One of the largest contributors to climate change is transport. A 2007 Journal by Lee Chapman: “Transport and Climate Change: a review” states; “Transport accounts for 26% of global CO2 emissions and is one of the few industrial sectors where emissions are still growing”, (Lee, 2007). The paper concludes the main solutions to reducing the CO2 emission from vehicles is research in alternative fuels and improvements in energy efficiency. This is a 10-year-old journal, and hopefully businesses and organisations have taken active steps since then to reduce emissions from transport. To help me understand what has been done on the energy efficiency aspect of reducing emissions in transport, I looked into UPS’s sustainability report in hopes of understanding what one of the world’s largest freight organisation are doing in order to reduce emission in transport. Not only did I find solutions with environmental benefits, but also how these solutions can help transport organisations gain competitive cost advantage.
One of UPS’s infographic environmental goals for 2025 is a 12% reduction in greenhouse gases. I was interested in seeing how they plan to reach this goal, and looked into the various solutions UPS are utilizing and are investing in to reduce carbon emissions from transport, ranging from; truck sharing, cero emission zones and alternative fuels. However, the one solution that peaked my interest was UPS’s AI system: ORION (On Road Integrated Optimization and Navigation). It was implemented in 2013, as a way for trucks to reduce both lead time, fuel usage and emissions. It is an advanced navigation system which changes on a daily basis, depending on the volume of packages, and where the packages are being distributed using advanced algorithms and fleet telematics. In other words, ORION decides the most efficient route for the day it is operating, depending on the cargo it needs to deliver. So how has ORION exactly benefited UPS? Since the implementation in 2013, UPS is seeing an annual reduction in 100 million miles driven, and reduction in carbon emissions by 100 thousand metric tons. With this UPS is experiencing an increase in cost efficiency. With an escalation in urbanization and therefore a higher volume of goods transported due to higher demand for freight; energy and cost-efficient systems are essential to maintain competitive advantage and keeping emissions as close to cero as possible. ORION and advanced AI has proved to be key in maintaining cost and emissions to a minimum.
The benefits of ORION for goods transport in the US is evident, and UPS is expanding the AI system globally and beyond tractor cars. ORION is a statement that technological improvement can be one of the solutions to meeting sustainable goals and visions in businesses.