Logistics and its Environmental Impact Part 5

The 2020’s started out as going to be the decade in which going green was the only way forward for logistics companies. Decarbonisation and reducing the environmental impact of company’s supply chains looked like would feature as a major part in business plans.  Companies in the logistics sectors choosing to adopt a going green plan seem to have many advantages despite the additional expense.

• Positive PR for the company
• Advertisement and promotional tool to existing and new clients
• Long term cost savings
• Risk reduction to employees not having to handle liquid fuels
• Risk reduction to employees having better air quality in distribution centres and transport yards
• Reduction or elimination of storing flammable liquids
• Risk reduction of fuel spills and associated health and safety with storing the fuel
• Easier maintenance of vehicles

Then we entered the Coronavirus crisis which has within a few months has change the world completely. It will be interesting to see if the long term Coronavirus impacts the sectors green credentials. If we enter a long world recession which may mean lower oil prices. This then has a knock on effect of reducing the demand for replacing internal combustion vehicles with zero emissions vehicles.  While the green reform momentum started in the previous decade at lease has credit a solid base and it may well mean that we have reached a tipping point that there is no going back to the old polluting ways. Already several shipping lines have decided to take advantage of the lower oil prices and transit from China to Europe via South Africa. While this is a longer route, the shipping lines can avoid having to pay Suez Cannel Fees. However this means much more emissions per voyage from the vessels but this is an example of economic benefits outweighing the environmental ones.

IKEA have publicly said they will not be shipping on any service which takes this route as it will impact the company’s public green credentials. All their cargo must be shipped on the shortest most efficient route into Europe to reduce their emissions. This is probably one of the first times that a large shipper has used environmental impact factors in their supply chain choices. While no other large shippers have taken any similar action, it does show that some companies regard how the public see their handling of their environmentally impact is important.

With governments around the world looking to stimulating their economies, green technology and green infrastructure projects are going to be ones which start to get much more attention and investment.  In Stallingborough, UK final planning permission has been given for the go ahead of a fuel production facility which uses household waste as its source material. The facility is being developed by a specialist company called Velocys, but has backing from industrial giants including Shell and British Airways. Despite planning permission being given it will be a least a further 2 years before construction starts and it is estimated the plant will not be online until the middle of the decade. However the fuel produced is planned to be used in both the airfreight and trucking industry helping to reduce their impact while reusing waste which would normally be buried in the ground.