Reducing Greenhouse Gas Emissions by Applying a Road to Rail Strategy

Posted on Tuesday, August 3rd, 2021

Client	Canada Post
Professor(s)	Dr. Ahmad Teymouri, Dr. Nadim Abboud and Dr. Preethi Upamaka
Program	Business Administration, Bachelor of Commerce (e-SCM), and Project Management
Students	Yilin Shan – Business Administration – Supply Chain and Operations Management, Year 2 Daniel Bourget – Bachelor of Commerce (e-SCM), Year 3 Ali Alzoheiry – Business Administration – Supply Chain and Operations Management, Year 2 Etienne Dininolamy – Bachelor of Commerce (e-SCM), Year 3 Hassan Jodaneh – Project Management, Year 1

Project Description:

As a signatory to the Paris Agreement and the Kyoto Protocol, Canada has a responsibility to fight climate change by reducing greenhouse gas (GHG) emissions. There are several major sources of GHG emissions. Of these, the transportation sectors of developed countries account for approximately 28% of total global emissions. In Canada, the transportation industry generates 10% of its overall GHG emissions. Reducing emissions generated from road-freight can therefore aid in achieving the Paris and Kyoto climate-change goals.
Canada Post Corporation (CPC), one of Canada’s largest organizations and a crown corporation, relies heavily on transportation. Canada Post’s 2019 Sustainability Report states that they have set an ambitious goal to reach net-zero emissions by 2050. Unfortunately, the same report shows that, in 2019, their GHG emissions increased by 5% compared to 2018. In 2020, Canada Post delivered more than 6.4 billion pieces of mail, parcels, and messages. Its value chain transportation network is connected by 21 major processing plants, 477 letter carrier depots, and 6,084 post offices. This network is responsible for 85% of the total GHG emitted by CPC.
Since trains emit approximately 75% less GHG emissions than trucks, rail seems the most viable option to reduce emissions–especially for long-haul deliveries. This research aims to help CPC investigate the implications of a switch to intermodal transportation, where a combination of road and rail can be used to transport mail. The biggest obstacle to making this move is the time sensitivity (also referred to as Delivery Standards) of transporting parcels from origin to destination. Therefore, this project aims to answer the following research question: “Can CPC’s parcel transportation network be redesigned to accommodate re-routing parcels via rail, maintain the Delivery Standards previously established, and in turn reduce overall GHG emissions?”. Specifically, which lanes (origin/destination) are eligible to use intermodal transportation? What percentage of parcel volume should be moved to rail?
To answer this question, five main objectives have been developed:
(i) Provide a detailed description of the mode of transportation of Canada Post and the advantages/disadvantages of each mode for Canada Post’s different products.
(ii) Provide a background study regarding rail and road intermodal transportation in supply chain networks, specifically postal services.
(iii) Analyze opportunities and risks associated with a road-to-rail intermodal shift.
(iv) Construct an analytical network design process that will facilitate decision-making to determine whether the parcel volume can be moved on rail or not for various routes; and
(v) Validate the decision-making framework using real data from a “typical” lane in the Canada Post network.
This research aims to provide Canada Post with alternative network design options to move more parcels from road to rail and reverse the emissions trend. Furthermore, by moving more volumes to rail, the added advantage of reducing transportation costs makes Canada Post more competitive.

Short Description:

Moving Canada Post’s volume off the highway and onto railway systems can reduce fuel consumption and avoid unnecessary costs of capacity expansion whilst increasing Canada Post’s network operational efficiency, reliability, and profitability.

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