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Transparency and collaboration to build zero emissions logistics

The road to zero emissions is a rocky one for logistics. Some wonder if the sector can achieve it in practice as there are many conflicting standards and interests. Sophie Punte, Executive Director, Smart Freight Centre (SFC), spoke to The Logistics Point about the way forward for green logistics. ‘Logistics will only go to zero emissions if it is possible from a commercial perspective,’ explains Punte. She believes change can be triggered when large multinationals start demanding low carbon freight and lead by example. An important part of this will be having full transparency on how much emissions have been caused by each transportation leg ….... throughout the supply chain. The second step is setting the right reduction targets and then implementing solutions that could help

companies to get to their goals. Finally, companies will need to work together

and with governments to create policies that will support business leaders and improve

efficacy.

Calculating and reporting

SFC is a non-profit organisation that aims to give companies a ‘sustainable logistics

roadmap’ to follow on their way to zero emissions freight, covering all modes of transport as well as logistics centres and hubs. As a first step, SFC has worked to create a methodological framework to

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calculate and report the logistics GHG footprint across the multi-modal supply chain and work towards reducing them.

The GLEC Framework was developed by the industry-led Global Logistics Emissions Council, formed by SFC, and is the only globally recognized methodology that is now a basis for a new ISO standard. It can be implemented by shippers, carriers and logistics service providers who buy or supply freight transportation.

Just-in-time

‘The notion of time will have to be stretched,’ Punte explains. This will mean that just-in-time will have to adapt.

During the past couple of years many companies were moving towards just-in-time without having any idea what their logistics supply chains really looked like. According to Punte this is not the most efficient way forward.

The world pandemic has only intensified the need for transparency because many

companies relying on just-in-time realised. It was brought in at they didn’t always know where the goods came from and who the suppliers were that transported these goods.

Punte believes firms will seek supply chain visibility but also a way to build contingency plans and anticipate unexpected events like Covid-19 and react faster to them.

" We have seen many

companies being reactive in the crisis,’ she continues, ‘they now wish to add a just-in-case to their

just-in-time. "

GLEC Framework

First released in 2016, the framework was tested and updated in 2019 and is the basis for a new ISO standard. Designed to inform business decisions and steer efforts to reduce emissions, it is in alignment with the Greenhouse Gas Protocol; UN-led Global Green Freight Action Plan; and CDP reporting. The Global Logistics Emissions Council, or GLEC, has grown into a voluntary partnership of more than 90 companies, industry associations, programs, experts and other organizations. Companies can implement the GLEC Framework in different ways. Those with developed accounting and reporting systems and dedicated staff can do this themselves. Whereas those that have less developed systems or are starting with emissions accounting can call in the help of SFC or SFC-accredited partners.

Redistributing supply chains

Despite the talks about supply chains shifting it is unlikely that a radical change is happening any time soon. ‘Companies are struggling for survival,’ Punte says, ‘and shifting a supply chain takes time and costs money.’ Some firms had a lot of stock during the pandemic which they were unable to sell while others couldn’t get their products to the consumer.

Companies with global supply chains have already started to look at ways to manage them better. For example, a large shoe manufacturer has factories in China but also in Germany, which allows for more flexibility and reliability. ‘Firms will look at ways to complement existing facilities in faraway …...

countries with facilities in the local markets where consumers are,’ Punte explains.

Another possible outcome of the pandemic will be the way suppliers are chosen. For example, chemical companies may have tried to spread risks by having multiple suppliers, but when most of these are in China they still are vulnerable in a crisis like corona. In the future they might look at diversifying and having partners in different countries around the world. Punte thinks the most likely effect will be a redistribution of supply chains with focus on balance.

Companies in the lead

The transport sector’s green future depends both on commercial and government

initiatives. For public transport what government authorities do is more important, given that you and I have the right to mobility access.

However, freight transport is much more commercially driven and for that reason the companies that buy and supply logistics services need to take the lead. ‘Companies are more likely to act if they will benefit commercially from going green than if the government just tells them what to do,’ she continues. here are ample opportunities for governments to leverage the natural willingness of companies to save costs, improve their image and satisfy customers and employees.

Policies that work for business

Companies who want to lead the industry are worried about spending too much money and effort on initiatives that won’t get them much benefits.

‘If you stick your neck out and your

EU’s Green Deal

Punte welcomes the EU's commitment towards a green future but she cautions against the continent introducing new policy that looks good on paper but doesn’t work in practice. ‘It is important to build on what companies already have in place and existing programs that work,’ Punte says. Building on previous commitments and initiatives will speed up the process but also create ownership. Most companies are supportive of climate policies but want to make sure that it works in their real-world situations. Existing initiatives should not be pushed aside. Quite the opposite: there are many leadership stories we can learn from.

competitors do nothing and get away with it, this is not the right balance,’ Punte adds. Leading companies want to see public policy that creates a level playing field in which their efforts are rewarded and recognised.

Another concern is unpredictable policies. For example, most companies Punte speaks clear how and when it is done. There still is a gap between promising announcements and implementation on the ground. Additionally, consistency in policies and standards between the different EU countries is critical for companies that operate across borders. For example, truck and trailer dimensions and rules for using extra-long trailer trucks are different between

to welcome carbon pricing as long as it is countries, which doesn’t help efforts to make trucking more efficient.

EU-funded projects such as AEROFLEX try to address this. Another example is urban freight. Some European cities have completely banned diesel trucks, others have restricted access to certain times or by other criteria.

Having so many differences makes it very difficult for companies to comply. In the

Netherlands, cities are aligning their zero emissions freight policies through the Top Sector Logistics program. And finally we come back to calculating emissions.

France has regulations that require companies to report transport emissions, but the methodology differed from the EU standard, making carbon accounting more cumbersome. SFC works with both the French government and the EU on the GLEC framework to create a harmonized approach, not only for the EU but also worldwide.

Investments

Another important point is who is paying for going green. As the logistics sector is mostly made out of SMEs without large budgets they need the support of their larger customers.

Currently, smaller firms usually receive one year contracts when it takes at least 3 to 5 years to pay back a new electric or more efficient truck. Punte believes that if big multinationals rethink their strategies and invest in longer contracts then this will provide stability for smaller transport operators who then could invest in green technologies and feel safe about it.

Success story

BDP International, a logistics service provider, approached FMC, who create synthetic and biological crop protection products, to take part in an EU-funded pilot project managed by SFC. Using the GLEC Framework, greenhouse gas emissions were calculated for selected routes and compared with alternative routes. FMC 11 determined that switching to a more carbon efficient trade route could realize emission reductions of up to 38%. FMC plans to expand this study to additional routes and BDP has adopted the GLEC Framework to provide similar value to other customers.

SFC brings together multinationals in China to figure out what a fair price and contract is so all supply chain partners can benefit. ‘As a customer you have the power to drive change but you also need to take leadership,’ Punte explains. ‘Sharing the responsibility for green investments without having to pay for, for example, an electric truck but by providing contract stability will get you a long way.’ ✷

Sophie Punte

Sophie Punte is the Executive Director of the Smart Freight Centre which she founded in 2013 as a global non-profit organization dedicated to efficient and zero-emissions freight. Previously, as Executive Director of Clean Air Asia, Sophie was a pioneer in introducing green freight to Asia. She also worked at the United Nations, KPMG and an engineering firm on environmental management and corporate sustainability. She sits on various boards and councils, including the WEF Global Future Council on Mobility.