This week’s World Economic Forum report into supply chain decarbonisation provides a deep look into the carbon footprint of the world’s corporate supply chains as well as ways in which it can be reduced.

Global carbon emissions amount to around 50 gigatonnes (50,000,000,000) annually with logistics and supply chains (from a small truck in India to global transport groups like DHL) contributing about 5% of that.

And according to Sean Doherty, associate director and head of the logistics & transport group at the WEF, the contribution which logistics and supply chains make to overall global carbon dioxide emissions could be halved. “The main message is that there’s considerable scope to reduce the carbon content of global supply chains, and not always in the ways that often pop up, such as road miles,” said Doherty. “What we tried to do was to quantify, of the 20 or 30 strategies, which ones had the biggest reduction potential and were also economically feasible.”

He explained how sourcing from a different location came top of that list, but that the manufacturing of the sourced goods must be taken into account as well as the transportation route. “In most supply chains, manufacturing is a large part of emissions,” he said.

Despeeding is another strategy which Doherty pointed to as key to reducing carbon emissions – and it is a strategy which has already been taken advantage of by many companies, not least in the automotive sector who were using ships as “floating warehouses”.

It’s a further example of how environmental and economic decisions often go hand in hand.

Alexandra Cain

The logistics industry offers an excellent hunting ground for environmental improvements, with two of the world’s largest players involved in innovative sustainability projects.

DHL, the world’s largest logistics company, is spearheading a sustainable supply chain approach and has made a commitment to reduce its carbon footprint by 10% by 2012 and 30% by 2020. Some of the early initiatives DHL has embarked on include using recycled paper and packaging and local education campaigns to reduce energy and water use.

But this is really only the tip of the iceberg for DHL, which is looking at replacing aircraft and vehicles as part of its sustainability push.

Flight of fancy

Paul Graham, CEO of DHL Exel Supply Chain, Asia Pacific, said that upgrading aircraft and fleet shows a benefit in terms of cost savings, “which is important because we’re spending a lot on sustainability.”

Cost savings stem from fuel savings by using more fuel-efficient planes and lorries, although Graham acknowledges DHL’s sustainability program is a long-term commitment, with the company having had to invest hundreds of millions of euros upgrading its fleet.

Other sustainable initiatives by DHL include better management of energy usage and better water recycling, including increased use of grey water. It is also looking at replacing old air conditioning systems for far more efficient replacements.

In Asia, DHL is looking at installing solar panels on some building rooftops and in Europe, it’s exploring whether small windmill generators might be an appropriate energy source.

“Nothing’s off the table, we’re still at an embryonic stage in terms of our sustainable development,” Graham said.

DHL has operations in India, China and Indonesia which have relatively less robust country supply chains compared with more developed nations. “That’s where the sustainability model has less relevance,” said Graham. “These countries need more water and power, not to use less. But there are still things that can be done in developing markets and creating awareness of sustainability is a positive outcome.

The company is also setting up systems to measure sustainability data, with country-level data being fed back into a centralised repository for further analysis. Best practice local programs can then be established.

Blaze a trailer

Julie Gaskell, head of communication at transport and logistics behemoth Stobart Group, says the company is working hard to increase its sustainability push. An important project is a plan to increase the length of its trailers by one metre, allowing trailers to carry larger loads to increase efficiencies within its fleet.

“That has the potential to save three million litres of fuel a year from UK roads,” said Gaskell.

Another initiative was the introduction of a traffic light system to indicate whether lorries are fully loaded. The company has also invested in rail freight and its first service, launched in 2006 between Daventry and Scotland, is the equivalent of taking 30 lorries off the road each day, saving around 2.4 million litres of fuel a year.

Anne-Marie Saulnier at environmental management consultancy Optim Resources acknowledged that most logistics companies are still in the early stages of sustainable development.

“Sustainability is still in the process of being integrated into purchasing functions,” she said “At the moment, sustainable practices are parallel to traditional practices and politics. There is no integration. At the purchasers’ level, there is a real interest, but there is a lack of tools and models to help them to act,” she said.