Green Logistics News

Your source for environmentally responsible transportation & logistics information

April 2008
Volume 1, Number 3

Logistics carbon footprint measurement: How deep will you go?

When I read articles about carbon footprint labeling, carbon emission measurement tools, and sustainability reporting, the focus tends to be on what the company in question is measuring: what product, which parts of the supply chain, and over what time period.  But now that so many are in the game, the rules are starting to change.  The new focus is the breadth and depth of the measurement: the breadth of what is being measured (are direct and indirect energy, materials, capital goods, and business travel included?), and the depth to which the footprint is measured (are material extraction, transformation, distribution, use, disposal and recycling all taken into account?)  What once looked a fairly straightforward proposal - how much does the vessel emit, how many products on the vessel, divide one by the other - becomes a complicated, long-winded, and expensive prospect.

A third factor - precision - also comes into play, and was the focus of many of the discussions at our recent Green Transportation & Logistics World Summit in Zurich.  The scrutiny focused not only on how precise the distances measured were, whether backhaul lanes were taken into account, and what the impact of the standards at the point of manufacturing were, but also on the reliability of the data used to measure a carbon footprint in the first place.  For, even if you've done your best to include the most relevant sections of the supply chain, average distances to as accurately as possible, and have accurate and up-to-date software to track your emissions, there is no standard measure of the greenhouse gas emissions from each process measured.  Thus, depending on which projected measures you (or the software developer) elect to use (Defra projections, for example), your carbon footprint may look vastly different than what it would have been had a different measure been used.  One mile of a delivery route in the same truck on the same day ends up having a different GHG output estimation under each scheme, and taken across the whole logistics operation for a product, the discrepancies can be significant.

This creates a lot of problems, including a dilemma for shippers: do I use the measure that I believe to be most accurate, or that which gives me the lowest reportable result?  And what are my suppliers and competitors going to do?  The obvious solution is one standard, global set of emissions projections regulated and taken to be the most accurate, but until that comes (and it looks to be a long way off, though the UK, for example, may soon lead the way nationally at least), it's down to individual companies to decide where their priorities lie.

What I found especially interesting was that most of the shippers I have been speaking to actively want standard emissions projections.  Measurement reporting is complicated enough without the added burden of choosing between schemes without knowing the risks involved and the full implication of doing so down the line.

Katharine O’Reilly, editor
koreilly@eyefortransport.com

Fuel Prices flip airlines belly-up

2008 is not a good year for US-based airlines. A week after Aloha Airlines announced it would cease all passenger operations, ATA Airlines filed for bankruptcy, Skybus Airlines shut its doors and Northwest Airlines announced plans to reduce capacity.

(4/7/2008)

Whilst these are all essentially passenger airlines, they also offer cargo capacity.  

After struggling to overcome the combination of rising jet fuel costs and a slowing economic environment, Skybus Airlines ceased all operations, effective Saturday April 5th.

Northwest Airlines’ management has announced plans to reduce capacity and the number of aircraft, also citing high fuel costs and economic uncertainties.

Northwest’s communications chairman, First Officer Greg Rizzuto, concedes that while flight schedule reductions are not exactly welcome, the decision was both prudent and necessary in order to maintain the financial viability of Northwest Airlines.

“At a time when other airlines are shutting their doors, parking and selling aircraft, Northwest management’s decision is practical given the current economic environment,” said Rizzuto. “It is notable that there are no planned pilot furloughs with this relatively small capacity reduction.”

Northwest’s communications chairman, First Officer Greg Rizzuto, concedes that while flight schedule reductions are not exactly welcome, the decision was both prudent and necessary in order to maintain the financial viability of Northwest Airlines.

“At a time when other airlines are shutting their doors, parking and selling aircraft, Northwest management’s decision is practical given the current economic environment,” said Rizzuto. “It is notable that there are no planned pilot furloughs with this relatively small capacity reduction.”

