REI's logistics teams manage domestic and international product transportation to ensure that our distribution centers and stores deliver customers' products when and where they want them. This process requires the efficient coordination among our operations and many merchandise vendors.

In recent years, our logistics teams have focused on better understanding how this facet of our business contributes to our environmental footprint. This includes our ongoing reliance on third-party shipping vendors, and collaboration with them to pursue opportunities for improvement.

RESULTS

In 2010, product transportation accounted for 11 percent of our GHG emissions, similar to 2009. This represents a 6.8 percent increase over the prior year.

While our international air freight elevated in 2010, our teams collaborated with our vendors on origin consolidation to help reduce inefficiencies. In addition, we partnered with our major international shipping partner to create a dashboard and forecasting tool to measure the GHG emissions of each shipment sent to REI.

The efficiencies realized in product transportation are also closely tied to REI's commitment to reduce packaging and our collaboration in the Outdoor Industry Association Eco Working Group. For example, our Novara bike brand has addressed the packaging used during the manufacturing process and shipment to our distribution centers. Through a significant redesign of our bike boxes, we reduced the amount of packaging used by 68 percent, while increasing the number of bikes able to be shipped in a container by 10 percent. These shipping improvements also equate to time efficiencies in unpacking and assembling bikes, resulting in financial benefit for REI.

Our company partnered with our primary international logistics provider to collaborate on a tool that gives us more specific visibility of the greenhouse gas impact of specific international container shipments.

LOOKING AHEAD

We look forward to working with our vendors, factories, shipping companies and others to both share our innovations and learn from theirs. For example, REI has worked with the Sustainable Packaging Coalition to identify efficiency solutions and share best practices. We will continue to participate in the sub-group of the Outdoor Industry Association to develop common guidelines for packaging materials and process that we believe will deliver benefits in coming years.