Green port logistics-Sailing toward a low carbon shipping

Recent geopolitical tensions and conflicts in major oil-producing regions have reduced crude oil availability, disrupting supply chains and driving up fuel costs. Post-pandemic economic recovery has exacerbated the situation, with surging energy demand outpacing supply and causing prices to spike. In addition, governments have imposed stricter environmental regulations and carbon taxes to encourage the shift toward sustainable energy sources.

As climate change and environmental degradation become more pressing concerns, consumers and businesses are increasingly demanding greener supply chains. Adapting to these challenges, the global maritime industry is pivoting toward green port infrastructure as a key solution.

Green ports significantly reduce emissions and enhance operational efficiency, helping to mitigate the industry’s impact on the planet while meeting the growing demand for sustainable practices. They integrate eco-friendly technologies and practices such as shore power systems, emissions-reducing innovations, and renewable energy sources like wind and solar power. For this to become the new norm, collaborative efforts among port authorities, shipping companies, and stakeholders are crucial.

With shipping responsible for 11 percent of life cycle carbon emissions in transportation, the push toward greener ports plays a vital role in reducing the industry’s overall carbon footprint.

Plugging into progress: the shocking truth about shore power
Originally, ports relied heavily on auxiliary engines running on fossil fuels to power ships while docked. These engines, however, emit significant amounts of pollutants, leading to demands for cleaner operations, especially in major port cities.

Shore power systems, known colloquially as cold ironing or alternative maritime power (AMP), reduce emissions from docked vessels at port. Ports worldwide, notably in Singapore and Shanghai, have significantly invested in shore power infrastructure to accommodate vessels calling at their terminals.

With shore power, vessels plug in to onshore electricity grids and do not have to use their auxiliary engines to generate power, reducing emissions and noise levels.
With shore power, vessels plug in to onshore electricity grids and do not have to use their auxiliary engines to generate power, reducing emissions and noise levels.
By interfacing ships with electrical grids, these vehicles are connected to land-based electrical grids while docked and idle. Berthed ships can turn their auxiliary engines off and transition to onshore electric power, reducing air pollution by up to 95 percent.

In this way, shore power systems significantly mitigate air pollution in port areas and enhance local air quality, contributing to the sustainability of port operations. Noise levels are also reduced, and local air quality is greatly improved.

The port of Hong Kong, the eleventh busiest container port globally, experiences severe air pollution. When Hong Kong shelved its shore power project, protestors pointed out that shore power could reduce the lives lost to air pollution, and even lead to annual savings of HK$523 million (€61 million). Still, the project was deemed too expensive to follow through with. As it is, the port city still faces unhealthy levels of air pollution.

Implementing shore power infrastructure in the port of Sydney improved the air quality in surrounding areas near the port.
Implementing shore power infrastructure in the port of Sydney improved the air quality in surrounding areas near the port.
The port of Sydney also faced backlash over air pollution caused by cruise ships and other vessels running their auxiliary engines while in port. Residents reported health issues linked to poor air quality, which pushed authorities to take action. Sydney responded by installing shore power infrastructure and enforcing stricter environmental regulations, leading to a noticeable improvement in air quality.

Harnessing solar and wind power for smooth sailing
Exploring renewable energy systems or hybrid systems that combine solar, wind, and hydroelectric power with complementary technologies can also help to increase energy resilience and minimize logistics disruptions.

By drawing on solar and wind power, ports possess greater energy independence as electricity is generated on-site, reducing reliance on external sources and ensuring a stable energy supply. This is especially crucial during periods of volatility or disruptions in traditional energy supply chains.
Alternatively, microgrid solutions offer localized energy systems that operate autonomously or alongside the primary grid, enhancing resilience during outages and emergencies while promoting energy independence and sustainability.

The Qingdao port in China and Brisbane port in Australia have invested in extensive solar panel installations across their terminals, leveraging the region’s abundant sunlight. Qingdao’s bridge cranes utilize photovoltaic (PV) systems to generate up to 500,000 kilowatts of energy annually, across 2,800 square meters of PV panels. Similarly, Brisbane has an 800-kilowatt rooftop solar system that provides a shaded car park and produces 1300 megawatts of power annually.

