F Plan

Last updated: 07/05/2013

Background

Tesco has set an ambitious goal to become a zero carbon retailer by 2050, as well as a number of demanding interim targets to reach by 2020 to reduce our carbon emissions – in our own operations, in the products we sell and by helping our customers to do the same.

Around 14% of Tesco’s own operational carbon footprint comes from our distribution activities – delivering over 3 billion cases of goods to our stores each year – the F plan helps us to reduce these emissions.

The F Plan

In 2007, we set ourselves a target to halve the distribution emissions per case of goods we delivered by 2012. To help us achieve this, we launched the “F Plan” in the UK, a simple strategy to underpin every operational efficiency activity within Tesco Distribution. The strategy is based on four pillars:

  • Fuller cages and/or pallets – maximising the amount of goods delivered each
    journey
  • Fuller trailers and/or containers – maximising the amount of goods delivered
    each journey
  • Fewer miles – reducing the number of miles we have to drive
  • Fuel economy – increasing the distance we can drive for each litre of fuel used

In focus: UK activities to reduce emissions

Since the introduction of the F Plan in the UK, we have saved 56 million litres of diesel, nearly 150,000 tonnes CO2e and taken 117 million miles off the road. Below are some examples of how we achieved this, which highlight our work under the “fewer miles” pillar of our F plan.

  • Double decker trailers – These can carry 67% more load than a conventional 13m trailer. Tesco operates the largest fleet of double decker trailers in the UK.
  • Network optimisation – This involves ensuring our distribution centres are in the right location and have the right capacity to serve our stores.
  • Mode shift to rail - We now operate 5 dedicated rail services 6 days a week. On the outward leg, the trains transport products part of the way to our stores
    and on the way back, they pick up products from our suppliers transporting them to the distribution centre. In May 2011 we opened our rail enabled National Distribution Centre next to the east coast main line at Daventry International Rail Freight Terminal.

Roll out to the rest of the Tesco Group

The F Plan was pioneered in the UK but it is now followed throughout the Tesco Group. For example, in South Korea and China we have been able to significantly increase our trailer fill by retraining our colleagues on cage and pallet assembly and trailer reloading. In Malaysia, we have been increasing the use of larger vehicles. By carrying more goods in each journey that we make, we can reduce the total amount of trips made. In Central Europe and Turkey, we have been investing in new trucks which have a higher fuel economy, reducing the amount of diesel used for each mile driven.

Progress against our targets so far

Our first distribution carbon target was to halve the emissions per case of goods delivered across the Group by 2012. We met this target in the UK but not across the whole Group, where we achieved a 24% reduction. This is because in our developing markets, such as China and Thailand, we have to develop a new distribution system from scratch. This network development takes time. As this happens, significant improvements can be achieved because stores and distribution centres become better connected.

At the beginning of 2012, we set a new long-term target to reduce carbon emissions per case delivered by 25% by 2020 against a baseline of 2011/12. At the end of 2012/13, our emissions per case delivered had increased by 0.4% from our 2011/12 baseline. This is also due to the growth of our business in developing markets such as Thailand and Turkey where we are opening new stores further away from our existing distribution centres. This means that our trucks have to take longer trips which has a negative effect on the entire Group position. The F Plan is helping to minimise the increase and seven out of 11 countries did reduce their emissions per case delivered. We expect to see a decrease this year.