In an era driven by environmental consciousness and increasing regulatory pressure, sustainability has become a growing concern for industries worldwide.
Multinational companies are taking a stand against climate change by publicly committing to reduce their carbon footprints and actively participating in environmental policies. That’s putting more pressure on transportation and logistics professionals to increase their focus on green shipping strategies. If you need to get up to speed quickly on the basics of green shipping, this primer is for you.
What is Green Shipping?
Green shipping encompasses a range of strategies and initiatives aimed at minimizing the environmental impact of transporting goods and services.
It revolves around reducing carbon emissions, enhancing energy efficiency, and adopting sustainable practices throughout the industry.
By utilizing multi-mode transport methods such as air, sea, train, and road, green shipping requires a collaborative effort from all stakeholders to foster a more sustainable future for global trade.
What are some primary green shipping strategies?
- Select the Greenest Mode: In the U.S.,freight transport accounts for 16 percent of corporate greenhouse gas emissions, making it one of the largest carbon footprint contributors. Mode choice could be the most impactful decision you can make in terms of carbon reduction. Compared to a cargo ship, for instance, air transport emits 47x more GHG emissions per ton mile (source: EDF Green Freight Handbook). So yes, mode choice matters. Choosing the greenest mode or combining different modes of transportation during a journey will significantly reduce your carbon footprint.
- Consolidate Freight: By combining multiple small shipments into one large shipment, this strategy maximizes capacity utilization and operational efficiency, delivering substantial cost savings while aligning with sustainability goals.
- Coordinating shipments and consolidating cargo minimizes the number of trips and optimizes load factors, resulting in reduced fuel consumption and emissions.
- Air freight consolidation offers the most cost-effective and sustainable mode of air transport.
- In ocean freight, buyer’s consolidation is a smart choice that combines shipments from multiple shippers to various consignees, routed through a central hub. This approach proves beneficial when buying from multiple suppliers in one country.
- Maximize Cube Utilization: When you put more goods into trailers and containers, you can reduce the number of freight runs, resulting in savings and lower emissions. For instance, by loading containers to capitalize on the full maximum weight, a business could potentially ship 80 containers in a year instead of 100. This not only reduces emissions but also translates into substantial cost savings.
- Optimize Fuel Efficiency: Minimizing the environmental impact of shipping necessitates a focus on fuel reduction. Methods such as switching to more fuel-efficient vehicles, optimizing fleet management, and embracing sustainable fuel sources can significantly reduce overall fuel consumption, leading to a healthier environment. The adoption of alternative fuels like biofuels, hydrogen, and electric propulsion systems holds immense potential for the shipping industry to long-term sustainability.
In addition to shipping strategies, what other logistics-related processes can be changed to reduce GHG emissions?
- Paperless Processes: The shipping industry has been reliant on paper-based processes, but the trend is moving towards a paperless, digital future. As leaders in IATA’s e-freight/e-AWB program, Dimerco pioneered the transition towards an end-to-end paperless transportation for air cargo.
- Waste management: The commitment to sustainability extends to waste management strategies that prioritize the principles of reduce, re-use and recycle. For instance, Dimerco has a corporate-wide effort to reduce use of stationery, paper cups, disposable eating utensils, and bottled water. At Dimerco, anything that can be recycled is recycled.
- Renewable Energy: Investing in and utilizing renewable energy sources to power operations.
How are carbon emissions measured?
The Greenhouse Gas Protocol (GHG) is a vital tool for organizations seeking to measure and account for their emissions accurately. The GHG protocol categorizes emissions into three scopes, each measuring a different aspect of a company’s carbon output.
Scope 1 emissions originate from sources directly owned or controlled by an organization, encompassing everything for which the organization holds direct responsibility –for example, emissions from company-owned vehicles.
Scope 2 emissions are indirect emissions resulting from the purchase and use of electricity, like emissions from power plants that generate the electricity to power your buildings.
Scope 3 encompasses all other emissions in the company’s supply chain. These emissions arise from upstream and downstream activities, including purchased goods and services, transportation, and the use and disposal of products. GMGs related to shipping your goods are Scope 3 emissions.
Can third party logistics providers (3PLs) help in your efforts to reduce your carbon footprint?
