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Consider the use of ports that utilizes renewable energy
TRANSPORT SERVICES
Segment Family Class
78
14
0
SDG Alignment
7. Ensure access to affordable, reliable, sustainable and modern energy
SDG Target
7.2
Target Description
By 2030, increase substantially the share of renewable energy in the global energy mix
Level of Effort
Level of Effort Scale
2
1 -Quick Wins: solution involves adding criteria for the good or service being purchased (ex: certifications), minimal internal process changes.
2 -Long Term Adoption: solution requires some changes to internal processes and/or more capital investment (ex: digital transformation to reduce paper use).
3 – Disruptive Opportunities: requires significant investment and changes to internal processes (ex: retrofitting building)
Category Assessment
Assessment
• Identify ports that have their goals targeted to cut back on carbon emissions across all facilities (including all the busy bridges, tunnels, and bus terminals).
• To establish a baseline, assess the current logistics provider's preferred ports, procedures to identify the port of use, contract terms, performance indicators, cost breakdown, and energy use structure (sustainable sources included or not) and check with your distribution supplier as well.
• Identify the measures that are required to calculate the emissions. For this purpose, you can use the EPA Greenhouse Gas Equivalencies Calculator provided in the reference.
For the calculator, you would require either of the below information:
a) Energy Data in gallons of gasoline, kilowatt hours of electricity, MCF of natural gas, therms of natural gas, or passenger vehicles.
b) Emissions Data in metric tons of carbon dioxide equivalent, carbon equivalent, methane, nitrous oxide, hydroflurocarbon gases, perflurocarbon gases, or suplphur hexafluoride gases.
Opportunity Identification
Business:
Build your shipment plan to maximize the use of ports that use renewable energy, as with renewable energy policies, such ports would have achieved profits or cost savings which could translate to reduced costs for your logistics provider and hence, you.
Sustainability:
Reduced carbon emissions into the environment and support the specific port's transition to renewable sources of energy.
Strategy Build & Execution
• Based on the assessment, understand the carbon impact and environmental tradeoffs of using renewable energy utilizing port and the alternative routes your shipment could be transited with limited to zero impact on the lead time.
• Utilize local suppliers for your requirements and avoid overseas shipments.
• Engage with your distribution supplier(s) and discuss tradeoffs associated with alternative routes (taxes, shipping time, risk, and cost reduction potential) to be considered to go ahead with ports that utilize renewable energy.
• If your existing distribution supplier is unable to provide the option (due to various reasons such as business scope or international relations), consider going to market with a Request for Information (RFI) and evaluate the potential options to switch providers.
Supplier Negotiation & Contract
• Work with your distribution suppliers on utilizing ports that use renewable energy for shipment transit.
• During the RFI, inform suppliers about higher scores provided to suppliers who possess licenses, certifications, and accreditations, showcasing their initiatives or support to cut back on carbon-emissions and if such actions are taken in-house.
• From the RFI, if a potential supplier is identified, consider using the volume of shipments as leverage during negotiations.
• Develop and provide incentives to suppliers if more carbon emission reduction-related initiatives are considered in the future.
Supplier Performance & Management
• Keep track of lead times to check whether any variations occur due to energy fluctuations.
• Perform a review by gathering information after the switch has been made to a port utilizing renewable energy and compare against the baseline to evaluate the commercial/risk and environmental impacts of this switch.
• If available, request the supplier for visibility into their logistics provider's vessel CSI (Clean Shipping Index) Class scores - to identify the vehicle's environmental performance.
Resource Links
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