DB Schenker: How air cargo can be green
08 / 04 / 2014
COMPANIES like to boast about what they are doing to combat climate change, but does it influence the way they design their supply chains? And what does that mean for air cargo? Will it inevitably always be seen as the bad boy for carbon emissions, or is there anything it can do to improve its image?
A good person to answer these questions is Andrea Schoen, senior manager of carbon controlling and consulting at global logistics company DB Schenker. Her response is that yes, companies are taking this issue seriously, but air cargo may not have such a poor story to tell as it thinks.
Certainly DB Schenker is receiving more and more enquiries from customers about its environmental credentials. “It’s gaining huge momentum,” Schoen reveals.
Pressure comes from EU regulations, from consumers, but also from capital markets which increasingly see sustainability – in which carbon emissions are a component – as a measure of a company’s financial robustness.
She points to the Dow Jones Sustainability Index and also to the Carbon Disclosure Project (CDP), a voluntary scheme put in place by the world’s stock exchanges. “The CDP shows that a company knows what its emissions are and can track them. Bloomberg includes a company’s carbon accounting in their security rating.”
Concern over energy security feeds into this debate. Investors in companies are worried not just about high energy prices, but also about access to oil and gas supplies in the future. And though CDP and other measures are currently voluntary, companies are anticipating future legislation.
Does that mean there is pressure to reduce airfreight use? Not necessarily, says Schoen. “We do have some customers who want to reduce their airfreight usage, but ca-bon emissions are not the only factor: more important may be to cut costs or improve their planning processes to reduce the need for emergency shipments.
“But for many shippers, for example in light electronics or high fashion, there is no way around airfreight. So while this is not easy to prove at the moment, my feeling is that airfreight will not reduce dramatically.”
Nor, despite reports about companies changing their supply chain policies to source closer to home, does Schoen think this will be a major trend. “We have global industries now and there is no stepping back from that.
Of course there is discussion about local sourcing and producing closer to the market, but this will never come about in a large way because we can’t step back in history. For example we won’t go back to eating apples only in autumn.”
Customers that can’t reduce their airfreight may still want to reduce their levels of emissions, however, and it is here that Schoen thinks airfreight has potentially a good story to tell.
“Airfreight is highly innovative. It is actually super fuel-efficient,” she says. “Efficiency has improved 70 per cent in the last 40 years, and I think they will be able to improve it further – not just due to new engines but also new materials such as carbon fibre and better air traffic control.
“Fuel efficiency models show the air industry has the potential to halve its total emissions by 2050, even taking into account the growth that will take place in the interim.”
This is a story that she thinks airfreight needs to shout louder about, but it also needs to be able to provide verifiable information on it to enable proper comparisons to be made. “This is my message to ai-freight: you are good, now prove it in a standardised way.”
She points to the Air Cargo Carbon Footprint working group of IATA as a good start, and the recently set up Global Logistics Emissions Council which aims to develop standard reporting of carbon emissions across all cargo transport modes.
She sees ocean freight as a good model. “It has the Clean Cargo Working Group, which has been in place a decade and calculates carbon emissions in a very unified way. They now cover 85 per cent of the container shipping industry by capacity, and we are part of that group.
“We get data from them in a validated and consistent way, which is tremendously useful. We can really prove improvements in emissions year-by-year.
“They have broken down world trade into 20 routes and they give average fuel consumption for each trade lane and for each carrier on the trade lane.”
This level of transparency was not achieved without some angst. There are many factors that can affect carbon emissions on a shipping route – higher or lower load factors, more modern ships, slow steaming – and, in some cases, carriers felt this meant them revealing some sensitive commercial information.
“But we do not need to know the detail, just the final carbon efficiency,” she says. “It was a painful process at first, but now even Asian carriers are abiding by European standards. I hope we can introduce a similar model to airfreight, as a way to make it look as good as it is.”
One thing in airfreight’s favour is that the kerosene fuel it uses is a lot cleaner than the heavy bunker fuel used by containerships. Bio-fuels also offer a degree of hope.
“The first tests have been positive, but at present they are not scaleable because the availability of biofuels is very limited,” says Schoen. “We as logistics providers would plead for the air industry to be given those biofuels we do have, and let other modes look for other solutions.”
One question if carriers are to produce standardised reports of carbon emissions is whether they would give a figure for the carrier as a whole, or would forwarders want flight-by-flight details – for example to know if a service was operated by a B777F or a B747-400F?
Schoen comes down firmly on the side of whole-system reporting. “We have a portfolio of core carriers, and we expect all of these to improve according to the EU16-251 carbon reporting standard. The key is they must show a consistent improvement across their whole system.
“Of course, the B777F is attractive, as it reduces carbon by 15-20 per cent compared to previous aircraft, so we would certainly encourage airlines to renew their equipment. But it is not realistic to expect them only to deploy B777s.
They have their systems and we realise we can’t cherry-pick from within them. We don’t encourage customers to cherry-pick on a large scale.
“For a single project where they want to demonstrate that they can cut emissions it can be useful to pick a B777F, but we would not make a contract with a customer where we would only use B777Fs in their supply chain. It is the same with our trucking fleet: we don’t do contracts where we say we will use only Euro 5 trucks.”
Another intriguing ques-ion is whether belly or freighter cargo is more carbon-friendly. But here it depends on how you frame the question. Since passenger ‘planes are more lightly loaded overall than freighters, if emissions are split strictly by weight then belly cargo has higher emissions.
“At the moment, the EU emissions calculation standard leads to an allocation of up to double the emissions for belly cargo compared to the same cargo in a freighter,” says Schoen.
“But, philosophically it is better to have belly cargo, because this combines different payload types – passengers and freight – in the same unit, in the most efficient way. So there is a need to review this standard and we’re involved in initiatives to do just that.”