News / Supply chain disruptions drive 'greener' transport goals further down the agenda

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“The jury is obviously out on willingness to pay for sustainability,” according to Dilip Bhattacharjee, partner at McKinsey & Co, as supply chain chaos is seeing ‘green’ transport put on the back-burner. 

During yesterday’s Flexport Global Logistics Outlook, Mr Bhattacharjee said: “You guys have seen it in your data, we have heard from clients in their data; the ability to charge a green premium is still questionable.” 

He added that, from a consumer end, there was more willingness to be sustainable, “but in the transportation buying side, it hasn’t yet shown up en-mass”.  

Flexport CEO and founder Ryan Petersen agreed: “You know, when rubber hits the road, there’s more stated preference than willingness to pay. I think that’s true.” 

He added: “The interesting thing that we see in particular, is that Europe … is very much proactive coming from [the shipper] side, whereas in North America, I think we’re the ones pitching it, presenting it, trying to get folks interested.  

“There’s definitely something in the zeitgeist in Europe that’s much more powerful in this regard.” 

However, Mr Bhattacharjee highlighted the McKinsey 2024 Voice of Consumer Survey, where 60% of end consumers claimed to value sustainability and 35% of respondents said they would pay extra for eco-friendly shipping.

He said: “So, there may be an opening here; if you’re truly in that zone, it’s at least worth testing as an option. For example, ‘reliable and eco-friendly’ may end up being a better thing to say than to say ‘slow’. Because slow is probably going to be more eco-friendly than fast.” 

Indeed, The Loadstar previously reported that NGO Transport and Environment was lobbying for carriers to reduce vessel speed after its commissioned study found a strong correlation between emissions and sailing speed.  

However, in Xeneta’s 2025 Ocean Freight Outlook webinar, senior shipping analyst Emily Stausbøll noted that net zero “has become less of a priority during the chaos of 2024”, and trades particularly impacted by the Red Sea saw a significant increase in carbon emissions this year. 

She said: “In an effort to get ships back to port quicker, carriers were increasing shipping speeds where they could. Longer sailing distances at higher speeds had a direct impact on emissions.” 

According to Xeneta data, the Far East to Mediterranean fronthaul produced 60.1% more emissions per tonne of cargo, compared with 12 months earlier. 

“While containerships continue to avoid the Red Sea, this impact will continue,” Ms Stausbøll added.  

And with no end in sight to the Red Sea crisis, a looming port strike on the US east coast, an upcoming alliance reshuffle, Chinese New Year and other potential disruptions, it is unlikely carriers will start slow-steaming to reduce emissions any time soon.  

Mr Petersen suggested the “really low-hanging fruit” was increased utilisation and modal shift from air to ocean. But he added: “Once you get beyond that, it starts to get a lot harder to do. The biofuels are really expensive. And frankly, I’m sceptical that we, as a civilisation worldwide, produce enough of them.” 

“If everybody switched, I think the price would go to the moon and they’d be even more expensive.”

Ms Stausbøll concluded: “Perhaps if 2025 brings calmer waters to the market, we will see carbon reduction given a higher priority.”