Reforming Government and
Corporate Procurements to Drive
Cleaner Trucking Services
Warren G. Lavey
August 2013
1
U.S.-China Climate Change Working Group (July 10, 2013)
Five action initiatives include:
• “Reducing emissions from heavy-duty and other vehicles:
• Heavy-duty vehicles are the fastest growing source of
greenhouse gas emissions from transportation in the United
States and account for more than half of transportation fuel
consumed in China.
• Light-duty vehicles also contribute significantly to greenhouse
gas emissions, fuel use and air pollution.
• Efforts under this initiative will include advancing
comprehensive policies to reduce CO2 and black carbon
emissions through: enhanced heavy-duty fuel efficiency
standards; cleaner fuels and vehicle emissions control
technologies; and more efficient, clean freight.”
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“If you’re a business that needs to transport goods, I’m
challenging you to replace your old fleet with a clean
energy fleet that’s not only good for your bottom line,
but good for our economy, good for our country, and
good for our planet.” (Apr. 2011)
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Lots of Federal Programs Aim at Cleaner
Trucking
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Fuel Efficiency Standards Getting Tougher
(for light-duty vehicles and heavy-duty trucks)
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Opportunity: Leverage $500 Billion in
Annual Fed Purchases
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Outline
1. Trucks and Climate Change
2. Some Leading Corporate Programs
3. On-going Efforts to Engage the Federal
Agencies
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1. Trucks and Climate Change
• Major emitters of GHG and other air toxics
• Environmental injustice
• Availability of cleaner technologies, fuels and
infrastructure
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Transportation Accounts for 28% of U.S.
GHG Emissions (EPA)
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Trucks Emit 50% More GHG than Cars, and 75
Times More than Buses
(Cong. Res. Serv. 2013)
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Growth in Truck Emissions
(Cong. Res. Serv. 2013)
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Truck Emissions Disproportionality Harm
Minority and Low-Income Communities
“Air pollutants from dieselpowered vehicles contribute
to respiratory illness, heart
disease, cancer, and
premature death. Minority
and low-income communities
near transportation hubs and
throughways bear
disproportionate impacts.”
(EPA advisory report, 2009)
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Availability of Cleaner Vehicles and Fuels
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Potential growth of low-emitting technologies,
fuels and infrastructure for goods movement
Energy Sec. Steven Chu requested advisory report:
“What actions could industry and government take to
stimulate the technological advances and market
conditions needed to reduce life-cycle GHG emissions in
the U.S. transportation sector by 50% by 2050, relative to
2005 levels, while enhancing the nation’s energy security
and economic prosperity” (Apr. 2010)
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Findings of Energy Advisory Commission
Advisory report (Aug. 2012)
If technology hurdles and infrastructure challenges can be
overcome, economically competitive low-carbon fuels and
improvements in fuel economy for all vehicles could
achieve a 40% reduction in GHG emissions per mile by
2050, compared to 2005.
• Fuel economy could double for heavy-duty vehicles via
advances in engine and vehicle designs
• Growth in non-petroleum fuels, especially natural gas,
biofuels and, for light-duty vehicles, electricity and
hybrids
• However, vehicle miles travelled are projected to
increase by 60-80%, which counteracts reductions in
GHG emissions per mile
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2. Some Leading Corporate Programs
Frito-Lay (PepsiCo)
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Procter & Gamble
• Goals
– Reduce truck transportation by 20% per unit of production
(including more use of trains)
– Convert 20% of for-hire truck loads to natural gas between
2013-15
• Press Release (6/27/13): “P&G Invests in Growth of
Natural Gas Industry by Awarding Loads to Eight
Natural Gas Transportation Carriers”
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Owens-Corning
Goal: Convert 50% of its network miles to natural gas
by 2020
• “Owens-Corning is talking to nearly all its trucking
partners about switching to natural gas…. Some who
balked at the proposal have lost "a piece" of the
building material maker's business…. Dillon Transport
Inc, a privately held company based in Burr Ridge,
Illinois, agreed to Owens Corning's request, adding
25 LNG trucks in Texas about a year ago.” Reuters
(3/22/13)
• “Not only do customers want to see more
predictable, and hopefully lower, fuel costs, many
also have internal goals to reduce the carbon and
tailpipe emissions of their supply chains."
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Targets and achievements by package delivery
companies
• UPS
– Achievements
• Reduced CO2 emissions by 1,000 U.S. domestic packages by
4.9% from 2008-11
• Reduced fuel used by U.S. domestic ground package by 8.7%
from 2008-11
– Goals
• Reduce emissions per vehicle of fine particulate matter by
75% and nitrogen oxides by 60%, 2012-20
• Double alternative fuel miles driven, 2010-17
• Reduce carbon intensity (including U.S. operations and
global airline) by 10% by 2016
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FedEx
Goal: Increase FedEx Express vehicle fuel efficiency
30% by 2020 compared to 2005
• Achieved 22% improvement through 2012
(beat initial target of 20%)
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Some FedEx Actions
• More than 10,000 clean diesel vans (70-100% more
efficient than vehicles they replaced)
• 358 hybrid electric and 92 all-electric vehicles in
North Am.
• 6 CNG and 2 LNG vehicles in North Am.
