Sustainable Freight Transportation – Finding a Balance with MIT’s Alexis Bateman and Suzanne Greene [Podcast]

This week’s Freightvine podcast episode examines the challenges facing freight transportation in the effort to reduce its environmental impact. Joining host Chris Caplice to discuss their work on the Sustainable Supply Chain Initiative are his MIT colleagues Alexis Bateman and Suzanne Greene.

What is sustainability, particularly when it comes to supply chain management?

Sustainability can be defined in broad terms as “meeting the needs of the present without compromising the ability of future generations to meet their needs.” Sustainability, as it applies to supply chains, refers specifically to the management of environmental and social impacts within and across companies. In the simplest terms, however, it is “people, planet, and profit – and finding a balance between those,” as Greene succinctly put it. By and large, enterprises have been, not surprisingly, mostly concerned with the “profit” part of that equation. Firms were not enthusiastic about sustainability, and their efforts were, in many instances, geared chiefly towards burnishing their corporate image and improving public relations. 

Despite this, Bateman and Green have seen companies begin to evolve in the past couple of years, focusing their interest and investments in aggressive sustainability programs and curtailing their environmental footprint. It’s become increasingly clear that social pressure is playing a role in corporations making an honest effort to become greener. 

As far as transportation is concerned, sustainability is all about the carbon footprint

It’s no surprise that sustainability in regards to transportation is primarily concerned with calculating and reducing carbon emissions. At its most simplistic, a carbon footprint is measured in tons per year and is a function of mode, distance, and weight. Companies can become more sophisticated with their calculation and include carrier- and supplier-specific numbers, but not all organizations have the ability to compile all of that data.

Establishing the baseline number for a company’s footprint is the first step. The Global Logistics Emissions Council (GLEC) is an initiative that started about five years ago to standardize the emissions calculation and accounting globally. (Greene is co-author of the GLEC framework.) Before GLEC, global companies with multi-modal supply chains couldn’t account for carbon emissions and roll up their numbers in a straightforward manner. This way, GLEC allows companies to accurately compute their carbon emissions worldwide and compare the data from different locations on equal terms, making it easier to analyze and improve their footprint.

After a company knows their “number,” then what? 

As other industry sectors – energy is a primary example – have made progress in de-carbonization, more attention has been paid to freight transportation. Currently, three of the six most challenging industry sectors to de-carbonize are in the transportation sector: airplanes, ships, and trucks. Ninety-eight percent of freight transportation runs on fossil fuels, and there are presently fewer opportunities to de-carbonize. The low-hanging fruit of reducing emissions are actions that most companies, from shippers to distributors to carriers, are already incentivized to take by the profit motive. Increasing driver utilization, mode shifting, and optimization to minimize miles are all standard measures that have positive if incremental impact. When attempting to go beyond these familiar steps is when the process becomes more difficult.

Electrification is one potential option. However, at this point in time, beyond potential applications in drayage and last-mile transportation, there are no clear paths towards removing fossil fuels from long-haul trucking or the most energy-intensive mode – air freight. Bateman and Greene recommend increased use of the more efficient intermodal options of ship and rail to help reduce overall emissions.

When technology and efficiency is not enough, there are carbon offsets

Eventually, all the optimizations and other incremental factors are exhausted, and companies run into a technological wall that allows little to no further reduction in carbon emissions. At this point is when carbon offsets come into the picture. Carbon offsets enable companies to offload part of their carbon footprint by funding activities that counteract the impact of their excess carbon emissions. Enterprises will buy certificates that fund projects – tree planting is a popular option – that, depending on the size, will remove a specified amount of carbon dioxide from the atmosphere, which offsets real-world carbon emissions. Most companies that use terms such as “carbon neutral” or “zero-carbon” employ carbon offsets.

This episode recap was written by Cindy Bosecker, Director, FMIC at Chainalytics.