These installations, in turn, reduce operational costs and reliance on conventional harmful energy sources such as fossil fuels, bringing them one step closer to their sustainability goals. For Brisbane, this has translated into the port meeting its net zero carbon emissions goal only three years after the commencement of its renewable energy journey, putting it six years ahead of its initial goal of 2030.

Green port logistics-Sailing toward a low carbon shipping – Ports experiencing favorable windy conditions also draw on wind turbines to bolster their renewable energy capacity. The Yokohama port in Japan and the Kaohsiung port in Taiwan strategically deploy wind turbines to supplement their energy needs and contribute to their sustainability objectives. These wind turbines also similarly generate electricity that can be seamlessly integrated into port operations or channeled into the grid, further reducing reliance on fossil fuels and mitigating carbon emissions.

These initiatives are paving the way for the Yokohama port to achieve carbon neutrality by 2050, aiding Japan in establishing a planned green shipping corridor with Singapore as the two countries tap into each other’s technologies to further decarbonize the industry. The hope is to develop a similar corridor between Kaohsiung and North America, which depends heavily on inter-port low-carbon facilities and clean energy resources.

Green port logistics-Sailing toward a low carbon shipping – Charging up port logistics
Port facilities have adopted hybrid and electric vehicles in their decarbonizing efforts. Rotterdam port in the Netherlands utilizes electric-powered vehicles for cargo handling and transportation within terminals. The use of diesel-powered equipment is reduced, so these ports have effectively mitigated their environmental footprint, retaining operational efficiency while reaping the benefits of diminished operating costs and reduced noise pollution.

Green port logistics-Sailing toward a low carbon shipping – Electric trucks parked in the surrounding premises of a port, to be deployed for cargo handling when necessary.
Electric trucks parked in the surrounding premises of a port to be deployed for cargo handling when necessary.
2,000 such trucks are expected within the facility by 2050. The port’s long-term goal is to enhance the infrastructure of all six of the port’s secure truck parks, to accommodate and utilize more electric vehicles.

Green port logistics-Sailing toward a low carbon shipping –

Green port logistics-Sailing toward a low carbon shipping – Energizing the future of port logistics
Logistics firms leverage smart energy management systems powered by Internet of Things (IoT) and data analytics within green ports. These systems optimize energy consumption, monitor performance, and identify real-time efficiency opportunities. Smart meters, sensors, and control systems are strategically deployed, and energy usage is meticulously tracked. On top of that, settings are adjusted based on demand patterns, with renewable energy as the priority, minimizing waste and enhancing operational efficiency.

Energy storage solutions like battery storage systems complement intermittent renewable sources. On-site battery storage allows surplus solar energy to be stored and discharged during peak demand or when renewable energy is unavailable, ensuring grid stability and uninterrupted operations.

Charting a course through cost and regulatory barriers
Renewable energy transitions are about more than just cutting emissions and improving efficiency for logistics operations. They are a statement, showcasing a company’s dedication to corporate social responsibility and environmental stewardship, resonating with stakeholders and consumers.

By tapping into solar and wind power, ports gain a newfound energy independence, ensuring a reliable energy supply even during disruptions. Microgrid solutions offer an extra layer of resilience, crucial during emergencies. Investing in renewables saves costs in the long run and strengthens financial sustainability. And with options like power purchase agreements (PPAs) and green bonds, overcoming adoption barriers becomes more manageable, paving the way for a smoother transition toward a greener future.

Governments in the Asia Pacific region are quick to set up renewable energy sources to assist companies in adopting clean energy. Japan’s Feed-in Tariff (FIT) scheme guarantees fixed prices for renewable energy, while Singapore’s Green Port Program incentivizes vessels that use cleaner fuels or adopt green technologies, pushing for the use of renewable energy sources. These not only drive compliance with carbon emission goals, but also foster innovation and investment in renewable energy infrastructure within ports.

