How data drives green logistics
12 Sep 2024
Logistics players are working hard to reduce their environmental impact from various angles
In today’s dynamic business environment, the significance of environmental, social and governance (ESG) principles is gaining recognition, signifying a profound move towards embedding sustainability into the core of business operations. This shift highlights a broader perspective on a company’s societal responsibilities, blending profitability with positive global impacts.
In this context, the logistics industry emerges as a pivotal player, adopting sustainable practices and leveraging technology to streamline supply chains in an environmentally conscious manner.
Players in the logistics sector are investing their efforts into minimising their environmental impact from multiple angles, including pick-up and delivery route optimisation, vehicle efficiency and modernisation, and a shift towards renewable energy (RE). These efforts highlight the sector’s commitment to science-based carbon emission reduction targets.
This initiative is crucial for the transportation sector to fulfil global warming limits set by the Paris Agreement and address its significant contribution to global CO2 emissions. Globally, industries have committed to reducing emissions to limit global warming to a 1.5°C increase, as per the Paris Agreement, to mitigate climate change risks. However, with the transport sector responsible for a substantial portion of CO2 emissions in 2020, it is clear that more aggressive action is required to meet these targets.
In Malaysia, these global sustainability trends find a strong echo, with targeted initiatives aimed at bolstering the logistics sector’s efforts. The country’s commitment to curbing greenhouse gas emissions in proportion to its GDP by 2030 exemplifies the logistics sector’s critical role in Malaysia’s sustainability journey. This solidifies the country’s position as a leader in sustainable logistics practices in the region and highlights the sector’s significant contribution to achieving broader environmental objectives.
Data Powers Sustainable Logistics
The pivotal role of data in bolstering sustainability initiatives is evident, serving as a cornerstone for strategic decision-making and operational enhancements. Specifically, within logistics, data-driven analysis in various parts of operations reduces carbon emissions and supports the transition towards RE. This strategic application of data not only aligns with the Paris Agreement’s objectives but also positions companies like FedEx to set a precedent.
Data supports sustainable initiatives within companies in several critical aspects:
• Measurement and Monitoring: Data enables companies to measure their environmental impact, essential for setting goals and tracking progress.
• Identifying Opportunities: Analysis helps pinpoint areas for sustainability improvements, such as energy usage and waste reduction.
• Optimising Resource Use: Data allows for better resource management, reducing costs and environmental footprint.
• Decision-Making Support: Provides insights for informed decisions on suppliers, investments and product designs aligned with sustainability.
• Compliance and Reporting: Ensures accurate sustainability reporting and regulatory compliance, avoiding fines and reputational damage.
• Innovation and Continuous Improvement: Fosters development of sustainable products and processes, enabling continuous strategy enhancement.
Leveraging data-driven insights, businesses can track carbon output, identify improvement areas and set precise sustainability goals. This visibility helps meet carbon neutrality targets effectively. Throughout the project lifecycle — from assessment to outcome and evaluation — this strategic use of technology ensures continuous advancement toward a greener future.
The strategic sustainability approach at FedEx, supported by concrete data-driven goals and targets in various segments, is founded on three core principles: Reduce, Replace, Revolutionise. This methodical framework facilitates precise tracking and measurement of environmental impacts, guiding the implementation of initiatives aimed at reducing emissions and waste, enhancing the efficiency of technologies and vehicles and pioneering innovations in fleets and facilities to achieve responsible resource use.
Through emission and waste reduction, upgrading to more efficient technologies and vehicles, and innovating fleets and facilities, FedEx aims at using resources in a more responsible manner. Collective efforts have led to a 48% decrease in CO2 emissions intensity between financial year 2009 (FY09) and FY23, despite a 121% growth in average daily package volumes.
Initiatives like fuel reduction in the fleet, increasing facility energy efficiency and optimising the recyclability of packaging are key to lessening environmental impact. An essential objective is converting the entire pickup and delivery fleet to electric vehicles (EVs) by 2040, aspirating for 100% of FedEx Express Pickup and Delivery (PUD) vehicle purchases to be zero-tailpipe emission EVs by 2030. Innovative solutions are necessary for achieving carbon-neutral operations and for carbon capture and storage. Modernising facilities and aircraft and adopting 100% recyclable packaging further FedEx sustainability commitments.
Malaysia-Singapore First Cross-border EV Delivery Trial
The first cross-border delivery EV trial from Malaysia to Singapore by FedEx represents a significant advancement in sustainable logistics, aligning with Malaysia’s environmental goals.
This 406km trial, which focused on data collection and operational insights, signifies FedEx’s move toward reducing its carbon footprint through environmentally responsible operations, demonstrating a reduction in tailpipe CO2 emissions of approximately 100kg compared to diesel-powered vehicles.
The insights gained are vital for improving FedEx operational efficiency and customer experience, contributing to the broader goal of transitioning FedEx fleet to zero-emission vehicles by 2040 and underscoring its commitment to global sustainable logistics.
During the trial, we closely monitored the time and efficiencies associated with EV charging. For instance, it took 40 minutes on a 90kWh charger to achieve a 48% battery gain. Additionally, similar to our mobile phones, the EV charging rate decreases once the battery reaches 80% capacity — charging at approximately 82kWh below 80% and dropping to about 25kWh above this threshold.
This data is vital as it enables us to evaluate the efficiency of EVs in our fleet operations involving hundreds of PUD vehicles. Understanding these dynamics helps us prepare future plans to deploy EVs more effectively, including ensuring adequate access to charging stations. Ultimately, it paves the way for us to minimise our environmental footprint as we transition to more sustainable vehicle solutions.
Vehicle range analysis is equally crucial for selecting the most suitable EV model for our operations. We observed that EVs are more efficient at lower speeds, consuming less energy per km. Specifically, at speeds estimated below 70kph with ECO mode activated, the drop in EV On-Board Telematics matched actual distance travelled kilometre-for-kilometre.
Additionally, it is important to note that the range tested during the cross-border delivery EV trial represents the maximum distance achievable on a single charge when the vehicle is not carrying any cargo. We understand that the volume of packages loaded on the truck will impact the range, indicating that real-world operational conditions could lead to variations in these results. This insight is critical for FedEx as we plan for the future, enabling us to choose vehicles that align with the specific demands and operational realities of our fleet, ensuring efficiency and sustainability in our logistics network.
These efforts to integrate advanced digital solutions like FedEx Sustainability Insights (FSI) and practical data into our business are mirrored in our wider sustainability responsibilities. FSI is designed to support our customers’ sustainability goals by providing them with detailed environmental data on their shipments moving through the FedEx network, enabling businesses, such as major global manufacturers in South-East Asia, to measure impact and implement data-driven environmental initiatives.
The commitment to achieve vehicle electrification, fuel conversation, investing in energy efficiency initiatives and RE, and offering end-to-end sustainability for customer supply chains through data and packaging solutions are all in harmony with Malaysia’s 2050 sustainability ambitions, aiming to transform the country into a green and tech-centric economy.
This highlights the logistics sector’s integral role in national and global environmental stewardship. Through shared commitment to green practices and responsible business operations, the logistics industry is setting new standards in driving a sustainable transformation for Malaysia and beyond.
- Woon Tien Long is the MD of FedEx Malaysia.
Source: The Malaysian Reserve
