The Green Corridor: Looking for the Green Lining

The Green Corridor: Looking for the Green Lining

by Timothy Foote, Director Transportation & Network APAC at Asendia and Founder of Susymbio

2023 is soon enough to end, and the transformation to a clean logistics future moves forward. How fast or slow that is I hope to share with you in this years annual roundup!

Since 2021 as the Green Corridor contributor, I’ve focused my roundup on the same basic categories. This year I’ll be highlighting as usual where our green transition is gaining ground, and where it seems to be dragging.

Air and Ocean

Maersk made its first methanol fueled trip to Singapore this year with no doubt a lot more to follow. This voyage demonstrates that the transition from the traditional bunkers engine has started. On top of that, the testing and standards for using ammonia as an alternative fuel is well under way in Singapore. Other alternative fuels are also being stocked as well as tested in real operational vessels.

The number of alternative and dual-fuel propelled container ship orders out numbers the traditional ICE only engines for new ship orders. This is big money and infrastructure is working to accompany the change. Key ports like Rotterdam, Hamburg, Singapore, Hong Kong and Los Angeles will be the key ports to be ready for fueling the first truly green lanes.

Additionally the large owners get it! In a joint declaration at cop28 a joint statement by Maersk, CMA-CGM, MSC, Hapag-Lloyd, and Wallenius Wilhelmsen Lines have pressed the IMO for more aggressive action.

Aeronautics engineering innovation is sadly only paddling forward in comparison to the ship building industry. There is no replacement for the fuel burning jet engine and all of the emission reduction emphasis is entirely pinned on increasing the use of SAF. Airlines have began to fuel with SAF blended fuels, but the industry is really waiting for production to catch up, and it is slow to do so.

My 2024 predictions for these modes is that ocean shipping transformation will continue. Furthermore the other decarbonising ship refitting projects will start making a reduction in global emissions in the sector. The jury is still out regarding what sort of mixture of fuels will be powering the fleets of tomorrow. That likely doesn’t matter though, because supply of the various fuels to replace fossil fuels will take many decades of investment to get near even 50% of the fuel used today.

Air transport emissions reduction goals sadly will be hampered by insufficient supplies of SAF. Additionally, with high costs for SAF, it will be necessary to demand increased blending minimums in order to keep an even playing field for the various competing airlines. The EU has started to work on charting out a plan for that transition, but other large markets like North America and China will likely not follow them in 2024.
Land Transportation Evolution

I was visiting family in Panyu, China recently and was absolutely amazed at the transformation that has taken place on China’s roads. The percentage of electric vehicles was so high that the roads were actually quiet! My colleagues who have visited other tier one cities in China also repeated the same message – it seems China has created the conditions required to make huge advances quicker than any other industrial nation. They’ve put in the right incentives for vehicle transformation as well as those needed for the charging infrastructure to support it. Now if only other nations could take a couple pages from their play book.

Green Power

Moving away from a power grid fueled by fossil fuel is happening. The expansion of wind, solar and even nuclear power has expanded. That said many countries are struggling to accommodate the new sources of power into grids designed for fossil fuel power generation.

My prediction for 2024 is that mature industrial economies will start addressing not only the challenges involved with accommodating high surges of energy from solar and wind power, but also work on increased transnational and even domestic regional grid connectivity.

I also believe that nuclear energy generation will be increasingly adopted by pragmatic leaders around the globe. The need for non-carbon emitting power is just outweighing the arguments against nuclear power.

Courier Fleets

Final mile and first mile vehicles have made progress in terms of increasing the number of EVs that replace the ICE vans and scooters. The infrastructure for charging is still a major concern for fleet managers. The competition is helping to drive down prices for EVs but in most countries in Southeast Asia the poor access to charging facilities or battery swap facilities causes management to delay purchasing.

In one instance this year, I was told by a friend in the industry that regulators in his country were blocking sale of an EV he was interested in because they hadn’t approved that model of vehicle for sale yet. They just hadn’t put together the approval process for EVs that was able to keep up with the growth of new models and makers.

My prediction for the coming year is that the regulators will get caught up. Additionally, the access to more EV vans and E-scooters in our region will increase, and that will allow for prices to come down. Infrastructure for charging will struggle to get in place fast enough though.

Packaging

2023 has seen no real breakthrough in eco friendly packaging innovation from the looks of things. More companies are using biodegradable packaging to replace bubble wrap, but the costs are still nowhere near as low as plastic. At the LogiSYM conference earlier this year in Singapore, I talked to a representative of a packaging solutions firm. He related to me that his only customers for biodegradable packaging solutions tended to be European brands. The main reason for non-interest for local brands was cost and lack of demand from customers.

My prediction for 2024 is that this attitude will persist in our region unless there are disincentives for plastic packing material use. There will be progress made on phasing out plastic bags and possibly “pay to pollute” incentives for consumers to get away from plastics, but for shipping cargo and e-commerce, the packaging industry is lacking the cost competitive biodegradable sachels and fillers still needed to move goods from the factory to the consumer in a safe, secure and ecologically friendly manner. I’ll be hoping to see some innovation, but my hopes are not high.

Summing It Up

The coming year of 2024 shows great promise for increased transformation – in particular in the final mile land transport sector as well as the ocean shipping sector. Investment is flowing more towards renewable energy than at anytime in history – so there is a real transition happening for grid energy to be green as long as the other investments for updating grids to support solar and wind power progresses.

Where progress is slow and possibly even stagnant is the realm of air transportation. As usual the incremental engineering gains in efficiency will be outweighed by increased overall numbers of flights. The record orders for new planes this year still supports fossil fuel burning engines. Those engines can burn SAF, but where is the supply? Hopefully by the end of 2024 there will be a “green lining” somewhere showing innovative new sources for SAF which could quickly start supporting all of the jet engines out there. I for one will be looking out for that.

So to end on a positive note, there definitely has been progress made this year for a global transition towards a de-carbonised logistics future. I would even say that it is beating some previous predictions in terms of pace. I keep 2050 in my mind as the target year for complete neutrality, but some big innovations are still needed to achieve that. I’ll keep looking for the green lining in our industry news when it comes to progress on sustainability. I hope you all do as well.

Have a great end to 2023! I wish everyone a prosperous and green start to 2024!

About the Author

Timothy Foote
Director, Transportation & Network APAC at Asendia and Founder of Susymbio

Tim has worked in management positions at multiple MNCs for more than 25 years, gaining expansive expertise in logistical operations. Tim continues to craft delivery solutions for many e-commerce clients at Asendia. Once a regional Head of Go Green at DHL eCommerce, Tim now works for customers to decarbonise their logistics by managing Asendia’s 100% carbon-neutral network.

To further promote a net zero future for the logistics industry, Tim created MOVE GREEN. This is a movement committed to greening the logistics industry during this time of transformation. Please join the companies making a pledge to become net zero by going to Susymbio.com for more details.

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