This may seem a ridiculous question, given the universal acceptance that urgent steps need to be taken to address climate change. However, it is one thing for transport and logistics companies to claim that they are ‘lazar-focused’ on reaching zero- emission targets and another thing to deliver on pledges.
At first sight, some sectors such as container shipping, have done quite well over the past few years. Work undertaken by Ti Insight on behalf of the Foundation for Future Supply Chain has shown that, across the sector, there was an average decline in carbon emissions of 3.1% and 4.4% for 2019 and 2020 respectively. Much of this reduction has been achieved with efficiency gains and emissions reductions based on current heavy oil fuels or less emissions-intensive LNG-based fuels.
However, 2021 is likely to show a considerable reversal in this trend. Post-COVID consumer demand in the West has driven up volumes on key trade lanes and the resulting capacity crunch has led shipping lines to augment their ultra-large container ships with much smaller, older and less efficient vessels. Congestion at ports has meant that ships spend more time waiting to be off-loaded and trucks more time waiting to pick up containers. In addition to this, ships are speeding up transit times in order to catch up with schedules; partly to keep their customers happy, partly to take advantage of eye-watering shipping rates. Slow steaming strategies (ostensibly introduced to reduce the consumption of oil and reduce emissions) have been rapidly discarded.
Shipping should not be singled out. Air cargo and express operators have also seen a boom in demand for their services in the past year and FedEx has already abandoned one of its targets due, not least, to a surge in international e-commerce shipments. An increase in the need for Last Mile delivery, such an important part of keeping societies and economies functioning during the COVID pandemic, will also result in much higher carbon emissions.
One way to look at the likely reversal of carbon emissions decline in 2021 would be to treat the year as a one off. However, this may be over optimistic. Common to all modes and sectors is the problem that in the medium term, without widespread adoption of alternative fuels, the re-structuring of supply chains or the shifting of freight to less carbon intensive forms of transport, previous gains will subside and volume growth in the market will outweigh even optimistic efficiency gains.
This issue is not one just for the transport and logistics sector to solve. After all, it is doing its best to respond to the pressures being heaped upon it by economies and societies. The point is, that without major structural changes to supply chains, these pressures will time and again produce the same result – higher emissions.
So, the answer to my initial question is that of course carbon emissions matter. However, at times of severe economic and societal stress, rightly or wrongly, they are not of primary importance shippers, logistics and transport operators, or, for that matter, governments, whatever the public pronouncements.
Source: Foundation for Future Supply Chain, July 29, 2021
Author: John Manners-Bell