Sustainable Logistics Final report, 9 April 2014

Sustainable Logistics

Contents

Introduction

Nature and scale of logistics

Environmental impact

Legislative drivers

Efficiency:

Introduction

Demand reduction

Route optimisation

Modal shift

Vehicle efficiency

Driver behaviour

Fuel switching

Scottish capability and advice

Conclusions

Annex A : Logistics Support (and checklist)

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Sustainable Logistics Final report, 9 April 2014

INTRODUCTION

This report identifies domestic and international examples of best practice to demonstrate how Scottish businesses can benefit from emerging opportunities in sustainable logistics, and how the various public sector agencies may help logistics sector companies, and the wider business community that use their services, to access these opportunities.

The Freight Action Plan (2006) details Scottish Government freight policy. It is delivered in conjunction with the freight industry through partnerships such as ScotFLAG and the Regional Transport Partnerships.

This is one of a series of reports produced by Scottish Enterprise to highlight the economic opportunities for Scotland from a low carbon economy. A wider research group has input to these reports, comprising the Scottish Government, Highlands and Islands Enterprise, Skills Development Scotland, Scottish Funding Council and the Edinburgh Centre for Carbon Innovation.

This report seeks to build understanding and prompt debate. The research group welcomes the opportunity to discuss the findings and take on board additional evidence.

Why Sustainable Logistics?

Traditionally logistics decisions have been based on cost and reliability, with speed important for perishable goods. However, a fourth dimension, that of sustainability, has recently been introduced into the decision making process. Unilver illustrates how one company can influence the wider supply chain.

Unilever has added environmental considerations to its distribution tenders. It requires its logistics suppliers to have an effective carbon management policy and to comply with the Food and Drink Federation’s1 ten point checklist for greener food transport.

There is a strong correlation between fuel burn, pollution and cost therefore there is an economic benefit for companies to engage with sustainable logistics.

Scope

‘Sustainable logistics’ is defined as finding less environmentally damaging methods of delivering products through the business supply chain to the consumer. Logistics includes transport of materials and goods, warehousing and related services. Global spending on logistics is forecast to increase to $13 trillion by 2020 (Frost and Sullivan).

The focus of this research is on reducing greenhouse gas emissions from freight transport, although we touch on other significant environmental impacts such as air pollution. We also consider ‘smart mobility’ and alternative business models that affect the demand for logistics, for example, home delivery, centralised depots, local manufacturing and digitisation.

The research covers all modes of freight transport (HGV, rail, air freight, and shipping) and includes both domestic freight and international freight to and from Scotland. Further detail on the efficiency of air and ship transport can be found in our report entitled ‘Low Carbon Opportunities in Aerospace, Defence and Marine’.

‘Smart mobility’ is the name commonly used to express the opportunity arising where informatics, transport and energy overlap. In a smart mobility system, individuals, businesses and public sector service providers are empowered with information, capabilities

1 Food and Drink Federation Transport Efficiency Commitment

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Sustainable Logistics Final report, 9 April 2014and methods to determine in real-time the best way for people, goods and services to move, or be moved, across all available forms of transit and connectivity (physical and electronic), with due consideration to need, cost, time, and environmental impact. A smart, optimised, logistics system is therefore likely to provide economic and environmental benefits.

Scottish Enterprise aims for Scotland to become a global location of choice for the demonstration of smart mobility products, services and business models and for Scotland to be a leading international provider of smart mobility technology and engineering products, services and know-how.

Scottish Government Targets

The Scottish Government’s Freight Action Plan (2006) outlines the ambition to improve journey times, improve quality, accessibility and affordability and to reduce emissions.

The ‘Roadmap to Widespread Adoption of Plug-in Vehicles’ (2013) details the Government’s vision to reduce the noise, air pollution and climate change impact from transport:

By 2030, half of all fossil fuelled vehicles will be phased out of urban areas; Pollution free logistics in urban centres by 2030; By 2040, almost all new vehicles sold will be zero emission at the tailpipe; and By 2050, Scottish communities will be free from the damaging effects of petrol and

diesel fuelled vehicles.

The Government’s ambition for 2030 is for the “wholesale adoption of electric cars and vans and conversion to hybrid or alternatively fuelled HGVs and buses, as well as significant steps to decarbonise rail and maritime transport”. The second Report on Proposals and Policies, to reduce GHG emissions 2013-27, has several measures for the public and private sectors that will impact freight:

EU van efficiency measures Renewable Fuel Obligation (biofuels)penetration of plug in hybrid electric vehicles fuel efficient driving for HGVs and LGVs freight HGV modal shift grants (5% modal shift) load consolidation centresnetwork efficiencies, including intelligent transport systems, variable speed limits and speed limit enforcement on trunk roads. Hybrid ferries.

The Scottish Logistics Report2 includes one scenario as to how Scotland could reduce emissions from freight by 76% by 2050.

tonne/ km X

modal shift X

empty running X

load factor X

energy efficiency X

energy content =

CO2

emissionsStable at 2007 levels

HGV 64% to 50%

Reduce 27% to

17%

Increase59% to

70%+ 40%

of fuel-30% -76%

The chart overleaf describes the main factors that affect the emissions from logistics. The main section of this report will describe each of these factors in more detail.

2 Scottish Logistics Report (2012), prepared for the Freight Transport Association

Smart mobilityTransport

systemsEnergy and grids

ICT

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Sustainable Logistics Final report, 9 April 2014

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Sustainable Logistics Final report, 9 April 2014

NATURE AND SCALE OF LOGISTICS

A number of research studies and statistics have been produced to ascertain the scale and nature of logistics in Scotland and to help develop freight policy, including:

Scottish Freight Strategy Scoping Study (Scottish Executive, 2006) Freight Statistics Project (Scottish Government, 2009) Scottish Logistics Report (Freight Transport Association, 2012) Scottish Transport Statistics (Scottish Government, 2012)

It is estimated3 that 163,000 people work in the logistics sector in Scotland, comprising 9% of Scottish GVA. In addition, 42,0004 work in the maritime sector accounting for 2% of GDP. Efficient logistics is a key determinant of business competitiveness and profitability, particularly to Scotland, which is on the periphery of the main European market.

Scotland generates more freight per capita than the rest of the UK. This is largely attributed to North Sea oil in pipelines; however, road freight tonnage was also 12% above the UK average in 2009.

In 2010, only 0.3% of road freight originating in Scotland was distributed directly overseas. Due to the dominance of whisky exports, Scotland directly exports 2 tonnes by lorry for every 1 tonne imported. Most imports are channelled through warehouses in England therefore the last leg is a domestic UK haul.

Scotland has no direct deep-sea container services and just one direct ro-ro service to the continent from Rosyth to Zeebrugge. There are ro-ro services to Northern Ireland and lo-lo feeder links from Grangemouth and Greenock to deep-sea ports in south of England or the continent.

Shipping dominates exports and imports carrying 95% by weight, with 4.5% on the Channel Tunnel and less than 0.5% by air.

Rail and water are primarily used for the transport of bulk commodity goods whilst HGVs tend to carry consumer products. Intermodal transport has increased with the development of containers.

Tonnage lifted, 2010 (million tonnes)Road Pipelines

(oil etc)Coast

shippingInland

waterwaysRail Air

132m 28m 19m 11m 8m 0.048m66% 14% 10% 6% 4% 0.02%

In addition, there were 40m tonnes of exports by ship but only 13m tonnes of imports.

