Asia’s freight industry is at a tipping point. Between 2018 and 2025, the e-commerce market in Southeast Asia alone is expected to grow fourfold, from US$23.2 billion to US$102 billion, requiring an attendant rise in logistics and delivery services.
By 2050, Asia is slated to account for 56 per cent of the world’s surface freight demand—goods transported via road, rail and inland waterways—making it the majority consumer of such services. The region’s road freight, in particular, is projected to climb by 269 per cent between 2015 and 2050, second only to Africa’s growth.
With delivery trucks already having a disproportionate impact on the environment and human health, governments, companies and organisations are increasingly promoting “green freight”, which aims to cut the per-kilometre pollutant and greenhouse gas emissions from freight transport and reduce the travel needed to meet the demand for freight services.
“Asia’s freight sector can rapidly adopt and implement green freight solutions, demonstrating that a quick shift to more efficient and environmentally benign freight is possible around the world, including in developing countries,” said the authors of a background paper on green freight in the region for the 2017 Intergovernmental Regional Environmentally Sustainable Transport Forum in Asia held in Laos.
Measure, neutralise, offset
Lionel Steinitz, chief executive of LYS Energy Group, a Singapore-based company specialising in solar energy and carbon footprint consulting and offsetting, said that freight firms should measure the greenhouse gas emissions generated by their activities and offset the amount by improving their processes and purchasing carbon offsetting certificates.
“There are some emissions that you can directly neutralise. You can put solar panels on top of your warehouses to create a greener energy mix. For emissions that you cannot directly neutralise, such as those produced by your employees travelling by car or plane for business, you can source renewable energy certificates from companies like LYS to offset them,” he told Eco-Business.
Steinitz is also chief executive of Green Freight Asia (GFA), a non-profit organisation comprised of Asian road freight companies that promote freight efficiency and reduction in transport-related emissions.
Among other actions, the GFA has created a voluntary certification programme called the GFA Label to recognise players in the freight industry, including shippers and carriers, who have committed to green freight practices. With the programme, which has four tiers from the lowest “Leaf 1” tier signifying minimum commitment to the highest “Leaf 4” tier representing outstanding commitment, shippers can easily identify environmentally conscious carriers, and carriers can gain a competitive advantage.
On 26 September this year, GFA also organised its annual forum in Singapore. This year’s edition was focused on The E-Mobility Transition in Asia Freight Transport and showcased how freight companies in the region have introduced electric vehicles in their operations. These include the use of electric bikes for last-mile deliveries in Vietnam and Malaysia and electric vans for freight in Shanghai.
A co-located exhibition of green technologies, held in partnership with Nanyang Technological University’s EcoLabs Centre of Innovation for Energy, also featured innovations that could help freight players to address their pain points in greening their supply chain.
In Asia, trucks used for goods delivery constitute only nine per cent of the total vehicle population but emit 54 per cent of road transport emissions, representing an opportunity to significantly reduce air pollution by addressing freight trucks, according to the GFA.
The way forward in freight
Several GFA members ranging from a regional company to one of the world’s largest multinational corporations have already instituted measures to green their operations.
The Toll Group, a GFA member and Leaf 1 GFA Label recipient which operates a logistics network across more than 50 countries, has invested in fuel-saving equipment such as fuel-efficient vehicles, low-rolling resistance tyres, LED lighting and rooftop solar panel systems.
The company monitors its new vehicles with a global telematics system and is installing cameras in them to capture events on the road to assist in safe driving analysis. “We can gather data on driver effectiveness and detect actions such as harsh accelerating, braking and cornering and excessive idleness (which consume more fuel),” Mark Jones, former manager of energy and emissions at Toll, told Eco-Business before he left the firm.
“We also work with our customers to see what can be achieved through planning and loading improvements, including improved vehicle use and consolidated shipments. We segment our customers’ shipment data, analyse their delivery locations and calculate key costs such as freight consolidation options and possible rates changes. Through optimising the supply chain, we can find savings of 20 per cent over unoptimised networks,” said Jones.
Toll has a dedicated business that works to reduce greenhouse gases from its freight forwarding operations. “By using a hybrid sea-air solution, customers can reduce greenhouse gas emissions by 45 per cent compared to using only air freight, he elaborated.
Since 2012, the company has saved its customers 247,000 tonnes of carbon dioxide from these services, decreased its greenhouse gas intensity by 19 per cent relative to its 2010 levels, and is on track to meet its goal of 20 per cent by 2020.
DHL, one of the world’s largest logistics companies and a Leaf 4 GFA Label recipient, has committed to zero logistics-related emissions by 2050. Its efforts so far include offering customers a GoGreen Carbon Neutral service, where it purchases carbon credits from verified and high-quality projects to offset a shipment’s carbon dioxide emissions.
It also works with customers on specific projects. In the United States, it helped a customer that ships about 170,000 parcels per year to right-size the packages and cut the empty space in them. This increased the density of outbound trailers by 19 per cent and minimised the number of outbound trucks needed. Not to mention, the packaging waste involved.
Another client, in the retail sector, wanted to lessen the carbon emissions of its transport operations between suppliers and distribution centres in Britain. DHL proposed using teardrop-shaped trailers that can carry more stock per trailer. This reduced the client’s fuel use by about 10 per cent and carbon footprint by more than 2,000 tonnes per year.
LYS chief executive Steinitz noted: “Every company, every manufacturer, is going to have to use transportation at some point. That’s why it’s a key vertical industry to tackle. Companies and organisations like LYS and GFA offer holistic solutions to neutralise the carbon footprint of the entire freight sector.”