The movement of our products is an area that has seen transformative plans put in place this year. Wherever possible, we seek to minimise the impacts of transporting products – especially as our global reach as a retailer continues to grow.
We have a long-term aspiration in place to establish international hubs that will support our global network of stores.
The scoping work has taken place for new merchandising software, a warehouse management system and supply chain solutions that will enable the development of a global network of hubs to optimise the efficient movement of goods from their place of production to the point of sale. We currently have two facilities in the USA - a warehouse on the east coast to support our TOPSHOP and TOPMAN stores in New York and Chicago and one on the west coast supporting stores in Los Angeles and Las Vegas.
New systems go hand-in-hand with developing the functionality carried out in our USA warehouses, including the ability to export goods.
In the longer-term, developing this network of international hubs will reduce the miles travelled by our products, with goods going direct to our partners, resulting in much reduced freighting. Alongside these initiatives we continue to examine taking trucks off the road from continental Europe by moving product via more emission friendly ferry and rail links. Meanwhile, back in the UK further improvements have been achieved through the delivery of plans to update our vehicle fleet, further consolidation of routes and adherence to industry best practice.
Last year we pledged to increase the use of double decked trailers on high volume routes, further consolidate our network and reduce our CO2 emissions by 5%. All of these targets have been achieved and we are on track to replace our fleet in early 2014 to meet the latest Euro 5 emissions standard.
This year we reduced our transport CO2 emissions by 5.4%. This is the sixth year in a row that we have achieved such reductions.
During the year we received approval to complete the replacement of our store delivery fleet. A pilot of six new trucks bought in early 2012 to comply with the new London Emission Zone indicated that there were benefits to be gained, which encouraged us to roll out the new fleet.
We anticipate that all our fleet will be replaced by early January 2014, slightly later than originally planned. By early in the New Year, we will have 125 vehicles that are fully ‘Euro 5’ emissions compliant.
In our current position with 82 compliant vehicles, we have still managed to make good headway on miles travelled and fuel consumed. This year has seen mileage reduced by 6%, building on the 9% reduction achieved last year. Our overall fuel consumption is down by 5% and, in the first 12 weeks of using the new vehicles, our like-for-like miles per gallon (MPG) improved by 11%. Whilst the good weather helped, this is an encouraging start and supports a target improvement of 5% in emissions in 2013/14. We continue to tighten delivery schedules, reducing frequencies wherever possible and have achieved further benefits from route consolidation this year.
Driver training using the SAFED (Safe and Fuel Efficient Driving) programme and the Smith System defensive driving programme is completely up to date, ensuring our drivers are competent and considerate road users. Forward facing cameras are being installed on all vehicles at the start of January 2014. The video footage Forward facing cameras are being installed on all vehicles at the start of January 2014. The video footage will provide valuable evidence to review accidents and also assist as a training aid for drivers.
Our efforts in the UK are mirrored by the commitments made by our third party forwarders and carriers. The long-term partnerships we have forged in this area continue to reap benefits. By selecting best-in-class partners we can be sure that they share our commitments to reducing environmental impacts and CO2 emissions.
When we consider the relative impacts of the different methods of moving our products, it is clear that moving goods by ship has the least impact in terms of emissions per kilometre travelled.
Our ocean freight partners are directing major emission reduction schemes in their businesses.
Maersk handles a third of our sea freight and made significant strides in reducing its impact in recent years, with its CO2 emissions now just a quarter of what they were five years ago.
Another of our ocean freight partners is NYK (Nippon Yusen Kaisha) Group. They recycle as much steel as possible and have signed a three-year contract to plant trees in Japan as part of a carbon offset programme. NOL (Neptune Orient Lines), our primary carrier, have recently received the Green Ships certificate for 14 vessels in its fleet from Singapore’s Maritime and Port Authority.
Of course, as a fashion business, speed is sometimes crucial and while we do not plan to use air freight across our business we need to respond to trends. However, we assess this need very carefully and air freight represents just 3% of goods brought into the UK by weight. Our air freight partner ACS (Allport Cargo Services) has a number of emission-reduction programmes and in January of this year won a British International Freight Association (BIFA) service award for its international hubs solution.