We need win-win solutions if we want to end climate change.
— Jochum Reuter, Vice President, Strategic Alliances (EMEA and APAC), FourKites
Sustainability is good business, now more than ever. But as companies and business leaders around the world know, sustainability alone is no substitute for sound business practices. In my time working at FourKites, it’s become increasingly evident that we need win-win solutions if we’re going to solve today’s environmental crisis. In other words, we need to build the tools that help companies both meet and exceed their business objectives, while guiding them down the path of greater sustainability.
We’ve written fairly extensively on how to do this when transporting goods over the road. In May 2020, Land O’Lakes and Coca-Cola succeeded in pairing two otherwise independent loads in one of the first-ever real-world pilots of FourKites’ Lane Connect technology. This effectively eliminated about 1,800 kilometers of empty backhaul — equivalent to about 2,500 kilograms of atmospheric carbon dioxide — as well as enabled substantial savings on fuel, detention and other logistics costs.
But what about driving greater sustainability at sea? Ocean shipping represents somewhere between 2-3% of the world’s total greenhouse gas emissions, as well as 15% of nitrogen oxide emissions, which are a key component in smog. It’s a sector where the EU has committed to cutting emissions in half within the next three decades. If we’re going to accomplish these objectives, we need to pair them with tools and practices that also enable businesses to cut costs, strengthen efficiency and improve performance throughout their operations.
Improving sustainability is a win-win for companies moving large quantities of freight over the high seas, since reducing emissions goes hand in hand with saving on fuel costs. Some of the biggest ships in the industry today consume over a million litres of petrol per voyage, representing a major cost for maritime carriers. Better sustainability is also a major competitive differentiator, with well over two-thirds of consumers willing to vote with their wallets and financially support brands that take the lead in stopping climate change.
Certain things can be done to minimise the impact that cargo ships have on the environment, such as reducing the speed a ship travels in order to conserve fuel. One study found that ships traveling along four European routes lowered their nitrogen oxide emissions by 12% during the 2008 economic crisis, during which time ships were traveling 30% slower than their average speeds in years prior, in order to conserve fuel. This is a case where a business need aligned with greater sustainability, which in turn led to a decrease in harmful particulates being released into the air.
Still, slowing things down is rarely ideal, especially at times when consumers are demanding ever-faster delivery times. Consider that, along with the fact that global capacity is already strained across multiple modes, and you can see that it’s more important than ever to find ways of phasing out fossil fuels entirely for ocean shipping.
“Multimodal transport needs a strong boost,” wrote the authors of the European Union’s new Green Deal. “As a matter of priority, a substantial part of the 75% of inland freight carried today by road should shift onto rail and inland waterways.” To be sure, this is a shift that’s already in motion, as many companies are attempting to migrate more of their freight to barge and rail. Our own data supports this, showing that in the second half of 2020, ocean load volumes tracked via FourKites grew nearly 150%, while rail and intermodal grew by about 50%.
Once again, this is driven in large part by shortages in both truckload capacity and ocean shipping containers. You can fit anywhere from 40 to 80 shipping containers on the average barge, which more than offsets the fact that they’re slower than trucks moving over the road. Especially in member states with lots of rivers and canals, like Germany and the Netherlands, moving more inland shipments by barge instead of truck can make good business sense. Just as importantly, a growing number of companies are making huge leaps to ensure that such a shift makes good environmental sense, as well.
Yara International is one FourKites customer that’s rising to the challenge of eliminating the emissions of waterborne shipments, with the release of its new zero-emission cargo ship.
The Yara Birkeland, named for Yara’s founder Kristian Birkeland, has a total capacity of 120 twenty-foot equivalency units (TEUs). It’s capable of moving at a top speed of 13 knots, though is expected to move at a more economical speed of 6-7 knots, and is powered by a 7 MWh battery, which can be charged on the docks prior to the ship’s departure. Since the country of Norway, where the ship will be operating, relies almost entirely on hydroelectric power, the Birkeland will be 100% zero-emissions from the minute it rolls off the line.
In addition to these environmentally-conscious developments, the ship is also fully autonomous, which means that companies who adopt it will also save on personnel. Eventually, Yara plans to have everything from loading and unloading cargo to berthing and unberthing the vessel handled autonomously.
All told, Yara International estimates its new ship, whose maiden voyage is expected to take place later this year, will boost available capacity by the equivalent of 40,000 conventional truckloads each year — and this is just within Yara’s domestic supply chain. Equally important is the fact that this ship will move cargo more cost-effectively than the conventional trucks it is replacing, which is the other component that’s needed to create a true win-win scenario for sustainability.
It falls to those working at the forefront of innovation to walk this delicate balance. If we’re working to solve a pressing business need, we must ask ourselves if we can do it in such a way that it also eliminates a source of waste, emissions or inefficiency. Conversely, those of us working to identify and eliminate the causes of ecological disaster must ask if there’s a way to orchestrate a new opportunity, rather than simply assigning a new source of blame. Above all, we must remember that it is just as much our job to build a better future, even as we work to clean up the problems of the past.
