Tag Archives: sustainability

Not enough SAF for air cargo to hit net zero – carriers must find other routes

Posted on February 20, 2023 by | Leave a comment

It’s becoming obvious that there’s no way that enough sustainable aviation fuel (SAF) can be produced to meet the needs of air traffic.

Carriers are already suggesting they will need to play a little use in their path to ‘Net-Zero’ emissions. They plan to take advantage of strategies which allow them to keep emitting but using offsets with technologies that have been declared legitimate to shelter fuel use.

Such technologies concern purchasing carbon credits and developing carbon capture sources. But those do not actually reduce the emissions from air traffic.

I’m interested by what Glen Hughes, the director general of The International Air Cargo Forum (TIACA) said for the article below.

“What’s important is the capacity to monitor a company’s total ESG impact and activities in a manner that fulfils audit requirements and has a direct impact on investment decisions by equity firms and banks.”

Source: Loadstar Article

Clearly this sidesteps serious ESG improvement for the industry and promotes a form of gaming the rules.

Promoting watered-down audit requirements and shaping how investment decisions are made by large investors clearly takes precedence over actually improving emissions. The premise that investment firms and auditors are to determine the world’s response to environmental improvement is patently ridiculous. TIACA is promoting a specious response. A harsh judge could call it a form of greenwashing.

To be fair, I will quote Mr Hughes again, from the same article, citing six questions to answer for supply chain officials:

 “Am I being as environmentally responsible as I can? Am I using recyclable materials? Am I optimising transport? Am I using sustainable energy or compensating for emissions? Am I supporting global prosperity and economic growth? And how can I, my partners and supply chain stakeholders continually improve?”

Source: Loadstar Article

Compensating for emissions is a big loophole. And if you use the loophole, are you being as environmentally responsible as you can be?

Leaving it to investors and politicians to decide does not seem like a wise course.

By Alex Whiteman 20/02/2023

Not enough SAF for air cargo to hit net zero – carriers must find other routes – The Loadstar

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Posted in Air, Logistics, Supply Chains, Sustainability

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The worst January for US intermodal for ten years, and no sign of relief

Posted on February 10, 2023 by | Leave a comment

It’s no wonder that US intermodal traffic is declining. Poor service from the railroads has made using any system that involves a transfer an invitation to delays. And shippers can’t afford delays.

Companies offering intermodal container service don’t have enough pull with the railroads in the US to get highly regular service. And now that container rates are dropping fast, shippers won’t pay an excessive amount for the service. So the large rails don’t feel any obligation to serve them well.

Will the major rail lines make any adjustments? My guess is they will be dragged kicking and screaming to provide more reliable service. The fuss they are making over simply making regular deliveries of feed grains to major customers, and the resistance to reciprocal switching, and the labor difficulties they are experiencing show that they don’t feel that customer service is top of their mind.

Why not? Recently I read a book about Charles Lowell, a young man from Massachusetts who fought in the Civil War. Before the war, and after graduating first in his class from Harvard, he worked as an agent in Iowa for a firm building railways west in that state. Each time they completed 25 miles of railway, the firm got a large new swath of land from the US government. The firm had to survey the land, decide on their route through it, and sell the land they didn’t need to fund the next 25 miles. They sold the land to migrants, from the east or from other countries, who were moving west to obtain cheap land for farms and businesses, their piece of the American Dream. There was a lot of graft in these land dealings. But Lowell insisted that his firm sell at a fair price and not engage in special deals with investors speculating on the land. His reason was interesting and farsighted.

Lowell believed that the railroad needed customers, and that was what he was creating by selling them land.

Today’s railroad executives don’t seem to think they need customers.

There are plenty of reasons to use intermodal for container shipment. It reduces emissions. It could be faster. It could require fewer transloads. (Most US truck traffic from ports is transloaded to 53-foot truck chassis before a cross-country trip). And it could be safer, and cheaper, or at least no higher in price, for the shipper. Rail lines could participate in this effort to reduce pollution while making the business profitable for them by operating their lines efficiently to accommodate it. But it does require them to serve their customers, those who want to ship on intermodal.

