The need for business and government collaboration on smarter freight
20 May, 2016 | 09:00-10:30 CET | Leipzig, Germany
Summary of the Side Event to the International Transport Forum (ITF) Annual Summit:
“Business and Government for Smarter Freight”
Leipzig, Friday 20 May 2016 | 9:00 -10:30 CET
Organized by the European Freight Forwarders’ Organisation (CLECAT), the European Shippers’ Council (ESC), the International Federation of Freight Forwarders Association (FIATA), the International Road Transport Union (IRU) and Smart Freight Centre (SFC), and moderated by Christian Doepgen of the International Transport Journal.
The freight and logistics sector is a critical part of transport and mobility and the broader economy. The private sector has to make ends meet in transposing low carbon use, efficient procedures and competitive freight rates (“smart freight”) at the same time. However, governments must help to overcome market and policy barriers to accelerate the uptake of solutions and innovation. Consumers must also be considered, given the rapid growth in e-commerce and globalization that drives the demand for freight. This side-event explored opportunities for enhanced collaboration.
SFC’s Executive Director Sophie Punte set the scene and presented the Smart Freight Leadership framework. “There is a strong business case for smarter freight: increased competitiveness, customer and public recognition, and policy influence,” she explained, “The opportunity to realize this lies in business, government and civil society demonstrating leadership and working together, for example in data sharing or green freight programs.” She gave feedback from 12 businesses that participated in the Smart Freight Roundtable organized by SFC and BSR in May on government’s role: clear policy direction so that business can invest; policy harmonization and simplification that keeps in mind what works for business; and financing for technology adoption, infrastructure and program development.
The panel discussion started with the challenges and what support business needs from government to make freight smarter.
Jens Poggensee, Board Member of CLECAT and Head Freight Forwarding Europe, UPS, gave some examples of the wide range of initiatives implemented by UPS to reduce its global carbon footprint, for example alternative fuels for delivery vehicles and the use of cargo bikes in urban areas. In addition he noted that “It is important to have one methodology to calculate emissions, preferably across modes, to be able to know what can be done to reduce emissions. But it remains important to get those initiatives and innovations backed by governments and policies.”
Jianmin Yu, Vice President, Sinotrans, explained that “In China due to the rise of e-commerce Sinotrans is moving towards integrated modal freight and increasingly uses bicycles for urban deliveries.” He admitted that for delivery to small customers the company still faces problems and called on governments to establish more urban distribution centers with business’ involvement in their design. He also noted that the company supports SME’s noting that “all entrepreneurship starts with competition, without it we will stop. Thereofore, governments should retain a neutral position and increase competition within the freight sector.”
Christian Labrot, President of the IRU, pointed out that fuel efficiency of trucks has improved significantly over the last decades due to better technologies, driver training and other measures. “Improvements should be business driven, but governments should set the scene. The challenge we face is that regulations are often one or two steps behind industry’s development”, he stated and gave examples of border crossing issues, regulation with regards to vehicle dimensions and road tolls in Europe. “Digitalization is also creating many opportunities to be more efficient and flexible, and where governments can help by facilitating the electronic exchange of data and promoting innovation.”
Denis Choumert, Chairman of the European Shippers’ Council, elaborated on the important role of governments in supporting smart freight. “Modernization of vehicles, warehouses and the establishment of a single flow of goods that combine trucks and trains requires legislation and investments in IT and infrastructure. But it is not easy for the industry to become ‘smart’, referring to the ban on diesel vehicles in Paris by 2020: “Over 70% of diesel vehicles in Paris are trucks and delivery vans, and their owners need support for alternatives.“
Vincent Benezech, ITF Transport Analyst, echoed the need for collaboration between business and government. “Freight will represent 55% of transport carbon emissions by 2050 and most of this will come from road freight. The ITF provides analysis and research for its members that are looking at policy options, while also bringing in businesses to think of solutions. We want to avoid that governments work on green freight policies or legislation that makes little business sense, which sometimes unfortunately happens.”
“If legislative processes don’t keep pace with changes in the sector then the logistics supply chain will seize up,” stated Scott Streiner, Chair and CEO of the Canadian Transportation Agency. He noted that “collaboration is often interpreted as business telling government what to do and government understanding this and taking action. Governments need to make trade-offs with broader societal priorities and needs time to get buy-in of a large community of stakeholders. On top of this, many challenges faced by industry are super-national but for legislation is mostly introduced at national level. Here, harmonization is the answer but this also takes time.”
