Canon global

CO₂ Emission Reduction in Transportation

In 2002, Canon established the Environmental Logistics Working Group, with the goal of promoting modal shifts^* and improving loading efficiency, as well as reducing transport distances. As a result, we reduced CO₂ emissions due to transportation per unit of net sales (CO₂ equivalent) by up to 29％ in 2006 compared with 2000 levels, confirming the validity of this approach.
In light of these results, we concluded our activities centered on the Environmental Logistics Working Group in 2008, resuming our proven reduction policies while investigating new strategies from 2009. In 2011, we took such measures as expanding routes using JR cargo containers.
As a result of these efforts, logistics-related CO₂ emissions in Japan amounted to 31,000 tons in 2011, a year-on-year reduction of 2,000 tons (about 6%).
We have also worked to reduce CO₂ emissions attributable to international transport as well as carriage within regions outside Japan by all of our Group companies in Japan and overseas. In 2011, we broadly reduced CO₂ emissions stemming from air transport, particularly as a result of promoting modal shifts from air to ocean freight in international transport. CO₂ emissions were also greatly reduced through improvements in air transport fuel efficiency, the use of bigger container ships for ocean freight, and fuel efficiency improvements through the use of slower shipping. As a result, logistics-related CO₂ emissions (global) amounted to 659,000 tons, a year-on-year reduction of 259,000 tons (about 28%).

Logistics-Related CO₂ Emissions in Japan

Environmental Activities in Logistics (Example of Distribution of Products Made in Japan)

Logistics-Related CO₂ Emissions (Global) (1,000t-CO₂)

		2007	2008	2009	2010	2011
Japan		39	38	29	33	31
Outside Japan		76	89	72	84	79
International Shipping	By air	452	416	376	611	389
	By ocean	284	280	193	190	160
	Subtotal	736	696	569	801	549
Total		851	823	670	918	659

Complying with "Designated Shipper" Stipulations under the Law Concerning the Rational Use of Energy in Japan

The Revised Law Concerning the Rational Use of Energy that went into effect in Japan in April 2006 includes, for the first time, measures targeting the transport sector. The law imposes energy conservation and reporting requirements not only on transport companies, but also shippers (referred to as "Designated Shippers") handling more than a prescribed amount (30 million ton-kilometers or more).
Canon established a system in 2005 to facilitate compliance with the law. Arrangements included the inauguration of an organization, the Subcommittee for Measures Responding to the Ministry of Transport Law, tasked with devising cross-sector responses for the Group, as well as the formulation of rules to govern the performance assessments necessary during reporting and the creation of new guidelines.
Aggregate transport-related results for 2011 indicate that two Canon Group companies in Japan are classified as "designated shippers": Canon Inc. and Canon Chemicals Inc. Both of these companies are complying with the law by submitting energy consumption reports and energy conservation plans to the respective divisions within the Bureau of Economy, Trade and Industry. Based on these energy conservation plans, measures to reduce transportation distances, such as by concentrating the operations of distribution centers, were carried out in 2011.

Efforts to Improve Logistics Efficiency

Shortening Transportation Distances by Changing Logistics Sites and Distribution Routes

Canon is working to shorten transportation routes by reviewing logistics base locations and finding more direct routes, so as to reduce the environmental impact of logistics operations.
While we had located our distribution center for storage/distribution of consumer goods in North America in the central part of that region, we were able to reduce transport distances to the western part of the continent by establishing a new distribution center on the west coast. Moreover, Canon is promoting direct delivery to retailers, bypassing marketing subsidiaries.
Also, Canon began shipping inkjet printers produced in Asia directly to Central and South America in 2009. For example, in the past, shipments were made via Miami in the United States, but direct transportation to Brazil shaves roughly 6,000 kilometers from each journey. Currently such direct shipments are being made not only to Brazil, but also to Chile, Panama, Costa Rica, and other countries.
In Europe as well, shipments to Eastern and Northern Europe, the Middle East, and South Africa are dispatched directly from Asian production sites. Similarly, in Asia we are actively promoting direct shipment from production sites. We continued to expand the number of destinations for direct shipments in 2011, including full-scale direct shipments to India.
We closed our inland distribution centers in Japan used for storing products for export, and concentrated distribution center operations at ports. In 2010, we closed the Funabashi Chiba Distribution Center, and in 2011 the Ibaraki Distribution Center, concentrating those operations at the Oi Area Distribution Center. In doing so, we shortened the shipping distances for container shipping, which creates a high volume of CO₂ emissions, and thus reduced such emissions.

