What’s your Transport Carbon Price?

Have you noticed that people aren’t waiting for 192 countries to agree how to address climate change? Many are getting on with it regardless, setting their own internal carbon prices, creating green investment products and targeting larger carbon reductions than most countries would contemplate at the Lima climate conference.

What could all this mean for Transport?

Internal Carbon Prices

Leading corporations already use internal carbon prices to factor future regulatory risk into current investments and create funds for carbon reduction activities. One study found 150 of the world’s biggest listed corporations – including 22 Australian firms such as Woolworths, Caltex and Qantas – have internal carbon prices ranging from US$6 to $80 per tonne. Most expect the cost of emitting greenhouse gases to rise so are integrating currently externalised carbon costs into traditional financial metrics to work out which projects to invest in now.

Microsoft makes environmental impact a line item in operational budgets by applying an internal carbon fee that is viewed as a climate solution rather than a new cost. By spreading the costs of its carbon neutral policy across the divisions that generate carbon emissions, Microsoft has created a self-replenishing fund to subsidise green initiatives and offset residual emissions.

Such voluntary actions to become carbon neutral ahead of or beyond regulation are increasingly seen as critical to stabilising climate change, and there’s real interest in scaling the innovation, reach and impact of voluntary carbon offsetting to help develop market mechanisms for a global climate agreement. As renowned free-market economist Milton Friedman would say, governments should create the market and then get out of the way and let the market figure out efficient allocation.

Green Bonds

As investment funds start divesting fossil fuel exposures (Rockefeller Brothers Fund, Australian National University) and demand for green investment bonds grows dramatically, the Conscious Business movement is picking up momentum. The National Australia Bank has followed international financiers by releasing green bonds for fixed-income investors who want to support projects with positive environmental impacts. A green bond from Canada’s Export Development agency supported Queensland’s Gold Coast light rail system which began operating this year. Nordic Investment Bank’s $500 million green bond issue quickly climbed to $800 million reflecting the growing appetite in the market for debt instruments linked to an environmental benefit, its proceeds financing biofuel- and electricity-based transport projects amongst others.

The business case for green transport in Australia still stacks up without an explicit carbon price. Fuel efficiency savings go straight to a transporter’s bottom line, and their customers increasingly demand use of cleaner fuels. Yet access to capital prevents thousands of small- and medium-size transport and warehouse operators from reaping these benefits and producing economy-wide transport carbon reductions.

Green Transport Bonds

Broader application of green transport bonds that reach beyond public transportation deeper into the freight logistics market may be a solution. Helping profit-seeking investors finance green technology growth throughout the transport market could fast-track dramatic carbon reductions from a sector that contributes over 16% of all greenhouse gas emissions.

Precisely measuring carbon reductions will be key to sustainable financial returns, requiring creative collaboration among many stakeholders. Cutting-edge technology capturing data with advanced analytics must underpin assurance of environmental benefits to make this work at scale. The prize awaits those who dare to dream and can pull people together to create value in this space.

Waiting for international agreement at Paris 2015 and beyond will not fix our climate. As Australia repeals its carbon pricing laws and shrinks its renewable energy targets, states throughout the USA are setting ambitious mandatory renewable energy standards that will cover 78% of the US economy and position US industry as green technology leaders for decades to come. Unfortunately Australia’s new Emissions Reduction Fund offers little hope to the Transport sector.

Instead it’s the self-interest of people and business that is already creating profitable models to change behaviours and limit human impact.

Green transport bonds have the potential to turn a carbon price on its head, changing its role from an added cost passed along a value chain to a source of funding for green transport and a profitable Conscious Business investment that sustains climate change solutions right here in Australia.

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Improving Energy Productivity in Freight Transport

At this month’s Forum on Doubling Energy Productivity held at the University of Technology in Sydney, key members of the team that developed the USA’s plan for doubling energy productivity by 2030 inspired the sharing of ideas for Australia establishing a similar goal.

An industry panel considered Freight Transport possibilities, canvassing what’s being done and the barriers faced, particularly for shifting freight from road to rail.

Representing Road Transport, for me High Productivity Vehicles and Fuel Efficiency are the chief levers.

High Productivity Vehicles

Truck-trailer combinations with greater weight or cubic capacity than standard truck types are a constant source of innovation in the industry, where energy productivity is all about moving more freight per litre of fuel. It takes close collaboration from supply chain partners including freight customers who ultimately pay for new specialised equipment, the customer’s customers or vendors often need to be on-board, as well as equipment suppliers who must get a practically engineered concept into production.