HGV vehicle km has remained static for the last 10 years with a recent dip due to the recession. Increased traffic from economic growth has been offset by a trend towards central warehouses, often in large regional centres or even 1 for the UK, which tends to reduce the number of deliveries, although each journey may be longer.

3 Scottish Logistics Report, 20124 The Economic Impact of the Maritime Services Sector in Scotland

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Sustainable Logistics Final report, 9 April 2014Van use is split evenly between commuting, tradesmen transporting equipment and freight. The latter is increasing because of online retailing.

Until the recession, rail freight tonnage had been slowly increasing partly because of supermarkets switching some Anglo-Scottish deliveries to rail supported by government mode shift grants.

In 2010, Scotland’s airports handled only 48,000 tonnes of air cargo although the cargo lifted tends to have a higher value (57% is mail). Whilst global air freight is forecast to increase, air cargo to and from Scotland has reduced due to the recession and the decline of Scottish electronic manufacturing although there has been a growth in the transport of perishable products such as exports of seafood. It is estimated that 8% of the airfreight tonnage at Heathrow had an origin or destination in Scotland. Scottish firms also use the East-Midlands airport.

ENVIRONMENTAL IMPACT

Greenhouse gases

8% of energy related global CO2 emissions arise from freight transport. This would equate to 3.2 million tonnes (mt) for Scotland but our reseach could not find full information on weight carried and greenhouse gas emissions for Scotland by each mode:

HGV’s emit around 2mt of CO2e;

Shipping emits 2.3mt but it is not clear what proportion is for logistics; Air travel emits 1.9mt but this will be predominantly for passenger traffic, albeit many

passenger flights carry freight too.

In Scotland CO2e emissions from all transport have increased by 1% since 1990, although

there have been slight falls each year 2008-10.

Other environmental impacts

Fixed transport infrastructure creates an environmental impact and freight transport affects local air quality and generates noise and vibration. HGVs, in particular, can damage roads.

Shipping is the most carbon efficient mode of transport but is highly polluting in other respects as it tends to burn ‘dirty bunker fuel’, rich in sulphur.

sulphur dioxide causes acidification and corrosion; nitrous oxides cause eutrophication and acid rain; ozone damages health (poor respiration) and vegetation; particulate matter (PM10) damages health and creates ‘black carbon’.

The net effect of this pollution is a short-term regional cooling effect. However, the EU estimates5 that these maritime emissions cause an estimated 50,000 premature deaths each year. Stricter sulphur limits would save €15-32 billion from improved health.

Shipping has other adverse impacts, outwith the scope of this report, including:

anti-fouling paints (can contain elements toxic to wildlife); ballast water (can transfer invasive aquatic species);

discharge of oil either deliberately or accidentally;

5 European Parliament Press release, 16/2/12

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Sustainable Logistics Final report, 9 April 2014 underwater acoustics; ship recycling and toxic chemicals; and waste disposal.

Complex chemical reactions from emitting pollutants at altitude amplify the warming from aviation by an estimated 1.9 times. There is also noise pollution and local air quality issues around airports.

Supply chain and carbon footprint

Logistics and transport emissions are typically 5 to 15% of a product’s lifecycle emissions, but this is as high as 96% in the case of asparagus6 flown from Peru to the UK.

Airfreight greatly increases the proportion of transport in the footprint, as to a lesser extent, does refrigerated shipping. As a rule, the emissions from shipping products are relatively small, and often smaller than the footprint of trucking the product relatively small distances to and from the port.

Lancaster University7 researched the effect of trade between China and the UK and estimated that Chinese industry is 2.7 times less carbon efficient than the UK due to fuel mix and lower productivity and that 10mt of CO2 is emitted transporting Chinese goods to the UK.

Defra8 compared the carbon footprint of food produced in the UK and imported:

UK potatoes, beef and apples were less carbon intensive than those imported from Israel, Brazil and New Zealand respectively;

However, UK tomatoes and poultry were more intensive than those from Spain and Brazil even after taking account of the transport emissions;

For lamb, the energy used to the farm gate was 30% less in NZ because of lush grass growth with less need for fertiliser and artificial feed; however, after taking account of refrigerated transport, UK lamb had lower energy emissions. As a further complication, if nitrous oxide from the UK’s larger use of fertilisers is included, the results reverse so that the total greenhouse gas emissions from NZ lamb are less!

Other studies have shown that roses flown in from Kenya are much less carbon intensive than those grown in heated greenhouses in Holland.

The whisky9 industry is emission intensive. 11% of the estimated 2m tonnes CO2 from its product lifecycle are from distribution (including exports); 50% from suppliers (mainly agriculture) and 39% from distilling and bottling.

Clearly, this is a complex area, but as a generalisation, productive agricultural areas (with a natural comparative advantage) produce higher yields and this is more important than distance in determining the carbon footprint of food.

6 How bad are bananas?, Mike Berners-Lee, 20107 The Effect of trade between China & UK on national and global carbon emissions, Energy Policy 36 (2008)8 Comparative Life Cycle Assessment of Food Commodities Procured for UK Consumption through a Diversity of Supply Chains, Defra (2008)9 Spirit of the Highlands: Whisky Logistics Study (2011), for HITRANs, by MVA Consultancy.

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Sustainable Logistics Final report, 9 April 2014

LEGISLATIVE DRIVERS

Given the growth in logistics and related pollution there is an increased focus on curbing the local air pollution and climate change impacts of transport. Originally, the focus was on HGV’s but attention has now shifted to shipping. Much of the legislation aims to curb local air pollution to cut the number of premature deaths from poor air quality.

The EU Roadmap to a Single European Transport Area (2011) established a number of non-binding goals, including:

Shift 30% of road freight over 300km to rail or water by 2030, rising to 50% by 2050; Major urban centres should have essentially CO2 free logistics by 2030; and 20% cut in all transport emissions 2008-30, and 60% by 2050.

Scottish Government targets are set out in the ‘introduction’ section to this report.

HGV’s

Since 1991, the EU has progressively tightened the Euro standards to curb the release of air pollutants such as oxides of nitrogen, particulate matter and hydrocarbons. One vehicle fitted to 2013 Euro VI standards should emit the same level of particulates as 35 vehicles in 1991.

Under the EU Biofuels directive, the UK blends 5% biodiesel and bioethanol with conventional fuel, potentially rising to 8% by 2020.

However, reducing local pollution has a fuel efficiency penalty, which has been offset by design improvements, resulting in little change in fuel efficiency in recent years.

Council’s have a statutory duty to monitor air quality (PM10 and NO2). Low Emission Zones, such as London, can be effective in forcing innovation. London has restrictions on vehicles over 3.5 tonnes. Vehicles that do not meet the required emission standards have to pay a daily charge of £200. Scotland has 30 Air Quality Management Areas, 26 primarily due to traffic emissions, and each has to produce an Air Quality Action Plan. Scotland’s approach to air quality is currently under review.

Vans

The EU proposes to reduce the emissions for light commercial vehicles from the current level of 203g per km to 175g by 2017 and 147g by 2020 (possibly extended to 105-120g by 2025). The Euro V1 standards apply for light vehicles (under 3.5t) from 2014.

Shipping

The UN has tasked the International Maritime Organisation (IMO) to introduce global restrictions on emissions from shipping. Market based measures are being examined, including a tax at bunker level or a cap and trade scheme.

The IMOs target is a 20% reduction in CO2 per tonne/km 2005-20 and 50% by 2050. It has introduced some measures, but recognises that more will be required to meet these targets:

Ship ‘energy efficiency management plans’ from 2013; Introduced an ‘energy efficiency operation index’; From 2015, new ships over 400 gross tons have to improve their energy efficiency by

10%, then 30% by 2024 (developing countries, 2019).

