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The time to prioritize sustainable transport systems is now

A new webinar series called FIATA Connect was launched this year to provide insights on cutting-edge practices for logistics professionals to better navigate the industry. With four editions planned over the year, the FIATA Connect series features leading experts in the supply chain. The first episode took place in July and focused on sustainability, while the next episode will be organized in October to focus on e-commerce.

The first episode of the FIATA Connect series was organized under the auspices of the Working Group Sustainable Logistics to discuss the Global Logistics Emissions Council (GLEC) Framework, an internationally recognized method to calculate and report on greenhouse gas emissions across the multimodal supply chain. Andrea Schoen, Head of Business Sustainability and Customer Consulting at DB Schenker, was the keynote speaker at the event and today provides additional perspectives for freight forwarders on the topic.  

In the 2030 Agenda for Sustainable Development, sustainable transport is present across several SDGs and targets. Why is this of relevance to the logistics industry?

Andrea Schoen: The logistics industry’s energy emissions including its buildings’ is responsible for around 13% of carbon emissions globally.[1] It is therefore imperative that it contributes to carbon neutrality through a variety of measures, which are directly and indirectly related to its business.

What would you say are the main efforts that have taken place within the industry in the recent past to move toward a more sustainable approach? Is this happening fast enough and equally across the globe?

AS: So far, mostly efficiency gains – such as reducing mileages, increasing filling rates (consolidating freight), and technical powertrain innovations – have taken place, which by and large kept carbon emissions stable over some decades. However, we still realize that GDP and transport growth are strongly related, therefore it is imperative to take stronger measures at a much larger scale, especially to exit any types of fossil fuels.

What is the Global Logistics Emissions Council (GLEC) Framework and why should freight forwarders be aware of it?

AS: The GLEC Framework was set up as a main pre-requisite of a globally accepted standard for transport carbon accounting. Many actors in the supply chain across the globe have participated in this process over a period of five years – with their knowledge and expertise, sample studies, data exchange, etc. It is important to make oneself familiar with this framework which is publicly available on the Smart Freight Centre website: GLEC Framework Implementation | Smart Freight Centre.

It is a decisive step to prepare for the new ISO 14083 which will be finalized next year. Then many shippers will require reports according to such ISO, most probably in an audited way.

What is the significance of taking the Global Logistics Emissions Council (GLEC) Framework into ISO (ISO standard 14083)? Why is it important for the logistics industry?

AS: Our logistics landscape has several actors which highly depend on each other: the carriers, 3/4 PL service providers, and shippers. All of them need to contribute to carbon neutrality in the near future and therefore need reliable data. Such data need to be collected and reshaped through the supply chain (along the cargo flows), and reports build on each other. This is only possible when every actor calculates in the same way: when carriers provide the same type and granularity of data, when the intermediates reshape such data for their clients, the shippers. Finally, the shippers are responsible to report to their stakeholders. In case they are listed at a stock exchange, such data qualify as non-financial data in the company’s annual or integrated report.

The capital market increases its surveillance on such data to assess investors’ risks and opportunities of climate-change related business development. The European Union recently launched Taxonomy Rules on Sustainable Finance to channel investments into climate mitigation.[2] UNCTAD estimates that the value of sustainability-themed investment products in global capital markets amounted to USD $3.2 trillion in 2020, up more than 80% from 2019.[3]

If a freight forwarding company is interested in measuring the impact of its activities, what is the first step to take and where can they find guidance on measuring their greenhouse gas emissions?

AS: The first step is to check own fuel bills and relate them to the vehicle-km driven. The amount of fuel can be converted into carbon emissions, the vehicle-km are the normalizer for efficiency calculations. In case one transports a lot of goods with limited vehicles and mileages, one’s carbon footprint per vehicle-km would be rather low (= highly carbon efficient).

For a further agent (LSP) or shipper to reproduce the data in their own systems and make them comparable with other modes of transport, the key normalizer would be the tonne-km. In such case, the average load of each vehicle class needs to be taken into account.

Example:

If one carries cargo on 3 different truck sizes with an average load of 50% including empty trips:

For each km

  • a 3.5 ton vehicle would account for 0.5 tkm (~1 ton = 100% load capacity),
  • a 7.5 ton truck for 1.5 tkm (~3 tons = 100% load capacity), and
  • a 40 ton truck for 12 tkm (~24 tons = 100% load capacity).

Each of these tkm values may be multiplied by the total cargo carried on the respective vehicle size class. Total fuel may then be divided by all the tkm arriving at a per tkm fuel consumption, the fuel being converted by the average fuel emission factor as outlined in the Annex of the GLEC Framework. One may look up more details on how to split fuel consumption related to vehicle operation in the framework.

As the global voice of freight logistics, how can FIATA encourage more sustainable practices among its members and support them in this journey?

AS: It is very helpful to give guidance on the new fuels: gas/biogas, LNG, biofuels, battery electric (BEV), fuel cell (hydrogen: grey, blue, green), and provide their respective emission reduction potentials – perhaps also with some guidance on social and sourcing related sustainability issues (conflict minerals, battery recycling, etc.).

It is also important to encourage FIATA members to exchange data and expertise, and organize best practice sharing.

Going back to the 2030 Agenda, how do we achieve sustainable transport systems globally in less than a decade? What are the key priorities you see that need to happen within the logistics industry?

AS: There are some: exit fossil fuels right away, put demand on OEMs to produce the respective powertrain vehicles without any further delay, organize fair cost sharing in the supply chain – everyone has to contribute! Accept political frameworks and regulation with carbon standards and pricing. In case of any market biases or disruptive effects, ask for healing instead of inhibiting the whole process.

Welcome innovation and encourage the consumer to allow more consolidation and relaxing of lead times. A living standard shall be defined not by the mere quantities to be consumed every day but rather by its quality and sustainability, by fairness towards other less privileged regions in the world and especially towards the next generations on the planet.

 

[1] Our World in Data. Cars, planes, trains: where do CO2 emissions from transport come from? 2020. https://ourworldindata.org/co2-emissions-from-transport

[2] European Commission. EU taxonomy for sustainable activities. 2021. https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-taxonomy-sustainable-activities_en

[3] UNCTAD. World Investment Report. Chapter 5 – Capital Markets and Sustainable Finance. 2021. https://worldinvestmentreport.unctad.org/world-investment-report-2021/ch5-capital-markets-and-sustainable-finance/

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