Retail needs to play its part in reducing carbon emissions

A leaked study in 2008 revealed that emissions from shipping could be up to three times higher than previously believed. It was something of a wake up call for an industry that was on its way to becoming one of the largest contributors to global CO2 levels.

That was a decade ago, but the International Transport Forum (ITF) estimates that trade-related freight transportation still accounts for about 30% of global CO2 emissions. What’s worse, ITF predicts a fourfold increase in emissions by 2050.

China and Europe (among others) have issued mandates stating clear emission reduction goals. But much more needs to be done. More freight, weighing more, is being moved around further afield and faster. It’s a problem that isn’t going away.

Sustainability initiatives abound as pressure from stakeholders like customers and regulators increases. Lloyd’s Register and University Maritime Advisory Services (UMAS) recently released ‘Zero Emissions Vessels 2030’, a new study that aims to demonstrate the viability of zero-emission vessels (ZEVs).

It’s a significant step in the right direction, and was given a boost earlier this month with the announcement that new unmanned electric container barges will being operating from the ports of Antwerp, Amsterdam and Rotterdam in summer 2018.

Sustainability measures are also being implemented by individual ports. In fact, in January, the Port of London Authority introduced a ‘green tariff’. Port Strategy reported that it would be “offering a 5% discount on port charges for vessels with an Environmental Shipping Index (ESI) score of 30 or above.”

Private companies are also beginning to seize the opportunity and the road freight industry is seeing significant attention from Silicon Valley startups. The clearest example of this is in autonomous vehicles, as companies from traditional truck manufacturers to tech giants are locked in an arms race to develop self-driving trucks.

José Viegas, former secretary-general of the International Transport Forum (ITF) told the FT this month that “driverless trucks could be a regular presence on many roads within the next 10 years.” Retailers are beginning to take advantage of this: supermarket chain Lidl recently partnered with Swedish self-driving transportation startup Einride in a bid to reduce their emissions in Sweden.

These initiatives will help transform a ‘dirty’ industry, but the scale of the problem means that all market participants have to look at practical ways to reduce emissions.

For retailers who frequently ship goods and are looking to reduce emissions, it’s important to know the scale of the problem. Calculating transportation data at a shipment level, not as a total, will give more granular insights into your emission levels. The more transparency you have over each stage of your supply chain, the better.

Retailers that own their own assets (e.g. truck fleets) can rely on their fuel consumption as the main indicator of their carbon footprint. However, most retailers shipping internationally work with a freight forwarder, which can make it more complicated.

One option is to analyse insights from a carbon calculator. This provides retailers with an analysis of each leg of the shipment taking into account distance, vessel efficiency, dimensions and utilisation. Any changes to the shipment route can be captured in real time and updated on the freight forwarder’s platform. These are yet to be established as the norm in the industry: we have developed one at Flexport and are continuously leveraging big data to help make our calculations even more efficient.

Favouring ocean over air and, in most cases, rail over truck, will significantly reduce emissions levels – air freight is by far the most emission heavy transportation. Equally, be mindful of reducing the number of stops in a shipment where possible or using an express service that’s more direct.

If you can’t optimise your shipping routes for cost reasons, think about utilisation. For example, can you use the warehouse of your logistics provider in order to consolidate your goods? Try to be more flexible regarding arrival dates. Can you get in at night to avoid congestion during the day, which causes long waiting times for trucks?

Your freight forwarder should be able to advise you and make sure your routes are aligned with your emission goals. In fact, a small number of freight forwarders have invested in carbon offset programs, which give their retail customers the opportunity to offset their transportation footprint by purchasing carbon credits. It works by funding projects that reduce CO2 emissions proportionally to the amount of carbon your shipments emit. Our carbon offset program at Flexport works out at roughly 1% of your total shipping costs.

Innovations like self-driving trucks or electric barges may grab headlines, but carbon emissions are still a very real problem that retailers can actively make efforts to act upon.   The scale of the problem is so vast that even relatively simple actions taken across the industry will have dramatic positive effects on the emissions problem. Even the smallest retailers need to look at the opportunities to lessen their impact and play their part in reducing the harmful effects of carbon emissions.

Jan van Casteren is the VP for Europe at Flexport, a company that move freights globally by air, ocean, rail, and truck for the world’s leading brands.