If you haven’t started working on a strategy to reduce your transport emissions yet, now’s the time to start.
As we uncovered in part one of this blog series, ‘How Big of a Problem is Climate Change in Freight Procurement?’, governments and shipping bodies are putting pressure on the entire logistics sector to clean up their emissions. So if you don't start reducing CO2 now, you could find yourself in hot water soon.
It can feel like a monumental task to reduce emissions when your job is to get goods from Point A to B cheaply and quickly. But some companies are already on the path to cleaner shipping using a variety of strategies.
So, let’s look at which companies are on the path to CO2 neutral and the ways you can start to reduce your freight procurement carbon footprint.
Case study: 3 companies that are on the path to CO2 neutral
Ikea
The Swedish furniture design firm has committed to a total overhaul of its CO2 emissions. They even publish an annual report breaking down their emissions by how they're produced. The brand is proactively tackling their transport and freight CO2 emissions (which make up 5% of their total emissions) in the following ways:
- They've partnered with carriers that use liquefied biogas to power their ships. This pollutes less and, as it's made of waste products, it doesn’t exploit the earth like fossil fuels.
- They are replacing parts of their road transport with greener rail transport.
- IKEA is switching from Diesel to HVO, a biofuel that produces around 90% less emissions, to power their trucks.
Hasbro
The toy and games manufacturer has been committed to sustainability for years. Their forward-thinking environmental initiatives have seen the company win several awards for sustainability – including the Gold Play for Change Award in 2020. This commitment to sustainability is also included in their supply chain strategy, here's what they're doing:
- They've publically committed to reducing their Scope 3 emissions in their annual corporate responsibility report, which includes specific data for shipping.
- They're closely balancing items stocked at regional distribution centres with the stocking needs of retailers in those regions to make transport more efficient and reduce emissions.
- Hasbro has also been a member of the U.S. Environmental Protection Agency (EPA) SmartWay® Transport Partnership since 2012.
BMW
The German car manufacturer is leading the way when it comes to sustainability in the automotive industry. They’ve recently started making serious commitments to reduce the emissions produced by shipping their cars around the world. Here’s what they’re doing:
- They've joined the Ship Recycling Transparency Initiative, which is committed to ensuring decommissioned container ships are sustainably disposed of and recycled.
- BMW partnered with Maersk to develop sustainable shipping fuel and reduce emissions on their car shipments by 25%.
- They joined the Getting to Zero Coalition which aims to reduce carbon emissions on transoceanic shipping routes
- BMW committed to exclusively using emissions-free shipping vessels starting from 2030 with the next decade to be used as a transition period.
5 ways you can reduce your transport carbon footprint
With big names leading the way in sustainable transport and shipping, how can you start to reduce your carbon footprint?
1. Use cleaner modes of transport
Container ships contribute 3% of the world’s CO2 emissions – that’s almost half of all freight transport CO2 emissions (7%).
But that doesn’t make container shipping the dirtiest mode of transport – in fact, it’s the cleanest! Container ships make up such a large share because 90% of all goods are moved by ship. That's why, when you’re building your sustainable transport strategy, it’s important to look at the mile-by-mile (or km-by-km) data to know which modes of transportation are the cleanest.
Like Ikea, switching from trucks to rail freight can have a big impact on your emissions. And the graph below clearly shows that avoiding air cargo (which produces 148x more CO2 per tkm than maritime shipping) is a very effective way to cut your freight transport emissions.
(Data source: Fraunhofer ISI and CE Delft, 2020).
2. Carbon offsetting
Carbon offsetting is one of the easiest ways to reach CO2 neutral – but you have to pay directly out of pocket to get it.
Essentially you invest in environmental programs (such as planting trees) to reduce the amount of CO2 in the environment. There are programs and companies to help you do this, but it can be tricky to find a reputable one. Look for a program that’s been vetted by a reputable agency to ensure that your contributions are really making an impact.
3. Onshoring and nearshoring operations
If your transports don’t have to travel as far, they will produce less emissions - making onshoring and nearshoring an effective way to reduce freight transport CO2. Plus, onshoring and nearshoring operations have become a big topic lately as companies recognise there are several benefits, such as:
- Increasing supply chain resilience
- Reducing CO2 emissions
- Avoiding busy Chinese lanes and ports.
However, there’s one clear downside to onshoring and nearshoring: relocating operations has a big cost and will take time to implement. It’s certainly not a cheap or easy option, but it can be an effective way to achieve long-term CO2 reduction.
4. Ensuring your FCL transports are full
Partly-full containers contribute more to unnecessary emissions than you might imagine. On average, shipping containers moving from Asia to the US are 24% empty - this equates to 61 million TEUs of empty containers and around 122 million tonnes of carbon dioxide emissions.
Ensuring you fill your FCL containers to capacity means the carbon cost for each shipment is lower. Implementing this strategy across all your shipments can have a massive impact on your overall carbon footprint.
5. Work with greener carriers
This is a strategy that BMW has implemented through their partnership with Maersk - as the carrier committed to reducing BMW’s shipping emissions by 25%.
Choosing to use an eco-friendly carrier at the point of procurement ensures that you reduce emissions at the very first stage of your shipping journey – making it one of the most efficient ways to reduce your carbon footprint.
Getting visibility into which carriers are the most eco-friendly for your transports has become possible recently for companies of all sizes with the help of sustainable procurement technology. Our sustainable freight procurement solution ShipstaPLANET makes it easy to choose transports based on emissions data at shipment level – so you can start to reduce your carbon footprint today. Learn more about ShipstaPLANET in the link below…
About SHIPSTA
SHIPSTA powers smart logistics procurement with a digital platform that connects shippers and carriers to ensure a frictionless procurement process for spot and contract buying, entirely online. It automates complex tasks, provides unrivalled visibility and supports fast data-driven decision making.
Designed and built by experts in logistics procurement, SHIPSTA is bringing transparency, automation and efficiency to the global logistics industry. It is used by some of the world’s largest companies to respond to market volatility, control freight costs and manage risk. The company was founded in 2015 and is based in Mertert, Luxembourg and Hamburg, Germany.