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Sustainable Logistics Final report, 9 April 2014

Most ships burn residual fuel, typically containing 2.7% sulphur. The IMO has set a global SO2 cap reducing from 4.5% to 3.5% by 2012, progressively tightened to 0.5% by 2020. The EU has created an ‘Emission Control Area’ for the North Sea, English Channel and Baltic with a 1% limit decreasing to 0.1% by 2015.

The IMO has also set NOx limits. New engines are limited to 17g/kwh reducing to 14.4g/kwh in 2011 and 3.4 g/kwh in emission control areas by 2016. Existing ships, constructed between 1990 and 2000, also need to comply with the 17g/kwh limit. There are no regulations for PM10, but typically ships emit 1 to 2.6g dependent on the sulphur content of the fuel, the engine and engine maintenance. This is much higher than the Euro VI standard for trucks of 0.01g.

Aviation

Plans by the EU to extend its Emissions Trading Scheme to include aviation are currently on hold, pending talks on an international framework. To improve local air quality, the UN International Civil Aviation Organisation has set emission standards for NOx emissions for landing and take-off.

Given the lack of legislation, industry bodies have set their own targets:

by 2020, reduce NOx emissions from new aircraft by 80%, CO2 per passenger/km by 50% and perceived noise by 50% (ACARE);

reduce CO2 by 1.5% per year per passenger (2010-20); cap emissions in 2020; then reduce net emissions by 50% in 2050 (Air Traffic Action Group);

an aspirational target to cap carbon emissions by 2020 then improve efficiency by 2% per year to 2050 (ICAO); and

reduce net emissions by 50% by 2050 (International Air Transport Association).

Compromises in design are sometimes necessary as reducing one pollutant can sometimes result in an increase in others.

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Sustainable Logistics Final report, 9 April 2014

EFFICIENCY: INTRODUCTION

A proposed freight hierarchy for reducing the carbon intensity of transport is drawn below. Strategic business decisions (in orange) determine the scale and nature of logistics required. Purchasing and contract negotiations (in green) determine how goods will be delivered. Operational decisions (in blue) are made on a daily basis.

Over the long-term, it is the strategic decisions that will have most impact on whether a company’s logistics can be sustainable. Purchasing decisions by companies are made within that strategic framework. Operational decisions can impact on emissions on a daily basis, but at best can only make a limited efficiency saving.

The World Economic Forum report on Supply Chain Decarbonisation Opportunities (2009) calculated that global supply chains account for 5.5% of GHG emissions. There is cost effective abatement potential in the medium term of 1400m tonnes of CO2, as follows:

Description Mt CO2e

Clean vehicle technologies (mainly road, some rail) 175Despeeding the supply chain (mainly ship, some road) 171Optimise the location of agriculture (shift 10%) 178Optimised networks (distribution hubs) 124Energy efficient buildings (warehouses etc) 93Packaging design initiatives 132Enabling low carbon sourcing: manufacturing 152Training and communication (drivers) 117Modal switch 115Reverse logistics/ recycling 84Nearshoring of production 5Increased home delivery 17Reduce congestion 26Total 1,400

fuel switchdrivers

vehicle efficiency

modal shift

route optimisation

reduce demandFirst priority

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Sustainable Logistics Final report, 9 April 2014

EFFICIENCY – REDUCE DEMAND

Business Models

Technology enables transformational change through new business models, which can then influence behavioural change. For example, the internet is an enabler that allows e-shopping and home working and this can affect distribution patterns.

New construction and waste management techniques can reduce the need to transport materials, for example,

off-site construction reduces waste and the number of journeys to site; melting and reusing asphalt avoids transport of virgin materials for road repairs; on-site reuse of demolition materials reduces the need to transport waste.

Adopting circular economy principles, including take-back and remanufacture, may reduce transportation requirements through reducing transport of waste to disposal sites and reduced demand to extract, process and manufacture raw materials.

Tidy Planet, Cheshire, sell dewaterers and in-vessel composters to treat food waste on site;

Sterilmelt’s ‘massmelt’ compacts compressible waste (polystyrene etc) into a dense log to reduce the residue to be transported; and

Changeworks Recycling , Edinburgh, offer combined waste audit, consultancy and waste uplift services with a view to reduce the volumes to be uplifted.

Dematerialisation is the physical substitution of a product, service or travel with electronic:

digital music, digital books and newspapers; teleconferences and home working can reduce the need for people to travel; digital information, e-mail, e-billing, paperless office, e-government; virtual modelling, testing and simulation.

The Global Sustainability Initiative (2008) report10, calculated global potential carbon savings by 2020 from dematerialisation and smart logistics through deploying ICT:

Potential Savings Mt CO2e

Dematerialisation: online media 20Dematerialisation: E-commerce 30Dematerialisation: E-paper 70Dematerialisation: Videoconferencing 80Optimisation of logistics network 340Intermodal shift 20Stock reductions/ fewer damaged goods 28Optimisation of truck planning 43Eco-driving 25Flight efficiency 11Ship loading/ routes 50

In the UK, 13% of retail sales are on-line; expected to rise to 23% by 2016. Except for music and books, most on-line sales will still involve the physical delivery of goods and as a

10 SMART 2020: Enabling the low carbon economy in the information age (2008)

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Sustainable Logistics Final report, 9 April 2014consequence van traffic is growing. This is a significant shift from high volume distribution to delivery of small customer orders, often sourced from further afield, to highly dispersed addresses – with a high level of failed deliveries and returns.

Online retailing has an environmental advantage over conventional retailing if the latter involves a car trip to a shop. However, this is highly case specific; dependent on the rate of returned goods, failed deliveries and whether the car trip was multi-purpose.

Over the medium to long term 3D printing has the potential to radically alter trade flows, particularly the long distance international transport network. It is possible that many goods could be manufactured locally, in central hubs, or even in individual businesses and homes. As 3D printing is an additive technique, there is no waste, with less need to transport raw materials.

Warehousing Strategy

The aspiration should be to provide goods and services on a local basis where possible; albeit in a globally competitive world, it will be more carbon efficient to produce certain goods in bulk and transport them.

There is a long-term trend towards regional distribution centres (eg supermarkets and Unilever). In some cases these can help to maximise operational efficiency, and through larger vehicles and route planning can reduce the number of vehicles on the roads.

Most companies design their distribution networks based on cost, speed and reliability. Optimising a network design, including the nodes and interrelated transport flows, can reduce both costs and carbon emissions significantly. However, a lot of networks are inefficient due to inertia and failure to factor sustainability into their design. The design of a network faces two contradicting sustainability objectives: to have the lowest inventory and warehousing emissions, and to achieve the lowest transportation emissions.

Scottish Enterprise’s Scottish Manufacturing Advisory Service (SMAS) can work with manufacturing companies to improve their production efficiency, which in some cases will enable improved transport efficiency.

improved layout of the despatch area for Diageo at Shieldhall led to improved load-factors; modelled and identified a new factory site for Barony in Ayrshire, with raw materials and

finished products now all stored on the one site; route optimisation for Binn-Skip hire; and removed bottlenecks from the despatch area for Amer Sports resulting in fewer failed

deliveries and improved load-factors.

Companies can improve the sustainability of networks by collaborating to create consolidation centres and multi-user warehouses, which can improve the load factor, while keeping the warehousing costs to a minimum. Sharing transport is also one way of driving down costs and emissions. Boots share deliveries with TK Maxx in the Isle of Mann.

