Sustainability: Latin America Continues Its Transformation

Proceedings — Session: H-4
2011 ISM Diversity Summits
February 9-11, 2011
Boca Raton, Florida

Presenter: Alexandre Cecolim, managing director, logistics, FedEx Express Latin America and Caribbean Division

"The big question is how we can do logistics and still take care of the environment."

With that overarching statement, Alexandre Cecolim, managing director of logistics for FedEx Express Latin America and Caribbean Division, opened his session, "Sustainability: Latin America Continues Its Transformation."

A native of Brazil, Cecolim shared FedEx Corporation's sustainability goal: to connect the world in responsible and resourceful ways. This commitment is embodied in EarthSmart, the FedEx roadmap to engage team members, customers, business partners and communities to minimize impact on the environment and operate in an increasingly sustainable way.

In 2004, FedEx put the first hybrid-electric delivery trucks on the road. In 2008, the company introduced the first zero-emissions, all-electric FedEx delivery vehicles in the United Kingdom and found ways to retrofit conventional delivery trucks with hybrid electric motors. Today, as Cecolim points out, FedEx's hybrid electric fleet is one of the largest in the industry and has proven to be a competitive asset.

Cecolim shared an interview with Mitch Jackson, director of environmental affairs and sustainability for FedEx. In the video, Jackson explains that sustainability is not just about protecting the environment; it's also about operating in responsible and resourceful ways. This belief is critical as populations and standards of living increase worldwide and society uses more of the earth's resources, he says.

"This is a team sport; nobody does this alone. And if you try, you're not going to get very far," Jackson advises. To this end, it's essential for businesses, nongovernment agencies and governmental organizations to work together to practice better ecological stewardship. "Nobody wins this race individually," he concludes. "We all get there together, or we don't get there at all."

Fostering a PSP Culture

As Cecolim explained, FedEx maintains a People/Service/Profit, or PSP, culture. FedEx places our people first. A few years ago, when wildfires destroyed a significant number of homes and businesses in California, the company developed special routing for the victims. "It wasn't about the number of packages we delivered — it was about the number of families we assisted," he told attendees.

FedEx team members are essential to our sustainability commitment. At FedEx Express, the company aims to reduce fuel emission intensity 20 percent by 2020. Helping to meet this goal is the replacement of the fleet's Boeing 727s with 757s and introducing the Boeing 777 into operations. FedEx introduced the Boeing 777 in 2009 and another 15 Boeing 777s are scheduled for use by 2014. "And we're not the only ones using this plane," Cecolim points out. "UPS, DHL and others are also getting them."

Not only will the Boeing 777 extend FedEx's reach to developing countries and economies, it's the only aircraft in the world with the ability to maintain extremely low temperatures throughout the entire cargo area. This characteristic makes the 777 an ideal transport option for temperature-sensitive cargo, such as pharmaceuticals.

At street level, FedEx uses routing analysis software that prioritizes fixed routes, shuttle routing, regionalization routing, optimized-ship frequency, continuous-move routing, optimized driver/tractor and more. This lets logistics professionals map the most sustainable transportation model possible.

It also strives to achieve the optimal balance between service levels and logistics costs. In Mexico, for example, FedEx offers mission critical deliveries through the Supply Chain logistics solutions. The company achieves very short delivery times by having drivers stand by to deliver mission critical services on fast, small, gas-efficient motorcycles.

In the paper and packaging arena, FedEx Express simplifies international shipping using FedEx® Electronic Trade Documents, a proprietary online customs-documentation submission tool. It also uses minimum-two-way-recyclable containers for its packaging products and envelopes. FedEx also works with its supply chain, asking suppliers how they dispose of their own waste and what percentage of their packaging is recyclable.

"All other things being equal, our sustainability focus might be the final consideration that wins us someone's business," Cecolim explains.

EarthSmart Outreach

FedEx extends its sustainability focus beyond operations and into communities. Last year, for instance, the company leveraged its logistic tools, marketing expertise and safety engineers in Mexico to establish a national network for urban mobility with EMBARQ. The goal is to help improve Mexican traffic and congestion issues, thereby reducing emissions, enhancing safety and expanding accessibility.

Questions and Answers

A brief, but enlightening, question-and-answer session followed Cecolim's presentation.

Q: We know that speed is important at FedEx. How does your company deal with slower-paced governments that require more documentation procedures?

Cecolim: We have teams on the ground dedicated to understanding those specialized customs procedures. Each airport has its own way of dealing with paperwork. Hybrid teams — with some members in the United States and some members on the ground in the Latin America and Caribbean countries — are instrumental at FedEx.

Q: My company uses a PDF-based document-signing tool, which is a huge paper saver. Will FedEx ever take its proprietary online customs-documentation submission tool and get into the software space for sustainability-focused companies?

Cecolim: Well, companies are usually hesitant to outsource their intelligence. So, most of them prefer to build their own tools.

— Reporting by RaeAnn Slaybaugh

About ISM Diversity Summits

Every year since 2009, ISM's Black Executive Supply Management Summit (BESMS), Hispanic Supply Management Summit (HSMS) and Women Executive Supply Management Summit (WESMS) have been co-located. Collectively, these events represent the annual ISM Diversity Summits experience hosted by Tempe, Arizona-based Institute for Supply Management™.

All three summits were developed as forums for diverse executives in supply management to come together and share their unique perspectives. Summit attendees learn from thought-leaders and change agents within their fields and representing leading organizations.