Too bad rails can’t seem to focus on the advantages it offers and shape their business around it. It would save the hassle of government regulation forcing them to accommodate it.

By Ian Putzger, Americas correspondent 10/02/2023

The worst January for US intermodal for ten years, and no sign of relief – The Loadstar

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Posted in Logistics, Rail, Supply Chains

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Counting the cost

Posted on November 15, 2022 by | 1 comment

Richard Butcher has written an interesting article on the large quantity of excess containers floating around the world today. Many of these containers are plugging up the yards of major and minor ports, causing longer delays in cargo handling. The space issue is important because with more space you can arrange inbound and outbound containers for easy loading and easy drayage to the customer or warehouse.

He makes a strong point— that containers are held as assets on the books of ocean carriers, and they don’t want to write off too many at a time. Obviously, the costs of holding them don’t outweigh the value of keeping them in the container liners’ eyes.

While managing the inventory of empty containers and aging them aggressively is a great idea, I don’t believe the container carriers have enough motivation to do much. It’s very true that we now have the software and technology for tracking and identifying these containers easily, and managing them one by one.

But empty containers are packaging materials, and already we have seen in domestic industries the close attention retailers and firms such as Amazon have paid to the waste caused by packaging. One of the reasons is the downstream cost of disposing of it.

Containers are also packaging waste, and should be if extra cost were added to storing them empty, it would induce carriers to cut down their stocks. We have evidence of this. Moves by ports to add detention costs to containers that sit idle for days have already induced carriers to move out their containers, even though in some cases the charges have never been enforced.

One difference between containers and the Amazon box you get with your shipment is that the container is reusable. Actually, the customer may reuse the Amazon box; I know I do. But that is relying on a chance event; after a while if I have nothing to ship, I may send it to our local recycling. Of course I pay for the recycling through my taxes, and Amazon doesn’t directly pay, nor do the charges show up in their books. This strategy is not effective for a major item like a container.

However, I propose that ports and yards, or perhaps political entities, such as the US or EU, or state governments, institute a recycling charge for containers left beyond the limit of days set. Containers left past that time would be carted off, cut up for scrap steel, and the costs of the removal and disposal be charged to the ocean carriers. I further propose that the scrap steel value be retained by the governments, perhaps for use in port and yard improvement projects; I don’t care much, since I don’t think it will be too big. It’s like condemning an unsightly property that is blighting a neighborhood.

This proposal would immediately place an accounting cost on ocean carriers. They would have to plan for how many containers would be lost through this process, and accrue the charges they are likely to receive for container disposal. This additional cost should certainly be enough to encourage efforts at tracking, removing containers from yards, and getting them back to exporting ports for reuse. Loss of the asset and paying for its loss will provide motivation for the ocean carriers to take care of their own waste.

If the US or EU would put such provisions into effect it might do the trick. These are the largest importing nations in the world, and they have the most empty containers around. But I think if they led, other nations around the world would follow.

China might not; it would put a dent in their container manufacturing business, which is mostly state-owned. But it would put a stop to the practice of buying new containers instead of recycling old ones, and charging the shipper for the new container.

Actually, since China is a major source of steel production, one could view the manufacture of containers as a form of ‘dumping’ at below the cost of manufacture. But trying to resolve this through the WTO would take forever, and have no certain outcome, like most of the past disputes on trade presented there.

Taxing the old empties and disposing of them would cut through the noise and begin placing the cost of the packaging and the ‘pollution’ it generates squarely on the ocean carriers. And it would force them to recognize the costs they are generating in their books, hurting their bottom lines.

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Richard Butcher | Nov 14, 2022

Counting the cost

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Posted in Logistics, Shipping, Sustainability

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