The freight challenge
Argon and Co writes the exponential increase in transport volumes over the last 50 years has been accompanied by an increase in air pollution, traffic jams, accidents, noise pollution, as well as significantly contributing towards climate change. Together, costing the European Union an estimated €1,000 billion every year.
Transport emissions account for 24 per cent of all global emissions of greenhouse gases (10 per cent of which is from freight alone), making it the second-highest emitting sector after energy production.
In this context, reducing emissions from freight is a somewhat unprecedented challenge; to reduce emissions by 30 per cent by 2030 (meeting the objectives of the Paris agreement) despite the International Trade Forum predicting trade to triple by 2050.
So how can we achieve this goal?
This article suggests one action that companies can take to reduce their carbon emissions, with a focus on transport, setting aside industrial relocation challenges. You can read further action points at https://www.argonandco.com/en/news-insights/articles/how-supply-chains-can-reduce-transport-emissions-by-30-in-the-next-10-years/
Start by reducing your transport costs
The first step is to optimise capacity, which allows you to reduce costs while favouring modes of transport that generate fewer emissions.
Maximise the fill rates of freight
The options for increasing the filling of freight are numerous and these are just some of the ways you can increase cargo capacity; optimise the weight/volume of packaging, use palletisation plans, pallet risers, and/or favour the use of homogenous pallet transportation rather than using heterogeneous pallets which take up more space.
Optimisation of resources
For transport by road, this can be done by favouring the use of large volume rigid-axle lorries and/or articulated lorries or through the use of a lightweight aluminium trailer which gives the option of increasing the payload (as opposed to a heavier trailer).
Developing synergies with partners (or competitors), in a shared services model can lead to a 30 per cent decrease in the number of lorries in circulation. For example, companies that are located in the same warehouse with the same (or similar) delivery objectives can share freight/delivery.
Optimise useful distances
In France, nearly 25 per cent of trucks on the road are empty. This is a shocking statistic and something that needs to be improved drastically. Below are two options of how this could be achieved;
- Logistically: such as utilising “backhauling” (hauling cargo from point B, back to point A), using couple flows, and minimising the distances of relocating of trucks systematically; Delhaize in Belgium is a great example of this in action.
- Digitally: the use of support tools can aid decision-making under specific constraints to significantly optimise the distances traveled. For example, setting up a ‘route optimiser’ results in gains of between 5-10 per cent when compared to opting for the ‘modal shift’ (switching modes of transport). However, the ‘modal shift’ itself has the potential to act as a powerful driver in reducing the carbon footprint of companies. For example, intercontinental transport flows show that using air passage in the maritime sector cut emissions by 50 per cent and costs by 20 per cent.
On a continental scale, rail freight is also often competitive over distances greater than 500 km.
Although challenging, a company could implement a postponement strategy (i.e. delaying delivery). This would require eligible products to be identified (perhaps considering time-to-market as a factor), and controlling the impacts of postponement by reviewing stock and replenishment levels, as well as taking service rates into account.
Improving the traceability and quality of transport conditions by relying on technologies like the IoT.