Sustainability and Green Logistics
Updated: Aug 29, 2019
My visit to the Transport & Logistic Fair in Munich made me wonder if the logistics industry has already inherited the necessary shift to sustainability, or if it is all green washing?
Are they actually walking the talk?
Certification requirements for a corporation’s ambitious climate goals
Logistics impacts a vast majority of the UN SDG goals and in particular these three:
Goal 8: Decent Work and Economic Growth
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
Goal 9: Industry, Innovation and Infrastructure
Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
Goal 13: Climate Action
Take urgent action to combat climate change and its impacts
All big corporates have ambitious climate goals, such as “Global Emission Free by 20xx”, but to reach their goals they must rethink their logistics as well. It is necessary for them to have the appropriate documentation and their climate neutral logistics certified for compliance.
Is that enough?
Surely for certification we need a new level of transparency about the real climate effect of transportation?
I believe that technologies such as IoT, Blockchain and Smart Sensors can give us that required level of transparency – and this is a great opportunity for Start-Ups, since the actual calculation values are mostly based on averages, and therefore do not honour climate efficient innovations and solutions of green suppliers.
The transparency is important in order for real sustainability to stick, to distinguish between:
CO2 compensation - pay for the mess
CO2 reduction - evolution of technology in logistics
CO2 avoidance - radical innovation in technologies and logistic business models
What was the actual status of green logistic solutions that were visible at the fair?
When we look at the climate effect of the currently available transportation methods, the ranking is fairly easy: the big ship is better than small ship; the small ship is better than rail; the rail is better than road; and the road is better than air.
In the different industry segments, you could see companies communicating their green logistic efforts. Most of the green suppliers reduce the CO2 output by using CO2 efficient technologies like battery powered forklifts and container movers, LPG driven trucks and vessels, and the latest generations of fuel-efficient means of transport. Some offered CO2 compensation and very used few both methods. Obviously, this was not the fair that was ready to show solutions for transport avoidance, i.e. 3D printing.
So, what is the solution?
While green logistics were visible with some sea-, rail-, road- and air-carriers, it was hard to find -among the gate keepers of the logistics industries – the forwarding agencies.
The agencies organising the door-to-door handling, by combining the transportation methods, seem like a complete logistic solution for the customer. They have identified the real problem – while everybody is talking about green logistics – they see very limited willingness of organisations to pay for this extra service in the market, so far.
Further research shows that the customers actually want, and even need, green logistic solutions to meet their sustainability goals, but don’t want to increase their logistics costs. Perhaps regulation is the only solution? A CO2 taxation perhaps would spur organizations to embed green logistics into their business proactively, to avoid the tax impact?
In any case, it is only when society and economy really shift their paradigms towards sustainability and understand that profitability is not the dominating KPI for decision making any more, can we move forward and use already existing solutions for implementing green logistic solutions.
What is your company doing to foster green logistic solutions?
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