Chris Hyde, managing director of convenience and food services at GXO UK&I, explains how firms can unlock the potential of low-carbon logistics and move towards a more sustainable future.
As the global response to climate change ramps up and consumers expect more proactive change from the businesses they rely on, action on emissions is becoming as central to commercial operations as financial accounting.
There are many initiatives to reduce emissions that are under your direct control, like switching to renewable energy suppliers, however businesses now need to focus on a broader view of their impact, both to meet regulatory changes and make their sustainability progress more meaningful.
Logistics and transport are the source of just over a third of global CO2 emissions, making this a clear target for regulatory bodies. Outsourced logistics are a major element of overall Scope 3 emissions – all of the indirect emissions that arise across the value chain, from raw material extraction to end-of-life product disposal. Every business that stores and moves goods has a duty to reduce their environmental impact but transforming an essential function like transportation requires deep experience and expertise as well as infrastructure and investment.
One area within your control is decarbonisation of your transport operations and this is where a consultative and experienced logistics partner can help. What we’ve learned at GXO from investing heavily in our fleet and transport operations is that the path is slightly different for every business and needs to be taken step by step.
Making alternative fuels and EVs a reality
It’s true that the end destination for road logistics is relatively clear. Ultimately, we are driving towards fully electrified, battery-based fleets, which are becoming increasingly viable as the technology gets better and cheaper, and which look set to out-compete long-term alternatives like hydrogen fuel cell electric vehicles.
Yet current batteries are relatively large and heavy so packing enough of them into a vehicle to provide similar range to a diesel truck limits how much can be hauled, putting them at an economic disadvantage. In addition, as EVs are significantly more expensive than traditional alternatives, businesses will have to weigh up whether they are the most effective investment in climate-positive outcomes. Charging EVs also puts a huge strain on the grid so mass adoption will require infrastructural upgrades, both at depots and across the nation, which will take time.
While EVs are not yet a universal solution, we can’t afford to simply wait until they reach full maturity before acting. The path forward requires exploration, innovation and testing to reach net-zero operations.
At GXO, for example, we’re at the forefront of trialling alternative fuels as we displace diesel from the energy mix. A range of possible options including liquified natural gas (LNG), hydrotreated vegetable oil (HVO) and compressed natural gas (CNG) offer bridging solutions to taper down emissions in the short to medium term in contexts where EVs don’t yet make sense.
A CNG truck today delivers a 19% reduction in carbon emissions, while bioCNG (biogas) can deliver up to 78% reduction. These solutions are much more comparable to diesel, operationally and economically, than an EV, and can be adopted with minimal disruption in the near-term, making them particularly attractive to many of our customers.
Rolling out alternative fuels like CNG is an opportunity to learn how to adapt and improve our approach to road logistics in ways that both reduce emissions and will make EVs viable, sooner. What’s more, thanks to GXO’s scale and expertise, our teams can redesign transport networks or create solutions to fit the lower range of EVs, with a large network of sites where we can base vehicles, while longer-range EVs are in development.
We shouldn’t forget, the energy source is not the only part of vehicle design and technology that affects its impact. Progress towards lighter, more aerodynamic designs with better safety and usability are also an important part in reaching a zero-emissions destination.
Changing how we drive to increase sustainability
Yet the trucks themselves are just one piece of the emissions puzzle, it’s also about optimising how we use existing fleet. We’re able to reduce emissions for our customers by putting the right level of capacity and range in place in a more tailored way to improve route execution. This can be further supported with more efficient backhauling, ensuring that vehicles are also doing useful work on return journeys, such as transporting waste or carrying returns.
Consolidating routes means fewer trucks on the road, tackling issues around air quality and congestion as well as driving down overall emissions. One benefit of working with an outsourced logistics partner is that, thanks to having numerous customers in close proximity, brands can share transport services so journeys service more than one company. In this way GXO’s shared transport network opportunities offer commercial and environmental benefits to all by reducing the number of journeys and ensuring vehicles are fuller.
Planning excellence is also vital as we attempt to reduce emissions and the number of trucks on the road. GXO leads the way in trialling and adopting the latest solutions to produce meaningful insights from the huge volumes of data that are produced from millions of routes driven every year. From AI-based route planning tools to integrated data lakes that can evaluate everything from vehicle capabilities and telematics data and much more, we’re using technology to continuously improve planning outcomes and uncover more efficient approaches.
By improving route efficiency, we helped a leading grocer to reduce the distance driven from one depot by over 900,000 kilometres per year, decreasing diesel consumption by over 250,000 litres and delivering over 720 tonnes of overall carbon emission savings to date.
We are likewise investing in driver training programmes and technology to encourage more efficient driving and reduce idling, a small step that can have a big impact.
Continuous logistics improvement
Through ongoing innovation and progress on efficiency, we are bringing decarbonised transportation closer to reality. Along the way, differing needs will lead to a diverse range of logistics solutions. The important thing is that the strategy meets today’s needs while moving, step by step, towards a sustainable future.
Navigating that terrain isn’t simple but working with a consultative and innovative partner like GXO helps businesses make real inroads today and effectively prepare them to unlock long-term sustainability tomorrow.