Green port logistics-Sailing toward a low carbon shipping – Emerging carbon pricing mechanisms like China’s pilot carbon trading programs may push more logistics companies toward renewable energy investments. These blockchain-enabled energy trading platforms empower logistics companies to participate in local energy markets, monetize excess renewable energy, and support community-based initiatives. Regional targets, such as India’s goal of 500-gigawatt renewable energy installed capacity by 2030, guide logistics companies in aligning with national priorities.

Measuring the waves from carbon footprints to carbon savings
For logistics companies to effectively address the environmental impact of their operations, they must first quantify it. This involves measuring and managing carbon emissions, energy consumption, and waste generation within green ports and maritime logistics. Logistics companies can utilize advanced data collection systems and analytics to monitor key environmental performance indicators by employing tailored metrics and methodologies.

This includes tracking greenhouse gas emissions from transportation, energy usage in facilities, and waste generated throughout the supply chain. By accurately measuring these metrics, these companies gain insights into their environmental footprint and identify improvement opportunities.

Life Cycle Assessments (LCAs), for instance, analyze environmental impacts across a product’s life cycle, aiding companies in identifying hotspots, assessing sustainability initiatives, and minimizing their footprint. Logistics companies conduct LCAs to evaluate the impact of renewable energy investments, from manufacturing to decommissioning.

Environmental Certification Schemes like ISO 14001 and LEED provide standardized frameworks evaluating energy efficiency, resource conservation, and waste management. Logistics companies can undergo audits to achieve ISO 14001 certification, signifying adherence to environmental management standards.

The transformation of port infrastructure through the integration of renewable energy and shore power systems is a pivotal step toward sustainability. By quantifying environmental impact and embracing best practices, ports worldwide set new standards for sustainability and operational efficiency, paving the way for a greener maritime industry.

 

4 essential factors to drive your sustainability journey
Decarbonization, circularity, digitalization, clean energy and mobility are key considerations for companies to enter an era of sustainable logistics.

Green port logistics-Sailing toward a low carbon shipping – Sustainability is crucial for companies in today’s business landscape, driven by environmental challenges, evolving consumer expectations, innovation, and long-term resilience.

Consumer expectations are shifting, with 73 percent of global consumers willing to change their consumption habits to reduce their environmental impact. Prioritizing sustainability allows companies to attract and retain environmentally conscious customers, enhance brand reputation, and gain a competitive edge.

“At DHL, we can help customers on their decarbonization roadmap. Typically, this includes the transparency about the emissions, optimization of flows such as network, mode switch, load, route, and the main lever which is the use of clean fuel and technology,” said Florian Schwarz, Head of Sustainability, DHL Customer Solutions & Innovation.

For companies to start on this sustainability route, they must first understand the four key aspects crucial for a sustainable future: decarbonization, circularity, digitalization, clean energy and mobility.

Green port logistics-Sailing toward a low carbon shipping – The Era of Sustainable Logistics
Bringing decision makers, thought leaders, and industry stakeholders together to focus on the development of cleaner, greener logistics.
Find out more

The Era of Sustainable Logistics
Bringing decision makers, thought leaders, and industry stakeholders together to focus on the development of cleaner, greener logistics.
Find out more

Green port logistics-Sailing toward a low carbon shipping – The Era of Sustainable Logistics
Bringing decision makers, thought leaders, and industry stakeholders together to focus on the development of cleaner, greener logistics.
Find out more
Decarbonizing from end to end
Companies that have started or are starting their sustainability journey need to take a long, hard look at their decarbonization strategy.
Companies that have started or are starting their sustainability journey need to take a long, hard look at their decarbonization strategy.
Decarbonization begins with reducing carbon emissions within their control, either directly or indirectly.

But decarbonizing aspects beyond their control is the key to a successful sustainability strategy. A report by Accenture has noted that the supply chain generates 60 percent of all carbon emissions globally. Thus, there is an urgent need to focus on decarbonization in the logistics network to achieve emissions reduction targets.

