Wal-Mart has been paying attention to fuel efficiency for a long time, and in 2005 the world's largest retailer began a sweeping environmental initiative to address energy and resource consumption in all its operations.
However, in 2005, the world's largest retailer began a sweeping environmental initiative to address energy and resource consumption in all its operations. Part of this initiative was an increased focus on the efficiency of its long-haul trucks. These vehicles are the backbone of Wal-Mart's distribution network; they crisscross the country collectively traveling 900 million miles a year to deliver goods to the retailer's nearly 4,000 stores. In typical driving conditions, the trucks average about 6 miles per gallon.
After Wal-Mart fleet managers worked with their vendors to identify possible efficiency technologies, the company turned to RMI in 2006 to decide which ones to adopt. RMI designed a comprehensive model that assesses the level of efficiency and emissions reduction associated with each technology and calculated returns on investment. Wal-Mart was then able to make its purchasing decision based on environmental and economic returns provided by RMI. Overall, the suggested innovations will save Wal-Mart nearly $500 million a year in fuel costs by 2020.
Developing a Competitive Advantage By Going Green: Small gains turn BIG
Wal-Mart's ultimate goal is to double the truck fleet's fuel economy by 2015, thereby reducing carbondioxide emissions by 26 billion pounds between now and 2020. These fuel savings will also give Wal-mart a competitive advantage by reducing its dependence on fossil fuels and saving money at the pump. Even as the retailer works to dramatically increase the fuel efficiency of its trucks, small efficiency savings have added up. Increasing the fuel economy of its long haul trucks by just 1 mile per gallon can save the retailer an estimated $35-50 million per year in fuel costs alone.
RMI's whole system thinking has helped make Wal-Mart an industry leader and has guided them along their sustainable path.
GOAL: Choose the best available technologies to double the truck fleet's fuel economy by 2015, reducing carbon dioxide emissions by 26 billion pounds between now and 2020.
CHALLENGE: Standard Class 8, long-haul trucks use fuel inefficiently.
METHOD: Strategic consulting.
Energy Efficient Practices
To improve the trucks' fuel economy, Wal-Mart improved the aerodynamics of the tractor and trailer, as well as install low rolling resistance tires. The company also decided to install auxiliary power units (APUs) in each truck to cut down on engine idling. These units consist of a small generator that can supply heating, cooling, and other accessory loads to the driver, without turning on the main engine. Drivers who sleep in their cabs overnight can engage the APU to stay warm instead of keeping the engine idling all night.
Wal-Mart Leading the Way
In May 2006, Wal-Mart installed APUs on all trucks that made overnight trips. This one change should eliminate approximately 100,000 metric tons of CO2 emissions, reduce diesel fuel consumption by 10 million gallons, and save the company an estimated $25 million per year.
Current estimates show that Wal-Mart is on track for meeting its goal of doubling its long haul truck fleet's efficiency by 2015. By July 2007, the company had already increased fleet efficiency by 15 percent and expected to hit its target of a 25 percent improvement by 2008. "We're real proud of where we've gotten to already," Tim Yatsko, the company's Senior Vice President of Transportation, told MSNBC.
Several energy saving opportunities were assessed to help the company meet its goal. Several scenarios looking at company-wide efficiency and CO2 savings were calculated to assist management in their decision-making.
Fleet image courtesy of shutterstock.com. Fuel economy concept image courtesy of shutterstock.com.