The exponential increase in transport volumes over the last 50 years has been accompanied by an increase in air pollution, traffic jams, accidents, noise pollution, as well as significantly contributing towards climate change. In Europe alone, this is estimated to have cost to the European Union an estimated €1,000bn/year!
Transport emissions account for 24% of all global emissions of greenhouse gases (10% of which is from freight alone), making it the second-highest emitting sector after energy production.
In this context, reducing emissions from freight is a somewhat unprecedented challenge; to reduce emissions by 30% by 2030 (meeting the objectives of the Paris agreement) despite the International Trade Forum predicting trade to triple by 2050.
So how can we achieve this goal?
This article suggests actions companies can take to reduce their carbon emissions, with a focus on transport, setting aside industrial relocation challenges.
The first step is to optimise capacity, which allows you to reduce costs while favouring modes of transport that generate fewer emissions.
Maximise the fill rates of freight
The options for increasing the filling of freight are numerous and these are just some of the ways you can increase cargo capacity; optimise the weight/volume of packaging, use palletisation plans, pallet risers, and/or favour the use of homogenous pallet transportation rather than using heterogeneous pallets which take up more space.
Re-design your network to reduce freight requirements
What’s good for the environment is nicely aligned to what is good for the bottom line. Reducing overall freight requirements through network redesign will naturally do both. With the exponential growth of e-commerce demand and rapid fulfillment options, leveraging all stocking points, particularly those closest to your customers is essential to low-cost fulfillment. At the same time fulfilling the objective of reducing the overall freight task.
Optimisation of resources:
For transport by road, this can be done by favouring the use of large volume rigid-axle vehicles and/or articulated vehicles or through the use of a lightweight aluminium trailer which gives the option of increasing the payload (as opposed to a heavier trailer).
Developing synergies with partners (or competitors), in a shared services model can lead to a 30% decrease in the number of vehicles in circulation. For example, companies that are located in the same warehouse with the same (or similar) delivery objectives can share freight/delivery.
Optimise useful distances
In France, nearly 25% of trucks on the road are empty. This is a valuable statistic and something that could to be improved drastically in all countries. Below are two options of how this could be achieved;
Economic drivers can also contribute to a significant reduction in the CO2 footprint, but remain insufficient in achieving the objectives set out in the Paris agreement. To be successful they must be supplemented by the implementation of a responsible transport policy.
A policy could integrate CSR accountability criteria during contract tenders for fleet renewal or the purchase of transport services to reduce emissions per kilometer tonne.
These criteria could be accomplished through one or more of the following suggestions:
The carbon footprint of the transport industry is vastly disproportionate when compared to that of the warehousing industry by a ratio of at least 95:1, whereas the financial costs of transport and storage are fairly similar in comparison. Logistics managers must analyse costs, stock levels, and CO2 impacts of various transportation and warehousing options because while they may appear to be economically similar there is the potential that one may be significantly better in regards to CO2 emission reductions. For example, when reducing financial costs, a company may choose to reduce the number of warehouses, however, this may lead to an increase in transportation distances thus increasing CO2 emissions.
The more we reduce the mass production of luxury items (massification), and the more times deliveries are made on time; the more significant the impact on emissions.
Reducing the frequency of deliveries (by storing more), or increasing the delivery times for the end customer are opportunities for emissions reductions that can be studied further. For example, many retailers are starting to raise the awareness to their customers of how their delivery methods are environmentally friendly, albeit slower.
Responsible transport policy actions implemented by companies can achieve significant reductions, but these policies must be supported by politicians and the public on two main axes;
At a company level, the reduction of transport emissions in response to the climate challenge sees the need for a combination of transport training, making responsible choices, and having a prospective vision. Engaging in these dynamic factors and successfully implementing them will be based on five main factors;