Companies need to establish a clear understanding of where carbon emissions lie along the supply chain, and through that, set their decarbonization targets. Understanding the carbon footprint, setting reduction targets, optimizing the supply chain, switching to sustainable fuels, and adopting technology are key steps to decarbonization.

With a better understanding of how to decarbonize both the direct and indirect aspects of their end-to-end value chain, companies can set a clear decarbonization roadmap to achieve their net-zero carbon emissions targets that align with the Science Based Target initiative.

Green port logistics-Sailing toward a low carbon shipping – Going full circle with circularity
Circularity is a key aspect of sustainability that focuses on creating a closed-loop system where resources and waste are minimized, and materials are continuously repurposed or recycled.
Circularity is a key aspect of sustainability that focuses on creating a closed-loop system where resources and waste are minimized, and materials are continuously repurposed or recycled.
According to the Ellen MacArthur Foundation, only 8.6 percent of the global economy is currently considered circular. However, transitioning to a circular economy could bring significant benefits. For instance, a report by Accenture estimates that circular economy practices could generate US$4.5 trillion (€4.2 trillion) in economic benefits by 2030.

Circularity involves designing products with efficient processes such as better packing practices and promoting the reuse of materials in packaging. The former has an almost immediate impact, as reducing empty space in packages means less boxes, and thus filling materials used. Companies can also switch from normal to pre-stretched pallet wrap, which has a significant effect in reducing the plastic intake by half.

Green port logistics-Sailing toward a low carbon shipping – According to the World Economic Forum, if all plastic packaging was made from recycled materials, it could save up to 30 million tons of carbon emissions per year.
Optimizing sustainability through digitalization
Digitalization plays a crucial role in promoting sustainability by integrating digital technologies and data-driven approaches to optimize processes, enhance efficiency, and enable informed decision-making.
Green port logistics-Sailing toward a low carbon shipping – Digitalization plays a crucial role in promoting sustainability by integrating digital technologies and data-driven approaches to optimize processes, enhance efficiency, and enable informed decision-making.
By adopting digitalization, companies can deploy smart systems to monitor and manage energy consumption, optimize supply chains, and facilitate sustainable practices. Leveraging digital technologies, for example, can identify energy-saving opportunities, optimize operations, and improve energy efficiency.

Organizations can use advanced analytics and machine learning algorithms to optimize energy usage in buildings, reduce energy waste, and lower carbon emissions. This applies to the supply chain perspective too, ranging from warehouses being able to reduce energy usage to optimizing the last-mile delivery route to reduce fuel consumption.

Cleaning up the act with green energy
Clean energy, including renewable energy sources such as solar, wind, hydroelectric, and geothermal power, is a crucial component of sustainability.
Clean energy, including renewable energy sources such as solar, wind, hydroelectric, and geothermal power, is a crucial component of sustainability.
Transitioning to clean energy is essential for reducing greenhouse gas emissions, mitigating climate change, and achieving a sustainable energy future.

According to the International Renewable Energy Agency (IRENA), renewable energy accounted for 72 percent of global power additions in 2019. The falling costs of renewable technologies have contributed to their rapid adoption. For instance, the cost of solar photovoltaic (PV) panels has decreased by 82 percent over the past decade, making it one of the most cost-effective sources of electricity generation.

Green port logistics-Sailing toward a low carbon shipping – On the logistics front, solar panels and LED lighting have become key considerations when upgrading or building new warehouses. In the United States (U.S.), the flat and open roofs of medium and large warehouses and distribution centers are perfect locations for solar panels. With more than 450,000 such buildings, totaling almost 16.4 billion cumulative square feet of rooftop space, the solar power potential is enormous. In fact, the rooftops of American warehouses built before 2019 have the capacity to generate 185.6 terawatt-hours (TWh) of solar electricity each year, enough to power almost 19.4 million average homes.

