IMPROVING THE PERFORMANCE OF THE LOGISCTICS SUPPLY CHAIN

Given the huge volumes delivered to Group stores the optimization of transport and logistics is key to a sustainable development. Amongst other initiatives, Carrefour focuses efforts to reduce the number of kilometres travelled by road.The Group is developing a national logistics network in every country where volumes are substantial enough. It streamlines flows and transport trips by pooling logistics and using backhauling. The latest involves having trucks collect goods ordered from suppliers and deliver them to the warehouses after completing their store deliveries.

A partnership approach has also been initiated in 2002 with the supply chain players aimed at reducing environmental impacts. The Demeter Environment Club now gathers private actors (industry, retailers, service providers) and public actors who work together on transport optimization.

Reducing road transport to warehouses

Now more than ever Carrefour is looking for alternative means of transport for deliveries to Group warehouses. In 2008, Carrefour France achieved the goal it had set to ship more than 40% of its merchandise by river and rail, resulting in 3,300 fewer trucks on the roads. Efforts will be continued in 2009 with an increase in the number of containers delivered by barge and by rail, the next milestone of the objective being 45%. In Spain, Carrefour dispatches 100% of its import containers from the port of Barcelona by rail and 67% from Valencia.
In order to reduce mileage on the road, since 2008 the Group has accelerated the pace at which it sets up consolidation platforms. These platforms enable suppliers to reduce their mileage and Carrefour to send the warehouses full trucks containing products from several suppliers. Preliminary studies show a saving of 25% in CO2 emissions per pallet transported (upstream/downstream). In 2008, five of these platforms were used in France, Italy and Spain. The short term objective is to open up six more.

Improving downstream transport

Various initiatives have been undertaken to streamline the transport from warehouses. In Italy, Carrefour now makes use of a software program capable of adapting the daily delivery plan to changes in order volumes. As a result, mileage has been reduced by 5% and costs by 7%. In France, optimization of the transport plan for dry groceries and beverages, has, with the same number of trucks, enabled the loading of 4,100 additional pallets per month for dispatch to hypermarkets and supermarkets.

Stores, the focus of logistics management

In 2008, logistics services started working with stores in order to review their systematic daily supply activities. It was thus decided to introduce more flexible hours and deliveries based on the realistic needs of the various departments. Advantages of this approach include the possibility of carrying out back-to-back delivery runs with the same truck, wasting less time and fuel in traffic jams, improving the filling of trucks, etc. This policy is to be intensified at Group level during 2009.

Raising the awareness of warehouses to reduce their impact

Based on the in-depth experience acquired from the management of store performance, in 2008 the Group extended the monitoring of environmental indicators to over 70 of its consolidated warehouses throughout the world. It is intended that the warehouses of Carrefour’s logistics providers also be included in this initiative.
Every year Carrefour warehouses in France undergo a sustainable development audit. In 2008 a total of 55 audits were carried out. To take things even further, Carrefour will be launching several projects in 2009: carbon assessments at two warehouses, the introduction of an environmental management scorecard to assess impact and develop action plans, etc.
Furthermore, "Supply Chain" teams will undergo training specially designed for them in order to help them integrate sustainable development criteria into their decision-making processes. Since the end of 2008, new logistics projects implemented in France all include a sustainable development indicator.

• 286 tonnes of CO2 saved by Carrefour thanks to the use of alternative upstream transport in France
• 38 French hypermarkets supplied by combined rail-road transport from warehouses in Sarran and Vert-Saint-Denis

See the graph explaining how Carrefour reduces carbone emissions throughout its supply chain: