Environmental certification of goods transports – about Sustainability and Cost Efficiency

September 1st 2015

Scandinavian Logistics Partners regularly welcomes university students from different fields of logistics and management who are seeking our views and experiences for their research papers and theses. For us this is a great way to learn from these talented young people what is going on in the academic world.

Mr. Martin Bursjöö, a recently graduated student from Chalmers University of Technology in Gothenburg wrote his Masters thesis in Maritime Management on the subject of environmental certification of transports. He met with our chairman Mathias Wideroth to discuss Scanlog’s views on this interesting subject.

Martin: What do customers in general request when negotiating freight and logistics contracts?

Mathias: Companies usually seldom regard transports and logistics as value adding activities – they are considered mostly as a cost, and in my opinion rightly so. That means that cost efficiency is what matters the most to our customers. What is interesting about cost efficiency in logistics however, is that it correlates well with environmental friendliness. A well utilized transport with minimised empty backhaul positioning is a more cost efficient transport, at the same time as it has less environmental impact. Less than full truck or container loads grouped together, or several full truck or container loads consolidated in larger units such as railway wagons also have smaller environmental footprints – at the same time as they offer economy of scale and thus increased cost efficiency. We are competitive on price, and part of that competitiveness actually derives from us using more environmentally friendly alternatives.

Martin: Are transport buyers only interested in price?

Mathias: Naturally, customers look at other parameters as well, such as transit time. A slightly longer transit time will however often be more cost effective, more environmentally friendly and achieve a more precise delivery precision. We have a job to do in that area, to emphasize that it is not always transit time that is the most important aspect, but also the delivery precision.

Martin: What do you present in terms of environmental data when discussing new contracts with your customers?

Mathias: We still rather seldom receive more than general questions regarding environmental aspects, about our ISO 14011 certification or about our use of Euro V and VI class trucks. However, transports significantly affect the environment, both directly and indirectly and as an international freight forwarder we have a responsibility to strive at minimizing the negative environmental impact as far as possible. As part of our efforts to develop sustainable transport solutions for our customers, we therefore regularly make environmental impact assessments, where we compare different transport modes and combinations of modes of transport with each other.

Martin: Can you give an example of what these environmental impact analyses show?

Mathias: A multimodal rail transport of wine to Sweden from France or Spain for example, reduces non-renewable fossil energy consumption by between 30% to 40%, and reduces CO2 emissions by as much as 50% compared to transports by truck. So even if customers don’t ask for it, we present this kind of environmental data as we are convinced that it deserves to be paid attention to. Hopefully it may also be taken into account when awarding new transport contracts.

Martin: What is your view on environmental certification of transports?

Mathias: I think it is interesting for a number of reasons. As we have said, transports affect the environment and it is our responsibility to minimize the negative effects as far as possible. If we can achieve that by using environmentally certified transports or ensure that our own transports are environmentally certified, this would be a seal of quality, a proof that we actually live up to our claim to take responsibility for our environmental impact. This then also means it would be a tool for marketing and sales as there is an increasing interest in the market for looking at the sustainability aspects of transports.

Martin: What are your customers’ views on environmental certifications in general?

Mathias: Several of our customers are in the forefront of using certifications and labels concerning sustainability and the environment. Since environmental certification of freight transports barely exist at the moment, we do not really know whether also this kind of labelling is of interest. We have tried the idea on a couple of our customers and asked whether it would be interesting for them if we were to environmentally certify our railway solutions for example, and have received quite positive response. I believe our customers are increasingly interested, especially perhaps in the grocery retail industry because here it can fairly easily be associated with the products themselves.

Martin: Do you think it is possible for you to carry out environmental and sustainability work without the demands from your customers?

Mathias: Our customers definitely push us to find environmentally friendly alternatives as they request more cost effective transports. More and more we also see requests for reporting of CO2 emissions and energy consumption as part of the general KPI (Key Performance Indicators) reporting. But I really do think that is us a supplier, and I am very firm on this that it is us as a logistics and transport company that ultimately has the responsibility to develop more environmentally friendly transports, not our customers. We are the ones that shall take the initiatives and the lead to minimise the environmental footprint and increase the sustainability of international goods transports.