Significant barriers can restrict High Productivity Vehicle projects, most critically “last mile access” for getting to where freight starts and finishes beyond the highways connecting our cities and towns. Local councils must approve larger vehicles moving on their streets, and many fear harm to neighbourhood amenity, despite larger trucks meaning fewer truck trips are needed, reducing noise and safety risks. Many councils don’t have the funds to upkeep roads with the resulting wear and tear, let alone upgrade roads to more productive levels.

For the operator, specialised equipment demands a price premium up-front and returns a lower re-sale value, so financial paybacks must be underwritten by longer term contracts with customers. Once in service the extra weight or space capacity must be fully utilised with maximum payloads on every trip, requiring precise load planning every day.

Fuel Efficiency

The three main areas of improvement in fuel efficiency are equipment, driver training and night-time deliveries. Equipment efficiency features include aerodynamic kits, lower tare weight equipment and adjusting engine and drive train settings for the particular task. Low profile tyres, nitrogen inflation and keeping tyres inflated at optimal levels are low cost energy productivity solutions with good paybacks.

Driver training offers the biggest fuel efficiency benefits for most fleets, but it’s not a one-off ‘set and forget’ solution. Rather, the training program must be systematic, with constant measurement and management to achieve the gains every trip, every day.

Night-time deliveries offer untapped potential to improve freight transport efficiency with spin-off benefits. Off-peak traffic times allow higher average speeds with reduced idling, heavy braking and gear changes, substantially improving fuel efficiency. As well as improving asset utilisation, the day-time road network benefits from fewer heavy vehicle movements, reducing congestion.

Access to capital holds back thousands of small operators in the trucking sector where capital and cash-flow restrictions make technology investments with long paybacks unattractive. There’s often a split incentive barrier, where the asset owner is disconnected from the fuel bill, such as tow operators pulling someone else’s trailer, so those with incentive to invest in fuel efficiency don’t have the cash or control, and vice versa. Operators also need accurate information from people they trust, because fuel-saving claims of imported technology can be unproven in Australian conditions, and are difficult to validate in practice.

Modal Shift

With road freight accounting for almost 80% of total energy consumption within freight transport, and rail being far more energy efficient, surely part of the key to doubling energy productivity in freight transport is to shift freight from road to rail. But how to do this in practice?

The two modes play different roles. Road offers a door-to-door service while rail is point-to-point, with trucks often having a role at one or both ends of a rail task. Improvement opportunities for intermodal productivity depend on big new infrastructure investments, such as those slated for Moorebank in Sydney and Melbourne’s western suburbs to get containers off congested roads linking ports to metropolitan and regional freight networks.

Rail will always be cheaper than road, but modal choice depends on the customers’ needs for timeliness and reliability. Some customers send freight from Melbourne to Brisbane using both road and rail. The road freight can arrive next day within a slim timeslot threshold, day in, day out, all year round. Rail handles freight with different perishability, demand or working capital characteristics.

Future Trends

So modal choice from point of production to consumption is about more than the end-to-end energy equation. Australia lacks the advantages Europe and North America have with their inland waterways moving freight to and from inland regions, offering higher energy productivity, reliable schedules and lower costs in those mature inland freight networks. Only coastal shipping offers such energy productivity opportunities for Australia’s populated coastal areas, yet government policy prevents the movement of domestic freight by international ships despite there being few local ships to do the job. You can see why the biggest energy productivity innovations in freight transport over the past 30 years have been the invention of B-Doubles, B-Triples and Road Trains, not found anywhere else in the world.

Furthermore, freight patterns are changing as imports grow while Australian manufacturing declines. Traditionally the manufacturing heart of south east Australia has generated freight moving north from Melbourne to New South Wales and Queensland, and from the east coast to the west. As more imported goods arrive directly into Brisbane, Fremantle and other ports by international sea freight for distribution into the metropolitan and regional hinterlands, perhaps market forces will drive the modal shifts necessary to double energy productivity in freight transport?

Transport Energy Audit Standard : seeking your views

Implementing energy audit recommendations usually achieves significant cost savings. However the current Australian Standard for energy audits is based on auditing commercial buildings and is not practical for transport.

Transport operations have characteristics that produce variability in energy performance and make fleet energy use difficult to model:

–          Very high variation in routes, loading and traffic conditions;

–          Vehicle operators strongly influence energy performance;

–          Regulations, such as noise or load limits, provide constraints.