Deploying clean energy such as sustainable aviation fuel (SAF) for transportation to reduce carbon emissions is also a key driving force for sustainability. “70 percent of our customer’s emission are on average related to aviation, so SAF will play a key role. The nice thing with solutions such as SAF is that there is no risk of path dependency. This product can be switched on and off flexibly and does not require upfront investments,” added Schwarz.

Driving the sustainability bandwagon with clean mobility
Clean mobility involves sustainable transportation options that minimize carbon emissions and reduce dependence on fossil fuels.
Clean mobility involves sustainable transportation options that minimize carbon emissions and reduce dependence on fossil fuels.
Transitioning from traditional gasoline-powered vehicles to electric vehicles (EVs), promoting public transit systems, and encouraging cycling and walking are all part of clean mobility initiatives.

The IEA projects that the number of electric cars on the road could reach 145 million by 2030. This shift towards EVs is crucial for reducing transportation emissions and improving air quality. A study by the University of Michigan noted that a battery-powered pick-up, from manufacturing to operating the EV, . While there are steps taken to reduce the upstream carbon emissions from manufacturing the EVs, it is important to note that the operation of EVs, powered by renewable energy, will have zero carbon emissions.

Investments in charging infrastructure are also crucial for the widespread adoption of EVs. The Global EV Outlook 2021 reports that there were over 7.3 million electric vehicle chargers worldwide by the end of 2020, including both public and private chargers. The growth of charging infrastructure supports the convenience and accessibility of EVs, further accelerating the transition to clean mobility.

Companies that proactively seek out partners to address sustainability risks, such as resource scarcity and regulatory changes, are better positioned to adapt and thrive in an evolving business landscape. “Once partners have talked to each other, it is important to quickly act and roll out pilot programs to learn. Deploy an EV for a certain lane, use SAF for a particular destination, and the like,” noted Schwarz.

Beyond the economic aspect, taking the sustainability route has a positive brand effect for companies, especially with the increasing awareness of consumers. By embracing circularity, digitalization, clean energy, and clean mobility, businesses can make significant progress toward a more sustainable future.

Green port logistics-Sailing toward a low carbon shipping – ALSO WORTH READING

What is sustainability in logistics?
Firstly, let us quickly remind ourselves of what logistics is. It covers all the processes a business has in place to get their goods from the point of origin to the customer – including procurement, inventory management, distribution, warehousing, transportation, packaging and risk management.

Sustainability in logistics refers to actionable steps a business can take to reduce the environmental impact of these processes. Examples include carbon offsetting, optimizing transport routes (to reduce emissions), and switching to electric vehicles.

The importance of sustainability in logistics and supply chain management
The European Environment Agency predicts that logistics will account for up to 40 percent of global carbon dioxide emissions by 2050 unless effective measures are taken1.

Beyond playing its part in changing this gloomy forecast, there are many reasons your business should implement a green logistics strategy:

Green port logistics-Sailing toward a low carbon shipping – Your customers are paying attention
A survey by McKinsey2 found that 66 percent of respondents say that they consider sustainability when they make a purchase, aligning themselves with brands that are compatible with their values and priorities.

Yet, they are also wary of “greenwashing”; in fact, a separate study found that 88 percent of Gen Z do not believe businesses’ environmental, social and governance (ESG) claims3. So, building an authentic sustainability strategy is key to enhancing your brand image and gaining a competitive advantage.

You can improve efficiencies – and save money along the way
A sustainability strategy will help your business embrace a culture of innovation and agility. You will review your current logistics operations, enabling you to spot inefficiencies and make changes that are not just better for the environment, but will save your business money. For example, implementing route planning software across your transportation fleet will reduce your emissions and your fuel costs. It is a win-win!

Sustainability in logistics trends 2024
Looking for ways to improve the sustainability of your logistics? As the subject becomes a key focus for industries globally, these are some of the key trends your business could adopt.

