Product Transport

Baxter transports vast amounts of raw materials and more than 100 million cases of finished products each year throughout the company's global supply chain. In some cases, Baxter directly operates its product distribution system. For example, Baxter leases its own fleet of refrigerated trucks for the company's frozen therapies, leases and operates a fleet for home delivery of Renal products, and performs some of its distribution in selected regions, such as Europe. In other cases, Baxter partners with third-party vendors and carriers for distribution.

Baxter uses several approaches to decrease the environmental impact of product transport.

Intermodal Transport

Different modes of transport – such as air, ocean, surface (trucks) and rail – have varying levels of environmental impact. This is largely because they use different amounts of fuel per ton of product shipped.

Since 2002, Baxter has increased its use of intermodal transport in the United States and Europe to shift toward more energy efficient modes. Using this method, containers are moved from manufacturing plants by truck and then transferred to rail, a more efficient form of transport, and then shifted back to truck for final delivery. This increases fuel efficiency per ton of product transported, decreases costs and reduces emissions.

By continually assessing product routing and transport efficiency, Baxter has increased the percentage of U.S. shipments using intermodal transport from 9.6 percent in 2005 to 12.7 percent in 2008. This has saved more than 500,000 gallons of fuel and reduced greenhouse gas (GHG) emissions by 530 metric tons carbon dioxide equivalent (CO₂ e) in 2008 compared to 2005.

Baxter also conducts route-by-route analysis in Europe to assess where migration to intermodal transport may reduce fuel consumption and emissions. As in the United States, these programs continue to drive tangible improvements. Shifting from standard truck to other modes of transport in Europe reduced GHG emissions by more than 1,580 metric tons CO₂ e in 2008, compared to what emissions would have been otherwise.

Environmentally Responsible Partnerships

As part of its ongoing strategy to align with environmentally responsible transportation providers, Baxter partners with firms that participate in the U.S. Environmental Protection Agency (EPA) SmartWay^SM program, which promotes environmentally cleaner, more fuel efficient transportation options. In 2008, Baxter modified its U.S. carrier evaluation process to mandate that all new carriers be participating members of the SmartWay program. Currently, 85 percent of Baxter’s U.S. truckload carriers comply with this requirement. In Europe, Baxter also encourages GHG reduction programs, and provides carriers with such programs higher consideration when awarding contracts than carriers without such programs.

Since July 2008, all product deliveries from Baxter’s Northampton distribution center in the United Kingdom have been carbon-neutral. To accomplish this, Baxter first defined the “carbon footprint” of these deliveries by calculating the total mileage required for all deliveries to reach their destination, then offset the associated GHG emissions by investing in renewable energy through The CarbonNeutral Company, a leading carbon offset and climate consulting business. This initiative, which involves investments in a wind farm in Tirunelveli, Tamil Nadu, South India, offset more than 2,220 metric tons of CO₂ e in 2008.

Capacity Utilization

Baxter also optimizes efficiencies in its transport system by increasing capacity utilization. For example, use of double-deck trucks in Europe has enabled Baxter to transport loads in two trucks that have historically required three, reducing the total amount of fuel required. In 2008, this saved 288 metric tons of CO₂ e. Baxter also manages loading profile estimates to ensure that trucks are at maximum load capacity, thereby reducing the number of trucks required. In some cases, Baxter collaborates with business partners to increase utilization.

Renal Truck Fleet

As the largest part of Baxter’s internally managed transportation system, the company’s U.S. Renal truck fleet provides home delivery of peritoneal dialysis (PD) supplies to thousands of home PD patients each day. In the last few years, a focus on operational efficiency has led to numerous environmental improvements.

For example, installing onboard computers to track and monitor efficiency has helped reduce truck idle times – when the truck is running and not driving – from 10 percent to 2 percent since 2005. The industry average is 5 to 7 percent.

Annually, the Renal private fleet rotates approximately 20 percent of its existing fleet to newer, cleaner units. In 2007, Baxter added diesel particulate filters to all trucks to reduce emissions. In 2008, Baxter began capping fleet speeds at 62 miles per hour to optimize fuel usage. In 2009, the company is implementing a second-generation onboard computer system and revised fleet delivery software to further improve efficiency.

Also in 2009, Baxter is piloting two new electric/diesel hybrid trucks to support its Renal home-delivery fleet in California. These trucks could save an estimated 2,000 to 3,000 gallons of fuel per year while reducing air emissions. Based on results of this pilot, Baxter will add additional hybrids to its Renal fleet in the next few years.

Collectively, Baxter projects that these changes, along with the continued upgrade of the Renal fleet to lower emission diesel engines, will reduce total U.S. Renal fleet emissions between 18 and 20 percent in 2009 compared to 2008. Since 2004, total emissions have been reduced by more than 40 percent.

Pallet Programs

Wooden pallets are used to consolidate cases of products for transport and to move product within Baxter facilities. Baxter works to use pallets more efficiently to save materials and cost. In Europe, for example, programs to recycle pallets within and across Baxter facilities improved pallet utilization and reuse by 30 percent in 2008 compared to the prior year, resulting in nearly $1 million in annual savings. The company is also exploring the use of alternative materials, such as cardboard, lighter wood and plastic under pallets.

In the United Kingdom, Baxter’s Northampton distribution center uses “loadhogs” – a reusable plastic cap that fits over a pallet – as an alternative to shrink wrap when shipping boxes of dialysis solutions to home patients. After all shipments are delivered, the driver returns the loadhogs to the warehouse for reuse.