Meanwhile, Aloha pilots continue to report for duty for cargo flight assignments, despite the company having filed for bankruptcy for the second time in two years.

But the Air Line Pilots Association (ALPA) has blasted ATA Airlines for its late-night decision to cancel all operations without warning last Thursday.

ALPA was notified at approximately 04h00 Central time that the airline was filing for bankruptcy and shutting down all operations immediately.

“ATA's customers and employees had absolutely no warning that the airline was going out of business,” said Capt Steve Staples, chairman of the ATA unit of the Air Line Pilots Association Int'l, adding that ATA’s abrupt withdrawal was the airline equivalent of “getting on the last helicopter out of Saigon”.
A year ago, ATA's holding company announced it was buying World Airways and North American Airlines, and would change its name from ATA Holdings to Global Aero Logistics (GAL).

World Airways and North American Airlines are not affected by ATA’s bankruptcy filing. Staples pointed out the incongruity of an acquiring airline folding whilst its acquired companies continue to operate.
Staples said that ATA’s financial woes are the result of a series of incompetent managers who chose to blame economic conditions instead of admitting their own mistakes.

“We were telling management two years ago that they needed to institute a fuel management program, and even found a fuel consultant who offered to work with the company - but our overtures to help ATA reduce its fuel costs were repeatedly ignored,” he said. “Management decided to outsource virtually all of our maintenance, then acquired elderly, unreliable DC-10s that needed extensive repairs. The ripple effect of years of poor management decisions - not the current economy - was what doomed ATA.”

Author: Sharon Gill / News Editor  / eyefortransport

Desire to be thought leaders drives green efforts

Forty-one percent of companies that participated in a recent Aberdeen study, Building a Green Supply Chain: Social Responsibility for Fun and Profit, have had green supply chain initiatives in place for 1-2 years, and thirty-nine percent have redesigned key parts of their supply chains to be green.

(4/3/2008)

Against this backdrop, the top four pressures driving companies to focus on green/sustainable supply chain programs today are the desire to be a thought leader for green and sustainability initiatives in their industry and markets (51% of companies), the need to control rising fuel and energy costs (49% of companies), the demands to improve competitive advantage and market differentiation (48% of companies), followed by the requirement to meet current and expected government regulatory and compliance demands (31% of companies).
Results show that:

• The Best-in-Class achieved a 2% decrease in their overall logistics and transport costs, versus one percent increase for Industry Average, and a four percent increase for Laggards.
• Best-in-Class companies achieved a six percent decrease in energy costs, versus no change for Industry Average and a seven percent increase for Laggards.
• Best-in-Class companies are 1.5 times more likely than all others to have implemented cross-functional metrics across their enterprise.
• Best-in-Class achieved a two percent decrease in the cost of operations and facilities, versus no change for Industry Average and a four percent increase for Laggards.

Click here to see the full article on Environmental Leader…

Author: Environmental Leader / environmentalleader.com

Transport industry least prepared for climate change

An Airbus A380 aircraft has successfully completed a three-hour flight from Filton in the UK to Toulouse in France using GTL (Gas to Liquids) Jet fuel.

(2/6/2008)

Aviation, healthcare, tourism, transport, oil and gas and the financial services sector all feature in the “danger zone” in a report on climate change risks from KPMG - meaning that they score highly on the risks which face them yet score poorly in terms of their preparedness to face these risks.

The climate change risks that companies should be paying more attention to are physical, regulatory and reputational risks as well as the emerging risk of litigation; yet the scope and potential impact of these risks appears to be under-estimated across all sectors.

While the oil and gas sector is far better prepared than any of the other sectors in the “danger zone,” the climate change issues it faces make it the riskiest of all the 18 sectors. By contrast, transport is a far less risky sector but its level of preparedness is the worst of all the 18 industries examined.
Click here to see the full article on Environmental Leader…

Author: Environmental Leader / environmentalleader.com