A new transport-specific standard, AS/NZS 3598.3 Energy Audits-Transport Sector, will be the first of its kind internationally. It is intended to help transport operators find the approach best suited to their business for assessing energy efficiency and reducing costs .

To develop a standard of practical value, the consultation process seeks additional expertise to address the specific data measurement and analysis needs of the road, rail, aviation and maritime industries.

You can contribute at the Standards Hub Website as referenced in the inside cover of the draft standard, available here.

Comments close on 10 April 2014.

Emissions Reduction Fund Offers Transport Companies Nothing

If the carbon price is repealed, what impact will its replacement policy – the Emissions Reduction Fund (ERF) – have on Australian transport emissions?

No one will argue with the ERF’s two key design principles for lowest cost and genuine emission reductions – they are surely mandatory features of any climate change policy. Yet how the ERF proposes to implement these principles will make it difficult for transport operators to access funding due to the inherent nature of emissions in the sector.

Purchase lowest cost emissions

Being so highly energy-intensive, fuel efficiency has been core business for transport operators since the 1974 oil price shock, and most low hanging fruit will be long-gone for those who have survived the fuel price volatility of recent times.

That’s why carbon and energy efficiency opportunities in Transport generally have longer paybacks than other industries (4+ years according to Energy Efficiency Opportunities program data).

So it’s unlikely that transport applications for ERF funding via competitive tenders and reverse auctions will beat the required benchmark price in terms of dollars per tonne CO2e reduced.

Genuine emissions reduction

Discrepancies occur between projected performance and real-world implementation of new technology due to differences between operating conditions where technology is made in Europe, USA and Asia and those in Australia.

It’s also difficult to isolate and measure benefits from a particular initiative due to the number of variable influences on fuel consumption, such as weather (wind, rain and heat), route, road/track quality, payload and driver behaviour.

Companies will need an approved emissions reduction methodology to prove achievement of emission reductions financed by the ERF. This may require an industry-wide method via technology or fuel suppliers aggregating their customers’ emissions savings, unless companies want to individually pursue their own methodology approvals. It’s a complex area which needs to accommodate the diversity of transport applications for freight and passengers across road, rail, air and sea transport modes.

Impact on Transport Emissions

Are we really going to leave it to engine fuel efficiency and emissions standards to do the heavy lifting as Transport emissions continue to climb faster than economic growth? The freight task alone will double by 2030 while other industry sectors benefit from Emission Reduction Fund assistance. Under this framework Transport’s 16% share of Australian emissions can only grow.

Carbon Neutral Transport

Australia has its first carbon neutral trucking company! Congratulations to Transforce Bulk Haulage in Dubbo who achieved this feat by saving fuel to reduce their carbon footprint then buying carbon credits to offset the remaining emissions.

So what’s stopping other transport firms from going carbon neutral?

Market Incentives & Barriers

Any emissions reductions need to be profitable to motivate action. According to Carbon War Room, heavy trucking can achieve huge emissions reductions using simple technologies with proven savings that are available today. Yet there are three formidable market barriers to get over:

  • access to capital for high upfront costs;
  • good information operators can trust;
  • principal-agent split incentive problem, where in a fragmented industry often those with incentive to save fuel don’t have the cash or the control. This can occur where prime movers and trailers have different owners, where fleets are leased, where freight companies hire sub-contractors, and where customers contract dedicated trucking services with operators paying for fuel.

Shipping also has cost-effective measures to reduce emissions available now. A DNV report points to 16 technical and 8 operational measures, as well as adopting alternative fuels such as biodiesel and LNG. Similar market barriers apply for Shipping as for Trucking. For both transport modes, shippers appear to be at the heart of environmental improvements, for freight owners are more likely to have the power as well as the appetite to pursue environmental improvements above basic regulatory compliance.

Cleaner fuels

There is no single solution to finding a cheap clean diesel alternative. Emissions regulations and oil price volatility will encourage the switch from diesel to a mix of cleaner fuels that need increasingly costly and complex equipment.

For the maritime industry the viability of LNG and biofuels has a longer time horizon than for Trucking, which has its challenges to overcome. As it is, Shipping will struggle with the low sulphur fuel mandate in 2015 due to insufficient refining capacity to make the cleaner grade. Biofuel refining capacity is far below what the shipping industry would need to make the switch.

