Solving emissions in logistics – a blend of technology, innovation and collaboration  

According to the green campaigners Business for Social Responsibility, freight makes up around 15% of the world’s energy demand. It’s therefore easy to see why it’s under pressure to do its part to meet targets to reduce emissions and fossil fuel consumption.  

The Paris Agreement is of course stimulating change and there are numerous initiatives, existing and new, aimed at reducing the dependency on fossil fuels.  

There is some focus on cutting emissions through efficiency – streamlined lorries, speed limiters, and using technology for more efficient route planning are just a few of the options that are more common-place for road transport and logistics. But while these all have merit, campaigners say that going further on less fuel is not going to solve the problem globally, which covers road, air, rail and sea. Instead it requires a more radical approach to reach carbon neutrality, i.e. renewable cleaner energy, biodiesel fuels and electric vehicles.  

However, they come with their own problems, the greatest being that they are invariably far more expensive. The ROI versus fossil fuel (often subsidised by governments) is hard to contemplate for a business that needs to survive against its competition. That said, there is a commitment to try to take positive action as seen at events such as ‘Verge 19’, a forum specifically designed to bring organisations together to discuss and accelerate a clean economy.  

Indeed, Maersk, which owns almost 10% of the container shipping in the world, says cost and obstacles can’t be an excuse, and is working on ways to solve the problem so it is carbon neutral by 2050. But it has also acknowledged companies can’t work alone on this, there needs to be industry collaboration.  

Customer education

With that in mind, it may come as no surprise to hear organisations such as the Smart Freight Centre, a non-government organisation working towards reducing emissions, says customers of the major logistics firms need to support change too, and they must persuade their end customers of the value in higher prices.  

Etsy is an example of a company that is trying to educate customers about the consequences of what they buy for delivery. A leaf motif is displayed next to the shopping basket, which reveals information about its carbon neutral shipping plan. So, just as plastic has become a dirty word in supermarkets, it’s likely shipping emissions will follow suit if more campaigns like this take off.  

Innovation

Solving the problems through collaboration has also led to innovation. Take UPS for example, which aims to reduce absolute greenhouse gas emissions by 12% by 2025. UPS found it couldn’t charge its new electric trucks at scale because buildings couldn’t support the power demands.  

So, it created a consortium with energy supplier UK Power Networks and Cross River Partnership (a London regeneration programme), to build a new solution. The result was a combined microgrid and energy storage unit that has allowed the company to electrify an entire building. This has raised the number of vehicles it can charge from 65 to 170 and is now a concept other businesses can adopt.  

Brand value

The big question many boards will ask as they evaluate the investment will be ‘how will the numbers stack up?’. But as consumer awareness becomes more heightened, the evidence mounts that investment in going green sooner rather than later will deliver dividends.  

It is likely that in the coming year more and more consumers will gravitate to companies responding to the emission challenge with initiatives like those of UPS and Etsy. It’s now well documented that taking emissions seriously can make significant gains for your brand.  

A study from Carbon Trust (a consultancy that helps businesses reduce their carbon emissions), shows that social and environmental concerns can result in changes in consumer behaviour. Among several factors that provoke this shift are ‘realistic available choices’.  

That’s where brands can make a difference - by providing the options. Being able to say your brand aligns with meeting climate goals and emission reduction can have a big impact to the bottom line, so working with suppliers together will pay off, especially if you can take first mover advantage.  

A game of inches

At the start of this article we talked about the need for much bigger initiatives to make a real dent in emissions. And it’s true, delivering milk supplies and other bulk food stuffs in green vehicles is a big tick to radically changing consumption. But that’s not to say the small things are any less important. They too can add up and will be among the measures customers will expect to see you do.  

This means using technology to help manage operations efficiently and reduce waste across the board. It’s about adopting things like Touchstar’s delivery optimisation solution, an in-vehicle system that provides real-time job scheduling so drivers know what they are delivering when and where, and when is the optimum time to return to the depot to reload.  

This form of technology also reduces time wasted waiting for information , paper inventory - another drain on the world’s resources - and improves customer service. Plus, the efficiency gains accrued can be used to offset other ‘green’ investment costs.  

As we’ve seen, there is no one silver bullet but a combination of technology, collaboration, education and innovation, from the small to the radical, which are needed to help meet the emissions targets the Paris agreement sets out. It will no doubt be difficult but as companies are already discovering, it will be worth it in more ways than one.