More logic in logistics

A modern distribution network has to satisfy a number of different demands. It must make our products available to our customers throughout the year at the right time and the right place, in sufficient quantities. It must also be able to meet the short lead times required by retailers and maintain a high level of delivery service. As part of our “Optimization of Transport and Warehouses” project, we work continuously on the development of efficient and environmentally compatible logistics concepts, also with external partners. We aim to reduce the complexity in the transportation and storage of Henkel’s finished products. Centrally coordinated purchasing of logistics services, as well as the greatest possible consolidation of warehouses should help to achieve synergistic effects. One of the criteria for selecting our logistics partners is the energy efficiency of their vehicle fleets.

Logistics as part of our operational carbon footprint

In order to achieve a comprehensive improvement in our operational carbon footprint, we strive continuously to improve and complete the database of our production and logistics emissions. We established comprehensive management systems for our production operations many years ago. These cover both our own carbon dioxide emissions and the emissions resulting from the generation of energy bought from third parties.

Measurement of the carbon dioxide emissions associated with logistics, the transport of our products or with business trips is far more difficult, however, as the system boundaries, basic data, methods and procedures are much less well defined. For example, the fuel consumption of each truck, its capacity utilization, and each traveled kilometer must be known exactly in order to calculate the transport emissions.

Estimates based on average values, emission factors, and secondary data from existing life cycle databases, indicate that the annual carbon dioxide emissions attributable to the transport of our products amount to approximately 500,000 metric tons. For business trips, we estimate a figure of about 150,000 metric tons per year. Regarding our logistics operations, we are working intensively to develop our data systems further so that we can determine the amount of emissions more exactly and check the effectiveness of measures undertaken to reduce them. We are looking closely at the transport and storage of our products, as well as business trips and company cars, in a determined effort to find ways to achieve an across-the-board improvement in our operational carbon footprint.

Different starting points for overall improvement

 Area  Action
Logistics structures
  • Intermodal transports: Since 2008, we have been working with European logistics partners to gradually build up our intermodal transport routes for the efficient transport of products by means of different modes of transport. In 2009, for example, about 300,000 of the kilometers traveled by our laundry detergents in their journey from our productions site in Düsseldorf to our warehouses in Lomazzo and Ferentino in Italy and Vienna in Austria were covered by rail instead of by road. This reduces the annual emissions of carbon dioxide by about 55 percent. For 2010, we and our logistics partners have already identified other European routes that are suitable for switching product transport to rail. In the USA, too, we are increasing the proportion of intermodal transport routes.
  • Since the beginning of 2010, Henkel has been shipping its cosmetics products by rail within Germany. We now transport all cosmetics products by rail from our production site in Wassertrüdingen in Bavaria to our central cosmetics warehouse in Monheim near Düsseldorf. About 86,000 metric tons of cosmetic products will be transported in this way every year, thus reducing annual carbon dioxide emissions by some 7,000 metric tons.
  • In 2009, as part of the Supply Chain Optimization Project, we focused on simplifying the structures of our finished products warehouses in the USA. As a result, we were able to reduce the transport mileage between the various intermediate warehouses by 35 percent. This is equivalent to avoiding the emission of almost 2,000 metric tons of carbon dioxide.
  • Centrally coordinated logistics purchasing and, where possible, grouping of transport consignments carried between individual sites. Example in USA and Europe: Increase in shipment weight and therefore in truck capacity utilization by grouping the transport quantities of neighboring Henkel sites.
  • We aim to cooperate with our retail partners to identify potential for improvements, and therefore participate in, for example, the European Efficient Consumer Response initiative.
  • Expansion of transport cooperations with other companies to avoid empty transports.
Product optimization
  • Product optimization in terms of weight and volume, provided this is possible without compromising the performance and stability of the packaging. Example: Switch of U.S. liquid laundry detergent brand Purex to a concentrate. Result: Avoidance of about 17,000 metric tons of carbon dioxide emissions from transport operations per year thanks to reduced product volume.
  • Step by step relocation of packing material production to the actual sites.
Business trips
  • Guidelines for replacing business and airline travel by video and telephone conferencing.
  • Example: In the last three years alone, the duration of our worldwide teleconferencing has increased ten-fold. This has gone hand in hand with a considerable saving in carbon dioxide emissions.
Company cars
  • Europe: Specifications for reference vehicles and establishment of criteria for the purchasing of new cars.
  • USA: Switch from 6 cylinders to 4 cylinder vehicles.
  • Turkey: Switch of company cars to more fuel-efficient diesel engines.
  • Test of alternative fuel concepts in different regions: Bioethanol in Sweden and hybrid engines in Japan. Example Japan: Estimated reduction of around 550 tons of carbon dioxide emissions per year if all current cars are replaced by Hybrid models.

Interview Kasper Rorsted, Chairman of the Henkel Management Board

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