Information Sharing

Sharing better information on fuel- and carbon-efficiency opportunities will help break down barriers, especially when this improves transparency at an organisational or even a vehicle level. Here are some current initiatives:

  • The Green Freight Europe program addresses the information barrier in Trucking through collaborative learning, reporting and comparative benchmarking
  • Carbon War Room has a shipping efficiency website which rates 60,000 existing ships on their specific fuel efficiency performance, enabling benchmarking against like vessels.
  • Three major shippers are choosing only to charter the most fuel efficient ships available in a demonstration to ship owners that the market will reward investments in sustainable fleets. Such environmental leadership is supported by a vessel fuel efficiency ratings system that uses reliable data from a respected technical specialist.

Measuring emissions to improve the bottom line, reduce risk and discover competitive advantage is a developing science. The ‘art’ of good information sharing may lie in real-time data by company – or by vessel, vehicle or aircraft – so that full supply chain awareness of Carbon Efficiency and Carbon Productivity become the mantra throughout all transport modes.

Accessing Funds to Invest

Trusting good information is important but the key to widespread adoption of fuel efficient technologies and clean fuels is funding the up-front costs.

How can we better link those with cash and the desire to save environmental resources, with those who want to save money but have little capital to invest in improvements? Carbon pricing on Transport helps the business case to finance fuel efficiency improvements, and incorporating carbon offsets helps even more, as Transforce Bulk Haulage has shown.

One maritime proposal wants a new bunker levy to contribute to an international fund so that ship emissions above set reduction targets can be offset by purchasing carbon credits. But who wants another fuel levy that may only be passed along the supply chain anyway?

New developments in California may point the way for Road Transport. Clean Mobility Centres embrace alternative fuels and enable drivers to offset the carbon emissions from their fuel purchases at the pump. Offset dollars go to the Carbon Fund Foundation to directly fund clean air projects.

What if we could offset Transport’s greenhouse gas emissions at the point of sale for all goods and services? Just like booking an airline seat where you choose to pay a little extra to offset your share of the flight’s emissions, imagine if you could offset the transport emissions of any delivery or purchase?

Imagine creating a clear transactional link between the consumer or organisation at the end of a supply chain and the transport operator needing funds to invest in fuel saving measures with economic as well as environmental benefits. It might work like this:

  • consumer chooses to offset the transport component of the emission profile of any goods purchase by paying a bit extra
  • that offset spend goes to a Transport-specific carbon finance fund
  • the fund is accessed by transport operators to finance precisely measured emission reduction projects with real financial paybacks
  • a strong transparent measurement methodology where integrity of data is key underpins emission reduction valuations for the consumer (investor) and transport operator
  • web, mobile and social media technologies enable ‘one click carbon offsetting’ as well as ‘real-time climate friendliness’ tracking of personal emissions savings to inform consumers

Yes – It’s Possible

Transport operators need better access to capital so they can make fuel- and carbon-saving investments, and operators, their customers and ultimately consumers must be able to have faith in the integrity of the emissions savings. Challenging, yes, but the unleashing of such incredible capital liquidity through ‘one click carbon offsetting at point of sale’ may generate huge Transport footprint reductions.

Look at what Transforce has achieved with its fleet of 11 trucks in regional NSW through fuel savings measures that save them money, supplemented with carbon offsets to neutralise their footprint. Yet it’s a question of immense scale to ask:

How can this approach be expanded throughout the mosaic of Australian supply chains?

Clean Transport Fuels – What are the Real Options?

Australia’s carbon price is here, so how can transport operators gain from cleaner fuels?

As a retailer, manufacturer, miner or farmer, where in your supply chain can clean fuels bring real benefits, now?

Biofuels win under Carbon Pricing

Biodiesel and ethanol now have a carbon price advantage over other transport fuels. While gaseous fuels (LNG, LPG and CNG) have lower greenhouse gas emissions than diesel and petrol, on July 1st they copped a tax “double whammy”:

  • Gas excise duty now rises each year while biofuels don’t pay excise until 2021.
  • Gaseous fuels attract a carbon price; biofuels don’t.

But costs continue to rise

Biodiesel and ethanol are made from agricultural commodities and organic waste materials. Rising demand in many industrial uses is pushing up prices of these feedstocks, and some are caught in the “Food versus Fuel” debate. The promise of offsetting society’s dependence on oil is now staged against our ability to feed growing populations. As food prices rise around the globe, economic, environmental and social trade-offs are made in a complex arena. Government support for biofuels in Europe is weakening as new laws narrow the choice of feedstocks.