3PLs can be instrumental in reaching your carbon reduction goals by implementing many of the green shipping strategies we noted earlier. In addition, they can help you create the reports you will need to comply with your company’s own CSR requirements.
For example, they can monitor freight miles by mode and then measure and report on the carbon emissions associated with your transportation activities. The following report is an example of the kind of reporting you can receive.
What is the most green-friendly mode of transport?
When it comes to choosing the most green-friendly mode of transport, there is no one-size-fits-all answer as it depends on various factors.
Air freight, while offering speed and efficiency, has a higher carbon footprint compared to other green modes of transportation. In contrast, ocean freight stands out as a more environmentally friendly option.
It emits fewer greenhouse gasses per ton-mile and has the capacity to transport large volumes of cargo, making it a cost-effective and sustainable choice for long-distance shipping. However, ocean shipping is generally slower and may not be suitable for time-sensitive deliveries.
Rail freight is another green mode of transportation that offers a balance between cost efficiency and environmental impact. Emitting fewer greenhouse gasses compared to road transport, rail provides the advantage of handling substantial cargo volumes. In fact, it’s approximately 3.5 times more fuel-efficient than trucks.
When it comes to green shipping, it is essential to weigh the trade-offs between speed, cost, and environmental considerations. Businesses need to evaluate their specific shipping requirements and sustainability goals to determine the most suitable mode of transportation.
By adopting green modes such as ocean and rail freight whenever feasible, companies can significantly reduce their carbon footprint and contribute to a more sustainable future.
Navigating the future of ocean freight
The International Maritime Organization (IMO) has introduced new regulations set for 2023 to reduce greenhouse gas emissions in the global ocean shipping industry. These regulations, measured by energy efficient indicators like the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII), require shipping companies to reassess their vessels, invest in fleet upgrades, and adopt new fuel technologies which can provide greener options for the industry.
While initial challenges may include increased transit time and freight rates due to necessary investments, the long-term effects will bring positive changes by improving shipping efficiency and lessening the environmental impact.
Leading shipping companies have already embraced the shift, with a substantial portion of shipbuilding orders dedicated to methanol dual-fuel vessels. This growing trend highlights the role of methanol in global shipping, showcasing the industry’s commitment to sustainable practices (source: Alphaliner Weekly Newsletter).
Can Sustainable Aviation Fuel (SAF) revolutionize air transport’s environmental impact?
Air transport is notorious for its high costs and environmental impact. Within commercial aviation, freight movement alone accounts for approximately 15% of the industry’s carbon emissions, contributing to the overall 2% of global carbon emissions attributed to air transport.
Recognizing this challenge, The International Air Transport Alliance (IATA) has set industry-wide goals for achieving net-zero carbon emissions by 2050. Meeting these goals requires a combination of measures and collective efforts from all stakeholders.
Sustainable Aviation Fuel (SAF) presents a solution that can revolutionize the industry’s environmental impact. SAF has the potential to reduce lifecycle C02 emissions by up to 80% compared to conventional fossil fuel.
Made from sustainable feedstocks, SAF powers aircraft with properties similar to conventional fuel while leaving only a small carbon footprint. By recycling carbon rather than adding it to the atmosphere, SAF reduces emission and decreases dependency on fossil fuels.
However, the widespread adoption of SAF faces challenges due to limited market supply and higher costs compared to conventional fuel. Nevertheless, it is essential to recognize that SAF usage represents a growing trend in the pursuit of greener aviation. Understanding and embracing SAF become fundamental aspects of Green Shipping, enabling businesses to comprehend its significance and impact on the industry.
How to achieve a greener and more responsible supply chain
Reducing logistics-related emissions and energy use while balancing global commerce demands is crucial for businesses. That’s why it is important to have a trusted partner that understands the importance of sustainability and can assist in achieving a greener supply chain.
Comprehensive solutions, including cross-border freight and rail services, offer a multi-modal approach that optimizes lead times and minimizes emissions. With the expertise provided, clients can gain data visibility and insights into their emissions, empowering them to set ambitious reduction goals.
Pave the way for a greener future
Dedicated to reliable and on-time shipping, Dimerco’s commitment extends to actively reducing logistics-related emissions and energy use. If you’re ready to explore greener freight options for your supply chain, reach out to start a conversation. Together, we can work towards revolutionizing your supply chain, embracing sustainable logistics practices, and making a positive impact on the environment.