News / Take the cost of going green out of your transport budget, says DHL chief

Tim Scharwath,

Extra costs for the transition to green shipping and logistics should be removed from transport budgets and “seen in a different way”, DHL Global Forwarding CEO Tim Scharwath told The Loadstar in Munich last week.

Mr Scharwath urged stakeholders along supply chains to factor-in these extra costs, but they must be broken down to become more palatable.

By reducing the cost of the environmental transition to unit level, such as an extra cost on the price of a pair of shoes, the challenges will seem less onerous, he claimed.

“If you build your own budgets, your CO₂ reduction or sustainability budgets should not be mixed up with transport costs, because that way you can start working on a cleaner supply chain by investing into it,” he explained.

Ultimately the cost of the green transition will be borne by the consumer, but he added, if you offer a retail customer the choice of a normal pair of sneakers and a “green alternative which is 10 cents more expensive, you’re offering a choice”.

This view is partially supported by a recent DHL survey of online consumers, which found that the majority of respondents were happy to pay a little extra for an environmentally friendly option.

Mr Scharwath added that the feedback he and his team received from customers in Munich was along the same lines.

“We have had numerous customer contacts and nearly everyone is asking questions about the cost of green fuels. So, the message we give is always the same – it’s going to cost more money because at the moment the supply of sustainable aviation and marine fuel is still not strong enough, and there is not enough being produced to make prices go down,” he said.