The transport and logistics sector is undergoing a global transformation

EM5 21 Trade and Markets BVLGreen logistics protects the environment and the climate

This article was featured in Eurofish Magazine 5 2021

The movement of freight has a significant influence on the sustainability of shipping and has developed into one of the most important areas in the transport sector. The term “green logistics” is frequently used in this context, which describes a combination of measures and technologies that aim to organise and monitor freight shipping in a way that protects the environment and climate.

 

For manufacturing companies, transport within and outside of their operation is indispensable to ensure that the required materials are available at the right time and in the right place and that a stable production flow is ­guaranteed. However, when considering transport convenience often wins over environmental concerns, and the potential for optimisation when it comes to the environment is seldom fully exploited. Lorries frequently take inefficient routes to supply customers with goods that they urgently require, and forklifts wander across warehouses because orders are coordinated either poorly or not at all. The costs of these empty journeys may be low in each individual case, but they add up over days and weeks. This reduces operational profits and also damages the environment, since the transport sector bears a significant amount of responsibility for the climate crisis. Transport causes a quarter of greenhouse gas emissions in the EU. Energy accounts for approximately 40 percent of the total costs in this sector. Maritime and inland waterway vessels, rail transport, lorries, logistics buildings, storage and conveyor technology, refrigeration, packaging and loading equipment consume enormous quantities of energy. Lighting can also be a “resource hog”, for example, if an entire warehouse is illuminated even though only a small corner of it is actually in use.

Like the rest of the economy, transport companies are naturally under pressure to reduce their CO2 emissions and become more sustainable, for example, by reducing water and soil pollution, land use and the number of ­transport accidents, as well as limiting noise levels. These responsibilities are not just in the interests of wider society, they also serve companies’ own fundamental interests, at least since carbon emissions are subject to a tax in many countries. Sustainability is hardly a new topic for transport companies, but the industry is nevertheless only making slow progress in implementing the required measures. For example, CO2 emissions from road haulage have increased by more than 20 percent since 1995, although engines today require less fuel and vehicles are much more efficient. Advances in this area have been far outstripped by the rapidly increasing numbers of vehicles on the roads, however. The climate goals for the transport sector can really only be reached if vehicle fleets are drastically reduced.

Meeting these kinds of demands does not seem realistic, however, and it appears that fleets are in fact still growing. On the one hand, transport solutions are subject to climate, environmental and social demands and they should effectively contribute to levelling off the increase of CO2 in the atmosphere. On the other hand, the economy requires a high degree of flexibility in transport chains, which should function reliably under all conditions. The recent fiasco of the 20,000 TEU container ship Ever Given and the associated blockage of the Suez Canal showed how fragile and disruption-prone globally networked value creation and logistics chains in the global economy are. However, the transport sector is indisputably one of the biggest causes of environmental problems worldwide. This is because vehicles drive half empty in order to meet tight delivery deadlines, and their emissions impact us and the environment. The transformation of our preferred shopping culture, with its fast delivery options, is also responsible. This results in an associated increase in delivery traffic, because the goods need to be delivered as quickly as possible, often on the same day. The constant time pressure makes it almost impossible for transport companies to plan orders and routes efficiently and to coordinate sensibly. Under these conditions, it is almost unavoidable that journeys will be undertaken with vehicles that are not full.

Digitalisation offers more efficient options

But increasing energy and raw materials prices make the need for action more urgent. A transformation in social values is also taking place, which is pushing environmental policy topics to the forefront like never before. The number of customers looking out for environmentally friendly products as well as transport and logistics services is growing. States are also intervening into processes with strict environmental regulations. More and more companies are taking responsibility and committing to becoming more environment and climate friendly as part of their corporate social responsibility policies. The transport and logistics sector is undergoing radical change and is searching for room to manoeuvre to implement sustainable solutions. Particularly in the fish sector, however, the search is difficult, since fresh, perishable products require seamless and individually tailored transport. Retail and other business customers expect transparency, flexibility and reliability. In this context, the solution to many of the problems lies primarily with digitalisation. Digital tools and platforms can contribute to the optimisation of travel routes, fuel saving and the prevention of empty journeys. Finally, all of this is part of a bundle of measures that characterise the key area of “green logistics”.

