Tech could someday let people even in dry climates
get clean water straight from the atmosphere›››
The buzzword for the logistics industry? GREEN
The industry is trending toward green logistics, ways of minimizing the environmental impact and carbon footprint of logistics activities. With 37 percent of global greenhouse gas emissions coming from the transport and logistics industry, transport is the easiest place to start.
“With respect to the environment, transportation is the most visible aspect of supply chains,” says Jacqueline Bloemhof, professor of operations research and logistics at Wageningen University, the Netherlands. “One of the main choices in transport is the mode of transportation — plane, ship, truck, rail, barge or pipelines — and each mode has different characteristics in terms of costs, transit time, accessibility and environmental performance.”
Niklas Simm, Ph.D. candidate at Linköping University, Sweden, says for years, logistics professionals have not prioritized environmental concerns, despite academia’s steady increase in research interest: “The basic premise of logistics has been to manage and organize flows of goods in a resource-efficient manner. However, with the development of the U.N.’s global goals for sustainable development and emerging environmental interest, logistics operators have acknowledged an increased public interest in environmental questions, changing the perception of logistics and adding a new dimension. Supply chain organizations have begun to take responsibility for their logistics practices and have seen the need to consider the environmental effects of their practices.”
While there’s more to greenifying the industry than just the physical transportation of goods — think green packaging materials, space-saving packing, reducing returns and failed deliveries, improving warehouse layouts — transport is a major concern to companies looking to reduce their carbon footprint. Logistics giant DHL, for example, developed a “Green Logics Toolkit.”
“In today’s globalized and interconnected society, modern consumers demand goods that are both affordable and readily available at a moment’s notice,” Mohamed bin Thamer Al Kaabi, Bahrain’s minister of transportation and telecommunications, told the World Economic Forum. “This depends on reliable and resilient supply chains. But supply chains are only as good as their weakest link — and, as the past few years have shown, that weak link often ends up being transportation.”
KEEP ON TRUCKING
According to CITEPA, a France-based organization that collects, analyzes and disseminates information about climate change, light duty trucks account for 20 percent of greenhouse gas emissions from transport, and heavy duty trucks account for 22 percent.
In a product’s journey from warehouse to consumer, the final step is known as the “last mile of delivery.” Last-mile delivery is the most expensive and time-consuming part of the process and covers the product’s actual delivery to the recipient. This is a hotbed of inefficiency because a shipment’s final leg typically involves multiple stops with low drop sizes.
Emrah Demir, professor of operational research at Cardiff University, says the last mile is an increasingly powerful force reshaping supply networks around the world: “Customers wish to have on-time delivery of the products, which might be very difficult task for the logistic service providers because of various operational challenges and uncertainties.”
Because warehouses have moved farther from city centers, the distance traveled to deliver goods has significantly increased. Additionally, most deliveries are home deliveries, increasing the number of stops for a delivery service. Changing to a pick-up point service encourages customers to use clean mobility solutions, such as walking, public transport or cycling, especially in urban areas. But most importantly, perhaps, is the increase in order frequency. Online shopping has intensified, particularly thanks to the global COVID-19 pandemic changing consumer behaviors.
“In 2022, retail e-commerce sales were estimated to exceed 5.7 trillion U.S. dollars worldwide,” Demir tells KUST Review. “This figure is expected to reach new heights in the coming years.”
DHL’s Green Logistics Toolkit recommends route optimization to reduce time and distance to destinations, lowering fuel consumption and reducing both emissions and costs. It also suggested training delivery drivers in eco-driving – driving behaviors that reduce emissions and fuel consumption – and using green fuels or electric vehicles.
The path to decarbonizing road freight transport seems straightforward: electrify. Dependence on fossil fuels remains one of the greatest challenges facing logistics, especially because effective, economically viable solutions have yet to be found. Many businesses, however, are shifting to EV fleets, which offer lower operating costs and less downtime. EVs offer another advantage too: They can be easily integrated into a greater cloud-connected supply chain network allowing AI-powered technologies to streamline operations.
Demir thinks EVs are the only option for delivery vehicles.
“For last-mile urban transportation, the future is EVs, but the technology is not there yet for heavy goods vehicles,” Demir tells KUST Review. “Phasing out fossil fuel road freight vehicles is an essential step to reducing emissions and combatting climate change.”
He points to the U.K.’s plans to ban sales of new diesel and petrol vans by 2030; require all new vans to be fully zero emission at the tailpipe from 2035; and ban the sale of all non-zero emission heavy duty vehicles by 2040 and lighter HDVs from 2035.
“Phasing out fossil fuel road freight vehicles will not only reduce emissions but also improve air quality and create new jobs in the green energy sector,” Demir says.
Limited electric recharging and hydrogen refilling stations in urban areas is an important drawback, however. Currently, light duty electric vans can travel around 250 kilometers before they need to be recharged. As technology develops and more electric vehicles are used, charging speeds will be reduced and more recharging hubs will become available in the network, but in the early days of the transition, recharging stations are a hard find.
