6 Essentials: Greening your supply chains

Shrinking the Environmental Footprint of Supply Chains – and, as part of that, transport and logistics – has become a central focus for many businesses worldwide. According to the MIT Sloan Management Review, 90% of executives consider sustainability crucial, and 60% of companies now have a sustainability strategy. The International Transport Forum (ITF) estimates that international trade-related freight transport currently contributes to around 30% of all transport-related CO2 emissions from fuel combustion and more than 7% of global emissions. It’s no wonder then that an increasing number of businesses are actively seeking opportunities to reduce the greenhouse gas (GHG) emissions associated with their transport and logistics, either independently or through collaboration with a logistics partner.

But what exactly is being done to trim supply chain GHG emissions? How are transport and logistics evolving to become more eco-friendly and sustainable? From the integration of electric vehicles to the optimization of warehouses and the use of green fuels – here’s an overview of the innovations and developments in transport and logistics that can assist businesses in achieving their sustainability goals.

Slashing Emissions in Ocean Transport: Ocean transport plays a pivotal role in global logistics, accounting for about 90% of world commerce. The International Maritime Organisation (IMO) states that this results in approximately 3% of global greenhouse gas (GHG) emissions. Recently, the IMO’s Marine Environment Protection Committee adopted a revised strategy to decarbonize global shipping, aiming for net zero greenhouse gas emissions ‘by or around 2025’. While met with both praise and criticism, the strategy outlines critical pathways to zero-carbon shipping, including new building standards, advancing fuel life cycle assessment, developing green fuel supply, and research and development (R&D) investments. Efforts are underway to improve vessel fuel efficiency and expand the production of green fuels for all transport modes. Already, businesses can opt for ocean vessels powered by low-emission alternatives, such as the first container vessel sailing on green methanol.

Electrifying Inland Transportation: Rail and waterborne transport boast the lowest emissions per kilometre and unit transported, according to the European Environment Agency. For trucking, when these options are unavailable, lower-GHG emission solutions are available, with a strong focus on exploring electric vehicles (EVs). The International Council on Clean Transportation hails EVs as ‘the single most important technology for decarbonizing the transport sector’. Energy efficiency and green fuel alternatives are also prioritized, contingent on the availability of renewable electricity sources, investment in infrastructure, and regulatory support. Adoption of these solutions depends on advances in fleet technology and the ability to secure green fuels at a scale and cost competitive with fossil fuels.

Sustainable Warehousing Options: Warehousing is identified as a key area for impactful change in the supply chain. A greener warehouse considers the social and environmental impact of its practices, addressing both working conditions and environmental sustainability. Renewable energy, sourced from installations or through on-site production, can significantly reduce GHG emissions for any warehouse. Solar panels, covering lighting, air conditioning needs, and more, can contribute to the grid. Technology and automation in warehousing are also contributing to waste reduction and sustainability improvements, with automated storage and retrieval systems allowing for higher storage capacity and reduced energy use.

Greener Air Freight: Decarbonizing air freight poses a significant challenge, but progress has been made, with ongoing efforts. Aviation, responsible for 13.9% of emissions from transport, is seeing improvements in fuel efficiency. Sustainable aviation fuel (SAF) holds the key to further reducing emissions. Using new, non-fossil fuels could cut aviation emissions by 53%, but their full potential is yet to be realized. Regulatory support and technological breakthroughs are crucial for SAF adoption.

Improving Cold Chain Transportation: Cold transport consumes up to 20% more fuel due to refrigeration equipment. Digitalization, especially data and analytics, facilitates transparency and traceability, pinpointing opportunities to improve sustainability by reducing waste and optimizing shipments and transportation to save energy. Choosing refrigerants with lower GHG impacts further contributes to sustainability.

Decarbonizing Port Terminals: Port terminals, crucial links between land and ocean operations, can significantly contribute to greenhouse gas emissions. Decarbonizing terminals involves strategies such as switching to renewable electricity sources, improving energy efficiency, adopting smart technologies, and redesigning terminal infrastructure.

The Future for Greener Supply Chains: The momentum towards greener transportation and logistics will persist, driven by both societal and commercial considerations. Many businesses are already embracing sustainable products and services. However, achieving the full potential of sustainability in supply chains requires regulatory support, industry and government-level investment, and ongoing technological advancements to propel us towards net-zero supply chains.