Co-location is the principle of using geographic proximity for competitive advantage. Businesses should consider locating near suppliers or customers to reduce transport needs.

Some ports offer warehousing facilities. A distributor can store goods at the port rather than at their own warehouse and this can avoid double-handling and short transport journeys. For example, at Zeebrugge, a purpose built storage facility has been built for imported green coffee beans. The Port of Liverpool and the Manchester Ship Canal are developing warehousing, for example, Kelloggs now store their products at the portside.

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Sustainable Logistics Final report, 9 April 2014There are several on-line retailing models:

an expansion of a traditional retail business with physical stores (Tescos); click and collect (Argos); dedicated online retailers (Amazon); direct from wholesalers/ producers; E-auction sites (often redistributing goods).

Each model has different implications for warehousing and deliveries. A significant issue is failed deliveries which result in a second delivery or customer travel to the depot. ‘Collection and delivery’ points would be more efficient but the UK has been slow to establish these. Similarly, ‘urban consolidation centres’ for a shopping mall (Meadowhall) or city centre can be used to alleviate local air pollution and traffic problems but have been slow11 to take-off due to difficulties in long-term financing.

Procurement and Sales Contracts

Procurement decisions and contract terms affect logistics. A key decision is whether to procure locally or from further afield. Local deliveries will normally reduce transport unless it results in many more small deliveries. ‘Just in time’ scheduling drives the use of air freight, particularly for global supply chains.

Long distance deliveries suffer from increased exposure to volatile fuel costs and the inability to rapidly adjust to changing customer needs. However, any return to local manufacturing is dependent on balancing a large number of risks, predictions and costs.

Distribution decisions impact on load-factors. In particular, contract delivery dates, or promises by sales staff, can make a huge difference. Quick delivery schedules and small minimum order lots will decrease load-factors. Effective co-ordination between purchasing, sales and logistics staff is essential.

EFFICIENCY – ROUTE OPTIMISATION

Load-factor

Load-factor percentage is the combination of how full a vehicle is and empty running. Increasing the load-factor is possibly the single biggest impact a company can have on its carbon efficiency. It is estimated that 25% of HGVs are empty, and that an empty HGV still uses two-thirds of the fuel of a full HGV.

A table showing the dramatic impact of load-factor on emissions per km can be found in the report12 on Measuring and Managing CO2 emissions in European Chemical Transport.

Load factors are affected by many inter-related factors, including: loading; routing; packaging; collaboration; and empty running.

Research by Heriot-Watt University into ‘Transport Efficiency in the UK Food Supply Chain’ found that food haulage vehicles spent only 28% of their time being driven. They spent a

11 Freight Consolidation Feasibility Study, Tactrans (2010)12 McKinnon and Piecyk (2010): Measuring and Managing CO2 emissions in European Chemical Transport (page 11)

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Sustainable Logistics Final report, 9 April 2014similar amount of time empty and stationary, and 20% waiting to be loaded or unloaded. Three-quarters of this waiting time occurred at the collection point, where the vehicles were on average preloaded three and a half hours before departure. For temperature-controlled distribution, this significantly increases energy consumption as it is less efficient to refrigerate products in a vehicle than in a cold store.

Routing and scheduling vehicles is a highly complex process. Logistics companies have developed dynamic vehicle routing software, which considers real-time traffic data and adjusts the routes. Deutsche Post DHL is trialling ‘the Smart Truck’ in Berlin for parcel deliveries. Routemonkey offer dynamic scheduling applications to optimise logistics. Isotrak uses GPS to track all vehicles signed up to encourage collaboration between companies. Aberdeen City Council is trialling BigBelly sell solar compactor street bins. Collection journeys are reduced up to 80% by compacting rubbish within the bin and scheduling pick ups as bins approach capacity.

By reducing the weight of whisky bottles, Edrington reduced raw material purchases and stock levels, and increased the carrying capacity of each delivery vehicle. It has been estimated that replacing round food cans with square ones could cut space requirements by 20%. Coca-cola, East Kilbride, has reduced the weight of its 500ml PET bottle from 34g to 22g (1994-2010). Highland Spring cut 274 truck movements per year by adding an extra layer to their pallets.

Empty running can be a trade off between different company objectives – customer service, stock minimisation and transport minimisation. It is affected by demand fluctuations, lack of knowledge of other loads, geographic traffic flow imbalances and any requirements for just-in-time deliveries.

Many companies either bring in or distribute goods one way only leading to 50% empty running. This can be overcome through backhauling – where a trailer leaves the distribution centre with a store delivery but returns with a load from a nearby supplier. In 2008, ASDA saved 8 million miles13 by backhauling. This can require a sophisticated level of planning and collaboration:

Refineries supply all filling stations in a local area regardless of brand; Vendor managed inventory where the supplier controls stock processes to optimise

delivery; Stobart Group has reduced empty vehicles to 15% through collaboration and sharing

loads with other companies; United Biscuits and Nestle, fierce commercial rivals, share transport of their products

to supermarket distribution centres.

On-line companies have been established to share the information that is necessary to successfully collaborate, such as www.haulageexchange.co.uk and Shiply.com. Shiply is a market place auction site designed to utilise empty lorry space by matching supply and demand. Users post their requirements then select the best quote.

Pallet Networks are co-operative organisations that enable small haulage companies to work together to increase load factors.

There is a geographic trade balance (1:1.3) between Scotland and England. It is estimated that 130,000 empty HGVs travelled from Scotland to England in 2003. Collaboration may

require triangular trips between inbound supplies to distribution centre, delivery to retailers and waste packaging back to the suppliers.

13 Delivering tomorrow: Towards Sustainable Logistics, Deutsche Post DHL, 2010 (page 96)

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Sustainable Logistics Final report, 9 April 2014This trade imbalance extends to exports of whisky to Europe. The empty containers need to be returned to Scotland. One solution is to export direct to Rotterdam, then ship the empty containers to England to be used to carry goods on HGVs from the Midlands to Scotland.

Day to day Routing/ congestion

HGV fuel consumption increases sharply when travelling very slowly or idling due to congestion. The timing of deliveries, particularly into city centres, can be important to avoid congestion.

Intelligent transport systems can be deployed to reduce congestion. These include: cameras to provide traffic data and warnings; sensors to monitor traffic flow; intelligent traffic lights to reduce braking and accelerating; route planning information to avoid congestion.

Intelligent transport systems can induce ‘smarter travel’, that is predict demand to enable more efficient use of capacity. This will be implemented at the Forth Replacement Crossing.

For ships, software connected to GPS and satellites can be used to plan routes to avoid bad weather and large waves and maximise use of currents. ‘Virtual arrival’ planning software can be used to slow a ship down if the destination port is congested.

For aviation, efficient routing includes: avoid stacking around airports and use continuous descent operations (gliding); avoid producing contrails by flying at different altitudes; take account of wind conditions.

Inefficient air traffic control adds about 12% to emissions. NATS has set a target to reduce the emissions of flights under its control by 10% (2006-20) using air traffic control measures, for example, Single European Sky is a project to integrate European air traffic.

EFFICIENCY – MODAL SHIFT

The chart below illustrates the wide range in emissions for various modes of transport to highlight the potential significance of modal shift. Defra14 publish emission factors for 3 categories of van, 6 for HGVs, 6 for refrigerated HGVs, 1 for rail, 3 for air, 19 for categories and sizes of sea tanker and 22 for cargo ships.