“(EVs) are environmentally friendly since their engines have almost no emissions and emissions in electric power stations can be controlled,” Bloemhof says. “With their limited range, they are better suited to city transport, and to compensate for the short range, a dense power re-supply network could be set up, possibly in conjunction with a swap of batteries.”
Intelligent fleet management can also be put to better use here. Algorithms can prioritize dispatch of an eco-friendly fleet, encouraging consumers to choose eco-friendly delivery methods to get their items sooner.
Alix Vargas spent 2020 working with Connected Places Catapult, an innovation accelerator in the U.K. There, she focused on sustainable collaborative logistics using planning algorithms to better manage freight logistics between companies: “Optimized truck journeys through collaboration will lead to a reduced total distance traveled and reduced number of trucks on the road with a consequent reduction in environmental and social costs.”
These algorithms and their associated platform can help potential collaborators trust each other, share data and build a new business model based on collaborative networks.
“Collaboration would reduce the number of heavy goods vehicles on the motorways, decrease emissions, reduce empty running, and identify routes and journeys where operators can consolidate their loads into single-vehicle trips,” Vargas explains.
Kardinal is a delivery-optimization platform for the logisticians. It recommends decreasing the number of vehicles used and the number of kilometers traveled. This can be achieved by optimizing routes and loading trucks to full capacity.
Kardinal also highlights the role companies need to play in raising awareness of a delivery’s environmental cost. A survey by the French Senate in May 2021 found that 93 percent of respondents felt insufficiently informed about the environmental impact of the delivery of their online purchases, and more than 85 percent thought it would have an impact on their choice of delivery method.
Cardiff University’s Demir thinks there’s more to it than simply optimizing the route:
“The traditional approach in route optimization was to reduce traveling distance, but all research in green logistics shows there are many other factors affecting fuel consumption,” Demir tells KUST Review. “Vehicle speed, congestion, road gradient, payload and driver behavior are all factors affecting fuel consumption alongside traveling distance. My own Ph.D. in 2012 looked at these factors, and only now have more and more software packages started looking at these factors together.”
According to an IBM Research Insights report, 57 percent of consumers are willing to change their ecommerce purchasing habits to reduce their environmental impact. Another study by UNiDAYS, a discount website for students in the United Kingdom, found 80 percent of Gen Z students would consider paying more for sustainably delivered products.
With the rise of the gig economy, crowdsourcing platforms are stepping up to ease last mile delivery difficulties in cities. Local, non-professional couriers who use their own transportation can make deliveries. And with the ongoing integration and enhancement of automation across industries, delivery robots and drones are becoming a reality quickly.
“Using drones and delivery robots as assistants in parcel delivery is a new service option, as seen in Amazon, UPS, Walmart, Alibaba, etc.,” Demir says. “With their joint work as assistants, the delivery services can be carried out more efficiently and environment friendly. When an adequate number of assistants is deployed, the cooperated delivery system would reduce the required energy consumption and the amount of CO2 emissions generated.”
Until then, Bloemhof says, an important aspect in green transportation is the choice of fuel. “Modern gasoline is cleaner compared to old gasoline as we focused on removing lead additives. Now, biofuels based on corn or on organic waste can easily be mixed with standard gasoline, but more extensive use requires adapting engines, which is quite expensive.”
Demir is happy to see autonomous vehicles introduced in the transport sector. It’s a major step forward, he says:
“Autonomous vehicles reduce emissions and air pollutants, protecting the environment and improving people’s lives. For example, truck platooning technology can be used to control the position of all vehicles in the platoon, permitting the group to operate extremely closely, reducing wind resistance and decreasing fuel consumption. The future of transportation will be seamless mobility where all modes and (semi-) autonomous vehicles are fully connected and integrated into a single network of information exchange.
“In an ongoing research study, the Giro Zero project assessed the viability of adopting alternative technologies, such as low carbon vehicle technologies like electric vehicles, and hydrogen, and dynamic planning tools that enhance the planning and execution of trips run by trucking companies in Colombia. Similar country-specific studies can shed a light on the transition to cleaner technologies by using real-life transport data and considering the requirements of the country.”
ADVANCES AT SEA
Today’s globalized and interconnected supply chains mean that some 80-90 percent of the world’s goods are transported by sea. Each year, container ships ferrying these goods emit upward of 1 billion metric tons of carbon dioxide, accounting for 3 percent of all greenhouse gas emissions.
The European Commission projects these emissions to increase if measures aren’t taken. The commission has made several legislative proposals as part of its Fit for 55 package, which aims to reduce net greenhouse gas emissions by at least 55 percent by 2030. One such proposal is to support demand for marine renewable and low-carbon fuels and boost alternative fuel infrastructures.
How will energy transition impact gas and oil?
