The world shoulders a heavy burden when it comes to shifting our stuff. Could new approaches lighten the load? Michael Ashcroft investigates.
“Sustainability is a commercial thing. Ultimately, organisations cannot function on a dysfunctional planet”.
Despite growing enthusiasm for local products, most of the items that end up in your shopping basket or in your wardrobe will have journeyed through a global cargo system that is as complex as it is carbon-intensive.
Indeed, according to most estimates, moving things (including people) around accounts for 15% of global carbon emissions. Shipping, according to the International Maritime Organization, represents more than 80% of global trade – and is the most efficient means of transporting large quantities of goods over significant distances. The World Shipping Council points out that if all the containers from an 11,000TEU [twenty-foot equivalent unit] ship were loaded onto a train, it would need to be 77km long.
Nevertheless, the 50,000 merchant vessels on the world’s seas and oceans at any given time are responsible for emitting 1 billion tonnes of CO2 each year. Cross-continental traffic is set to increase with population growth and urbanisation, so the race is on to rethink each stage of the global supply chain. Can industry find a way to transform this heavy load into an efficient system of exchange?
The first step has to be finding out where the inefficiencies lie. You might start by looking for the worst performers – but that’s not always easy, says Peter Harris, Director of Sustainability, EMEA at the logistics firm UPS. The complexity of the supply chain makes it “very difficult to measure sustainability performance objectively between two companies, even in the same sector”, he says.
One beacon of hope in all of this is the trend towards transparency. If data hackers are able to make sense of supply chain impacts, retailers and consumers will come to expect a new level of accountability. This should help to drive improvements in performance and ultimately enable more sustainable decision-making for business and, in particular, procurement.
Take, for example, Green Freight Europe. This consortium of more than 65 carriers, shippers and logistics firms monitors and reports on the carbon performance of road freight companies. It’s facilitated by the (neutral) European Shippers’ Council and the Dutch Shippers’ Council, and the London-based Energy Saving Trust has been contracted to develop the methodology and operate the platform. The aim is to help logistics companies pick the carrier best placed to boost their sustainability credentials – while saving them money on fuel. This also drives best practice by rewarding carriers that invest in energy-efficient technology with new business.
“We intend to use Green Freight Europe to get a better understanding of the environmental performance of our subcontractors”, says Harris of UPS. “And it will give us an opportunity to demonstrate our capabilities to our customers.”
It’s all very well for road freight moving across defined and well-regulated geographical regions. But how would it work for shipping? At the moment, sea freight works something like this: the organisation with goods to transport subcontracts to a logistics company, and the logistics company, in the majority of cases, charters a ship.
Demand for efficiency could reward those who do maintain a clean fleet
Here’s the hitch: as the cost of a ship’s fuel is paid for by the charterer, the ship’s owner has no incentive to install efficiency measures. One way to overcome this could be to increase the demand for efficient ships, and make sure they are available to charter, thereby rewarding those owners who do maintain a clean fleet.
An initiative spearheaded by the Carbon War Room seeks to do just this, by providing a database of a large proportion of the world’s shipping fleet, complete with efficiency data. When charterers need to procure a ship, they can search the database of over 60,000 vessels and select an efficient one. Each ship is assigned a rating using an A–G rating system, the Existing Vessel Design Index [EVDI], developed by Melbourne-based ship vetting specialist RightShip. When an owner upgrades a ship, they are encouraged to update the details on the database.
This initiative is already being used by some major players. Cargill, one of the world’s leading agribusinesses, is one of 180 organisations globally to have signed up to RightShip’s EVDI rankings service. “We endeavour to charter the most efficient vessels operating in the shipping market”, says Jonathan Stoneley, Environment and Compliance Manager at Cargill. “This is a significant commitment as it marks a first in the industry.”
At the same time, ship owners, charterers, builders and engineers, as well as the insurance and logistics sectors, have teamed up with Forum for the Future and WWF to launch the Sustainable Shipping Initiative [SSI]. It aims to set the industry on course to be resilient, socially and environmentally responsible, and profitable – by 2040. Making transport more efficient is the most pressing challenge facing the industry right now, and the most attractive from a savings point of view, and so the SSI is exploring everything from better planning of shipping routes to enhanced ship design to slower (and therefore cleaner) traffic.
Making the vessels themselves more efficient is just a start, admits Sam Kimmins, who leads the SSI at Forum for the Future. More pressing over the longer-term, he explains, is the need to make the logistics chain as a whole more sustainable, something which requires a major rethink of not just how goods get from A to B but why they are sent in the first place. Indeed, would it be best to just cut out the need for global transportation completely?
Not necessarily. According to the Low Carbon Leaders Project, an initiative supported by the UN Global Compactand WWF, transport can be part of the solution rather than part of the problem. Its ‘Chasing the Sun’ initiative, which has the support of Maersk, imagines a more holistic approach to transport and logistics, going way beyond new hull designs and fuel-efficient routes. Take fruit and vegetables. While produce grown locally may, to European consumers, appear to be the ‘green option’, Chasing the Sun asks whether shipping fruit and vegetables from regions of high solar input such as Africa may be more sustainable. The fertiliser and pesticides needed to grow such crops in colder climes have a greater carbon footprint than that of a fuel-efficient container ship, the reasoning goes.
Kimmins would like to see the speed of travel given the same public profile as the distance, where environmental impact is concerned. Any possibility of moving freight by sea rather than by air should be explored as a priority, he maintains, replacing the culture of getting the product from A to B as quickly as possible with one where it journeys as sustainably as possible. “Both consumers and importers need to ask themselves, ‘Can I wait a few more days and get this shipped rather than sent by air mail?’”, he says.
Patience is one thing; financial incentive another. To create change at scale, sustainable cargo options have to be attractive to business. “It’s a case of constantly looking for ways to bring things into the space where economic and environmental intersect”, says Harris. “Sustainability is a commercial thing. Ultimately, organisations cannot function on a dysfunctional planet”.
Michael Ashcroft is an energy technology and policy analyst and freelance writer. His article originally appeared in Green Futures, the leading magazine on environmental solutions and sustainable futures published by Forum for the Future.