Deutsche Post DHL is investing a “low double-digit million euro sum” per year into sustainablelogistics, CEO Frank Appel disclosed yesterday at the presentation of a new sustainable logistics
study in Shanghai.The company has also seen strong growth in its GoGreen product with volumes rising fivefold from145 million shipments in 2008 to 704 million in 2009, he announced at a press briefing in theChinese metropolis. Responding to questions from CEP-Research, Appel declined to state whatpercentage of overall shipments this figure represented but stressed that the product was nowoffered in 17 countries around the world.
According to the study “Delivering Tomorrow: Towards Sustainable Logistics”, the pursuit ofsustainability will transform the logistics industry, both in terms of its business model as wellas the range of advanced solutions and technologies that will be used by logistics serviceproviders.
The seven key developments for a sustainable logistics industry, according to the study, arethat logistics is not only a chief catalyst of global trade and a defining component behind valuecreation but is also a business of strategic importance in the move towards a low-carboneconomy.Technological change will be achieved only through a concerted drive from companies,governments and financial institutions, the study predicted.
Collaboration will increasingly be seen as an enabler to attain sustainability, and evenerstwhile competitors will cooperate more closely, it forecast. Moreover, business models oflogistics companies will change as sustainable innovations open up new opportunities. In addition,CO2 labeling will become standardised, carbon emissions will have a price tag, and carbon pricingwill lead to more stringent regulatory measures.
Deutsche Post DHL is already preparing for some form of carbon pricing regulations in the futureby getting “internal visibility” on breaking down CO2 costs by customer, Appel told journalists.“There is no doubt that there will be carbon pricing in the future,” he commented.
Emissions trading for airlines in Europe from 2012 onwards would “just be the starting-point” ofcharging transport companies for their emissions, Appel said. It would be better to have someglobal agreement on this issue to prevent companies moving goods between regions to try to avoidthe charge, he added.
However, both the logistics sector, through the World Economics Forum, and the postal sector hadalready set targets for CO2 reductions in the future, Appel pointed out.
One survey result was a clear customer readiness in Asia to pay more for “green products”. Therecould thus be an opportunity to pass on the increased costs from CO2 charging to customers ingrowth markets but this would be more difficult in mature markets with low growth, Appel said.
Asked by CEP-Research about modal shift from air to road or sea for environmental reasons, Appelhighlighted DHL’s Air-Sea service, involving transporting goods by sea to Dubai and then flyingthem to Europe for distribution, which reduced the CO2 footprint “massively” while ensuring thatlead times for customers were still met. Victor Mok, CEO North Asia for DHL Supply Chain, pointedout the multi-modal Road-Air service from Asia to Europe, which also reduced emissions.
In general, there would be “a change in business models” in the future, Appel said. There wouldhave to be more collaboration between logistics companies and customers to consolidate shipmentsfor distribution to “mega-cities”, which would grow dramatically in the decades to come.
“We want to take a significant step forward to improving carbon efficiency and do our part tofacilitate a low-carbon economy. The study provides valuable insights how our industry can achievethis goal,” Appel stated.
“Sustainability, especially the reduction of carbon emissions, is already a central aspect ofour business and an integral part of our corporate strategy. Customers worldwide increasinglydemand greener logistics and are thus the best indicators for us that we are on the right track.”& amp; amp; lt; /p>
“The logistics industry can achieve significant carbon reduction results today by makingdistribution networks more efficient, using the right modes of transportation and by managing loadcapacities and routes more efficiently,” he added. “Our aim with the study is to create a morefocused debate. The report aims to show how business innovation and green demand can drive acarbon-efficient industry and lead to a low-carbon economy.”
The study also showed that carbon pricing mechanisms will accelerate a market-based dynamictoward more sustainable solutions. Once there is a real price tag attributed to carbon emissions,the environment will be an integral part of investment decisions.
Customers in Asia in particular are ready to accept that sustainable solutions may cause higherprices, the study showed. For example, 84% of consumers in China, India, Malaysia and Singapore saythey would accept a higher price for green products – compared to only 50% in Western countries.The sense of urgency regarding climate change is strongest in Asia (India, China), where 70% ofconsumers asked rated it as one of the world’s most serious problems.
The new 150-page report, issued as a follow-up to the 2009 Delphi Study on ten top futuretrends, concentrated on green logistics and the future of the industry and identified keydevelopments for the years to come. The study was based on in-depth research and contributions frominternational experts as well as a representative survey of 3,600 business customers and consumersworldwide.