The oil and gas industry plays a major role in driving economic and social growth. According to BP’s energy outlook 2030, the world’s primary energy consumption will grow 39 percent over the next 20 years. Concerns over environmental impact and future availability have prompted a transition to low carbon industry, but there has been little research into the impact of this transition on the oil and gas supply chain. Read more›››
“Even though the evolution process from high carbon to low carbon energy is currently very slow, we should be identifying how the shift will affect the supply chain of oil and gas,” Marisa P. de Brito said at the Asian Conference on Sustainability, Energy and the Environment in 2013. De Brito, lecturer in sustainable supply chain management and circular economies at Breda University of Applied Sciences in the Netherlands, investigated the impact of energy transition on sustainable supply chain management of oil and gas
Her review of sustainability reports of companies in the oil and gas industry noted that the energy transition is an issue attracting considerable attention. However, as the players in this space move toward becoming energy companies, not just oil and gas producers, focus shifts to the infrastructure supporting alternative energy sources too.
“We are seeing increased efforts concentrated on improving efficiency of operations and products, which could help in addressing sustainability issues, especially in terms of carbon emission reduction,” de Brito said. “Around 73 percent of the companies we looked at discussed issues related to supply chain management in their reports. Of these, 18 companies disclosed that they are in planning and/or research and development phase of alternative energy sources and significant investment must be made in their supply chains to develop production and logistics infrastructure that can deliver this energy.
De Brito emphasized that logistics infrastructure such as storage and transport systems must be efficient so as to reduce cost and time to deliver supplies to users because many production sites are located in remote areas. The sustainability concerns plaguing the oil and gas supply chain – such as sustainable sourcing; clean production; water and waste management; and the carbon footprint of the production process and logistics activities – are the same facing the development of alternative energy.
“As one of the major players in the energy sector, the oil and gas industry will be affected by the energy transition. They can either continue doing what they do best — exploring and producing oil and gas —but risk running out of business in the long run, or get involved in the so-called clean energy race to remain resilient against the changes in their business environment.”
De Brito’s points remain salient almost a decade on. The oil and gas industry continues to face increasing demands to reduce greenhouse gas emissions and the strategic challenge of balancing short-term returns with its long-term operations. Reimagining existing supply chains can build a sustainable and efficient network for the movement of energy products‹‹‹ Read less
Danish shipping company Maersk has started to pivot toward carbon-neutral methanol-powered ships to offset the 33 million tons of carbon dioxide it emitted in 2020. Fully electric tanker ships and even the world’s first autonomous electric cargo carrier are also helping to wean the industry off fossil fuels. Norwegian chemical company Yara launched the fully electric, fully autonomous cargo ship in 2021 to demo the journey between two cities on the Norwegian coast.
The International Council on Clean Transportation says hydrogen could fuel 43 percent of voyages between the United States and China without any changes to fuel capacity or operations and 99 percent of voyages with minor changes.
For the shipping industry, it’s not just what fuel it uses, but what fuel it delivers too.
Changes to the oil and gas industry as the world shifts from fossil fuels will directly impact the shipping sector too: Thirty-six percent of current trade is transporting energy goods, primarily oil, coal and gas. The shipping freight industry’s biggest problem right now? Declines in shipments of oil and gas outweigh growth of transport of new fuels. Different forms of energy would not be difficult for freight companies to deliver, given existing infrastructure and familiarity with the cargo. While no shipping vessels have been tested with hydrogen, retrofitting existing ships with hydrogen fuel cells should be relatively easy.
And, if we can figure out hydrogen transportation, bioenergy and hydrogen shipments have the potential to be as high as coal and gas shipments, but such increases still do not offset an overall decline in energy products transported by sea.
UP IN THE AIR
According to the Air Transport Action Group, air transport as a whole represents 2.1 percent of global carbon emissions. Air freight produces around 10 times more CO2 than transportation by ship.
Jet fuels created from waste products and other sustainable feedstocks have the potential to reduce these emissions by 80 percent. These are known as sustainable aviation fuels (SAF), and their development could be the key to sustainable air travel.
The International Air Transport Association says more than 450,000 flights have taken to the skies using SAF and more than 50 airlines have experience with the product.
SAFs can be mixed with traditional liquid aviation fuel but they’re also known as drop-in fuels — they can replace traditional fuels without any changes to the engines or systems of modern aircraft. However, SAFs are more expensive, which limits their uptake. Lufthansa Cargo and Air France KLM Martinair have adopted SAF programs for their air cargo activities but scaling up their use to a global market requires substantial investment.
Battery-powered aircraft are also an option. Working toward electrifying air freight is an important step since electrified commercial flights remain out of reach. Larger-capacity electric planes require major advancements in battery technology but smaller flight distances could benefit.
Eviation, an electric aircraft manufacturer, offers a freighter version of its planes that could be used to cover shorter, primarily domestic routes.
Beyond the fuels used, advances in AI and digitalization can support and accelerate sustainable air freight logistics. Blockchain technology, for example, could help provide companies with “fully traceable environmental attributes of SAF to help decarbonize air travel” — so says Avelia, a blockchain solution backed by Shell, Accenture and Amex GBT.