How is the logistics industry responding to climate change?

Weather systems, freak storms, affected sea routes and environmental transformation are climate change factors changing the logistics industry: how will they survive?

It’s now widely accepted across the scientific community that human activity is causing a dramatic increase in the production of greenhouse gases, most significantly carbon dioxide, resulting in heat being trapped in the planet’s atmosphere. This has been the case for the past 150 years, and the resulting global warming is already having disastrous effects on our environment. The study of history demonstrates that much worse is to come unless far-reaching and urgent measures to limit greenhouse gas emissions and deforestation, among other actions, are taken in the immediate future.

On the front line

The impact of global warming can already be seen in the melting of polar ice caps leading to rising sea levels, the growth of inhospitable desert environments, and more extreme weather and geological events, including stronger and more frequent storms and hurricanes. Of all the industries that must accept responsibility for climate change, arguably logistics operators are the most directly aware of the deterioration taking place, as changes in weather systems, freak storms, affected sea routes and environmental transformation will all make a significant impression on their activities, forcing established business patterns and trading routes to be altered or dropped altogether.

If logistics firms are at the sharp end of climate change, then they are also major contributors to it. 28.5% of US greenhouse gas emissions came from transportation in 2016, and the majority of vehicles worldwide are still using petroleum-based fuel, one of the worst offenders in terms of carbon emissions.

Major contributors

Road transportation in its present form is the most environmentally harmful form of logistics, partly because it is so widespread. Aeroplanes are the next worst, producing a range of pollutants including water vapour, carbon, nitrogen and sulphur oxides, hydrocarbon, black carbon and even lead. Large ships also produce large amounts of sulphur and nitrogen oxide through the use of unrefined heavy fuel oil, which can cause smog and acid rain as well as global warming. Rail transport is the least environmentally harmful logistics solution, but still makes a significant negative impact on its immediate surroundings.

The industry responds

What is being done? As governments around the world sign up to global energy policies aiming to reduce the use of fossil fuels, conserve resources, and improve efficiency through less waste and greater recycling, the logistics industry has necessarily responded. In the area of road transportation, major logistics firm DHL has committed to achieving zero emissions by 2050 and has also set out a series of 2025 targets. These include increasing carbon efficiency by 50% compared to 2007, and using clean delivery solutions such as bicycles and electric vehicles for first and last-mile delivery. The firm is also supporting wider environmental activities such as tree planting and is encouraging green solutions among their supply chain partners.

International shipping

The shipping industry has also responded, and last year the International Maritime Organisation (IMO) agreed to cut carbon emissions by 50% by 2050, and to implement a 40% improvement in ship efficiency by 2030 (compared to 2008 figures) and 50-70% by 2050.

Individual shipping companies have also made commitments, including Capital Maritime Trading Group, headed by Greek business tycoon and philanthropist Evangelos Marinakis. Considered an industry leader on climate change, Capital is increasing fuel efficiency across its current shipping line while investing in research and technology to reduce the carbon footprint of new vessels. As far back as 2009, Capital developed a plan to reduce emissions by 30% over an 11-year period to 2020.

The pace of change

It is a feature of the shipping industry that change is necessarily slow. Large cargo ships take a long time to build and are a significant financial investment. Those commissioned ten years ago cannot realistically be scrapped to meet targets ten years in the future. Nevertheless, the sector is responding with alacrity, with tools including better voyage management, waste reduction and optimised energy use combining with research into better design and alternative fuel sources.

Last year, the Rotterdam Port Authority developed an incentive scheme for clean inland shipping and sustainable logistics, offering financial support to new projects aimed at reducing greenhouse gas emissions and fuel consumption.

The shipping industry is under pressure from new regulations to drastically reduce sulphur emissions, and research into new non-fossil fuels is underway. New propulsion systems and optimised designs are also being developed, and the aviation industry is conducting similar intensive research. Change cannot happen overnight, but while some providers will sadly go out of business, industry leaders will meet and even surpass new energy policies through innovation and vision.