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Logistics Providers Made a Sharp Turn Toward Sustainable Transport in 2020

Some of the biggest names in logistics got serious about sustainability in 2020.

The large-scale ocean and land logistics providers made major strides in lowering their carbon footprint and using more energy efficient fuels and vehicles this year. They also are investing in pilot projects aimed at even greater advancements next year and down the road.

Ocean’s alternate fuel route

For ocean container carriers, the International Maritime Organization (IMO) GHG (greenhouse gas) Strategy, adopted in 2018, set ambitious targets to cut in half GHG emissions from ships by 2050 compared to 2008 and reduce carbon intensity of international shipping 40 percent by 2030 compared to 2008. The strategy offered a number of potential measures to reduce emissions and help achieve the targets in the strategy, in particular a 40 percent reduction of carbon intensity from shipping by 2030.

The IMO 2020 regulation, effective since Jan. 1, limits sulfur in ships’ fuel oil to a maximum 0.50 percent. A key method of achieving that goal was a switch to liquefied natural gas (LNG) from high-carbon bunker fuel.

The CMA CGM Group recently embarked on a major program to build a new class of LNG-powered vessels, as part of its drive to take the shipping industry’s energy transition to the next level. On Sept. 23, the CMA CGM Jacques Saade joined CMA CGM Group’s fleet, becoming the largest LNG-powered container ship in the world.

In 2017, Rodolphe Saadé, chairman and CEO of the CMA CGM Group, ordered nine 23,000 TEUs (Twenty-foot Equivalent Units) with an LNG power supply, a first in the history of the shipping industry for vessels of this size. CMA CGM now operates seven LNG-powered container ships and will have a fleet of 26 such vessels of various sizes by 2022.

LNG is currently the state-of-the-art industry solution for preserving air quality. It delivers a reduction of 99 percent in sulfur dioxide and fine particle emissions and of 85 percent in nitrogen oxide emissions, surpassing the requirements of current regulations. An LNG-powered vessel also emits up to 20 percent less CO2 than fuel-powered systems. This technology is one of the initial ways in which CMA CGM plans to meet its target of being carbon-neutral by 2050.

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DHL Global Forwarding, the air and ocean freight unit of DHL Group, said it will be neutralizing the carbon emissions of all less-than-container load (LCL) ocean freight shipments from Jan. 1. In line with DHL Group’s “Mission 2050–Zero Emissions” agenda, the firm is committed to fostering clean and sustainable sea freight transport. The CO2 compensation for all LCL shipments will be achieved by using maritime biofuels and utilizing existing and new partnerships.

“To fight against climate change, the transport sector needs true decarbonization,” Tim Scharwath, CEO of DHL Global Forwarding, freight, said. “For us at DHL Global Forwarding, sustainable fuel solutions are the key lever to change the fuel mix and ultimately reduce carbon emissions in ocean freight. This is why we have taken the decision to neutralize the carbon emission of all our LCL shipments. Even though we are in unprecedented times, due to the ongoing pandemic, we have to make sure that climate protection and sustainability efforts remain at the forefront.”

DHL noted that, at no extra cost to the customer, the heavy oil that would ordinarily be used is replaced with sustainable marine biofuel onboard a pre-selected container vessel to drive carbon neutralization. The CO2-reduction benefits are allocated to the customer. In addition, DHL Global Forwarding has a GoGreen carrier evaluation program that allows the freight forwarder to give preference to carriers with strong environmental performance.

DHL has been exploring renewable fuels as an important lever to minimize ocean freight’s impact on the environment. Key criteria in evaluating the suitability of renewable fuels are that they are produced sustainably and do not compete with other needs, for example with food production for land use. Following strict sustainability standards, the waste-based biofuels must meet the requirements to be qualified as the cleanest biofuels currently available on the market.

Based on the principles “Burn Less, Burn Clean,” the engagement within DHL Group’s global GoGreen program also aims to optimize the carbon efficiency of the company’s transport network, fleet and real estate. This includes reducing energy consumption, increasing the use of renewable energy sources and fuels, and optimizing transportation networks, as well as pick-up and delivery routing. Transport subcontractors are encouraged to acquire low-emission vehicles and employees are educated to apply environmentally friendly thinking, through training and other activities.

