Initiatives for Reducing Environmental Impact

CNH Industrial realizes numerous initiatives to promote ever-more sustainable logistics processes. Such initiatives comprise technologies, procedures and activities aimed at environmental impact reduction for logistics processes without compromising service quality or profitability, and considering the social impact of the activity itself. In defining these activities, the aspects considered include technical solutions, such as which means of transport to use, intermodality, organizing long-haul transport, and packaging design.

INCREASING LOW-EMISSION TRANSPORT

CNH Industrial is committed to reducing CO2 emissions arising from the transport of components and finished products by continually promoting the use of road vehicles that conform to the most stringent environmental standards, thus ensuring lower emissions.

From 2012, in Europe, all segments gradually introduced specific environmental contractual clauses obliging external transport providers to use vehicles compliant with Euro IV standards or higher. For all segments, the 2015 target is the introduction of a clause stipulating that at least 80% of vehicles used in fulfilling a contract conform to Euro IV standards or higher.

service providers

In North America, the Agricultural Equipment and Construction Equipment segments continued to engage their logistics partners in the SmartWay Transport program, launched in 2003 and sponsored by the Environmental Protection Agency (EPA) to improve efficiency and reduce greenhouse gas and air polluting emissions along the transport chain. SmartWay provides its partners with a set of EPA-tested tools to help in making informed transportation choices, in measuring and reporting carbon emissions, and in improving supply-chain efficiency and environmental performance. SmartWay helps its partners exchange reliable and credible performance data and accelerate the adoption of advanced technologies and operational practices. Participation in the program is one of the factors considered in evaluating potential suppliers. In 2014, 92.5% of service providers (rail and road transport) joined the Smart Way program.

USING INTERMODAL SOLUTIONS
CNH INDUSTRIAL EUROPE 

BREAKDOWN OF INBOUND TRANSPORT

BREAKDOWN OF INBOUND TRANSPORT

BREAKDOWN OF OUTBOUND TRANSPORTa

BREAKDOWN OF OUTBOUND TRANSPORT

(a) Percentages refer to Agricultural Equipment, Construction Equipment, and Commercial Vehicles, and are based on the principal mode of transportation used for each vehicle.

The inbound and outbound transport of materials can generate significant road transport volumes, depending on geography, infrastructure and production levels. CNH Industrial always strives to promote alternative modes of road transport using intermodal solutions, with the aim of reducing both traffic congestion and CO2 emissions.

Intermodal solutions take a holistic view of transportation services, treating them as an integrated logistics chain and employing a variety of solutions for the movement of goods from source to destination.

Again in 2014, there was an increase in suppliers using the sea connections between Italy and Spain to supply the Madrid and Valladolid plants (Spain) with components produced in Italy. This reduced CO2 emissions by 1,982 tons.

In 2013, for the first time, the Powertrain segment set a target for CO2 emissions reduction through the launch of its first regular inbound transport flow by train. In 2014, with a view to continuous improvement, the project was expanded by adding new suppliers in Central Europe to the existing logistics flows, and introducing the first intercontinental flow by rail, from China to the Bourbon Lancy plant (France). The initiative cut both road and air transport emissions: the CO2 reduction target of 480 tons was exceeded, reaching a total of 2,521 tons. The project will be extended in 2015 to a second plant in Europe, Torino Engine (Italy), with an expected 500-ton reduction in CO2 emissions.

OPTIMIZING TRANSPORT CAPACITY

Optimizing transport capacity is one method CNH Industrial employs to reduce the costs and environmental impact of transportation. To optimize and streamline the entire process, including in environmental terms, technical and organizational changes are made to routes and volumes.

Streamlined Delivery is one of the projects launched to realize this objective, outsourcing the collection of materials destined for CNH Industrial plants to a pool of logistics providers, replacing delivery by individual suppliers through dedicated transportation services.

In 2011, the project was launched in Powertrain, exceeding its 3% target to achieve a total coverage of 22% in 2014.

In 2015, coverage is expected to reach 24%.

In 2014, the DICIOTTO Project was successfully concluded, begun in 2008 to road-test 18 meter-long tractor/ semi-trailer systems in Italy (the standard length is 16.5 meters). A twice-daily service was launched in November between a panel supplier and the Suzzara plant (Italy), optimizing the transport capacity and environmental impact of heavy vehicles, in compliance with stringent safety requirements.

REDUCING NON-REUSABLE PACKAGING AND PROTECTIVE MATERIALS

The planning and standardization of packaging materials, including the use of lighter materials and structures along with reusable materials, reduces raw material use and waste, and optimizes transport capacity, so reducing CO2 emissions.

In 2014, as part of the World Material Flow (WMF) program, the Agricultural Equipment and Construction Equipment segments continued to monitor the quantity of cardboard and wood used in consolidating shipments of materials by sea to plants in North and South America.

In 2014, in the Commercial Vehicles segment, the optimization of packaging continued in Europe and for shipments to Latin America. This cut the use of wood crates by 29% compared with 2013 (from 10.3 to 7.3 kilos of wood packaging per cubic meter shipped), reducing wood shipped by about 515 tons.

The Powertrain segment, which adhered to the WMF program in 2013, decided for the first time to focus on the progressive reduction of non-reusable packaging in shipments from Italy to the plants in Latin America, in favor of metal crates. It set a wooden crate reduction target of 35% for 2014. Taking into account the other projects in place, this target was exceeded, achieving a reduction in wood use of 47% compared to 2013, or 637 tons.

Powertrain’s other initiatives focus on optimizing supplier packaging to maximize the capacity utilization of wood crates in the logistics flow. This is achieved by employing overseas packaging at the suppliers to eliminate the need for repacking, and by replacing small wood crates with larger ones to maximize the utilization of container capacity.