14 Defra: Government Conversion Factors for Company Reporting

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Sustainable Logistics Final report, 9 April 2014

Vans

HGV 3.5-7.5t

HGV art. >

33tRail

Domestic fl

ight

Short-

haul

Long-hau

l

Crude t

anke

r

Container

ship

Bulk carr

ier0

500

1000

1500

2000

2500

530 580

80 30

2190

1360

690

5 20 4

Gram

s CO

2e p

er to

nne/

km

Rail can be more efficient than road because there is less rolling resistance (friction to the ground). Water is relatively dense but ships can overcome this inherent inefficiency through scale. Air travel is less efficient because gravity needs to be overcome in addition to air resistance.

An average diesel truck emits 8 times more per tonne/km than a small container ship, whilst flying cargo by air can be over 100 times more carbon intensive than by ship. However, these averages mask economies of scale; for example, a large oil tanker is 10 times more efficient than a small one.

The FTA runs the ‘Mode Shift Centre’ website. The Department of Transport (2008) published a detailed guide, including 35 case studies, on ‘Choosing and Developing a Multi-modal solution’ for transport by rail and water freight. For example, Tesco’s uses rail from the Midlands to central Scotland saving 6000t CO2/ yr. Given the extra loading and unloading required, a threshold of 250km is often quoted as the minimum journey length to make rail logistics economic.

In Italy, Unilever launched a sustainable logistics initiative, ‘Green express’ involving modal shift to rail for its ice cream, taking 3,500 HGVs off the roads.

The Scottish Whisky Association is undertaking research into the carbon footprint of exports to its main markets. Preliminary findings indicate that significant savings could arise to certain markets if transport was optimised for carbon savings, for example, exporting to France by rail is twice as carbon efficient as by truck. For exports to the Far East there is less scope for modal shift, other than for short journeys to the ports. It may be that there is scope to choose more efficient ships, Maersk claim that their ships to Asia are 34% more efficient than the industry average, but that was outwith the scope of the research.

HITRANS has been awarded EU funding to trial the modal shift from road to rail of bulk spirit from Elgin to the bottling plants in the Central Belt. Transport Scotland offers grants to encourage companies to shift from HGV to rail or sea (see ‘Scottish capability’ section). The FTA runs the ‘Freight by Water’ website.

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Sustainable Logistics Final report, 9 April 2014VEHICLE EFFICIENCY

Vehicle efficiency aims to maximise the distance travelled per litre of fuel. This is affected by the inherent efficiency of the vehicles purchased or hired, by driver behaviour, vehicle maintenance and by routing and congestion issues.

The theoretical efficiencies of different forms of transport can be summarised as follows:

land vehicles lose efficiency at high speeds because of air resistance; ships lose efficiency at speed because of water resistance; planes have an optimum efficient speed, for example 560mph for a Boeing 747; lightweighting reduces the energy requirements for all modes of transport; there are theoretical limits to transport efficiency, especially for aircraft; increased scale or capacity reduces emissions per tonne/km.

For a HGV, fuel typically costs one third of operating costs. There are therefore costs savings and environmental benefits from maximising efficiency.

Menzies Distribution won the Scottish Environmental Haulier of the Year Award (2014) for reducing its carbon footprint by 30% in 10 years and for its active membership of the Eco Stars scheme and its support of the Logistics Carbon Reduction Scheme.

Vehicle Efficiency

Vehicle efficiency covers the size and shape of the vehicle, streamlining, lightweighting and its powertrain.

Size and shapeThe UK raised its maximum lorry weight from 41 to 44 tonnes in 2001 thereby reducing the number of vehicles on the road. UK infrastructure allows 5m high vehicles (allowing double decking) unlike most of the EU at 4m. The Department of Transport is running a 10-year longer trailer trial (15.6m) to reduce emissions.

Arla Foods developed a combination trailer - half tanker and half refrigerated container - to transport raw milk and finished dairy products simultaneously thereby increasing the load factor.

SME designed a trailer that uses the space between the truck and the trailer axle to carry an extra 1%. They are working with UKTI to export these trucks to European markets.

FTA publishes case studies, some focusing on increasing the carrying capacity of vehicles.

The Maersk triple-e class ships for Asia-Europe trade can carry 18,000 containers at 3g CO2/tonne/km. They are the longest and widest possible ships based on current port restrictions. CO2 per container is 20% less than Maersk’s other ships, and typically 50% less than other operators.

StreamliningStreamlining will reduce drag and air resistance for all forms of transport.

Integrating the HGV tractor and trailer will eliminate turbulence and reduce aerodynamic drag. An alternative is to fit wind deflectors between cab and trailer although this will increase the tare weight. Aerotails design products that can be retrofitted to reduce turbulence from the tail of a vehicle, saving 13% fuel at motorway speeds.

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Sustainable Logistics Final report, 9 April 2014Tradeteam, is enhancing the efficiency of its fleet by investing in 60 new streamline ‘teardrop’ trailers. The trailer’s swooping, streamlined roof improves fuel efficiency by 2% as the design eradicates drag.

For shipping, ‘International’ claims that its smooth, low friction surface coating reduces fuel consumption by 9%. It is also possible to reduce the frictional resistance of the hull by reducing contact with water by pumping a thin layer or bubbles of air around the hull.

Aircraft are already relatively streamlined, but turbulence accounts for much of the drag on a plane. This can be minimised by laminar flow control (tiny holes in the wing). The University of Strathclyde is investigating nanomaterials to reduce drag. Winglets, which can be retrofitted, can reduce fuel by 4%.

LightweightingThe German Institut für Energie15 estimates that the energy savings arising from lightweighting modes of transport by 100kg are as follows:

cars HGV trains high speed ferry aircraft26 GJ 30 GJ 100 GJ 1,600 GJ 15,000 GJ

Although lightweighting always helps, it is critical for aircraft. For ships it is less important as the cargo is a larger proportion of total weight.

Switching steel to aluminium could cut 3 tonnes from an articulated lorry. The main benefit from lightweighting HGVs is that it will increase the carrying capacity where vehicles are already at their maximum weight limits.

Samskip Multimodal are piloting containers made of steel frame and composite panels which are 800kg lighter (20%) than the traditional all steel container.

Virgin Atlantic calculates that reducing weight by 1kg saves 0.4 tonnes CO2 per year for its transatlantic aircraft. Carbon fibre-based composites are stronger, smoother and contribute significantly to making aircraft lighter. Simply replacing existing parts, with lighter, but otherwise identical shaped parts, will not always achieve best results. It may be possible to redesign parts into new shapes, for example, ‘blended wing’ is a new ‘flatter’ design where the whole aircraft contributes to lift.

Powertrain

Powertrain efficiency improvements (engine, transmission, drive shaft) offer the greatest scope for improvement as well as the potential to improve the energy efficiency of auxiliary systems (fans, pumps, compressors, lifts) using electric power. Modern vehicles tend to be more efficient than their predecessors so fuel economy will improve simply by accelerating capital replacement programmes.

Viezu offer fuel economy tuning for commercial fleets to optimise the engine management system to your requirements. BT has re-tuned 24,000 vehicles, with a claimed saving of £4m per year.

Fuel efficiency can also be improved by purchasing low rolling resistance tyres. Michelin produce these at its factory in Dundee.

15 The Potential Contribution of Light-Weighting to Reduce Transport Energy Consumption, Institute for Energy and Environmental Research

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Sustainable Logistics Final report, 9 April 2014For aviation, Rolls-Royce’s Trent 1000 engine is 12% more fuel efficient than its predecessor. GE Aviation developed the 15% more fuel-efficient GEnx engine for Boeing using carbon fibre composites for its main fan blades. In the longer term, Rolls-Royce and other manufacturers are developing a more efficient open rotor engine to replace the traditional turbo-fan. Airlines are also replacing hydraulics with electrical systems.

