Reducing CO2 during Distribution
CO2 Emission Reduction in Transportation
In 2002, Canon established the Environmental Logistics Working Group. The Working Group promotes modal shifts* and improve loading efficiency through five categories of action in Japan: parts procurement, efforts at manufacturing sites, product arteries, sales to customers and packaging materials. It also seeks to reduce transport distances.
As a result, we reduced CO2 emissions due to transportation per unit of net sales (CO2 equivalent) 25% in 2005 compared with 2000 levels. Furthermore, this figure was increased to 29% on the same basis in 2006, confirming the validity of this approach.
In light of these results, we tied up our activities driven by the Environmental Logistics Working Group in 2008, resuming our proven reduction policies while investigating new strategies from 2009. In 2010 we began using import shipping containers for export as well, and concentrated our logistics centers around ports.
As a consequence of these efforts, CO2 emissions associated with logistics in Japan were 33,000 tons in 2010, an increase of 4,000 tons (14%) against 2009 levels.
At the same time, we have striven for Groupwide reductions, including in our operations outside Japan, in CO2 emissions attributable to international transportation and carriage within regions outside Japan. Just as we have with domestic transport, we have sought to improve loading efficiency and reduce transport distances, and in some overseas regions such as Korea we have been promoting modal shifts. Nonetheless, transport volumes have increased due to the rapid recovery in overseas markets, and correspondingly associated CO2 emissions volumes increased in 2010 by 248,000 tons (about 37%) compared to 2009, to 918,000 tons.
- *Modal shift
This phrase describes switching from truck- and air-based transport to rail- and sea- based transportation, placing a lower burden on the environment.
Reuse for export of import shipping containers (Round-Trip Use)
Rather than leaving the containers used for imports empty, Canon loads them with products with bound for export and sends them back, which reduces the CO2 emissions associated with transport. While this has been Canon Group internal policy since the 1990's, if the shipper used during import and export, and furthermore the domestic container transport company used at both the export and import stages, are not the same, reuse is impossible, so the number of containers actually being reused was low.
To remedy this, in 2010 we sought to use the same company for import/export shipping and subsequent domestic container transport, and also encouraged the use for domestic transport of containers returned to port. As a result, the number of reused containers reached 2,566 in 2010, a marked increase from 1,019 in 2009. This represents a CO2 emissions reduction benefit of 157 tons.
We plan to increase the number of reused containers in 2011, not only by redoubling efforts within the Group, but also by encouraging container reuse by other companies.
Logistics-Related CO2 Emissions in Japan
Environmental Activities in Logistics (Example of Distribution of Products Made in Japan)
| 2006 | 2007 | 2008 | 2009 | 2010 | ||
|---|---|---|---|---|---|---|
| Japan | 35 | 39 | 38 | 29 | 33 | |
| Outside Japan | 72 | 76 | 89 | 72 | 84 | |
| International Shipping | By air | 559 | 452 | 416 | 376 | 611 |
| By sea | 274 | 284 | 280 | 193 | 190 | |
| Subtotal | 833 | 736 | 696 | 569 | 801 | |
| Total | 940 | 851 | 823 | 670 | 918 | |
Complying with "Designated Shipper" Stipulations under the Revised 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 on transport companies and shippers handling more than a prescribed amount (30 million ton-kilometers or more) (referred to as "Designated Shippers").
Canon established a system in 2005 to facilitate compliance with this revised 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, formulating rules to govern the performance assessments necessary during reporting and creating new guidelines.
Aggregate transport-related results for 2010 indicated that two Canon Group companies in Japan fall into the classification of "designated shippers": Canon Inc. and Canon Chemicals Inc. Both of these companies are complying with the new requirements by submitting energy consumption reports and energy conservation plans to the relevant bureaus of economy, trade and industry.
- *Canon Precision Inc. was also a designated shipper until 2008. However, during 2009 it was excluded from this classification as a result of a substantial decrease road haulage.
Efforts to Improve Transport Efficiency
Shortening Transportation Distances by Changing Logistics Sites and Distribution Routes
To lessen its environmental burden by streamlining logistics, Canon is working to shorten transportation routes by reviewing locations of production/logistics sites.
