction was impacted by the launch of new models for which new reusable containers had not yet been developed. Going forward, FGA will maintain the commitment to reduce disposable cardboard packaging by eliminating it for material supplies for new models, where possible, and by negotiating the best terms with suppliers for changes in packaging for existing models. In 2012, the commitment is to reduce disposable cardboard packaging by 7% over 2010, to 5.6 kg/vehicle.
FGA’s World Material Flow (WMF) unit has continued to reduce wood packaging for international shipments of materials from Italy. This strategy is being pursued in spite of the considerable investment required for metal crates or specially equipped containers which are affected by fluctuations in activity volumes.
In 2011, efforts to optimize packaging in shipments were continued for the Kragujevac (Serbia) plant and begun for the Betim plant in Brazil. In Serbia, the use of wood crates was reduced by 78% compared with 2010, dropping from 4.5 to 1.0 kg/m³ shipped.
Shipments to the Brazilian plant recorded a 21% reduction in the use of disposable wood packaging, from 15.6 in 2010 to 12.4 kg/m³ shipped in 2011.
Fiat Group Automobiles Parts & Services, the FGA division that manages, sells and distributes parts, is also moving towards more environmentally sustainable solutions. In 2011, monitoring began of disposable materials used in Italy for the packaging and protection of parts. The objective is to introduce reusable containers starting in 2012, resulting in an expected 8% reduction in disposable packaging.
Chrysler Group has also started projects to reduce packaging material. The packaging for the export of materials to international manufacturing locations (Venezuela and Egypt) is already comprised of 100% wood or corrugated material. In 2011, this resulted in a 9% reduction in packaging requirements and shipping costs. The company partners with service providers that are certified by the Sustainable Forestry Initiative (SFI). The SFI program integrates perpetual growing and harvesting of trees with protection of wildlife, plants, soil, water, and air quality. All of Chrysler Group’s corrugated boxes contain at least 46% recycled fibers.
