top of page
Open Site Navigation

Transport and distribution CO2 emissions: a supply chain issue

Updated: Jun 23, 2022

According to the World in Data, the transport sector has a participation of 16.2% of the total global emissions.

According to the World in Data, the transport sector has a participation of 16.2% of the total global emissions.

According to the World in Data, the transport sector has a participation of 16.2% of the total global emissions. This includes a small amount of electricity (indirect emissions) as well as all direct emissions from burning fossil fuels to power transport activities. Some of these activities are:

  • Road transport which are the emissions from the burning of petrol and diesel from all forms of road transport which includes cars, trucks, lorries, motorcycles, and buses. This activity has a participation of 11.9%. Sixty percent of road transport emissions come from passenger travel (cars, motorcycles and buses) and the remaining forty percent is from road freight (lorries and trucks).

  • Aviation, this transport activity accounts for the emissions from passenger travel and freight and has the participation of 1.9% of the total transportation emissions. 81% of aviation emissions come from passenger travel and 19% from freight. From passenger aviation, 60% of emissions come from international travel, and 40% from domestic.

  • Shipping which are the emissions from the burning of petrol or diesel on boats. This includes both passenger and freight maritime trips with a share of 1.7% of the total emissions.

  • Rail is the transport activity with the lowest emissions (0.4%).

Due to the importance that this sector has, especially in this globalized world, in the distribution of goods that ranges from raw materials and final products, transportation and distribution are key in the supply chain of any company. For example, according to the U.S Environmental Protection Agency- EPA, the U.S. manufacturing relies upon multiple sources and modes of transportation. A single product can be transported by marine vessel or plane multiple times, then distributed across the country via barge, truck, and rail. Therefore, producing goods means transportation over longer distances, and that means more fuel consumption which in turn contributes to the emissions of CO2 to the atmosphere.

According to the World in Data, the transport sector has a participation of 16.2% of the total global emissions.

The EPA also argues that companies involved in the production, distribution, and transportation of goods can make a difference. For example, in freight transportation, companies could contribute to the reduction of emissions in this area by measuring, benchmarking, and assessing freight transportation activities and strategically making better choices that reduce emissions.

A study conducted by MIT mentions that until very recently, freight transportation was a negligible consideration in company strategy with regard to environmental responsibility and that supply chain management has largely overlooked the greenhouse gas impact of transportation decisions. However, given the high greenhouse gas impact of such activities, it is vital to alert companies to the importance of including transportation impacts in any environmental analysis of their supply chains. Therefore, even though this is a problem that has an impact directly on the transportation sector, this issue also involves at some point all the companies that rely on a supply chain and in turn in the distribution of goods and products.

Some of the efforts that some companies are making according to the MIT report are:

  • Structuring their supply chain with suppliers and customers that have similar cultures with respect to sustainable practices and are proactively focused on initiatives that minimize the impact of their transportation greenhouse gas emissions

  • Utilizing transportation technology that reduces fuel and therefore emissions

  • Optimizing their supply chain’s logistical network such that transportation distances are minimized

  • Developing detailed metrics that monitor actual as well as relative results from all implemented initiatives to determine which strategies have the biggest emission and cost impacts on the supply chain

  • Using an environmental clause in its transportation-related contracts

  • Reconfiguring pallets and packaging to increase trailers’ volume efficiency to decrease the number of loads and eliminate empty miles

As a result of these new requirements that companies are having in their transportation and distribution providers, some companies in this sector have actively changed their business strategies. This is the case of companies like FedEx that are committed to connecting the world in responsible and resourceful ways. Their goal is to expand the world’s ability to connect more efficiently while minimizing their impact on the environment. For this reason, the company set ambitious goals to reduce their footprint where it has the greatest environmental impact such as to reduce aircraft emissions 30 percent by 2020 on an emissions per available-ton-mile basis, increase vehicle efficiency by 30 percent by 2020, get 30 percent of their jet fuel from alternative fuels by 2030 and expand on-site renewable energy generation and procurement of renewable energy credits.

Another example of companies with sustainability initiatives is DHL which stated that the logistics industry must strive for clean operations and climate protection. In line with this, the company announced that it will reduce all logistics-related emissions to zero by the year 2050. In pursuit of this ambitious new target, the Group hopes to contribute meaningfully to achieving the goal of limiting global warming to well below two degrees Celsius established at the 2015 Paris climate conference (COP 21), as well as to the United Nations’ 2030 Agenda for Sustainable Development.

From the mobility platform perspective, Uber is committing to become a fully zero-emission platform by 2040. They have also set an earlier goal to have 100% of rides take place in electric vehicles (EVs) in US, Canadian, and European cities by 2030. In addition to their platform goals, the company is also committed to reaching net-zero emissions from its corporate operations by 2030.

Finally, some delivery companies like iFood, which is a Brazilian online food ordering and food delivery platform, has also set the goal of at least 50% of deliveries to be made via non-polluting modes by 2025. To achieve this the company will invest in innovation, research and development to become a global reference in online delivery operations without environmental impact.

It can be concluded that although transport emissions have a direct impact on a specific sector, it is also directly related to the different strategies that companies carry out in the distribution and commercialization of their goods and products. As well as in the different activities that are part of their value chain. Therefore, not only do transport companies have the need to change their business strategies to more environmentally friendly ones thanks to the different climate initiatives but also transport companies are under pressure from many of their customers, as other companies also have to comply with these new requirements, in which transport emissions are essential in the reduction of scope 3.

By Silvana Andrade, sustainability specialist.

5 views0 comments

Recent Posts

See All
bottom of page