One of the greatest challenges in the Environment area and of our times is climate change, and Klöckner & Co regards it as its duty to counter related risks with a suitable contribution to protecting the environment.
A significant part of our business model involves shipping products to customers by truck. Klöckner & Co’s key task in the Environment action area is therefore optimizing the environmental impact of logistics processes along our value chain. The Group-wide objective of our projects and measures in this area is to maintain our current high service level with fewer trucks, thereby both cutting costs and reducing CO2 emissions.
To this end, we endeavor to influence the environmental impact of logistics at three levels in our value chain - receipt of goods, internal transport and delivery to our customers.
At the first level, we strive to optimize the management of incoming goods. The products are mainly delivered to our locations by suppliers. Through the targeted coordination of suppliers at level one coupled with enhanced inventory management at level two, we aim to reduce the internal transport between our locations. This is achieved, for example, through optimized inventory allocation. In addition, our internal networks in each country organization are checked on an ongoing basis. By monitoring and reporting relevant KPIs such as transport, warehousing costs and shipments, we can see where networks require adjustment. In the pilot project region in eastern Germany, the warehouse structure was improved, which has further reduced our internal transport from other regions of Germany. France is pursuing the same aim by opening a new central warehouse in Paris to replace two existing ones. Switzerland is also undergoing further consolidation, with eleven steel warehousing locations being reduced to three regional centers. This consolidation to a small number of locations increases truck capacity utilization. In addition, all locations at our country organization Kloeckner Metals UK and our German company Becker Stahl-Service are already certified to the ISO 14001 environmental standard, which also covers logistics. Moreover, Kloeckner Metals UK attained BES 6001 certification for responsible sourcing in the reporting year.
At the third level, the goods are delivered to customers from our roughly 100 warehouse locations in Europe. Here, we pay particular attention to efficient delivery route planning, where key quality aspects include adherence to delivery dates along with ongoing optimum utilization of truck capacity and optimized route planning. Consequently, we launched the universal rollout of transportation planning software back in 2017. This is in operation throughout our EU country organizations with the exception of France. The transportation planning software delivers data we aim to harness to reduce the fuel consumption of the trucks we use. This can include tactics such as avoiding empty runs and fine-tuning delivery frequencies. Several country organizations deploy state-of-the-art on-board computers that provide continuous feedback on driving behavior, vehicle speed and engine speed, thus helping to reduce truck fuel consumption and hence CO2 emissions. In Germany, the drivers operating our modern fleet are provided with road training and regular feedback on their driving behavior. At Kloeckner Metals UK, too, the “Safe & Fuel Efficient Driving” program has been in place since 2017. In addition, our UK organization replaced its own vehicles, and the modern fleet helped to further reduce diesel consumption.
As one of the very first companies in Germany, Klöckner & Co will align its business to the UN Global Compact “Business Ambition for 1.5⁰C”. In this regard, we intend to act even more responsibly and take appropriate and verifiable measures helping to limit the global temperature rise to 1.5°C by further reducing its carbon emissions. “Business Ambition for
1.5°C” is an initiative by the UN Global Compact. The campaign is calling for businesses to step up and take action against global warming. The call-to-action was announced by more than 25 businesses, civil societies and UN leaders in June 2019. Recognizing the urgency of the climate challenge, Klöckner & Co also follows the call, thus formalizing its increased ambition and signaling its commitment to its peers, investors, policy makers, customers, suppliers, civil society organizations, and other stakeholders.