Will the economic downturn curb investments in “green” supply chain projects?  This is the second most common question I get these days, after what impact will the economy have on IT investments (which I’ll write about more in a future posting).  My quick answer is this: the early adopters will likely continue to move forward with their Green SCM initiatives, while the laggards will probably wait a little longer to get started.  Overall, I think there is plenty of forward momentum in this area, especially when you consider that creating a “green economy” is one of President Obama’s priorities and a key component of his recovery and reinvestment plan (see “Obama and the Logistics Industry“).

Speaking of early adopters, Walmart announced on Monday that it will test several heavy-duty trucks that use hybrid technology and alternative fuels, including diesel-electric hybrids and vehicles converted to run on reclaimed cooking grease from Walmart stores.  Walmart is actively working with several suppliers, including Arvin Meritor, Eaton, Peterbilt and International, to develop and test these new technologies.  Chris Sultemeier, senior vice president of transportation for Wal-Mart Stores, says in the press release: “We look forward to determining if these technologies will help reduce our environmental footprint, are viable for our business and provide a return on investment.”  In other words, they need to determine if these technologies pass the “green is good for business” litmus test.

Walmart is not the only company testing out new truck technologies.  Several transportation companies are also experimenting with hybrid and alternative fuel vehicles (see “Ryder, UPS, and Hybrid Trucks“).  But among retailers and non-transportation companies, Walmart is arguably the most aggressive in pushing the envelope in this arena (what else is new).

Why should you care about what Walmart, Ryder, UPS, and others are doing?  If you’re a transportation company or a private fleet owner, you need to stay informed about these emerging technologies because depending on what happens on the legislative and regulatory front, the transition to these types of vehicles may occur sooner rather than later.  Also, many shippers, as part of their sustainability efforts, are choosing to work with partners that share a similar commitment to improving the environment.  Although cost and service are still the dominant selection factors, “greenness” is certainly playing a role.

If you’re a shipper, this news is important because (aside from your interest in working with “green” partners) you need to understand the trends and issues affecting your carriers.  It’s likely that these vehicle technologies, as well as proposed regulatory changes, will result in increased costs for the transportation industry.  As I’ve argued before, creating a green and sustainable supply chain won’t be cheap or easy.  Somebody has to pay for it, so don’t be surprised if you see a “green surcharge” on your freight bill in the not-so-distant future.  Ignorance is not bliss when it comes to your freight spend budget.