Raise the floor: greening logistics in developing countries

CSR reports of companies sparkle with stories of new technologies and innovative solutions: self-driving trucks, aerodynamic teardrop trailers, electric highways... These efforts are certainly commendable, but let’s be honest: most of it takes place in developed countries. This is somewhat remarkable given that most business – and freight – expansion is in developing economies. It is thus time to not only lift the ceiling but also raise the floor.

I often ask multinationals about their efforts to green their logistics supply chain in developing countries. Generally, I get three types of answers. First the pessimist: “There is little we can do there because everything is lacking: infrastructure, technologies, skilled people, and so on.” Second, the cynic: “Government and civil society put little pressure on us and if we move too fast we can’t compete with local players.” And finally the enthusiast: “We did a great pilot project with technology X in city Y or country Z that I can share with you!”

One contributing factor is the role of head offices – a workshop with 10 companies in Brazil identified corporate responsibility targets as the biggest driver for green freight efforts. An unintended consequence is that in finding solutions companies risk trying to change developing countries into Western replicas (pretty much impossible) or end up waiting for obstacles to go away (we might as well go home then). Focus on opportunities unique to developing countries! Need examples?

India is plagued by a bureaucratic government, a highly fragmented trucking sector, infrastructure left wanting and many unskilled drivers.  The opportunity lies in training carriers on fleet management and drivers on eco-driving to improve road safety and fuel efficiency – a Green Freight India pilot reported 45% in fuel savings. But how to reach carriers? Three Indian truck manufacturers hold close to 90% of the medium- and heavy-duty truck market: TATA Motors, Ashok Leyland and Eicher. They have direct access to carriers through hundreds of country-wide after service workshops and dozens of training centers.

Brazil has a similar private sector treasure. The National Transport Confederation (CNT) unites Brazil’s various transport associations and their members’ contributions help pay for 149 centers across the country. Thousands of truck, bus and taxi drivers are trained each year, and they and their families receive free dental and medical care as well. CNT’s Executive Director Bruno Batista explained that driver shortage is looming and this is a way to make the job of truck drivers more dignifying. What a vision! And what a great channel to amplify the message of fuel efficiency to drivers!

Finally, China. A US logistics company noted that China’s truck drivers are often unskilled but high in numbers. They contract them on the condition that they have GPS installed on their trucks and take training. The first prize goes undoubtedly to a European vehicle technology supplier for pushing back on a common complaint that China’s government favors local suppliers: “The truth is, it keeps us on edge to take products to market that are just that little better than the rest.”

Companies out there, let me know how you’re going to raise the floor!

31 March 2016
Sophie Punte, Executive Director 



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