Green port logistics-Sailing toward a low carbon shipping – Trend 1: Decarbonization
This refers to the steps a business can take to reduce its carbon footprint, which is the total amount of greenhouse gases emitted directly or indirectly by its activities. Currently, the transport and logistics sector contributes around 24 percent to global carbon dioxide equivalent (CO2e) emissions4, so there is plenty of work to be done.

You may have heard the term “net zero”, which is the balance between the amount of greenhouse gas that is produced and the amount that is removed from the atmosphere. Here are some decarbonization steps your business can take on the path to net zero status:

The first step to improving your business’s carbon footprint is to know where it currently stands – from there, you can set goals to improve. A carbon calculator tool will give you an in-depth picture of your carbon footprint across three scopes: Scope 1 (direct emissions), Scope 2 (electricity and gas related emissions), and Scope 3 (indirect emissions throughout your chain).
Ask your suppliers what they are doing to reduce their carbon footprint. If they are not doing enough, it may be time to research alternative partners.
Equally, you should let your customers know what your business is doing to make a difference with an environmental policy statement on your website.
Talk to DHL about GoGreen Plus , a dedicated solution to help businesses reduce the carbon emissions associated with their shipments through the use of Sustainable Aviation Fuel. SAF is a biofuel produced from renewable sources such as vegetable oils, animal fats, waste products, and agricultural crops. It is specifically designed to be used as a substitute for traditional jet fuel and can reduce greenhouse gas emissions by up to 80 percent compared to fossil fuels. GoGreen Plus can be selected for individual shipments, making it a viable option for SMEs and e-commerce businesses with smaller cargo loads.
Choose a logistics carrier with an electric vehicle (EV) fleet. DHL, for example, has invested significantly into its EV network on its mission to have 60 percent of its last-mile vehicles electric by 2030.
Trend 2: Green energy solutions
Adopting renewable energy solutions will be a big part of your decarbonization strategy. More than 30 percent of the world’s electricity is now generated using renewables – a milestone that was reached in 20235. Renewable energy is defined as that derived from natural sources that are replenished at a higher rate than they are consumed; it promotes the use of sunlight and wind, for example, as an alternative to fossil fuels. Some sustainable energy solutions your business could consider are:

Switch to a “green” energy supplier. This is one that generates the power it provides via renewable sources such as hydroelectricity and wind power.
If you own your business premises, look at installing solar panels on your roof. These will generate clean, carbon free electricity which you can use onsite.
Research what energy grants are available to help you make changes. Some governments have dedicated funds for small businesses to cover things like installing EV charge points.
It is a simple but effective energy-saving tip: ensure all your equipment is turned off overnight or when not in use. You will reduce your bills too!
Trend 3: AI innovations
Artificial intelligence is playing a big part in helping businesses transform the sustainability of their logistics. Some of its applications in this area include:

Green port logistics-Sailing toward a low carbon shipping – Demand forecasting. AI-powered inventory management software can analyze historical customer data and market trends to help your business anticipate its inventory needs with greater accuracy. This will reduce your wasted stock and optimize your storage space.
Route optimization. If you are making several deliveries to customers a day, AI can help you find the most efficient routes, taking in factors such as distance, real-time traffic, vehicle capacity, and delivery time windows. This reduces the fuel emissions of the vehicle, whilst maintaining customer satisfaction.
Identifying areas of energy wastage within your warehouse. AI can analyze your data to find inefficiencies within your operations, such as machinery that is outdated and thus using excess energy. You can use these insights to make necessary changes.
Trend 4: Sustainability initiatives in reverse logistics
Reverse logistics is the movement of goods “upstream” through a supply chain, to return them from the end customer back to a retailer or manufacturer (e.g., product returns). It embraces a circular economy model – extending old or damaged products’ lifecycle by promoting recycling, repurposing, repairing and resale.

Green port logistics-Sailing toward a low carbon shipping – The good news for your business? There has never been a wider range of innovative, eco-friendly packaging solutions to choose from – including compostable mailing bags and packaging made from seaweed!

With a DHL Express Business Account, you will have access to a range of dedicated sustainable solutions to help your business meet its green logistics targets.