Ocean and land logistics providers made major strides in lowering their carbon footprint and using more energy efficient vehicles in 2020.
A UPS hybrid vehicle. Courtesy

Ground transport going electric

For ground transportation, the answer to more environmentally sound methods has primarily been to go electric.

A report from Lux Research, “Automating the Last Mile,” predicts that automated last-mile deliveries will generate up to $48.4 billion in revenue by 2030, while fulfilling just 20 percent of all parcel deliveries. Lux forecasts that the market for parcel delivery will grow from 107 billion parcels delivered in 2019, generating $350 billion in revenue, to 289 billion parcel deliveries in 2030, generating $665 billion in revenue.

Amazon is in the process of adding more than 1,800 electric vehicles (EVs) from Mercedes-Benz Vans to its delivery fleet in Europe this year. Amazon and Mercedes-Benz share a commitment to reduce emissions from the transportation sector.

Amazon’s Delivery Service partners will have access to the new fleet of zero-emission vehicles to make deliveries to customers in Europe this year, helping to save thousands of metric tons of carbon. The order is a milestone for Mercedes-Benz Vans, marking the largest order of EVs to date and making Amazon its largest sustainable transportation partner worldwide.

More than 1,200 EVs in the order will be comprised of the newest electric commercial van available at Mercedes-Benz–the eSprinter, a larger model than the manufacturer’s first zero-emission vehicle, the eVito. The eSprinter includes state-of-the-art safety features, such as an electric parking brake, active brake assist, reverse camera and blind spot assist. The remaining 600 vehicles will be comprised of the manufacturer’s midsize electric van, the eVito, to give delivery service partners operating in geographies that require a smaller-format vehicle access to a zero-emissions delivery option.

Walmart is teaming up with Cruise to pilot all-electric self-driving delivery powered by 100 percent renewable energy. Tom Ward, senior vice president of customer product of Walmart U.S., wrote in a blog that “this year, we’ve had our foot on the accelerator expanding our pickup and delivery services, so customers can get the items they need quickly and safely.”

“What’s unique about Cruise is they’re the only self-driving car company to operate an entire fleet of all-electric vehicles powered with 100 percent renewable energy, which supports our road to zero emissions by 2040,” Ward said.

As part of the pilot, which begins early next year, customers can place an order from their local store and have it delivered, contact-free, via one of Cruise’s all-electric self-driving cars. Ward said this technology has the potential to not only save customers time and money, but is also helpful to the planet and is something the company wanted to learn more about.

Cityfreighter Inc. and AB-Joost signed a development agreement in August to build Cityfreighter’s beta version of the CF1 electric class 3 truck at AB Joost’s production facility in Belgium. The CF1 electric truck is aimed at last-mile logistics, with a special modular concept featuring a low floor with easy driver access that the companies said will significantly decrease development costs and time to market.

A fully functional concept vehicle was presented by Cityfreighter at the ACT show in Long Beach, Calif., in 2019. The beta version is anticipated to be finished in March, followed by a targeted start of production in the beginning of 2022.

UPS and DHL are ramping up investments in electric vehicles and automated technology to meet efficiency, last-mile and environmental demands.

UPS said in February that it was getting aggressive about employing alternative fuels through its venture capital arm UPS Ventures, which has taken a minority stake in Arrival, a startup that makes EV platforms and purpose-built vehicles. Already, UPS has committed to purchasing 10,000 of the less impactful vehicles.

The investment, the amount of which was not revealed, allows UPS priority access to purchase additional electric vehicles. UPS will also collaborate with Arrival to develop a wide range of EVs with Advanced Driver-Assistance Systems (ADAS). The technology is designed to increase safety and operating efficiencies, including the potential for automated movements in UPS depots.

UPS has also begun testing the suitability and durability of Gaussin EVs, which also have autonomous driving capability, to move semi-trailers and containers on the grounds of its advanced-technology London Hub, while DHL Supply Chain and Locus Robotics are expanding their partnership to include 10 new, nationwide deployments of the Locus autonomous mobile robots in 2020.

Shamika N. Sirimanne, director of technology and logistics at the United Nations Conference on Trade and Development, said the pandemic should not push to the back-burner action to combat climate change in shipping. Post-Covid-19 recovery policies should support further progress toward green solutions and sustainability.

“The momentum of current efforts to address carbon emissions from shipping and the ongoing energy transition away from fossil fuels should be maintained,” Sirimanne said.