UK freight forwarders split on sustainability

A study on U.K. freight forwarders found a wide range of sustainability prioritization and implementation based on company size, despite most participating forwarders agreeing that sustainability is important. In efforts to track sustainable technologies and resources, the British International Freight Association (BIFA) and Pledge , a London-based platform that provides emissions measurement, recently released a report that surveyed 83 U.K.-based freight forwarders to identify industry practices, shortcomings and standards on sustainability. “We are at a start of this journey and there are challenges” to implementing data tracking and sustainable practices in air cargo, Steve Parker , director general at BIFA, told Air Cargo Next. “These [challenges] may be technological such as the motive power to be used, as well as the number of players involved in moving a consignment, which makes coordinating data difficult.” For the June “2024 State of Sustainability in Freight Forwarding” report, Pledge gathered information from BIFA affiliates in April. The responses are broken down by demographics, including company size, annual revenue, operating region and modes of transport. The report shows growing interest in implementing sustainability practices within the freight forwarding industry, but also highlights challenges, particularly among smaller companies. “The breakdown by company size suggests there’s a drastic drop-off in prioritization once company size dips below the 50-employee mark,” David de Picciotto , chief executive and co-founder of Pledge, said in a release. Sustainability standards vary Prioritizing sustainability correlates with forwarder company size, with smaller companies making it less of a focus, according to the report. Larger businesses tend to build sustainability into their budgets . [caption id="attachment_57143836" align="alignnone" width="1042"] (Courtesy/Pledge)[/caption] The push for sustainability is driven in part by customers, according to the businesses surveyed. Nearly two-thirds of respondents said their customers are asking for carbon emissions reporting on their shipments and 73% of respondents said pressure from customers is an incentive to provide carbon emissions reporting. “ The primary challenge for shippers in fulfilling their carbon reporting regulatory obligations is the availability and accessibility of quality data,” Gary Gonsalvez , head of marketing at Pledge, told Air Cargo Next . “This challenge is amplified by the fragmentation of data across supply chain partners or suppliers.” Nearly all respondent companies with more than 250 employees include sustainability as a budget item, with some even having budget lines for individual projects. The number drops dramatically as headcount drops, with only one-third of medium-sized respondent companies saying they had a plan in place. [caption id="attachment_57143837" align="alignnone" width="1050"] (Courtesy/Pledge)[/caption] Sustainability as KPI Measuring their carbon footprint is the most significant key performance indicator (KPI), most report respondent said, with 66% marking it as “important” or “very important.” Two-thirds of respondents agreed that other important KPI’s are: Measuring customer shipment carbon emissions, 64%; Reducing their company’s carbon footprint, 64%; and Implementing fuel efficiencies for transport and warehousing, 64%. The focus on these measures comes down to cost, according to the report. “Operational efficiencies are generally more cost-effective and easier to implement as businesses save money through operational efficiencies rather than paying a premium for carbon offsets,” Gonsalvez said. “Offsets should then be used to tackle residual emissions.” Small forwarders are the most in need of sustainability changes . Only one-fifth of respondents said they account for sustainability in their budgets, despite a growing demand among shippers to provide this information. To combat shortcomings in resources, Gonsalvez said that many small and medium-sized forwarders “integrate carbon reporting tools into their compliance, sales, product and operations departments.” Next steps Despite higher demand for sustainability practices, respondent companies have not yet seen any penalties or loss in subsidies due to a lack of sustainability practices, according to the report. Yet, “companies that fail to adapt to shippers’ demands for sustainable practices might risk losing business to competitors with established sustainability initiatives,” the report stated. Respondent freight forwarders said sustainability initiatives have resulted in increased sales, brand and marketing efforts, while keeping employees and customers satisfied. “Ultimately, this change really depends on the airfreight industry's willingness to invest in and innovate with new technologies,” Gonsalvez said. “Achieving these targets will also require support from governments and other organizations to create pathways for sustainable practices.”

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