During the questions and answers session with the audience, an exchange took place on trade, investments and the role of fiscal policies. Panelists called for the need for the need for investment in transport infrastructure, and preferably for earmarking of charging of infrastructure use.
The discussion also touched on the unstable growth that shippers, LSPs and carrier face. With cutting costs on their mind, how can we conciliate cost reductions with smart freight? The panel thought that there was a need to focus on the low hanging fruit because so much can already be done without further regulation.
In response to a question from the audience on whether smart freight is something only the larger forwarders and shippers can invest in, the panel members noted that this is why industry representation of SME’s through organizations like CLECAT, ESC, IRU and FIATA is so important, to address and support the overall interests and initiatives.
Scott Streiner of the Canadian Transportation Agency gave three suggestions for associations on how to improve SME participation based on Canada’s experience: alternating chairmanship between small and large players, dedicated associations for SMEs and using social media tools for crowd sourcing and wider interaction.
The moderator Christian Doepgen of the International Transport Journal summarised the debate with a call for governments to put forward the right incentives to allow for smarter solutions with digitalisation, investments, trade facilitation and horizontal and vertical collaboration. Green freight programmes are a long-term solution for industry and governments in reducing emissions and living up to the commitments made.
Christian Labrot, President, IRU
Born in Germany, Christian graduated in Rheinische Friedrich Wilhelms University in Bonn where he specialized in transport economics and logistics. He subsequently held various functions in business within the Bundesverband Wirtschaft, Verkehr und Logistik (BWVL), which is an active member of the IRU. Christian is the Secretary General of the BWVL and has held honorary functions related to national and international transport economics, in particular as the Chairman of the advisory board of the GVB.
Denis Choumert, Chairman, European Shippers' Council
Chairman since 2012, Denis graduated engineer from Polytechnique School in Paris and holds an MBA of INSEAD Business School. He has exercised high level operational responsibilities in engineering and project management then procurement, transport and logistics in Technip and Italcementi Groups. As AUTF Chairman since 2005, Denis has been the Director of the Ports of Paris Board and Réseau Ferré de France and Board Director of Voies Navigables de France and AFTRAL (professional training).
Jens Poggensee, President, UPS Freight Forwarding Europe Region
Jens leads strategic initiatives and develops solutions to help customers manage their product supply more effectively and succeed in a global marketplace. Responsible for the performance and growth of the company's freight forwarding services in more than 50 countries and territories across Europe. Native of Germany, Jens began his career in the transportation sector in 1981. Since then he has held various managerial positions in operations, sales and marketing at national and regional levels.
Yu Jianmin, Vice President, Sinotrans
Mr Yu Jianmin graduated with his Master Degree from Dalian Maritime University in 1990, and obtained his MBA degree from China Europe International Business School in 2002. Mr. Yu began his Sinotrans career in 1990, and currently is the Executive Director and Vice President of Sinotrans Ltd., in charge of specialized logistics, including contract logistics, project logistics, heavy-lift logistics, chemical logistics, warehousing and cold-chain logistics, as well as road transportation network construction.
Scott Streiner, Chair and CEO, Canadian Transport Agency
Scott Streiner is the Chair and CEO of the Canadian Transportation Agency. Since assuming that role in July 2015, he has realigned the Agency's structure to reinforce key capacities and organizational agility and introduced innovative approaches to delivering on the Agency's regulatory and dispute resolution mandates. Prior to his appointment to the Agency, Scott had a 25-year career in the federal public service, most recently serving as Assistant Secretary to the Cabinet, Economic and Regional Development Policy, Assistant Deputy Minister, Policy with Transport Canada, and Assistant Deputy Minister with the Labour Program.
Sophie Punte, Executive Director, Smart Freight Centre
Sophie works with industry and other stakeholders to remove market barriers, leverage existing initiatives and thus accelerate the uptake of practical solutions throughout industry. Previously, as Executive Director of Clean Air Asia, she helped establish the China Green Freight Initiative and Green Freight Asia. Sophie also worked at the United Nations and KPMG on environmental management and corporate sustainability. She holds a Master of Science (Biology) and a Master of Environmental Management from the Netherlands.
About the ITF Summit
The Annual Summit of the ITF is the premier global transport policy event. Held since 2008, it brings together transport ministers from around the world to share policy perspectives with CEOs, heads of international organizations, thought leaders from civil society, academia, and media.
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