Green logistics, also known as ecologistics or ecology-oriented logistics, has still not been fully and consistently defined. The term has been in more frequent use recently, but is often interpreted differently. Green logistics means redesigning the strategies, structures and processes of all logistics processes to be more environmentally friendly and to use resources more efficiently. The main goal is to reduce the environmental impact and minimise the ecological footprint. Green logistics is expanding the term “logistics” to include an ecological component. To be precise, green logistics refers not only to the environmental credentials and efficiency of transport and distribution systems, but also includes areas such as the use of resources, packaging, storage and waste management.

Companies that are certified in accordance with ISO 14001 have demonstrated that they have implemented an environmental management system and follow the basic principles of green logistics. This includes a wide range of measures that make significant interventions into day-to-day work processes. Transparency is the foundation for more efficient and less resource-intensive planning. In order to plan in advance, coordinate journeys to save energy and prevent bottlenecks in intra-company transport, monitoring of all transport in real time is indispensable. Complex tasks such as this can only be tackled through digitalisation in all company areas. Warehouses, vehicle fleets and administrative buildings must be planned, converted or modernised in accordance with the unwritten principles of green logistics and the state of the art. Ecologically harmless construction materials and efficient water and energy consumption are just as important in this context as the use of alternative energy sources, for example, the installation of a solar panel system on warehouse roofs to even out temperature fluctuations, or, in huge warehouses, only using targeted lighting of certain areas. Automation can also improve energy efficiency and lead to measurable savings. The use of robots in packaging and storage prevents accidents that are almost unavoidable when these tasks are done manually.

Always keep the entire chain in view

An important core area of green logistics is the vehicle fleet, whose fuel consumption and emissions damage the environment. Electric vehicles are currently only suitable for short distances, but some fish dealers are already delivering to their customers in cities with electric delivery ­bicycles and e-vans. Such initiatives may still represent little more than the proverbial drop in the ocean, but these positive examples are being really noticed and recognised. In order to achieve actual measurable reductions in CO2 emissions however, much greater efforts are required on a global scale. This includes all sectors of the transport industry, i.e. road, rail, air and river and sea transport. “Green vehicle routing” is a particular challenge for the globe-spanning transport industry, which aims to ensure that the advantages of green logistics measures in one area do not have negative consequences for other areas. The goal is to achieve win-win solutions that benefit all stakeholders. An example of possible problems that can arise as a result of steps taken by one side alone is the “slow steaming strategy” of maritime shipping companies. It seems entirely reasonable from an environmental point of view for container ships to travel a few knots slower over the world’s oceans. The reduction in speed in maritime traffic reduces fuel consumption, saves costs and reduces exhaust emissions, thus benefiting the environment. Particularly if ship engines are supported on specific routes using SkySails (fully automatic towing kites) and are operated in a more environmentally friendly way. On the other hand, slow steaming increases shipping times and places additional time management demands on global long-distance supply chains. If some companies then use more ships in order to ensure continuous supply, this of course contradicts the original goal of implementing more “ecological supply chains”. A comprehensive approach to green logistics in the area of environmental protection and resource conservation therefore always means seeking sensible compromises to ensure a reasonable balance between all stakeholders.

Right from the project planning stage it should be kept in mind that decisions at this level also have consequences for downstream logistics. For example, the size and dimensions of products influence their volume and weight. This indirectly defines the maximum number of products and the capacity of the planned load carriers, such as containers. Such strategic decisions offer enormous savings potential as the following example shows. The edible proportion of a fish is usually significantly below 50 percent. Transporting gutted and headed fish or fillets instead of whole fish therefore reduces CO2 emissions per unit weight of product by at least half! Storage strategy in large goods distribution centres for retail chains is just as important. If products that are in high demand are concentrated in a limited area, this can save on transport routes, energy and time spent picking deliveries. Another point that is currently receiving a lot of public attention in ­connection with ­plastic waste in the oceans is the type and quantity of packaging materials. For many foods, including fish products in particular, packaging can probably never be entirely dispensed with. In this case, this makes it even more important that products are designed so that packaging is extensively reduced and, if possible, recyclable, compostable or even edible materials are used. However, recyclable packaging should not be the first choice when selecting materials, because recycling also requires resources and energy.

