Greener Skies Ahead: How going green can help your bottom line

Last month, FedEx issued a report with much fanfare about the results of two initiatives that made them understandably proud. They had set baseline targets back in 2005 and were already close to hitting their goals. All told, the two initiatives saved FedEx a combined US$281 million dollars in cost savings in fiscal 2016 alone.

But, surprisingly, the dollar figures for the projects were buried under a lot of other statistics. It took several click-throughs on the website to find mention of these cost savings, which are substantial even for a multi-billion-dollar company.

So, what statistics did FedEx choose to promote instead? By purchasing new, more efficient aircraft and instituting operational improvements, the integrator had avoided dumping 1.47 million tonnes of CO2 into the atmosphere, on its way toward a companywide objective of a 30 percent reduction in carbon emissions by 2020. The other project involved the use of alternative-fuel vehicles and more efficient driving methods that helped prevent more than 217,000 tonnes of CO2 from being released. For FY2016, the aircraft emission reduction is already a 22 percent reduction from the 2005 benchmark, while the alt-fuel project stood at an impressive 35 percent reduction, with eight years left to raise the figure to 50 percent by 2025.

These are, of course, admirable goals and noble achievements that help make our planet a little less filthy, and FedEx deserve all the credit it gets for these triumphs. Airfreight companies, in general, like to talk about reducing emissions and using alt-fuels, but that’s about as far as it goes. Many don’t like to talk much about holistic measurements, such as carbon footprints and CO2 emissions, because they know the numbers are not on their side.

For example, according to calculations by Lufthansa, the average modern ocean vessel usually emits between 10 and 40 grams of CO2 to move one tonne of freight one kilometer. For railhaul, the emissions are 30 to 100 grams per tonne-kilometer, and 60 to 150 grams for today’s trucks. Airfreight, however, is in its own category: 500 grams and up per tonne-kilometer – and that’s just for today’s most clean-burning engines. Just as no other mode can compete with airfreight’s speed, airfreight can never win on the green playing field.

“Let’s be honest, on a greenhouse-gas basis, airfreight is far more impactful then trucking or using marine cargo,” said Lindsay Zingg, global head of quality, health, safety and environment at Panalpina. “But as we are in a world where we demand ‘next-day delivery,’ and the customers are willing to pay for it, then we need to figure out how to do it better.”

But as the FedEx example shows, implementing green initiatives can also save a lot of “green,” too. Trumpeting about CO2 reductions and carbon offsets achieved by an industry that is a well-known leader in greenhouse-gas emissions may end up doing more harm than good in the public eye, but cost savings are welcome in every language and every currency. Perhaps it’s time for the air cargo industry to worry less about appearing green and pay more attention to the financial side of sustainable transport.

See sidebar: What can forwarders do?