Drop trailer logistics

To support our large, international business, our logistics groups worldwide seek out new technology solutions and collaborate across regions to improve efficiency across our organization.

Whether we are using modeling software to improve the efficiency of our store delivery network, better utilizing trailer space or testing new alternative fuel vehicles, we are constantly striving to improve the ways that we move merchandise from suppliers around the world to our stores. U.S. Highlights. With the growth in our business over the past several years, our shipping miles have increased significantly. Despite this, our focus on fuel and network efficiencies has resulted in a reduction in our CO 2 emissions per shipment over that same period. For inbound logistics, we have reduced our CO 2 emissions per shipment by 35% since 2010. For outbound logistics, by switching to more efficient modes of transportation and increasing the efficiency of our network by opening service centers, our logistics teams in North America have reduced CO 2 emissions per shipment over 21% since 2010! We are also reducing greenhouse gas emissions (GHG) through expanded use of intermodal* for shipping merchandise. This is a more fuel-efficient alternative than trucking alone, and we intend to use this greener transportation alternative where possible as it reduces both our costs and logistics-related GHG emissions. Some highlights from 2016 include: Inbound intermodal to distribution centers increased to 78% of miles travelled in 2016, up slightly from 2015; About 22% of our outbound shipment miles between our distribution and shipping centers (i.e., crossdock) were intermodal in 2016, up from about 18% in 2014; We continued to ramp up our outbound intermodal mileage for transportation for store deliveries and increased the percentage of miles travelled by intermodal to stores by over 2.3 times compared to 2015; and, For the first time, we partnered with a rail carrier to utilize trains fueled by liquefied natural gas for select routes in southern Florida for outbound freight and are continuing to explore this option where feasible. It is expected that these trains will produce fewer emissions than traditional locomotives. In addition to these initiatives, we have opened new service centers that are smaller than distribution centers. They are located closer to store "clusters" and designed to improve the efficiency of our store delivery process. We also utilize these service centers to co-locate our Asset Recovery and Recycling Centers (ARRCs) and maximize our delivery trucks’ utilization by backhauling recyclable materials like cardboard and plastic from our stores to the ARRCs. Since 2013, we have been working with one of our transport carriers to operate compressed natural gas (CNG) trucks in two major metropolitan markets in the U.S. We have increased the number of trucks used in each of the past three years. We estimate that these trucks produce about 22% less CO 2 emissions per mile than diesel trucks and that our initiative is helping to reduce CO 2 emissions by over 230 tons annually. That is the equivalent of the annual GHG emissions of 49 cars! We are pleased with the success of this program and continue to test other efficient methods of delivering merchandise to our stores. In the U.S., we are a member of the U.S. Environmental Protection Agency's (EPA) SmartWay Transport Partnership. This program is a collaborative effort between shippers, truckers and the EPA to find innovative ways to reduce both fuel consumption and GHG emissions.

As a SmartWay shipper, TJX is committed to using SmartWay-certified transport carriers. We require that all new U.S. carriers are SmartWay certified. In 2015, the most recent year for which we have data available, nearly 99% of TJX's U.S. land transportation mileage (98% of our spend) was with SmartWay-certified carriers. To achieve this result, TJX collaborated with carriers to encourage their participation in this program. SmartWay scores are now included in our TJX Logistics Service Provider Questionnaire, which goes out to all prospective U.S. carriers. Canada Highlights. In Canada, the majority of our carriers are Fleet Smart or SmartWay approved. (Fleet Smart is the Canadian equivalent of the SmartWay program.) In 2015, a significant portion of our Canadian carrier spend was with either Fleet Smart or SmartWay carriers. We are increasing our engagement with our transportation and logistics carriers on environmental sustainability topics and have added environmental sustainability questions into select logistics bids. We are also starting to engage in discussions with our partners during business review meetings. Our initiatives to reduce fuel consumption extend beyond our transport partners. For example, at our distribution centers in North America, we work to optimize store delivery runs by using logistics software to design more efficient routes. We utilize various co-loading methods to encourage use of fully loaded trucks as well as alternative methods to load and unload trucks. We now have a variety of delivery techniques, including traditional deliveries, floor-loaded trailers, pallet drops and trailer drops. Additionally, we have a Drop Trailer program and have introduced a night time drop program that reduces drive times to stores and maximizes the space used on the truck. This program is another way in which we conserve fuel, reduce travel time and decrease the number of trucks on the road. In 2016, an additional seven stores were added to the night drop program, bringing the total number of stores served to 31. We are now serviced by a new, third-party distribution center in Delta, British Columbia. The 450,000 square-foot facility was strategically positioned to support stores in western Canada and will substantially reduce the miles needed to ship products to our stores. Europe Highlights.

In the U.K. and Ireland, where we directly manage our logistics, we believe we are at the forefront of innovation in our logistics fleet. We collaborate with our transport providers and incorporate a "green" clause in our agreements which covers both trucking and store delivery vehicles and commits both parties to achieving key environmental goals. Together with our partners, we continually work on new ideas to increase fuel efficiency and reduce costs thereby minimizing the impact of our vehicles on the environment. Through these logistics partners, we work with trailer manufacturers to develop innovative designs for our vehicles. The newer lifting deck trailers built for T.K. Maxx represent the latest in trailer solutions and offer better durability, more cubic space, aerodynamic profiling and a host of safety features. We further encourage our logistics partners to pilot hybrid vehicles. In addition, we use technology and design to improve logistics efficiency. For example, we are using low-rolling resistance tires on new double deck trailers and introducing driving-style management applications to provide fuel savings. We move a significant amount of our European freight using a fleet of zero-emission, large electric trucks. We also utilize dual-fueled vehicles (liquefied petroleum gas and diesel) within our fleet to reduce our carbon emissions. We take steps to increase the utilization of our vehicles and to help manage delivery routes more efficiently. We also offer driver education and invest in technologies like vehicle tracking that can help optimize driving habits to reduce fuel costs, improve safety and ensure efficient routes. We are also proud of our collaboration with other retailers in the U.K. and Ireland to share capacity on some of our delivery routes. This collaborative approach can eliminate the need for multiple, parallel trips to the same location, helping to further reduce carbon emissions. Outside of the U.K. and Ireland, we are working with a trailer manufacturer to help design a new double deck trailer for use across other parts of Europe. The new trailer is designed to increase cubic capacity and deliver improved aerodynamics. Our goal is to begin testing the trailer in 2017. * Intermodal: Transportation involving more than one form of carrier during a single journey.