For shipping, efficiencies can be gained from: waste heat recovery from engines; efficient and streamlined propeller design; winglets on the tips of propeller blades; rim-driven thrusters – electric motor linked to a diesel generator.

To meet new sulphur and NOx regulations, shipping companies are developing exhaust gas scrubbers to capture SO2 and retain it or discharge to sea and selective catalytic reduction technology for NOx reduction. An alternative approach will be to use LNG.

EFFICIENCY - DRIVER BEHAVIOUR

Simulators for truck drivers can improve fuel efficiency by 8-10% by reducing harsh braking and idle engines. Financial incentives, speed limiters or monitoring of behaviour is required to maintain awareness.

Smartdrive offers automatic video of driving ‘incidents’ which can be used for driver training, insurance claims, and results in fewer collisions. Daimler has developed a predictive powertrain control, combining GPS and cruise control to automatically optimise driving behaviour in hilly terrain.

Turners (Soham) Ltd demonstrated fuel efficiency using route-based analysis and improvement tools and introducing a telematics system to analyse driver performance data.

Autokontrol supply intelligent speed limiters that detect vibrations to lower the speed on rough surfaces, for example gravel roads. This reduces fuel and also maintenance.

Regular maintenance can also reduce fuel requirements – check tyres, axle alignment, fuel leaks, poor combustion and oil.

It is more efficient to move vehicles slowly because air resistance increases rapidly with speed. Generally, fuel use and speed are related by a third-power function, so a 10% reduction in shipping or lorry speed corresponds to a drop in emissions of 27% per unit of time or 19% per unit of distance.

Although reducing the speed of land based vehicles and ships will reduce energy use, it will also require more vehicles/ships for the same amount of transport work, and affect the logistical chain by increasing the travel time of cargo. There is therefore a theoretical optimum balance between logistics, supply chains and energy use.

The immediate response to the rise in fuel prices was for ships to adopt slow steaming. The Maersk triple-e class ships are designed for a slower speed (23 knots) which enabled a more streamlined hull shape and efficient engine design with waste heat recovery. Maersk estimate that slowing down from 25 knots to 17 knots can reduce fuel consumption by 50%.

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Sustainable Logistics Final report, 9 April 2014EFFICIENCY – FUEL SWITCHING

The vast majority of logistics are transported using fossil fuels; diesel for HGVs, rail and shipping, and kerosene for aviation. There are many alternatives but none have significant market penetration due to capital costs and/or lack of infrastructure. Changing fuel type will usually have knock-on effects on engine design, fuel weight, fuel storage, maintenance and payload capacity.

Scottish companies are active in this market. Alexander Dennis design hybrid vehicles, albeit buses, Axeon produce lithium ion batteries for electric vehicles and Argent Energy produce bio-diesel from animal tallow and used cooking oil. Allied Vehicles manufacture specialist vehicles including electric delivery vans. Artemis Intelligent Power design and manufacture hybrid truck transmissions.

Government Support

The Office for Low Emission Vehicles published its ‘Strategy for Ultra Low Emission Vehicles in the UK’ (2013) outlining its ‘technology neutral’ support for electric vehicles, hybrids and hydrogen infrastructure and the implications for wider energy policy.

The UK Government offers a grant of up to £8,000 to subsidise ultra low emission vans. The EST offers free installation of domestic chargepoints, and it is likely that this scheme will be extended to certain private businesses.

UKH2Mobility is a UK Government and private sector partnership to promote hydrogen vehicles and infrastructure. They have published a hydrogen roadmap for the UK.

E-cosse is a partnership to advance Scotland to adopt electric and plug in hybrid vehicles. Their ‘Roadmap to Widespread Adoption of Plug-in Vehicles’ (2013) includes plans for rapid charging points every 50 miles on trunk roads.

Job opportunities will arise throughout the supply chain, for example, Tennant Green Machines, Falkirk, manufacture electric street sweepers for quiet operation in city centres. RB Grant, Kirkcaldy, install electrical charging points.

HGVs and vans

Under the EU Biofuels directive, the UK blends 5% biodiesel and bioethanol with conventional fuel.

Hydrogen and fuel cell technology can result in zero tailpipe emissions but require a refuelling infrastructure, and a life-cycle analysis is required to determine the overall energy efficiency.

Electric vehicles are typically twice the cost of diesel vehicles. Using current UK grid averages they cut emissions by 30%. Hybrid vehicles may be suitable for stop-start deliveries and can capture energy from regenerative braking and/ or use electric motors when idling or travelling at low speeds.

Until the infrastructure is in place, ultra low carbon vehicles are most effective where use is on site, controlled by the operator. For example, Heathrow airport operates a fleet of 750 electric vehicles. Mueller Wiseman operates dual gas-diesel electric vehicles between its two main depots. Early adopter, niche applications include electric local urban delivery

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Sustainable Logistics Final report, 9 April 2014where there are air quality or night-time noise constraints and hydrogen fuel cell forlkifts within warehouses where diesel fumes would not be permitted.

Early adopters can gain considerable marketing capital through adoption of charging infrastructure and ultra low carbon vehicles.

Logistics Company, DHL is developing a prototype hybrid-electric truck which could reduce fuel consumption by 25% using an on-board power generator and a super capacitor energy storage system.

B&Q powers 50 vehicles with gas from waste (biomethane).

United Biscuit’s use all of their waste vegetable oil as a bio-diesel for their fleet resulting in a 33% reduction in emissions16.

TNT uses 7.5 tonne electric powered vehicles, with a 70 mile range, for urban deliveries.

DAF Trucks manufacture a 12 tonne hybrid model. The electric motor allows up to 2 km of electric driving reducing fuel by 24% on stop-start driving.

TSB is running a £23m Low Carbon Truck Demonstration Trial, primarily dual fuel diesel and gas vehicles. Their website describes the options for gas run HGVs.

Routemonkey offer a fleet review service to determine which vehicles and routes are suited to electric vehicles, taking into account whole life costs, charging points and range limits. This can minimise the normal requirement for lengthy trials of electric vehicles.

Shipping

Liquid natural gas (LNG) is one solution to the new sulphur and NOx regulations, reducing CO2 by 20%, NOx by 85% and SO2 by nearly 100%. Significant work will be required if Scotland is to establish suitable infrastructure for LNG by 2015. LNG is bulky to store and may involve a loss of cargo space if retrofitted to existing ships.

Rolls-Royce has developed a lean-burn reciprocating gas engine that reduces NOx by 90%, emits virtually no sulphur and achieves a 20% reduction in CO2. Its hybrid diesel-electric (LNG) propulsion system KV Harstad can operate using conventional diesel or electric drive from LNG. This was developed for ships operating in Norwegian coastal areas where local environmental rules forced innovation.

Caledonian Maritime Assets Limited has ordered the world’s first diesel-electric/battery hybrid RoRo ferries from Ferguson Shipbuilders. Lithium-ion batteries will be charged from the mains when the ferries are in port. There is the potential to extend this innovation to use wind power to produce hydrogen which can be stored for use in fuel cells.

Biofuels are an option, but likely to be limited, due to its potential impact on global food prices. Although they are low in sulphur, they emit NOx. Biofuels from non-food sources are an alternative, for example, Maersk has experimented with biofuel from algae.

Aviation

16 http://www.ubgraduates.com/sustainability.html

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Sustainable Logistics Final report, 9 April 2014It is unclear whether ambitious industry projections of 30% penetration by 2030 for biofuels will be realised. There are significant uncertainties around the economics and environmental benefits. However, some policy makers consider that aviation will be one of the best uses for the limited global supply of biofuels.

