Logistics on the way to true Climate Neutrality

What does it take to decarbonize global freight transport?

Did you know that global freight transport is currently responsible for 8% of global carbon dioxide emissions, rising to 11% when emissions from logistics sites are included? And this figure continues to rise. This creates a responsibility and, at the same time, an excellent opportunity for us. It is a great opportunity, because we can contribute to limiting the global temperature rise in line with the Paris Climate Agreement. But is climate-neutral global freight transport realistic at all? And what does it take to decarbonize the transport sector? Here are four aspects that, in my view, are imperative in addition to technology and the proper regulatory framework.?

1.??????Acknowledge responsibility and take the decision

The logistics industry plays a crucial role in global pollution, even though one could argue that we do not play a major role with a share of up to 11%. But every per cent of emissions that fizzles out in the atmosphere or is released into the oceans is too much and could end up being the decisive factor in whether or not we can limit global warming to two degrees Celsius. From my point of view, the question is not whether climate-neutral logistics is possible. Instead, the question is whether we are brave and bold enough to take the path towards climate neutrality. One of the golden rules in economics is to minimize and mitigate risks to one's own business as best as possible. A decision to decarbonize global freight transport seems to come with several unpredictable risks. Which technology to invest in? Which fuel alternative and which propulsion system will be the future? Some technological solutions are not even ready for the market. However, a careful risk assessment clearly shows that the decision not to invest in sustainability is even riskier. It ultimately leads to the loss of the license to operate. Societies and legislators will no longer accept companies that have not implemented sustainable standards and operations. At Deutsche Post DHL Group, we have decided to decarbonize our business and offer zero-emissions logistics by 2050 because we are deeply convinced that this will secure our business success and, more importantly, our employees' jobs well into the future.?

2.??????Lead by example?

To be honest, "leading by example" is an often misused buzzword. However, I firmly believe in this concept. Innovation and change are only possible when someone leads by example. Perfectly, it's as simple as that. Someone has to be the first. Whenever there has been a radical change in history, there have always been some courageous pioneers. Just think of Bertha Benz. She was the first woman car driver and the first person ever to drive a car over long distances. I can only imagine how irritated people looked when she drove past. Or the Wright Brothers, who made possible the first powered, sustained and controlled flight of an aircraft. Or Steve Jobs, who with the Macintosh and the iPhone revolutionized the computer world and the way we communicate, take photographs, surf the internet and listen to music. They were all driven by the same goal - to disrupt the status quo. Although they faced a lot of skepticism, criticism and ridicule, they pursued their goals.

And it is precisely this kind of intrinsic motivation that should also be the driving force when it comes to decarbonizing transport. We need to lead by example and show that it is possible. That's why we at Deutsche Post DHL Group have ordered twelve of the very first all-electric freighter aircraft for our Express division. That's why we offer sustainable marine fuel for LCL and FCL shipments at DHL Global Forwarding, and that's why we want to invest 7 billion euros as a Group in climate-neutral logistics solutions by 2030.?

3.??????Change has already started?

These are just a few examples from our sustainability roadmap. But they clearly show that change has already begun. And the positive feedback from our customers as well as the growing demand for our sustainable solutions clearly shows the winds of change. Discussions with our partners, such as ocean and air freight operators and fuel suppliers, also show that an entire sector has entered a transformation process. It is easy to say that the right technology is not yet in place and that we need a better regulatory framework. To a certain extent, that may be true. But I don't think the Wright Brothers discussed international air law before they were in the air themselves. Besides, there are already existing solutions that we can use.

Be it sustainable aviation fuel (SAF) in air freight, Bio-LNG and electric drives in road transport or sustainable marine fuel (SMF) in ocean freight. The greater the demand, the greater the diversity of solutions and supply. That's why we at DHL Global Forwarding are following the ‘one-atmosphere’ approach. As each vessel outgasses in the same atmosphere, ?the sustainable marine fuel does not have to be bunkered on the particular ship transporting the freight. The more customers choose this option, the lower the amount of regular marine fuel bunkered. Theoretically, this approach can gradually replace regular marine fuel in ocean freight. Retrofitting of engines or high investments are not even necessary. So with this concept, you are not only reducing CO2 emissions but also actively driving change. Does it affect the speed or quality of transport? Not at all.

4.??????It needs a joint effort

As mentioned in one of my last blogposts, we can only stop climate change together. It will take a joint effort from shippers, freight forwarders to sea and air freight operators or transport companies, etc. We need to work together and cooperate across the industry. This does not come for free: Sustainable marine fuel, for example, is currently more expensive than regular fuel. For all LCL shipments of our customers, we take over these additional costs. For FCL shipments, the service can be booked. Our customers are happy and willing to accept this because they have their own sustainability goals and are very aware of their responsibility. Only if we work together on supply and demand the transformation will work. So, I invite you to join in the decarbonization of global freight transport!