Calculating the carbon footprint of the whole supply chain

26 Jan 2017
DP World's first smart logistics centre in Peru

DP World's first smart logistics centre in Peru

By its very nature logistics has always been ‘bitty’ because there are a million and one parties to the transport of goods. Consequently, a universal method of calculating the carbon footprint of the whole supply chain has been impossible to realise, but that may just be about to change, writes Anne-Marie Causer.

In 2016, a glimmer of hope appeared on the horizon with the Global Logistics Emissions Council (GLEC) launching what it called the first carbon accounting method launched for global logistics supply chain.

“For the first time, emissions can be calculated consistently at a global level covering road, rail, inland waterways, sea, air and transhipment centers,” said Sophie Punte, executive director of Smart Freight Centre (SFC), a global non-profit organisation that leads the GLEC.                                                          

With freight and logistics generating around 6% of global greenhouse gas (GHG) emissions, companies are increasingly being asked to report and systematically reduce emissions, giving companies with a smaller carbon footprint a competitive advantage.

But until now, comparing emissions across different modes of transport could be like “comparing apples to oranges” because so many methodologies exist.

The GLEC Framework for Logistics Emissions Methodologies combines existing methods into one framework and fills the gaps. It also carries the World Resources Institute ‘Built on GHG Protocol’ mark, making it compatible with global carbon accounting standards.

Alan Lewis, SFC’s GLEC director, said: “This has been a major international collaborative effort, and a milestone for shippers, carriers and logistics service providers who have been have been waiting for a harmonised cross-modal calculation method.”

Smoothing out the chinks

Surely this will come as welcome news to operators as it’s never been more apparent to them that they need to offer the full package, including sustainability, to shippers to stay competitive. Any chink along the logistics supply chain could result in business being moved elsewhere.

DP World has its sights fixed firmly on fast efficient logistics with the opening of its first smart logistics centre in Lurin, Peru.

The logistics centre is connected by optical fibres to the terminal at Callao Port which meaning it can deliver information to the port and customs enabling customers to manage the movement of their cargo using their own electronic devices and smartphones.

Sultan Ahmed Bin Sulayem, DP World Group Chairman, CEO and Chairman of Ports, Customs & Free Zone Corporation, said: “This new logistics centre underlines our commitment to enabling trade across the supply chain connecting ports and customs through smart technology to make life easier for business and end users.”

He added that the new platform is designed to encourage trade in the region and on the west coast of South America saving time and money through the efficient movement of cargo.

“This development is part of our strategy to deploy state-of-the-art technology across our global portfolio of 77 marine and inland terminals worldwide,” he said.

It’s a win-win situation of course because the added bonus of smarter logistics doesn’t only benefit traders and investors, it benefits a country’s economic growth.

Improving efficiency

Signs of improvement are apparent at ports across Europe too.

The Port of Rotterdam is one of the partners involved in a major new €2.2 million logistics project focusing on blockchain technology to improve the efficiency of the transport sector.

In the joint project, TKI Dinalog, TU Delft, ABN AMRO, the SCF Community, Royal FloraHolland, SmartPort and 10 other partners, will use blockchain technology, which uses an open network of databases and functions as a public digital ‘ledger’, to unite operational information, financial flows and contracts.

During the project, the use of blockchain technology for logistics purposes will be concretely set up, tested and live tested.

TU Delft meanwhile will concentrate on creating an open-source core business infrastructure that will make the blockchain suitable for mission critical usage.

Being one of the largest ports in Europe, Rotterdam has always made logistics and hinterland connections a priority. It has said time and again that a port is nothing without its hinterland connections and its logistics partners.

Its PortShuttle Rotterdam service serviced by GVT Group of Logistics has more than doubled since it was set up in 2015. The service is responsible for the exchange of containers between the various deep sea terminals.

The connection allows the port to offer the speed and reliability that transportation by trucks lack due to the road congestion on the A15-A16.

"The PortShuttle is a service that genuinely adds value for the port of Rotterdam," said Matthijs van Doorn, logistics manager at the Port of Rotterdam Authority. “Increased ease in the exchange of containers, the strengthening of the rail product and a nice sustainable solution for the port."