Renewablejetfuels.org is an industry body to certify the safety and sustainability of biofuels. Lufthansa has successfully operated test flights with a 50% vegetable oil and kerosene blend in one engine. However, the impact on global food prices, and the uncertain net carbon savings, is likely to restrict the growth in first generation biofuels.

British Airways, in collaboration with Solena, aim to produce jet fuel from waste biomass in London. 500,000 tonnes of waste will be converted to 16m gallons.

Virgin Atlantic is commercialising technology with LanzaTech to use waste carbon monoxide from steel mills to produce ethanol. They estimate that this reduces lifecycle emissions by 50% and could provide 19% of global jet fuel.

Hydrogen is another potential fuel, but it is not as energy dense as kerosene so larger fuel tanks would be needed. It would also emit more water vapour, which could increase the warming affect from cirrus clouds.

SCOTTISH CAPABILITY AND ADVICE

Scottish Enterprise/ SDI

SE can help companies to reduce emissions from international logistics: support technological improvements and innovation; help with efficient export logistics; and encourage the ‘relocalisation’ of manufacturing.

Scottish Enterprise offers a free advisory service, SMAS, for manufacturing companies to use lean techniques to help to improve their production efficiency, warehouse layout and optimise distribution networks.

Transport issues facing the Scottish Food and Drink Industry (MDS Transmodal, 2013)

Of the 1m tonnes of food and drink exported from Scotland to countries outwith the UK, 74% are whisky, 19% fish and seafood and 7% meat, dairy, biscuits and confectionery. Another 600k tonnes are exported to the rest of the UK. This causes 546,000t of CO2 emissions with fish and seafood comprising 39% because of the greater proportion carried by air freight. Exports, and resultant CO2 emissions, are forecast to rise by 10% 2012-17.

The report recommends several efficiency measures, a) modal shift to rail, b) examine the empty container imbalance, and c) to preserve North Sea shipping services given the SO2 regulations.

SE also plans a study on the freight (road, rail, port) industry in the Grangemouth area.

Industry Associations

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Sustainable Logistics Final report, 9 April 2014The Freight Transport Association (FTA) and the Road Haulage Association (RHA) are the two main membership industry bodies for the freight industry. The FTA has worked with the UK government on sustainability for its members, including:

guidance on sustainable measures for transport companies; Carbon fta provides guidance on climate change policies and practical advice on

reducing vehicle CO2; the Logistics Carbon Reduction Scheme, a UK wide voluntary initiative to measure

and report carbon emissions. It has 90 members, covering 63,000 vehicles (30% of FTA membership). Participants are collectively committed to an 8% reduction in the intensity of CO2 emissions by 2015, compared to a 2010 baseline. There are also indicators on fuel consumption, loading, empty running, carbon intensity of fuels and modal split. The scheme may be extended to rail freight.

the FTA also provides the secretariat for the Global Shippers Forum, who has published a briefing note on Maritime Emissions.

The RHA has worked closely with the Scottish Government on transport issues and has helped to facilitate the introduction of initiatives such as the trial of longer semi-trailers and the use of methane for HGVs.

Transport Scotland

Transport Scotland is the national transport agency helping to promote the Scottish Government’s transport policy and deliver major rail and road infrastructure projects.

It operates grant schemes for companies to shift goods from road to rail or water: Freight Facilities Grant - capital costs associated with moving freight by rail or water

instead of road. Waterborne Freight Grant - operating costs associated with moving freight by water

instead of road. Mode Shift Revenue Support Scheme - operating costs associated with moving

freight by rail or inland waterways instead of road.

There is no other direct financial assistance to freight operators. EU State Aid rules restrict the opportunity to provide direct financial assistance to what is generally considered to be an efficient, competitive market.

Transport Scotland has a portal for freight best practice guides, including: A fuel saving toolkit; Fuel Saving in a Scottish haulage fleet (John Mitchell, Grangemouth); Moving loads from road to rail.

Further freight best practice guides and case studies are also available on the Welsh site: Refrigeration; innovation in Scottish timber haulage (tyre pressure control); The Malcolm Group (Linwood, Renfrewshire).

University Research

Heriot Watt University runs the Logistics Research Centre to promote research into logistics, modelling and networks.

The Centre for Sustainable Road Freight is a collaboration between Cambridge University, with its engineering strengths, Heriot Watt and industry with funding for 5 years of £5.8m. There is a list of publications on sustainable logistics.

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Sustainable Logistics Final report, 9 April 2014

Staff at Heriot Watt co-authored the ‘Green Logistics: Improving the Environmental Sustainability of Logistics’ book, by Alan McKinnon, Michael Browne, Anthony Whiteing (2012).

Heriot-Watt developed a decarbonisation tool. The scenario tool, part funded by FTA, allows companies to estimate the extent to which they can reduce CO2 emissions from their freight transport if they apply various combinations of measures.

The Centre for Transport Research, Aberdeen University, focuses on transport and the environment, society and the digital economy.

The Glasgow Research Partnership in Engineering includes a theme on sustainable transport, covering aerospace research, travel behaviour and marine transport.

Edinburgh Napier, Transport Research Initiative coordinates research on a wide range of transport issues, including maritime logistics, transport modelling and transport economics.

Lowcarbonshipping is a consortium of UK universities (including Strathclyde) and industry stakeholders undertaking research into shipping emissions and potential efficiencies.

Scottish Partnerships

The Scottish Freight and Logistics Advisory Group (ScotFLAG), chaired by Transport Scotland advises Government on freight policy.

The Scottish Transport Emissions Partnership, led by Scottish Government and SEPA, seeks to improve urban air quality. They are drafting a Low Emissions Strategy for Scotland.

There are 7 statutory Regional Transport Partnerships covering Scotland to develop and deliver regional transport developments. For example, the Tayside and Central Scotland Transport Partnership are exploring the idea of a consolidation centre at Perth, with deliveries by electric vehicles within the urban area. It is also working on vehicle route planning and modal shift through Dundee port improvements. Dundee is a follower of the EU ENCLOSE programme and is developing a Sustainable Urban Logistics Plan.

The UK Timber Transport Forum shares information on timber supply chain and logistics.

UK Government

The Department for Transport's Low Carbon Supply Chain Steering Group aims to produce guidelines to help operators record and report their carbon emissions from freight transport. Defra has published advice on how to calculate carbon emissions with specific examples relating directly to freight transport operators.

UKTI can provide information on legislative standards and market needs in different countries.

Transport innovation is one of the priorities for the Technology Strategy Board. They run funding calls to accelerate innovation, highlighted in their Transport Action Plan.

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Sustainable Logistics Final report, 9 April 2014

European Funds

FP7 fosters collaborative research across Europe through projects by transnational consortia of industry and academia. Research will be carried out in ten key thematic areas including transport:

Weastflows is an ERDF project for the North Sea area to encourage sustainable logistics;

FoodPort examined sustainable transport of food in the North Sea area; and DryPort examined the potential for freight inter-modal connection at Coatbridge.

Dryport produced a summary report of opportunities for Scotland and produced a containerised cargo carbon calculator to compare road, rail and water.

There are two ECOSTARS schemes in Scotland; Edinburgh has 35 members and Falkirk has 14. ECO Stars is a European voluntary scheme to provide recognition and guidance on environmental best practice to operators of goods vehicles and buses. It rates individual vehicles and the overall fleet operation using a star system. North Lanarkshire and Dundee City have been successful in bidding for Scottish Air Quality Grants to fund their own schemes during 2013/14.

