Smart Freight Leadership Roundtable 2016
Driving Corporate Leadership for Smart Freight and Logistics
12 May, 2016 | BSR Office, 85 Boulevard Haussmann | Paris, France
BSR and Smart Freight Centre (SFC) organized a one-day roundtable with 12 leading corporations to discuss their role in leading the way to climate-resilient, smarter freight. The aim was to discuss five business commitments for the freight transport and logistics sector: setting targets; emissions measurement, reporting and verification (MRV); implementing actions; collaboration; and input into policy development. The starting premise is that these all help companies to directly or indirectly reduce emissions, improve freight efficiency, and thus improve competitiveness.
These commitments are linked to the Smart Freight Leadership Framework and tie into the broader policy asks and industry commitments that successfully made it into the final Paris Agreement, through the work of the We Mean Business Coalition, of which BSR is a founding organization.
Expectations mentioned by participants included:
- Discuss challenges faced in improving efficiency / achieving targets
- Sharing experiences and avoid made mistakes in the future
- Hear different perspectives from shippers, LSPs, carriers
- Define new collaboration areas/projects
- Define key messages to policy makers
- Understanding the business case for leadership and how BSR/SFC can help
- Explore how to fill gaps in data (especially road freight) and role of green freight programs
- Anders Holbech, Damco
- Andrea Schoen, DB Schenker
- Anne Dubost, Heineken
- Dominique Jennequin, KUEHNE + NAGEL
- Dominique Mamcarz, TNT
- Frédéric Fimbler, CHEP Europe
- Gorm Kjærbøll, Electrolux
- Inigo Canalejo, Brambles
- Jaap Sinnige, Intel Corporation
- Juup Willemse, Dow Chemical
- Katharina Tomoff, Deutsche Post DHL Group
- Marlène Fine, XPO Logistics
- BSR: Angie Farrag-Thibault, Emilie Prattico
- Smart Freight Centre (SFC): Sophie Punte, Eszer Toth-Weedon, Floor Bollee
This summary reflects the discussion held with various companies but does not necessarily reflect the views of all companies present nor imply endorsement.
The following introductory presentations were given:
The Five Business Commitments for Smarter Freight
For the five business commitments, facilitated discussions covered
- What is being done and needs to be done
- Barriers and considerations
- Next steps and needs (including roles of NGOs like BSR/SFC and governments)
The main points from these discussions are provided below.
1. Set emission reduction targets
A first step is to set clear science-based emission reduction targets for the global freight and logistics sector, and modes within these. These have to be supplemented with national and company targets for freight and logistics.
- Targets are often needed to set action in the right direction
- Challenges in setting the right KPI that is comparable between businesses and reflects what we are trying to achieve: drive emission reductions and create a level playing field
- Changes in data quality affect target setting and tracking of progress against targets
- Targets are set at the company level but require efforts by the company and subcontractors
- Percentage reductions do no create the level playing field needed (as companies come from different starting points and late starters would be advantaged), performance standards (e.g. real reduction in tons CO2) do
- guidance, facilitation and best practice sharing would be helpful on
- How to set science-based targets
- Performance standards of ‘best-in-class’ efficiency standards that can be reached
2. Measure, report and verify emissions
Measurement, reporting and verification, or MRV, should be high on the corporate agenda, especially of companies with high logistics supply chain emissions as a portion of total corporate emissions.
- Measurement is a priority and lies at the basis of setting targets, identifying improvement measures and tracking progress
- The starting point should be what data are used for – setting targets, reporting, identifying improvement measures, GHG reduction projects and logistics (purchasing) decisions
- Data uses differ between shippers, LSPs and carriers and thus has implications on detail/ simplicity of data esp. when (partly) outsourced Supply Chains are being assessed in scope
- Importance of universal set of methodologies, reporting formats and data sources for comparable data
- Primary (how much fuel is burnt for the task) data, as well as data from subcontractors is lacking and it was acknowledged that trust is the basis for data sharing – should emphasis lie on comparing carriers or working together to improve?
- Implementation of the GLEC Framework of Logistics Emissions Methodologies (several companies indicated their intent to adopt this framework)
- Further assessment of data needs and uses by shippers, LSPs and carriers
- Create/improve mechanisms (and organizations) for efficient data collection and collation, e.g. templates and databases
3. Implement actions + 4. Collaborate with industry peers and subcontractors
A multi-pronged strategy with actions covering vehicles/fuels, freight movement, and modal optimization can help shippers, logistics service providers and carriers deliver on corporate emission reduction targets.
As the logistics supply chain spans across the globe, covers multiple modes and involves thousands of players, collaboration is the only way forward if we are to achieve double-digit emission reduction. Given the central position of shippers as customers who make use of the same global logistics supply chain, collaboration must start here and involve their (often overlapping) logistics service providers and carriers.
- Collaboration is important and for successful collaboration keep the vision in mind (while making small concrete steps): carbon neutral transport
- B2B collaboration already exists on an ad hoc basis (e.g. truck sharing, back-loading, joint investment in electric vehicles) and needs to be scaled up
- There is a need for matching networks but there are barriers e.g. anti-trust laws, shippers setting conditions for freight assignments whereas support from shippers is needed, express business is time bound, and for urban delivery asset sharing requires an extra step
- Clean Cargo Working Group (CCWG) is a strong and compelling example of successful collaboration between global business partners and the collection and reporting of data using standard methodology
- Expectations of future green freight programs
- Most multinationals are global and multimodal – most programs are modal or regional/national and should integrate or align/harmonize
- Use of standardized methodologies and data collection (focus on road and air freight which are main gaps)
- Provide guidance on use of data and provide benchmarking and incentives (carrot/stick method)
- Performance improvement schemes including dedicated projects between shippers and subcontractors
- Best practice sharing across the value chain
- Labeling scheme (as important marketing driver) covering data and qualitative information to recognize efforts and select pro-active carriers, shippers and LSPs.
- Create a consolidated voice for pro-active policy
- Develop statistics and KPIs (in green freight programs) for the utilization of assets
- Build a stronger business case for technologies and other improvement measures and for collaboration / asset sharing
- Research on existing collaboration opportunities practices and how these can be improved, replicated and scaled up, for example through policies or improved use of IT
- Review and decide of how green freight programs can improve and be better aligned/harmonized – discussion on the future of green freight programs needs to be continued
5. Engage proactively in policy development
Government policies are important in providing a secure environment for deploying smart freight solutions and innovation and enabling climate resilience. Most companies have joined one or more industry association to reach out to governments, and some green freight programs are led or supported by governments.
- Policy incentives can be critical in the business case for the implementation of technologies and other measures that improve efficiency and reduce emissions
- Government subsidies for research and process/program development are not always geared to things that matter for business and are often requiring a lot of pre-work.
- Business needs from governments on policy
- Clear policy direction and enforcement so that policies are followed and business can/will invest;
- Policy harmonization and simplification – keep in mind what works for business
- Financing for technology adoption, infrastructure and program development (how will the upfront investment be financed e.g. railways, as committed to in COP 21)
- Guidance on policy implementation for business
- Further analysis of business needs from policy and how to communicate these to governments, e.g. WeMeanBusiness, Climate Finance, green freight programs, International Transport Forum (ITF).