Inside Logistics

Dealing with energy costs

Energy is a tremendous cost for distribution centres, particularly those that focus on the cold chain,


May 12, 2015
by Mary Del Ciancio

Energy is a tremendous cost for distribution centres, particularly those that focus on the cold chain, where they have to maintain a range of temperatures for dry, cooled and frozen foods.

It’s one of the cost pressures that VersaCold feels, and one that the company has heavily invested in to bring costs down.

For additional coverage, see our Links in the cold chain feature by Mary Del Ciancio

“We’ve invested roughly $4.5 million over the last two years in energy efficiency, green lighting [and] other technologies that reduce energy consumption in our facilities, but still provide the required temperature consistency,” CEO Douglas Harrison says.

VersaCold has implemented auto shutoffs on lighting when certain parts of the building are not in use. The company has introduced LED lighting, which is more energy efficient and produces less heat and, therefore, the refrigeration systems work less to maintain the temperature of the building. The company has implemented variable frequency drives, which manage the speed of the fan in the refrigeration system, and ensure it’s not operating at times that it doesn’t need to. The company also uses ammonia-based refrigeration systems, which are more environmentally friendly and energy efficient.

Wal-Mart, too, has made major investments in energy. Watson says the company’s Alberta DC is one of North America’s most energy-efficient distribution centres. It’s so sustainable, in fact, that the company has opened it up to tours, where the team highlights all of the energy-efficient features of the building—LED lights; solar panels; material handling equipment that runs on hydrogen cells; two large windmills; and more.

The results are clear when you compare the energy costs of Wal-Mart’s Mississauga PDC, which runs on traditional power, to its Alberta DC. The Mississauga facility uses 1.3 million kilowatts per month, while the Balzac location uses 601,000 kilowatts a month to run a facility the same size.