Maserang, who previously held supply chain management positions at the information technology firm
Freedom Pay and at Pepsi Bottling Group, joined Chiquita
in 2003. He recently spoke with DC VELOCITY Associate
Managing Editor Susan Lacefield about the techniques
Chiquita used to reduce its North American supply chain’s
carbon footprint.
QWhat led Chiquita to start looking at ways to boost fuel efficiency and sustainability in its transportation
operations?
AFor decades now, Chiquita has looked for innovative ways to continue our efforts to be a good corporate
citizen, especially regarding the environment. Even prior to the change in
presidential administrations and the
potential for a cap-and-trade policy, we
were engaged in reducing our carbon
footprint.
We also saw that fuel was not going to
get any cheaper. If you remember back
to the ’06 to ’08 time period, fuel was
just going through the roof. We saw $4
dollar-plus diesel, almost $5 diesel. So
we knew we were going in the right
direction.
We’re constantly looking for ways to
drive efficiencies. That’s partly because
if you can drive efficiency, you can drive
cost out, which is good for the customer
and good for the carrier. But there’s the
sustainability side to consider as well.
And that’s more important because
more people—at least from a consumer customer perspective—are focusing on food miles and on buying local. We
just felt we needed to get as far ahead of that as possible to
remain competitive in the market.
QHow did Chiquita go about introducing its program to carriers?
AFor the last 18 years, we’ve held annual carrier confer- ences, and we decided that would be the ideal oppor-
tunity to get the word out. So at our 2007 conference, we
started encouraging carriers to participate in Smart Way.
Then, we set a goal of 100 percent SmartWay miles
[freight miles logged by SmartWay-certified carriers] and
using 100 percent Smart Way-certified carriers in the net-
work. We also put out a challenge that year to push the net-
work to work toward achieving 10 miles per gallon with the
new engines that were coming out in 2010 [to meet the
EPA’s new stricter emission standards].
During the conference, we talked about some of the
things that carriers should be doing. Obviously, you need to
be thinking about single-wide tires [as opposed to using
two thin tires]. We’d done our own internal application of
single wides on about a thousand chassis that year, and
we’ve seen a 0.3 to 0.5 mile-per-gallon differential. So we
were trying do within our own network—our private fleet
and dedicated operations—some of the same things we
were asking all the common carriers to do.
We also installed cowlings, which are
aerodynamic devices that you put on the
roof of a truck, and freight wings, which
go underneath the vehicle. We looked at
some APU (auxiliary power unit) technology, which eliminates the need for
drivers to keep their engines idling during long stops to provide heat, light, and
power.
That’s what we did at first. We measured ourselves so we’d have baseline
numbers. Then, we started introducing
small, incremental improvements. Each
year since, we’ve gotten a little stronger.
Probably the most impressive thing
we’ve done is change the way we compensate carriers for fuel. A couple years
back, we decided the only way we were
ever going to drive the right behavior
was to take a different approach to fuel
surcharges. Basically, we pulled all costs related to fuel out
of the base transportation rate. We then created a new fuel
surcharge table for the carrier that incorporates all of the
fuel costs that were previously embedded in the base rate.
Doing it this way provides full transparency to all costs
related to fuel. Bottom line: You cannot impact effectively
what you cannot measure.
QWas there any grumbling from the carriers?
AOh, sure. Some didn’t understand it or didn’t want to change because they had been using the fuel surcharge
to their advantage. I would always tell them, “You know,
guys, I’m with you when it comes to competing in other