Reducing Transportation between Warehouses

As part of our overall effort to reduce environmental impact by making logistics more efficient, we are reducing transport between warehouses. Examples of our efforts worldwide are outlined below.

Introduction of a "diversion" system for shipments to North America

Canon dispatches its business products for the United States and Canada to five warehouses in North America from its production sites in Japan and Asia. For ocean freight, we generally arranged the vessels after determining the shipping volume for each destination. However, if demand changed while the goods were in transit, they had to be reshipped from the original destination warehouse to another warehouse in the new area of demand.
To reduce such unprofitable reshipping, Canon has introduced a "diversion" system for part of its product shipments by which determining the final destination warehouse can be postponed until 48 hours before docking on the west coast of North America. This method alleviates inventory distribution imbalances between warehouses in North America, enabling a reduction in CO₂ emissions arising from reshipping.

"Virtual warehousing" covering all of Europe

In Europe, we have switched to an order-based method for some of our consumer products.
We previously carried out supply and demand adjustments based on warehouses by national units (requisite volumes determined by country at the time of placing orders, with shipments made accordingly).
In recent years we have come to view Europe as a single warehouse destination (virtual warehousing); we examine the latest inventory information at the time of shipment from production sites in Japan and elsewhere in Asia and initially sort quantities by country. This has enabled us to reduce inventory imbalances in Europe and cut avoidable transport between warehouses.

Promoting Modal Shifts

Canon strives to reduce transport-related CO₂ emissions through modal shifts inside and outside Japan, from road and air transportation to a combination of ocean and rail freight, which have a lower environmental impact.

Modal Shift in Japan

In Japan, we have since 2002 been using ships and railroads as much as possible for shipping parts between Group production sites and shipping products to regional distribution centers. For collecting used products for recycling, we use ships and railroads for some of the transportation between collection and recycling sites. We have especially focused on using railroads for a greater percentage of our transportation, working with logistics companies to develop large custom-made containers for product logistics.
As a result of these efforts, in 2005 Canon became one of the first companies in Japan to acquire corporate certification for the Eco Rail Mark system^* promoted by Japan's Ministry of Land, Infrastructure and Transport. We have since continued to meet the certification conditions, and been renewing it continually.
One new initiative in 2011 was a modal shift for shipments of parts from Canon Precision in Aomori Prefecture to the Kanto area, switching from truck transport to rail transport using 31-foot containers. Nonetheless, in part due to the effects of the Great East Japan Earthquake, the amount of CO₂ reduction due to modal shifts decreased year-on-year.

CO₂ Emissions Volume Comparison (Ratio for Truck, Ocean, and Rail Transportation with Air at a Base Value of 100)

Air	Truck	Ocean	Rail
100	15	4	2

CO₂ Reductions due to Modal Shifts (Japan)

Modal Shift in International Transport

We continued changing from air to ocean for international transportation through modal shifts in 2011.This broadly reduced CO₂ emissions attributable to air transport, from 611,000t in 2010 to 389,000t.
We are promoting rail transportation in Europe to move products from the distribution center at our regional marketing headquarters in the Netherlands to warehouses in various countries. For some products imported to Europe, we bypass the distribution center and transport directly from the port of entry to the warehouses in each country by rail and feeder boats.
International transport from Oita (Japan) to Korea used to involve transport by truck from Oita to the Port of Shimonoseki, whereupon it would be shipped to Pusan in Korea and then trucked to a warehouse in Inchon. Beginning September 2010, we implemented a modal shift by switching from truck to rail for the land routes, and also shortened the transport distance by switching to the Port of Hakata as the port of export embarkation. As a result, CO₂ emissions attributable to transport were reduced by 33 tons in 2011.

Modal Shifts between Japan and Korea