DHL Goal and Achievement
• Goal: Improve by 30% carbon efficiency of
operations, 2007-20
• Achieved 16% improvement, 2007-12
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Procurements from SmartWay
Transport Partners
• Requiring carriers to track and reduce their
emissions -- Hewlett-Packard, Best Buy, others
• Lower barriers to participation -- 100s of
medium-sized and small businesses
• Cost effective as well as environmental
benefits
• Truck leasing options
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UIUC Became First SmartWay Partner
Academic Institution
“EPA congratulates The University of Illinois at UrbanaChampaign for registering as a shipper partner in EPA’s
SmartWay Transport Partnership and committing to improve
the performance of its freight operations,” said Christopher
Grundler, the Director of EPA’s Office of Transportation and
Air Quality. "As the first-ever academic institution to register
in SmartWay, The University of Illinois at Urbana-Champaign
leads the way for universities and other institutions to work
as shippers in SmartWay and engage with their carriers and
suppliers to improve freight efficiency, reduce greenhouse
gases and other emissions from goods movement while also
helping enhance our nation's energy security.“
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June 2013
3. Federal Government Efforts
Framework of Laws and Executive Orders
• Alternative fuel fleet vehicles: Energy Policy Act of
1992, as amended in 2005
• Alternative fuels for fleets and reduced GHG emissions:
Energy Independence and Security Act of 2007
• Reducing petroleum use and emissions for fleets; green
suppliers: EO 13514 “Federal Leadership in
Environmental, Energy, and Economic Performance”
(2009)
• Reducing Health Impacts on Disadvantaged Groups: EO
12898 “Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income
Populations” (1994)
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Sustainability Plans
and Annual Reports
for Agency
Operations
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Government Shippers and Carriers -Better Targets Than Government
Fleets
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Larger spending
More petroleum consumption and emissions
Higher utilization of suppliers’ trucks
Leverages private sector investment and uses
Opportunities through improved contract
structures and procurement practices
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Opportunities in Government
Procurements of Trucking Services
•Reduce
• Spending
• Emissions
• Petroleum consumption and imports
•Spur the markets for alt fuel infrastructure and vehicles
•Enhance national security
•Increase domestic jobs
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Some Recent Actions Addressing
Fed Agencies’ Procurements
• GSA’s Green Purchasing Plan (2009)
– GSA “must consider to the maximum extent practicable a
preference for environmentally sustainable products or
services when developing best value evaluation factors.”
• Federal Acquisition Regulation amended to reflect
“sustainable acquisition policy” (May 2011)
– Agencies shall advance sustainable acquisition by ensuring
that 95% of new contract actions are energy efficient,
environmentally preferable
– “Best value must be viewed from a broad perspective and
is achieved by balancing the many competing interests in
the System. The result is a system which works better and
costs less.”
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U.S. Postal Service Program
Addressing Trucking Carriers
• Tracks and reports contractors’ fuel use
• Targets reducing suppliers’ transportation
emissions and petroleum use 20% by 2020, with
annual reporting
• Will require suppliers with contracts >$500,000
annually to report emissions and other data
• Will use standard sustainability clauses in
contracts to engage suppliers and encourage
improvements
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USPS Estimated Savings from 20%
Reduction in Petroleum Consumption
Annual Budget
Savings ($ mil)
Annual Petro Fuel
Annual Emissions
Savings (gallons mil) Savings (MMT CO2
equiv.)
Fleet
50 - 90
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0.2 – 0.4
Transportation
Contractor Services
215 - 350
111
0.7 – 1.2
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Recommendations from American Clean Skies
Foundation’s “Oil Shift” Report (Aug. 2012)
• Agencies report annual measures and targets for
fuel use and emissions from suppliers of
transportation services
– Targeting petroleum reductions
– Targeting alt fuel gains
– Open to logistics improvements, multimodal, fuel
efficiency, etc.
• Procurement preferences for cleaner trucking
• Multiyear contracts with incentives for reduced
petroleum use and emissions
• Identify attractive candidates for alt fuel trucking
services
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Some Actions to Promote Procurements of
Cleaner Trucking Services by Fed Agencies
• Outreach to Fed Agencies
– Presentation at GreenGov Conference (Sept. 2012)
– Meetings with
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GSA
OMB
CEQ
EPA
DOE
USPS
Domestic Policy Council
CEA
– Workshop for fed procurement staff to learn from private
sector experiences
– Specific recommendations for GSA tools and procurements
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• Work with consultants and industry
– Case studies of cost-effective changes in procurements
– Preliminary analysis of fed agencies’ shipments to identify
“low-hanging fruit”
– Access for government staff to experienced commercial
procurement officers
• Support from other environmental and energy
security non-profit organizations
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Opportunity in Third-Generation Domestic
Delivery Service Solicitation
• Up to 5 years
– $100-350 million annually
– 15-35 million packages annually
• DDS2 (2009) failed to:
– Assign preference to cleaner carrier
– Require reporting of emissions or fuel use for deliveries
– Require improvements
• New developments
– EO 13514
– More SmartWay and other measurements and reporting
– Advances in alternative fuel vehicles, infrastructure and
corporate commitments
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Proposals for DDS3 Solicitation
• Selection preference for vendor environmental
commitments
– Fuel efficiency, emissions and alt fuels by year
– Fleet-wide
• Annual targets in contract
• Annual reporting
• Contract incentives for superior environmental
performance
– Annual contract extensions; renewal expectancy
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Vision and Traction
“[T]he only way we're going to break this cycle
of spiking gas prices for good is to shift our
cars and trucks off of oil for good.”
President Barack Obama, Address from Argonne National
Laboratory (March 16, 2013)
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