Author: Mei Ling Tan

A combination of external and internal pressures are continuing to drive a ‘greening up’ of logistics operations in Asia and worldwide. Increasingly, though, companies are implementing such developments as part of an overall corporate business strategy rather than a standalone area of activity.

Some of the key trends in that context were outlined by John Manners-Bell, chief executive of UK-based global logistics industry research and analysis company Transport Intelligence, who spoke on the subject of ethics and sustainability in the supply chain at a recent conference, The Future of Logistics, in London, and is now writing a book on that subject.

One of the key points to emerge from the conference session which discussed those issues, Manners-Bell told Asia Cargo News earlier in September, was that ethical and environmental logistics practices were now increasingly part of wider corporate sustainability/social responsibility programmes being implemented by companies as an integrated element of their overall business development.

Another key point to emerge from the conference, he continued, was that ethical behaviour and commitment to environmentally-sustainable practices need not be at the expense of profitability. “In fact, best practices in logistics and supply chain management bring together ethics, sustainability and bottom line performance in a holistic approach,” he argued.

Expanding on that point, Manners-Bell suggested that going back a decade or so, most manufacturers, retailers and logistics providers still tended to view the development of greener supply chain and other operations as something “nice to have” or a potential additional competitive advantage but basically separate to the actual business of making money.

“Now, companies increasingly see that they need to get all those elements right in order to prosper. For example, if you are a multinational consumer electronics manufacturer or retailer and one of your suppliers in China is found to be mistreating its workers or releasing large quantities of toxic chemicals into the environment, that could have a huge negative image on the global image of your brand,” he said.

Commenting specifically on supply chain trends in that context, Manners-Bell confirmed that logistics providers were now focusing both on developments designed to improve the environmental performance of operations for customers and their own internal “green” credentials.

“Logistics providers are being pushed by their customers to make their supply chains more environmentally friendly, but many are also large corporations in their own right and therefore have a responsibility of their own to operate in a sustainable way,” he said.

One recent example of the first of those trends saw major Asian region and global logistics provider DHL announce in June that it had launched DHL Carbon Calculator, “a new online application which delivers live data-based emissions calculation for almost all shipment sizes and modes of transport for local, national and international deliveries.”

Kathrin Brost, vice president, green strategy and customer intelligence at DHL Global Forwarding, which tested the Carbon Calculator together with customers, explained that the calculation was carried out online based on intelligent algorithms.

“While many other computational tools provide only a rough estimate of the transport emissions and the route, the Carbon Calculator taps into real logistics data,” she said. “That data includes the route to the nearest airport or harbour, the main leg by air or sea and the ‘last mile’ in the destination country.”

More recently, at the beginning of this month, French global logistics provider Geodis highlighted the ‘environmental’ credentials of a new rail transport operation it had just introduced between Wuhan in central China and the city of Lyon in France for Marseille-based designer jeans manufacturer Kaporal.

Vincent Allal, head of Kaporal supply chain, claimed the new service enabled that company to reduce its transport time, costs and environmental footprint. “Rail transport is a real alternative to air travel that was previously not considered. The transit is relatively short, we have halved our bill on this transaction and we are very sensitive to the low environmental impact of this solution,” he added.

One of the latest instances of a logistics provider “internal” green development saw Samskip, which operates one of Europe’s largest multimodal container logistics systems, report in August that subsidiary frigoCare had completed the installation of what it claimed was the largest solar panel system in the Dutch port of Rotterdam, a major European gateway for Asian deepsea container traffic, as part of its “sustainability strategy.”

That initiative, undertaken in partnership with Dutch renewable energy company Zon Exploitatie Nederland (ZEN), comprised the installation of some 3,100 solar panels on the roof of frigoCare’s 14,000 pallet-capacity cold store in that port. The installation covers an area of 7,500 square metres and is said to be capable of generating 750,000kWh of electricity a year.

“The new solar panel installation is owned by ZEN, while the roof’s surface is provided by frigoCare,” explained Samskip. “In turn, frigoCare benefits from access to a cheaper, and ‘greener’, energy supply. Under the agreement between frigoCare and ZEN, the solar panels will meet around 30% of this requirement. Any excess power will go back into the local electricity grid.”

FrigoCare managing director Jan Bouman added: “When we upgraded our cold store, which is primarily used to store frozen fish, we wanted to make it as environmentally-friendly as possible. The partnership with ZEN has enabled us to reduce our annual carbon emissions by around 325 tonnes a year.”