How the Environmental Ship Index (ESI) aims to clean up Europe's Ports
Try to keep up with SCD on this one, okay?
Six European ports operating under the WCPI, an important arm of the IAPH, recently teamed to create the ESI in an attempt lower the GHG emissions—even further than the IMO standard—at all member shipping ports and its operators.
Did you get all of that? Don’t sweat it. Either did we the first time we read it. But a large part of our job here at Supply Chain Digital (SCD) is to report on the happenings of these acronymic organizations.
If you read the title, you probably deduced pretty easily that the ESI is the Environmental Shipping Index. If you pay attention to the news at all, then you also probably knew that GHG stands for Green House Gases. And since this is a supply chain publication, you also get the benefit of the doubt on knowing that IMO stands for International Maritime Organization. Word association with the last two acronyms, however, will get you nowhere.
What is the WPCI? Who are the IAPH? We picked up a little hint from our friends at IHOP when we first started researching these organizations. If the “I” in an acronym is at the beginning of a title, then it probably stands for “International” and if it’s at the end, it probably stands for “Initiative.”
But does that give you any further insight into what those acronyms are all about? One’s an Initiative and one’s International. Got any reasonable guesses? Alright fine, we’ll just tell you.
The International Association of Ports and Harbors is a global alliance of ports around the world that was established in 1955. Today, it represents some 220 ports and 130 port-related companies of about 90 countries. Member ports within the IAPH handle 90 percent of the world container traffic and over 60 percent of the world maritime trade.
The IAPH officially launched the World Port Climate Initiative at a global summit at the Port of Los Angeles in 2008. Participating members agreed to commit to a plan that jointly reduces the threat of global climate change from a port authority perspective. The goal of the summit was to deepen the support for the WPCI among the world’s ports, promote information sharing and establish a framework for CO2 footprint inventory and management.
More recently, six member European ports teamed to create the Environmental Ship Index in accordance with the WPCI. Port authorities from LeHavre, Bremen, Hamburg, Antwerp, Rotterdam and Amsterdam launched the ESI in November last year. Implementation of the ESI in the last few months has been steady, but it hasn’t been realized globally just yet. The target European ports, though, are more interested in providing a framework that other Port Authorities will be able to follow in similar indexing efforts. The research, studies, strategies and actions taken to reduce GHG emissions by the European ports are being documented. Eventually, there will be an ESI methodology that all IAPH members will be able to follow.
Here’s a brief overview of how the ESI works: It’s a voluntary system that helps improve the environmental performance of sea vessels by distinguishing ships in their environmental performance regarding air pollutants. It gives points for ships performing over current IMO standards. In short, the ESI ranks a ship on a scale from 0 to 100 where a score of 0 indicates an “underachiever”, or a ship that meets the IMO standard, but doesn’t exceed it. Conversely, a score of 100 would indicate that a ship has no emissions at all. Obviously, no one is near 100 yet. The best scores from the implementation at the six European ports are between 20 and 30. The Mediterranean Shipping Company is the owner of the highest ESI-rated ship at 31.1. Shipping giant Maersk has over 600 vessels in its fleet and the few ships that have been indexed so far hover just above the IMO standard. The Cornelia Maersk has the highest ESI at 15.7, but the average score for the Maersk fleet is right around 5.3.
In no way, shape or form is the ESI a finished product. It’s almost as if the ESI is on beta release and the European target ports are the first testers. It’s not perfect, nor is it the final solution to our climate change problems. But for an industry that emits more pollutants than most of the other industries combined, the ESI is a start down that road we call Sustainability. It’s a long, windy road with a few dead ends, but there is certainly light at the end of it. It will probably require help from a few more organizations with catchy acronyms, but we’ll get there sooner or later.
Well, hopefully its sooner or it will likely be the EOTW as we know it.
This article looks way cooler in our February edition of Supply Chain Digital. Check it out HERE!
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.