Reverse logistics is creating new business areas

The recycling and waste disposal markets have benefited from changing environmental priorities and new market opportunities are being created for the transport and logistics sector. While traditional logistics mainly organises the forward distribution of goods from producer to consumer, the growth of recycling has created a new sub-sector of green logistics , which deals in “reverse distribution”, or the transport of waste and used materials. This area of the circular economy is demarcated from traditional logistics using terms such as reverse logistics, reverse distribution or reverse flow logistics. Ecology-oriented green logistics is both input and output-focused. “Input-focused” means that right from when the products are being manufactured, care is taken to ensure the economical and responsible use of natural resources. “Output-focused”, on the other hand, means that packaging and products are disposed of in environmentally friendly ways after they are used. Although reverse logistics contributes to traffic, it provides an important contribution to making logistics greener. To improve the overall situation, journeys must be better coordinated, more environmentally friendly drive systems must be promoted and road, rail and maritime traffic must be optimally networked. However, intelligent, holistic logistics concepts such as these continue to be rare exceptions.

Consumer behaviour influences future developments

In practice, a reverse trend is currently observed. Value-creating activities are carried out in low-wage countries and less stock is kept on-site, which reduces costs but places increased demands on logistics and the environment. Particularly since the time window for deliveries is becoming ever narrower. Modern logistics facilitates door-to-door (DTD) services, which are often ­combined with ­just-in-time (JIT) delivery. But the pressure on deliveries requires faster times within distribution systems, which can often only be achieved using less energy-efficient and more environmentally harmful means of transport. The vicious circle of DTD and JIT strategies and ever greater pressures on the environment due to increasing traffic can best be broken by a return to a regional model and using local suppliers. Regional products may be somewhat more expensive, but these costs are usually readily compensated for by lower transport costs and significantly less severe environmental and social consequences.

Although the economic and ecological advantages of green logistics are obvious, many companies still do not see the need to change their logistics business processes. Many continue to work with handwritten lists and undertake long routes and empty journeys. Making the change to sustainable, green logistics even seems threatening to some, because it is associated with additional investment and the disruption of long-established routines. Part of the responsibility for this stagnation also lies with the markets. Customers seldom demand sustainability and are often only interested in price and reliable and speedy delivery. However, if customers do not care whether green logistics is implemented, the motivation for change is lacking. The hope of some companies that the changes needed will somehow not apply to them is unlikely to be fulfilled.

However, it is not just companies but also society and consumers who must make a contribution to solving the problem. For states and governments, this primarily means adapting transport infrastructure to the new requirements. Traffic jams on roads slow down transport, and trains and ships are often delayed. Container ships only arrive on time about 50 percent of the time. This is actually quite a good result, but still shows that, in half of all cases, ships do not arrive at ports at the scheduled time. The lack of reliability forces companies to keep stock levels higher in order to have a buffer to secure daily production needs, but this frequently indirectly damages the environment. In particularly urgent cases, transport and logistics companies must fall back on air and lorry transport, which are some of the least environmentally friendly forms of transport. Depending on its speed and load, a lorry emits an average of 7 times more nitrogen oxides and 17 times more particulate matter per kilometre than a mid-range car.

We as consumers can also make an effective contribution to green logistics. Most importantly through our consumer and purchasing behaviour. Demanding that the full range of fresh products be available in supermarkets even on a Saturday evening right before closing contributes to goods spoiling, wasted energy and potentially to unnecessary delivery journeys. The increased popularity of online shopping has even more serious consequences for the environment. Online transactions are the most important source of growth for courier, express and parcel (CEP) services, but these consume more energy than other retail activities. The “last mile”, i.e. the last section of the route that goods travel to the customer’s door, increases the number of journeys, harms the environment and causes the highest costs for parcel delivery. If the logistics sector is to become more environmentally friendly, energy-efficient and sustainable, it also needs help and cooperation from us, the customers.

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