Computer maker Dell beat its deadline for running its worldwide facilities carbon neutral by year’s end, though the record for its carriers and logistics providers is somewhat less certain.
“Almost all of our emissions are from electricity,” said Dell spokesman Bry- Seldom, neverr ant Hilton. Dell now buys about 20 per- 44%
Always,, frrequently
cent of its power from renewable energy 23% sources such as wind and solar generators; the company purchases the remain- Occasionallly ing 80 percent from regular sources and 27% neutralizes its carbon emissions by purchasing offsets.
“That may or may not be the same for our suppliers,” Hilton added, and therein lies the rub, not only for Dell but for the hundreds of manufacturers trying to “go green” by reducing their carbon emissions.
While operations inside the “four walls” of the factory floor can be brought under control with comparative ease, carriers, warehouse operators and third-party logistics providers are mostly on their own, if they are not under often-unfunded shipper mandates to follow their customers’ lead.
A survey by U.K.-based Transport Intelligence sponsored by trade and logistics software maker Kewill found that while three quarters of industry respondents that awarded logistics contracts included environmental compliance goals, more than half made no provision for the additional costs of such compliance.
Giving added urgency to the issue, research by consultant McKinsey & Co. found that between 40 and 60 percent of high-tech, consumer goods and other manufacturers’ carbon output comes from upstream in their supply chains — from transportation, packaging and raw materials that make up their products, distribution networks or final presentation to the consumer. Companies that own dedicated fleets or
How often does your company take climate
change into consideration in purchasing
and supply chain management?
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7%
Source: McKinsey Global Survey: “How Companies Think About Climate Change”
their own distribution networks have direct control over the fuel-conserving, cleaner-burning engines that drive their trucks and over the routing and scheduling technologies used to minimize road miles and empty backhauls. But like most of the electronics sector, Dell outsources almost all its warehousing and transportation needs to third parties.
Hilton said Dell influences its service providers through a variety of means. The company is a member of the Department of Transportation’s voluntary Smart Way
Transport Partnership, which identifies emissions and sets benchmark goals for businesses to reduce their carbon footprint over time.
Dell also includes emissions reporting among factors — such as price, service quality and supply security — it uses in Quarterly Performance Reports to score suppliers.
The suppliers’ reporting requirement, introduced last year, does not yet require emissions reduction, “though the vision is that this is a step toward reducing,” Hilton said. “The score they receive on that QPR can influence our ongoing business with them,” he added.
Dell said its worldwide operations with 88,000 employees in 17.9 million square feet of office, manufacturing and warehouse space (as of February 2008) became carbon neutral this summer.
While it didn’t include suppliers in its carbon neutral commitment, Dell does require that its ocean carriers use low-sulfur fuels; that seaport freight handlers use electric powered material handling equipment; and that transloading facilities use electric or liquid propane gas forklifts at warehouses.
Dell also created hubs in Asia to consolidate supplier inventory in strategic locations. “We’re also looking at where to locate manufacturing to minimize our distance to customers,” Hilton said.
Bahrain-based investment group Arcapita Bank agreed to purchase French warehouse logistics provider Compagnie Européenne de Presetations Logistiques from private equity group Sagard in a deal valued by observers at more than $734 million.
Arcapita called it the largest leveraged buyout in France this year.
Atif A. Abdulmalik, Arcapita CEO, said, “This is one of the few transactions of this size in Europe to have secured LBO financing in these tough market conditions, which attests to the quality of the business, as well as the strong reputation that Arcapita has built within Europe.”
Headquartered in Béville le Comte, France, CEPL employs about 2,200 workers across 23 locations in France and Germany.
Arcapita owns more than 54 million square feet of industrial warehouse space around the world, including the acquisition in May of Pinnacle, a fast-growing warehouse developer and operator in Central and Eastern Europe.
CEPL’s current management team, led by founder and CEO Thierry Ortmans and COO Akim Lamrani, will remain at their posts. Both have increased their equity investment in the business, Arcapita said.
Arcapita has completed 73 transactions worth almost $27 billion since its founding in 1997. The company’s holdings specialize in logistics, retail, consumer goods, specialized manufacturing and energy.
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