Our small demand in global terms competes for inputs with big biofuel producers overseas. Australia has only a handful of biodiesel and ethanol plants, and none are world scale. Soaring Asian demand  consumes feedstocks and raises prices, challenging the viability of Aussie producers.

On a positive note, one Queensland company already produces an ultra clean synthetic diesel  and says they can do it for only 20 cents per litre.  20 cents! Is that a typo?

Biofuel blends

In practice, biofuels gain only a small carbon price advantage over other transport fuels. That’s because biodiesel and ethanol need blending with regular diesel and petrol to comply with fuel quality standards and excise rules. This reduces their carbon price advantage by 80% in the case of a B20 blend (20% biodiesel and 80% mineral diesel) down to 1.2 cents per litre. Then the logistical challenges in getting blended products to end users can pretty quickly gobble that up!

Market Reality

Market entry remains the biggest challenge of all:

  • it’s hard to supply biofuels at a competitive price due to the infrastructure and volumes needed
  • business models face rising production costs and can’t rely on government support
  • many people just don’t trust biofuels
  • lack of demand means local plants can’t expand to world-scale
  • fuel retailers need to invest in storage tanks to offer alternative fuels at the bowser

Playing with the Big Boys

Despite volatile prices, oil-based transport fuels dominate the market. Major oil companies have supply networks, production technologies and retail models they have refined for more than 100 years. While a few officially support alternative fuels, their practical steps have been tentative at best.

Getting traction

There’s no silver bullet for introducing cleaner transport fuels – a portfolio of fuels is needed. Today, both biofuels and gaseous fuels are used successfully in various light and heavy vehicle applications. Depending on a vehicle’s work task – it’s payload capacity, speed, stop-start intensity, distance range and fuel efficiency to name a few variables – each fuel has its’ “pro’s and cons”. Thorough due diligence is needed, and the clean fuels industry could better educate and communicate the sweet-spots to end users.

Meanwhile, trials of cleaner jet fuels show that biofuels can be safe, reliable and are ready for use, but would not meet immediate demand if large airlines make the switch. Yet such trials are vitally important, especially with the support of engine makers who remain critical to clean fuels take-up. Truck manufacturers like Scania run ethanol trials in their own operations to prove new clean fuel technologies.

Test & Invest

Yet even with government support, some avid users and a few keen oil companies, all clean fuels have their own market entry challenges. Carbon pricing may help some clean fuels, but it will fall short of what’s needed.

To make real progress, all supply chain partners must work together to understand which clean fuels can help their particular situation. Only through collaborative testing can the right clean fuels be chosen for each supply chain. Then clean fuel producers must make their fuels available at retail and industrial points of use – reliably and cost-effectively.

So if you want to win from cleaner fuels, you’ve got to make it happen. Get with your supply chain partners to test and invest in clean fuels now.

How can Freight Buyers minimise carbon tax in their supply chains?

Moving freight around Australia will soon attract carbon tax.  You can reduce this new cost in 2 ways:

  1. Use less fuel
  2. Use cleaner fuel

While they control fuel use, transporters need their customers’ help to manage carbon liability. Moving the discussion past who carries the carbon tax burden, the question now becomes: How can Freight Buyers minimise carbon tax in their supply chains?

Carbon Tax = More Fuel Tax

Carbon tax on Transport will be applied through the fuel tax system. Fuel tax is a consumption tax, and fuel tax credits are needed to ensure that fuel tax is not burdened on transport businesses, but rather the final consumer. This is consistent with Australia’s tax system more broadly, where consumption taxes are intended to apply to final consumption rather than business inputs.

If transporters pass on carbon tax (that is, reduced fuel tax credits), Freight Buyers wear the cost; and if carbon tax is not passed on, their transport partners may become unviable. So, as a consumption tax based on Freight Buyers’ demand for transport services, carbon pricing gives Australian shippers a clear incentive to make their supply chain buddies improve fuel efficiency and switch to cleaner fuels.

How Transporters improve Fuel Efficiency & Switch Fuels

Using Less Fuel requires efficient equipment and efficient operations. The Australian government’s Energy Efficiency Exchange reviews a wide range of fuel saving measures for rail, road and air transport. If you total the high side of the energy savings estimates, you’d think that 50% fuel savings or more are there for the taking. But it’s never that simple. The success of each measure depends on its operational setting and many only deliver long term results if adopted systematically. For instance, vehicle eco-driving improvements which promise 10% fuel savings need all drivers to have specific training in expected behaviours, backed up by regular refresher training and constant performance management to always maximise fuel savings.

