Story by Jeff Berman, Group News Editor — Logistics Management
BOSTON—While it is no secret these days that the proposed Wall Street bailout plan comes in at $700 billion, that sum is basically equal to what the United States spends per year on oil, according to Robert F. Kennedy, Jr., an environmentalist, activist, and attorney.
In his keynote speech for executives of nearly 200 independent truck leasing companies at NationaLease’s 64th Annual Meeting held in Boston, Kennedy explained that the $700 billion tally represents the costs for purchasing oil, but explained the actual cost is trillions of dollars, including military and other expenses. And with oil and fuel expenses reaching record levels in 2008—and having a major impact on transportation carriers and consumers alike—Kennedy said a major challenge for the future will be to get off of dependence on hydrocarbons and oil, which is particularly acute in all forms of freight transportation that are heavily dependent on oil.
“If you have the question of ‘how do we operate trucks without diesel,?’” said Kennedy, “we are moving in that direction now. There are technologies out there that can dramatically reduce the use of diesel. Those that can adopt these technologies more quickly are going to be more competitive in the future, and the more efficient we can make ourselves, the more competitive we can become globally.” Illustrating this point, Kennedy noted that the U.S. spends 12 percent of its GDP on energy. In comparison, Japan and Germany spend seven and eight percent, respectively. Despite this disparity, Kennedy said this expenditure provides the U.S. with a competitive advantage.
Energy savings at work:
On a practical level, Kennedy cited how Wal-mart installed auxiliary power units for its entire private fleet in 2006, which allowed drivers to heat and cool truck cabs with a hydroelectric communications system that could be deployed without turning on the truck engines. This change, he said, allowed Wal-mart to save $40 million.
Kennedy added that Wal-mart is also active on other energy-efficient fronts, including a plan—slated to kick off in 2009—to begin work on super-efficient diesel engines that are plug-in aerodynamic hybrids that Wal-mart expects to reduce its fuel costs by 50 percent by 2015 and by 25 percent in the next two years.
“The faster we can get people to adopt and push for [these types of things], the better it is going to be for this industry and for all of us,” said Kennedy.
In an interview with LM, Kennedy said that Wal-mart serves as a good example of a shipper going about energy efficiency the right way, as it has added 100 new stores and cut shipping costs by seven-to-eight percent by being more strategic about its route planning, how it loads trailers and reducing packaging materials.
“There are many ways you can reduce packaging and still ship the same amount of items or dramatically increase the number of items you out on your truck,” said Kennedy. “If you insist to your suppliers to reduce the packaging, that is another way to do it.”
When asked about continued U.S. dependence on foreign oil, Kennedy said the current situation will eventually result in everyone making the move to electric power, because it is a quarter to a sixth of the expense of diesel. And those who switch to electric quicker by driving plug-in hybrid vehicle and leveraging hydrogen-powered fleets are the ones that “will triumph in the marketplace,” he added.
“If you are really looking to the future and looking to save money, and there is anyway you can take these steps with your fleet, that is the way to go, because you want to get your energy off of the grid rather than from Saudi Arabia,” Kennedy explained.
Tips for the next President:
In order to steer the nation to become less oil dependent in the future, the next President needs to focus on ways of eliminating the nation’s dependence on oil by using domestic energy resources, as opposed to offshore drilling, which he suggested may not amount to more than a short-term fix.
And taking the domestic energy route may be able to provide millions of energy jobs that cannot be outsourced, enrich the U.S., and stop the hemorrhaging of money to Saudi Arabia, said Kennedy.
“If we can get off oil, we will all be richer,” he said. “By using alternative energy more efficiently, we can dramatically improve our balance of payments [as a nation], our trade deficit, our national debt, and have healthier and cleaner air.”
Other ways for the U.S. to reduce oil dependence include implementing a market-based carbon cap and trade system, which Kennedy said is endorsed by both Barack Obama and John McCain, and rebuilding the country’s national grid, which he said is inefficient and archaic.
Story from Green Logistics