Horizon 2020 is the EU programme for research and innovation. It includes transport as one of its themes and will be launching funding calls.

Scotland Europa can provide further advice on EU funding.

Energy Savings Trust

The Energy Savings Trust has a guide to running a modern pool fleet, including vans. They offer a free sustainable fleet review for vehicles up to 3.5 tonnes and interest free Low Carbon Transport loans for fleet management software, vehicle efficiency devices and the purchase of low carbon vehicles.

Other Advice

The Wine and Spirits Trade Association has produced a carbon calculator for alcohol and one focused on wine.

Shippingefficiency.org has allocated an ‘A’ to ‘G’ rating and calculated grams of carbon per container/km for 60,000 ships. It publishes a comprehensive guide to ship efficiency and technology measures.

Sustainable Aviation, a UK industry body, published a ‘CO2 Roadmap’ showing that emissions from UK aviation can be reduced to 2000 levels by 2050 through new technologies, operational efficiency and sustainable fuels, despite a projected tripling in passenger numbers.

Company Initiatives

Unilever aims to cut emissions from its global logistics network (2010-20), representing a 40% improvement in efficiency; by reducing truck mileage, using lower emission vehicles, modal shift and improving the energy efficiency of warehouses.

Tesco aims to reduce emissions per case of goods by 50% (2007-12).

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Sustainable Logistics Final report, 9 April 2014B&Q aims to reduce its emissions from business travel and haulage by 50% by 2023.

FedEx offers carbon-neutral envelope shipping by using tree planting offsets.

DPD offer a ‘Total Zero’ commitment to reduce and offset their emissions to be carbon neutral at no extra cost to the customer.

UPS cut emissions by 2.1% in 2012 despite an increase in volume shipped by 2.3%.

TNT has the ambition to become the first zero emission delivery company.

DHL has pledged to increase its CO2 efficiency by 30% (2007-20). Its ‘GoGreen programme’ can help companies to measure and offset carbon emissions.

CONCLUSIONS

This report is primarily designed to raise awareness of the opportunities for sustainable logistics in Scotland. The main agency for promoting sustainable transport is Transport Scotland, delivered in conjunction with partnerships and freight industry bodies.

Sustainable logistics will be a growth area for Scotland. The main opportunities are:

Improve load-factors through collaboration immediateRetrofit vehicles to be more efficient immediateNiche applications for ultra low carbon vehicles immediate Advanced software to optimise routes and driving immediateOptimise warehouses, procurement etc immediateModal shift immediatePowertrain efficiency improvements – innovation immediatePurchase the most fuel efficient vehicles immediateWider adoption of electric vehicles medium termWider adoption of hydrogen vehicles longer term

The ‘freight hierarchy’ indicates that the priorities should be:

1. design out the demand for transport; strategic decisions2. drive less through route optimisation; operational decisions3. modal shift strategic decisions4. purchase fuel efficient vehicles; purchasing/ operational decisions5. driver training/ speed operational decisions6. switch to alternative fuels. strategic/ purchasing decisions

fuel s

witchdrivers

vehicle efficiency

modal shift

route optimisation

reduce demand

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Sustainable Logistics Final report, 9 April 2014Close integration and collaboration across infrastructure, energy supply and ICT will be required in order to roll-out new low carbon transport initiatives. There are economic opportunities for Scotland from the supply chain across all these areas.

Given the high price of fuel, sustainable logistics initiatives that focus on resource efficiency, are often cost effective even without subsidy. Companies who purchase ultra low carbon vehicles may benefit from free marketing publicity, and given the subsidies and incentives in place, may reduce their costs and increase their competitiveness.

The Roadmap to Widespread Adoption of Plug-in Vehicles contains 37 actions, many for the public sector. These are not repeated in this report.

Scottish Enterprise has a role to play as outlined in the ‘Scottish Capability’ section above. Our Smart Mobility plan will outline our initiatives to support the technological and cross-cutting themes that will also support sustainable logistics.

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Sustainable Logistics Final report, 9 April 2014

Annex ALogistics SupportThis document is designed to help Scottish Enterprise’s customer facing staff and specialists to identify the potential to help companies to reduce their transport requirements or to improve the efficiency of their transport. It can also be used by any others interested in transport efficiency.

This transport hierarchy indicates that the first priority is to design out the demand for transport, then to optimise routes, then to focus on resource efficiency.

Given the high price for fuel, many of the resource efficiency suggestions within this checklist are cost effective. Even at the top of the hierarchy, switching to electric or hybrid cars can be cost effective with current subsidies and may benefit the companies through ‘free’ marketing publicity.

Support Available (using existing products)

Our Sustainability specialists can help with monitoring and reporting of transport emissions, offer generic support on sustainable logistics and/ or refer companies to other experts (lean management, expert help products). The Sustainability Specialists should also be the first point of referral.

Our Account Managers can use our product portfolio to help companies consider their strategic approach (eg general strategy or strategy development products).

SDI Export Advisors can offer exporting support or make referrals to the Professional Advisors Network.

Our SMAS specialists can offer support on lean techniques to improve production efficiency, to meet production plans, on warehouse layout and to optimise distribution networks.

Our Innovation specialists can offer support on innovative techniques, such as 3D printing, and new transport technologies (innovation support product).

Our IT specialists can offer support on technological solutions such as integrated stock control systems, optimal routing, sensors, tracking etc (ICT project and expert support products).

The Energy Saving Trust offers a free sustainable fleet review.

fuel switch

drivers

vehicle efficiency

modal shift

route optimisation

reduce demand

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Sustainable Logistics Final report, 9 April 2014

Carbon Intensity of Transport

Issue Discussion points17

Reduce demand Business models Digital, circular economy, on-site activity [1,4,5,6] Distribution/ warehouse strategy Optimum location, collaboration [1,3] Procurement and contracts Co-ordinate production/warehouse/sales [3,4] 3D printing On-site or local production [5]

Route optimisation (distance) Load factor/ empty running Maximise loads/ minimise empty running [3] Backhauling Planning, sharing, collaboration [2,3,4] Routing Optimising software, tracking [2,3,6]

Transport mode Modal shift Road to rail or ship. SG modal shift grants [2,4] Air freight Good planning to avoid ‘emergency’ shipments[3,4]Vehicle efficiency Vehicle specification Purchasing/ tenders focus on mpg [4] Powertrain Engine, transmission, drive shaft, engine tuning [4,5] Size and shape Max weight & height, combination trailers [4,5] Streamlining Reduce drag, turbulance, tyres [4,5] Lightweighting Vehicle, containers and packaging [4,5] Routing and congestion Sensors, tracking, optimising software [2,4,5,6]

Drivers Driver behaviour Speed limiters, training, incentives [4,5] Vehicle maintenance Health and safety and fuel saving [4]

Fuel carbon intensity Electric and hybrids Fleet reviews [4] or Energy Saving Trust Alternative fuels Biomethane, CNG, LNG, fuel cells [4,5]

Monitoring and reporting Monitoring mileage Data collection [4] Carbon footprint Carbon factors, carbon saving calculations [4,6]

[1]: Account Managers [2]: SDI [3]: SMAS [4]: Sustainability specialists [5]: Innovation specialists [6]: IT specialists

17 Numbers in brackets relate to potential sources of support

Demand and Distance

(tonne/ km)

TransportMode

(road, rail, ship)

Transportefficiency

(km per litre)

Fuel carbon intensityX = ARBON INXX

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