When it comes to Cleaner Fuels, so-called ‘drop-in’ fuels such as ethanol, biodiesel and renewable diesel are the easiest to introduce because they can use existing fuel delivery infrastructure (with some adaptations). And these Biofuels offer great opportunities for immediate reductions in carbon tax due to their zero rating for carbon emissions under the Clean Energy Future laws. Gaseous fuels like LNG and CNG, however, need capital investment in new engine technologies as well as dispensing equipment and infrastructure to create a reliable and extensive supply network.

Ultimately, Transport firms who thrive under carbon pricing will be those using a myriad of actions that lead to lower carbon and energy use.

How Freight Buyers can help

Freight Buyers across the retail, resources, construction, manufacturing, energy and agriculture sectors increasingly insist on low carbon transport. The next step is to think of carbon tax as a shared liability with joint commercial incentives to improve productivity and fuel efficiency. They can help their transport partners by measuring, co-investing and even “opting-in” to manage carbon in their supply chains:

1. Measure

At minimum, an accurate picture of baseline energy use and greenhouse gas emissions is needed. Partnerships can collect,  analyse and verify such data to develop emission reduction plans. Supply chain carbon profiling is the starting point to reduce risk and gain competitive advantage in a low carbon economy.

2. Co-invest

When Freight Buyers invest time and money in fuel use projects, more knowledge and resources can earn a bigger bang for everyone’s buck:

  • Operational changes can boost productivity dividends from investments Transporters have already made. Changing operating hours so delivery vehicles can avoid peak commuter traffic is one. Another is making greater use of High Productivity Vehicles such as B-Double trucks through local road permit applications as well as site works expanding physical access and storage capacity at load and delivery points to allow ordering in larger load sizes.
  • Commercially, Buyers can specify low emission and fuel efficient technologies in their tenders and contracts. Paying a freight price premium supported by contract commitments allows transporters to secure finance and recover the higher capital costs of advanced emissions technology. Large Freight Buyers can even boost their transport partners’ negotiating power with technology suppliers through joint procurement contracts to reduce unit prices.
  • Capital investment can overcome barriers to adopting new technology which the carbon price – by itself – is unlikely to impact. Supporting R&D trials of latest technologies in local conditions will improve joint understanding. This may require funding which shares risks and puts some ‘skin in the game’ with all stakeholders sharing the rewards. LNG and Biofuels, for example, need to be conveniently available. Large freight users could install LNG or biodiesel refuelling stations at their Distribution Centres, which are hubs for regional & interstate linehaul and urban delivery vehicles. This would complement the emerging LNG and Biofuels distributor networks to speed-up trucking industry adoption of cleaner fuels.

3. Opt-In

What if large Freight Buyers could “Opt-in” to emissions trading so they could directly manage their transport carbon liability?  Freight contracts that pass-on carbon property rights would allow Freight Buyers to manage the carbon tax liability for all the transport services they consume, opening up international linkages and domestic offsets on greater economies of scale than only the largest transport firms could contemplate. It may help achieve the economic goal of any emissions pricing regime: To achieve targeted environmental improvements at the lowest marginal cost to society.

Collaborate to Win!

Intelligence on carbon and energy use within supply chains will improve decision-making and is the first step on the path to gaining competitive advantage in a low carbon world. Shared understanding of carbon and energy reveals business opportunities and manages risks. “Without conducting the study,” says one company MD who has done just that, “I have no doubt we would have targeted projects in areas with less potential for both environmental and financial return.”

Cross functional teams of Freight Buyers, transport operators and other stakeholders can develop more powerful business cases for reducing carbon use. Such teams challenge conventional wisdom by asking:

Are we doing everything right to minimise fuel and carbon use, everyday, on every truck, train, ship and plane?

There is no silver bullet; a portfolio of initiatives is needed. It takes more work to be energy-efficient. Efficient operation requires experimentation. And many measures will only deliver consistent, long-term results if businesses adopt them systematically.

Freight Buyers who want their transport providers to do it all alone will miss out on the substantial opportunities that arise from supply chain co-operation.  In the new low carbon economy, the opportunity cost of not collaborating is competitive disadvantage. Stay tuned!