Penske Logistics Debuts 3PL CEO Sustainability Report

READING, Pa., April 22, 2010 – Penske Logistics, Dr. Robert C. Lieb, Professor of Supply Chain Management at Northeastern University and Dr. Kristin J. Lieb, Assistant Professor of Marketing Communication, Emerson College, today issued the "Third Party Logistics Sustainability Report" in commemoration of Earth Day. The report reveals that despite the global recession of 2008 and 2009, many large third-party logistics (3PL) companies increased their respective commitments to developing greener practices and building environmental sustainability programs during that time. The report is based on key findings from the 2008 and 2009 "3PL Provider CEO Perspective" surveys, which interviewed 35 third-party logistics company CEOs across North America, Europe and Asia-Pacific whose companies were responsible for generating approximately $60 billion in revenue each year.

The report, authored by Dr. Robert Lieb and sponsored by Penske Logistics, indicated that "a corporate desire to do the right thing" was by far the most important reason to commit to sustainability initiatives; "pressure from customers" ranked second. According to the surveys, CEOs were not only dedicated to providing customers with more environmentally-friendly services, but also to applying such practices internally within their organizations, employing a variety of tactics; from reducing company-printed materials to using windmills at distribution centers for electric-power generation.

Corporate dedication to sustainability programs yielded overwhelmingly positive results for 28 out of the 35 CEOs surveyed, including reduced operating expenses, positive impacts on company employees, substantial savings in fuel costs, and even reduced fuel costs by 40 percent, as noted by one CEO. Six CEOs reported that company sustainability efforts led to increased business with both existing and new customers. However, despite these investments, most CEOs noted that sustainability was very infrequently a determining factor in either extending existing contracts, or securing new 3PL business.

"Compared with other industries, 3PL service providers are ahead of the game," commented Dr. Robert Lieb. "They appear to be planning for the long-term by recognizing emerging customer preferences and providing services consistent with them, even in the current market downturn."

"Penske is committed to identifying ways to drive the industry toward greater sustainability in anticipation that it will be a major area of focus that customers must consider in the future," said Vince Hartnett, President of Penske Logistics. "Our investments in this area include EPA’s SmartWay program, for which Penske Logistics has attained a rating of 1.25, and implementing technologies such as dynamic routing, fuel management and flexible asset management."

The "Third Party Logistics Sustainability Report" is available upon request.

Further insights into this year’s research findings are outlined in additional detail below:

Reasons for Establishing Sustainability Programs

The 2008 survey sought to determine the most important reasons the 3PLs had established sustainability programs by asking the CEOs to indicate the three most important reasons for doing so.

  • "A corporate desire to do the right thing" was by far the most important reason to establish sustainability programs, with 24 out of 39 CEOs ranking it as the primary reason
  • Ranking second was "pressure from customers," with seven out of 39 CEOs ranking it as the primary reason
  • Other reasons cited for establishing sustainability programs were "a desire to enhance the company’s image," "a desire to attract green customers" and "competitive pressures"

Importance of Sustainability Issues in the Sales Process
The 2008 survey attempted to determine how often existing or potential customers raised sustainability requirements in their contract discussions with 3PLs.

  • CEOs stated that on average 21 percent of existing customers and 20 percent of potential customers raised sustainability issues in their discussions with the 3PLs
  • Three CEOs said these sustainability issues were frequently a major determining factor in contract discussions with 3PLs
  • 36 CEOs indicated that sustainability issues were very infrequently a major determining factor in contract discussions with 3PLs
  • CEOs were also asked what percentage of their companies’ existing contracts included sustainability performance metrics; the average response was 2.5 percent
Continued 3PL Commitment to Sustainability
  • None of the CEOs involved in the 2009 survey had scaled back their company’s commitment to sustainability goals as a result of the recession
  • 63 percent of CEOs surveyed reported expanding the existing sustainability programs during the previous year
  • 71 percent of CEOs surveyed indicated they had launched completely new sustainability initiatives during the same time frame

Table 1
Most Important Short-Term Sustainability Challenges Faced by 3PLs

Sustainability challenge Total Weighted Points*

Balancing sustainability efforts with customer expectations for low-priced 3PL services 55 (10)

Identifying appropriate environmental benchmarks/targets 48 (6)

Establishing sustainability priorities within the company 47 (9)

Generating accurate company information related to current sustainability practices 22 (4)

Developing an organizational sensitivity to sustainability issues 10 (1)

*Number of "most important" mentions in ( )

 

Survey Design
In 2008, 39 CEOs completed surveys via an Internet-based questionnaire. Companies participating in the annual survey included: Cardinal Logistics, Caterpillar Logistics Services, CEVA, DSC Logistics, DHL Exel Supply Chain, Genco, Kuehne + Nagel Logistics, Landstar, Menlo Logistics, NYK Logistics, Panalpina, Penske Logistics, Pittsburgh Logistics, Ryder, Schenker, Schneider Logistics, Transplace.com, UPS Supply Chain Solutions, UTi, Wincanton and YRC Logistics. In total, these companies are responsible for generating approximately $60 billion in revenue.

In 2009, 35 CEOs completed surveys via an Internet-based questionnaire. Companies participating in the annual survey included: Cardinal Logistics, DSC Logistics, DHL Exel Supply Chain, Genco Supply Chain Solutions, Kuehne+Nagel Logistics, Landstar, Menlo Logistics, Panalpina, NYK Logistics, Penske Logistics, Pittsburgh Logistics, Ryder Integrated Logistics, Schenker, Schneider Logistics, Transplace, UPS Supply Chain Solutions, UTi Integrated Logistics, Caterpillar Logistics Services, CEVA Logistics and Wincanton.

About Northeastern University's College of Business Administration
Northeastern University College of Business Administration, established in 1922, provides its students - undergraduate, graduate and executive - with the education, tools and experience necessary to launch and accelerate successful business careers. The College credits its success to expert faculty, close partnerships with industry and its emphasis on rigorous academics combined with experiential learning.

The College is highly ranked by several prestigious publications. BusinessWeek ranks the College 34th in its "Best Undergraduate B-schools" and number one in internships, and students have ranked the undergraduate program number one in job placement three years in a row in the publication. The College's Bachelor of Science in International Business program is ranked number thirteen by U.S. News & World Report. The undergraduate program is also distinguished by The Princeton Review and Entrepreneur magazine as number 14 of the U.S. top 25 entrepreneurship programs. For more information about Northeastern University's College of Business Administration, visit http://www.cba.neu.edu/.

About Penske Logistics
Penske Logistics is a wholly owned subsidiary of Penske Truck Leasing. With operations in North America, South America, Europe and Asia, Penske Logistics provides supply chain management and logistics services to major industrial and consumer companies throughout the world. Penske Logistics delivers value through design, planning and execution in transportation, warehousing, international freight forwarding and carrier management. Visit www.PenskeLogistics.com to learn more.