“We’ve been talking for five or ten minutes now but we haven’t seen a parcel go past. Can’t we just turn it off?”

Such was one conversation which Mark Jones, Manager – Energy & Emissions at Toll Group, had several years ago with the facilities manager at a purpose-built warehouse which the logistics giant had built for its customer Nike in the suburb of Altona in Melbourne’s south-west.

Jones had identified that energy was being wasted and excess carbon emissions were being needlessly generated as the 2.5 kilometre long conveyor system continued to run irrespective of whether or not parcels were coming through.

Following that, Toll achieved energy savings of 20 percent by rewiring and reprogramming the system so that the conveyor adjusted its operation according to product volumes and did not move unless parcels were on the system. Changes were also made to reduce the pathways which boxes need to travel to reach the right packing area.

These measures not only improved efficiency but also boosted conveyor capacity by around 25 percent.

This was one of several initiatives which saw the facility become the first to achieve whole-building certification under the National Carbon Offset Standard in March this year. This requires owners and operators to measure the emissions of their building or facility, reduce emissions as far as possible (achieving either 4 Star Green Star or 4 Star NABERS ratings as a minimum) and offset remaining emissions through eligible offsets such as investments in conservation or energy efficiency programs.

In a presentation at the recent Green Building Day in Melbourne, Jones described Toll’s pathway to achieving carbon neutrality at the Nike facility.

According to Jones, initiatives at the facility are part of a broader Smarter Green program begun in 2012 through which the company aims to reduce the intensity of its energy emissions to the tune of 20 percent by 2020. This is important as Toll, which employs around 40,000 people all up, operates around 1,200 sites across 50 countries. In Australia alone, the company’s annual electricity use sits at more than 70 Gigawatt hours.

Under its program, the company focuses on five areas:

  • Coaching drivers to operate vehicles efficiently. This is significant as fuel burn can vary by up to 20 percent between good and bad drivers.
  • Smart facilities. This includes LED lighting, solar energy, optimising conveyor systems and HVAC systems and understanding facility energy use.
  • Smarter vehicles. This includes procuring vehicles with fuel efficient design and the right tyres and aerodynamics. It also involves looking at larger and heavier vehicles which can be more efficient on an emissions per tonne kilometre travelled basis.
  • Use of fuels, including greater use of electric vehicles.
  • Smarter planning to optimise networks, minimise required travel distances and avoid double-ups in travel.

Thus far, Toll has reduced its absolute scope to emissions by fifteen percent and is on track to achieve its 2020 targets.

The Nike warehouse specifically is a medium-sized facility (18,000 sqm) which holds around 27,000 stock keeping units (SKUs) at any time and handles around 12,000 SKUs of stock each year. Features include approximately 1,300 light fittings, 145 electrical motors and 2.5 kilometres of conveyor belts.

When improving energy efficiency, Toll and Nike first looked at data to understand where energy was being used. They found that around eighty percent energy use centred around lighting, conveyor motors and mezzanine lighting.

As mentioned above, savings of around 20 percent for the conveyor system were achieved by reprogramming the system to operate according to product volume and redesigning routes to reduce travel distances for parcels.

On lighting, the company replaced around 220 halogen lights plus over 900 fluorescent tubes in the mezzanine area with LEDs and installed sensors within isles to enable lights to be switched off when isles are vacant. All new fittings came with a seven year replacement warranty. Light levels, however, were maintained at standards which exceed those required under the National Construction Code. Isle optics, as well, were optimised so that operators looking up from forklifts were not blinded.

Overall, these combined measures cut energy emissions for the site by around half and saved around 700 tonnes of carbon emissions annually. This happened as site output increased by around five percent.

Further initiatives involved reducing paper use and making better use of boxes in which shoes and apparel arrive. Ideas such as solar or batteries were eschewed as limits on the remaining term of the lease (four years) at the time meant that investments such as these would not achieve payback within the term of the existing lease.

After all this, the final 1,100 tonnes worth of remaining carbon emissions have been offset through investments in a forest conservation project in Tasmania and an energy recovery wastewater treatment plant in Thailand.

Beyond the Nike facility, Toll is looking at providing its customers with greater visibility about emissions produced during distribution of their merchandise and working with customers to reduce the volume of emissions associated with merchandise delivery.

In one case in Queensland, five percent of emissions associated with the delivery of parcels for a major retailer were in fact being generated by re-deliveries which occurred when customers were not home at the time of delivery. To reduce the incidence of this happening, Toll and the client have devised an arrangement which allows drivers who arrive at empty houses to phone a call centre which in contacts the customer to seek permission for the delivery to be left at the door. By doing this, around half of the emissions previously generated by redeliveries have been avoided.

When pursuing energy efficiency, Jones says there are several keys to success.

Data is critical. Understanding energy data and how energy is being used is imperative.

So too is stakeholder management. Particularly when doing something never previously done, having landlords, customers, finance people, health and safety people and others on board is critical.

Planning is also important, At the time when Toll was changing its light bulbs, it was around Easter. Careful planning was needed to ensure that reliable delivery of merchandise was not compromised.  

Finally, it is important to communicate outcomes with stakeholders and employees and to celebrate successes. Upon achievement of NCOS certification, Toll held a barbecue for all on site. Workers, Jones said, take pride in working in Australia’s first carbon neutral building.

Around Australia, building and facility owners and operators have an opportunity to make their facilities carbon neutral.

Through its Nike warehouse, Toll has shown how this can be done.