Vorarlberg and the Lake Constance area are important hinterland regions for the Port of Rotterdam. It is not a coincidence that the port supports the local partners in expanding connections in Austria. The government of the Netherlands is also committed to a new programme for handling the intermodal Austrian market.

The port said that since other market partners have shown concrete interest, a further consolidation of the connections to Rotterdam is planned.

Rail connections

Samskip and the Rail Cargo Group are set to launch a rail connection between Curtici, Romania and major logistics centres in Sweden.

The two companies have announced plans to link their multimodal transport networks from 1 January 2017, this will hope to lower emissions output in both countries.

This move will make the two companies the first to offer an end-to-end connection between Turkey and Scandinavia.

Until now, shippers wanting to transport shipments between the two regions have had little choice but to use road haulage, running the risk of road congestion, delays and unpredictable delivery times”, said Frank Gielen, rail development manager at Samskip Van Dieren Multimodal.

He added: “The rail connection offers shippers a more reliable alternative, as well as achieving substantially lower emissions per unit load.”

It effectively joins two existing, fully operational routes to form the first unified rail connection between the East European nation and Scandinavia, taking advantage of Samskip’s state-of-the-art railway hub in Germany. The multimodal freight service will offer competitive transit times compared to road, allowing shippers to transport cargo from Curtici to Stockholm in four to five working days.

Incubator programme

Meanwhile in Asia, PSA International has launched a new corporate venture capital arm, PSA unboxed, with an initial fund size of US$20m.

PSA unboXed is expected to invest in and nurture start-ups that are keen to create innovative logistics, engineering solutions as well as transaction solutions for the maritime trade and finance ecosystems. 

“Being one of the world’s largest port operators gives PSA the unique platform to instigate and support game-changers in our industry,” said Tan Chong Meng, group chief executive of PSA International.

“Through PSA unboXed, we want to encourage creative ideas that can improve and revamp LogTech, increase port productivity, and enhance the integration, security and performance across the constituents of global supply chain logistics.”

Selected start-ups will initially receive up to US$50,000 in seed funding and be provided with incubator facilities at PSA’s Pasir Panjang Terminal Building 3 in Singapore. They will also have access to the live port environment to develop and test-bed ideas for the real market at PSA Singapore Terminals, and receive the mentorship of seasoned PSA port professionals and other business leaders.

Into 2017

It will be interesting to watch all of these projects develop in 2017. But one thing that we can be sure of is that logistics projects will be affected by other key factors in the industry, including the challenge of securing funding.

In America, the new Trump administration’s promise to rebuild US infrastructure could involve a system of tax cuts and credits for corporations and an infrastructure bank for projects, which could prove to be problematic for the transportation and logistics industry.

Port Strategy magazine says that a recent report by The Hill suggests that private investors would only fund projects that have tolls or user fees that can recoup investment costs, meaning critical infrastructure needs like deepening ports or fixing existing roads and bridges may go neglected.

And in the UK, as the country moves towards exiting the EU, there will surely be hurdles to face with regards to reduced funding for infrastructure projects, meaning that more and more funds will need to come out of stakeholders own pockets.

But there may also be new opportunities for these projects to gain support in the future.

For example, GLEC is now looking at building on its Framework for Logistics Emissions Methodologies to support businesses that want to reduce their carbon footprint across their global logistics supply chain.

Its newly launched Logistics Emissions Accounting and Reduction Network project (LEARN), which is funded by the European Commission, is implemented by a consortium of 13 organisations and industry associations led by Smart Freight Centre.

Companies will be supported through guidance, training and testing of MRV in real logistics supply chains, as well as help with setting research and policy priorities.

More info is available from www.learnproject.net

Book your place at the 2017 GreenPort Congress to find out more about calculating your carbon footprint.

For further information contact the Events team on +44 1329 825335 or email congress@greenport.com.

Follow the event on Twitter @GPCongress.

Links to related companies and recent articles ...

Port of Rotterdam

view more