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By: Dr Andrew Traill, director, Shippers Digest
The Loadstar recently reported on the lack of transparency when it came to air freight emission measures. Unlike the shipping industry, airlines have the data in order to comply with the EU’s Emissions Trading Scheme, but are not releasing it to the public and their customers. Freight forwarders made a plea to IATA for them to act and reveal the data.
People get very nervous about transparency; after all it exposes your weaknesses as well as your strengths; and in a competitive environment it takes a brave person to show their faults. But without it, how can anyone help you to improve those areas of weakness?
Transparency is very important, whether talking about emissions or improved supply chain management – and the two are in my view inextricably linked. But what is just as important is comparability.
To demonstrate this we have to look at the motivation for all the different schemes to measure emissions, whatever the mode.
Ask yourself why it is important for shippers and logistics companies who contract freight transport services to be able to benchmark. Cynics will say it is so they can choose the cheapest: lower emissions correlates well to lower fuel consumption, which equates to lower costs and should be reflected in lower prices. Wrong.
The need to compare emissions of different operators and different freight flows is so that you can manage improvements resulting from the flow and the supply chain. There are no businesses which can yet base their choice of contractor on their emissions record alone: it is just one of many key performance indicators which need to be considered; but it is undoubtedly becoming increasingly important.
It is becoming a corporate imperative to reduce the carbon footprint of the business, the products, the supply chain. Of course, if you can do this and show it to your existing and potential customers, you can benefit from a positive, green marketing spin; and who could blame anyone for that, if the claims are true and comparable with others.
So how do you know they are true? How can you compare with others and use this information to your advantage?
The need to trust the emission results is why so many companies are joining the various industry schemes, national and regional initiatives and programmes: they add authority to the claims far more than any individual company or even sector scheme can – no matter how genuine the methodology.
But if you want to compare like with like, everyone needs to be doing things in the same way: measuring in the same way; submitting the data in the same way and in the same format, and getting the output from the same calculations in the same way.
If you want to compare door-to-door freight flows, between different modes or involving a combination of different modes, then each must use a similar methodology and produce output that can enable linkage between them. This is where things get complicated. But just because it may be difficult to achieve, doesn’t mean we should not try.
At the moment there is no way one can link the emission results from the main sea freight emission-measuring schemes with that of road or rail freight. And without the transparency from the aviation sector, there just isn’t a chance of including air freight in your thinking at the moment.
In sea freight there are a few schemes competing with each other. For example, the Clean Cargo Working Group (CCWG) provides for its members (not for the public) data on a trade-lane basis. This isn’t much good if you want to know the emissions of the ships you are using. So you might choose the Clean Shipping Index (CSI)which gives you an emissions index for individual ships; but that doesn’t help you if you don’t know the ship your goods are sailing on – which is the majority of occasions, given the complexity of alliances and consortiums operating today.
So how do you combine the two to get the best of both worlds? How do you link up the results of the CCWG or CSI, with the CO2 equivalent performance measures for rail freight under the EcoTransIT programme, for example, which remain private to the company requesting a calculation from this tool; or link either with the road freight measures proposed under the Green Freight Europe programme or the SmartWay programme in the US, neither of which produce results in the same way as it is done for shipping?
Is it good to have competing schemes? Isn’t it better to provide a single approach for each of the modes, that covers all sectors of industry, types of traffic and freight flows, that enables one to see clearly which are the best environmentally acceptable routes, combination of modes and service providers?
And is it not also best to seek such a standardised approach so it becomes possible for shipper, carrier, and logistics service provider to work out and achieve together the lowest emissions performance they can?
My plea to IATA, the managers and members of the other schemes and programmes for measuring CO2 performance, is to try and align with each other to provide what the shipper increasingly needs: comparable results. Some joined-up thinking is required.