While we had located our logistics 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 logistics center on the west coast. Moreover, Canon is promoting direct delivery to outlets, bypassing marketing subsidiaries.
In Europe, shipments to Eastern and Northern Europe, the Middle East, South Africa and other areas are dispatched directly from Asian manufacturing sites. Similarly, in Asia we are dispatching shipments directly from production sites.
In Japan, we are using regional ports to shorten the transportation distances for imports and exports.
Over and above the above initiatives, we rerouted a portion of inkjet printer transportation during 2009 to facilitate direct delivery from regions of production in Asia to Latin America. Formerly, shipments were made via Miami in the United States. Direct transportation to Brazil shaves some 6,000 kilometers from each journey.
In 2010 we expanded our direct shipments to include Costa Rica and other locations. In addition, we began direct shipments to Asia, include exports to Indonesia.
Reducing Transportation between Warehouses
At Canon, making logistics more efficient is part of our overall effort to reduce environmental impact, so we are reducing the amount of transportation that occurs between warehouses. The following is a description of our efforts to do so throughout the world.
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. When using shipment by sea, in general we arrange vessels after determining the destination. However, if demand changes while the goods are in transit, the shipment has had to be re-shipped from its original destination warehouse to another warehouse in the new area of demand.
To reduce such unprofitable re-shipment, 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 and can reduce the CO2 emissions arising from re-shipment.
"Virtual warehousing" covering all of Europe
In Europe, we have commenced procedures to switch a portion of consumer products to an order-based method.
Hitherto, we 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), allowing us to examine the latest inventory information at the time of shipment from production sites in Japan and elsewhere in Asia, and by initially sorting quantities by country, reduce inventory imbalances in Europe and cut avoidable transport between warehouses.
Concentrating logistics centers in port areas
We have been closing our inland logistics centers in Japan and concentrating their operations in the logistics centers located near ports. In June 2010 we closed the Funabashi Logistics Center. Warehousing goods with a high export ratio at ports rather than inland reduces the distance that containers must travel. As a result, we have reduced the distance traveled by containers to ports, cutting CO2 emissions by 226 tons annually.
Promoting Modal Shifts
Canon strives to reduce transport-related CO2 emissions through modal shifts in and outside Japan, from road and air transportation to a combination of lower-environmental-burden shipping and rail freight.
Modal Shift in Japan
Since 2002 in Japan, we have been using ships and railroads as much as possible for parts logistics between Group manufacturing sites, and for product logistics to regional logistics centers. For logistics of used products collected for recycling, we use ships and railroads for some of the transportation from collection sites to recycling sites. We have especially focused on using rail for a greater percentage of our transportation, working with logistics companies to develop specially made large containers for product artery 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 continued afterward to meet the certification conditions, and have been renewing it continually.
In October 2010, we began implementing a modal shift whereby containers arriving from Vietnam to the port in Tokyo are shipped by train to Fukushima Canon (Tokyo – Koriyama), rather than by truck as they had been up to then. Such efforts produced a 3,538-ton CO2 emissions reduction benefit. We will also look into introducing a new type of container with greater internal dimensions, so as to increase our rail transport loading efficiency.
- *Eco Rail Mark system
Companies acquiring the Eco Rail Mark are recognized for their efforts in using rail transport to contribute to curbing global warming.
Eco Rail Mark
- Comparison of CO2 Emissions (Ratio of Emissions Generated by Truck, Maritime and Rail Transportation Compared with Air Shipment Emissions, with Air Shipment Emissions at 100)
- Air:truck:ship:rail = 100:15:4:2 (Rough guide to the environmental burden resulting from transporting one ton of freight one kilometer in Japan)
CO2 Reductions due to Modal Shifts (Japan)
Modal Shift in International Transport
We are promoting rail transportation in Europe to move products from the logistics center of our regional marketing headquarters in the Netherlands to warehouses in various countries. For some products imported to Europe, we bypass the logistics center and transport directly from the port of entry to the warehouses in each country by rail and feeder boats.
International transport from Oita to Korea used to involve transport by truck from Oita to 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 Port of Hakata as the port of export embarkation.
As a result, we were able to cut CO2 emissions at a rate of 286 kg per truckload (about 30 m3).
Modal Shifts between Japan and Korea
