AAFA International Sourcing Customs and Logistics Integration May 6, 2010 Lee Kindberg Director, Environment Transportation and Sustainability
Today, a single ship can deliver thousands of tons of cargo for many customers to dozens of ports. But it was not always this way Slide 2
Diesel engines have replaced wind power Slide 3
Containers have replaced break bulk cargo handling Slide 4
Containers are standard sizes: 20, 40 or 45 A 40-foot container is the size of a city bus. It can hold... One million Legos 10,000 Nike Shoes 1,500 DVD Players Slide 5
CO 2 NOx PM SOx H 2 O Burning hydrocarbon fue produces Carbon Dioxide Slide 6
Vessels are becoming more energy efficient, so are reducing emissions CO2 relative emissions - estimation for entire fleet Due to Technologies Operations Speeds Vessel size g CO2 / (TEU x Km) 105 100 95 90 85 80 75 70 2002 2003 2004 2005 2006 2007 2008 2009 Slide 7
Initiatives to reduce vessel environmental impacts Waste Heat Recovery System (10%*) Voyage Efficiency System (VES) (1%*) Electronically controlled engine (0,5%*) Adjusting main engines to economical speed (1%*) QUEST: Low energy reefer containers (0,5%*) Trim tests for all classes of vessels (1%*) Ballast water optimization Antifouling paint Maintenance of hull and propeller (1.5%*) Slide 8
Vessel CO 2 emissions Hong Kong to LA: <1 tonne CO 2 per TEU Basis: 11,855 km Hong Kong to LA 2008 Data for Asia to LA: CO 2 Emission factor 75.4 g/teu*km 75.4 g/teu.km x 11,855km x 1tonne 1,000,000g =.89 tonnes/teu or 1.8 tonnes/ffe Slide 9
A Ton of Carbon Fuel a truck with 2 drums of diesel fuel (110 gal.) Truck travels 600 to 900 miles Generates 1 ton CO 2 Slide 10
Ocean shipping is the most energy- efficient mode of transportation Transport 1 pair of shoes from China to North Europe China 3700 g CO 2 372 g CO 2 10x more North Europe 0 Km 20 Km Shipping emits <4% of the world s CO 2 emissions while transporting 90% of the worlds goods Slide 11
CO 2 Emissions by Mode of Transportation Air > 1,500 km (Boeing 747-400) 5,582 Truck (Global Average) Rail diesel Rail electric (Global average) Ocean (Avg. ML-owned vessels) 472 205 176 84 0 1,000 2,000 3,000 4,000 5,000 6,000 grams of CO 2 emitted per (TEU.km) Ocean shipping has the lowest environmental impact for long distance transportation. Slide 12
Reducing carbon footprint by routing Istanbul to Belgium Compare CO 2 emitted per container all truck sea and truck transportation 25% 1300 kg of CO 2 Inland dest. Porthandling dest. Transportation Porthandling org. 980 kg CO 2 Ocean Transportation Trucking Transportation Slide 13
Factors determining supply chain CO 2 footprint: Mode of transportation Energy efficiency Routing available Distance traveled by each mode Cargo / container weight and volume How is the footprint calculated and reported? WRI distance-based protocol Clean Cargo Working Group has added definition to this approach Carbon analysis Generic logistics and carbon accounting software Carrier-specific tools (CarbonCheck, Carbon Dashboard ) Slide 14
Case study: Nike Visibility on supply chain carbon emissions to help accomplish 30% reduction target for 2020 15 15
Greener can also be cheaper Case studies at www.damco.com CarbonCheck projects with Boots, a leading international chain of pharmacy and health and beauty stores. Since 2004, focus on these analyses have enabled Boots to reduce CO2 emissions by 29% and reduce logistics costs by 21% in their inbound supply chain from Asia to their distribution centre in England. It goes to show that if you review and optimize your supply chain end-to-end from a green perspective, great savings can be made. -- Erling Johns Nielsen Supply Chain Development Team Maersk Logistics Slide 16
What we ve learned 1. Use a consistent calculator approach Best if agreed-upon by whole industry Clean Cargo Working Group (BSR) 2. Transportation footprints can and have been reduced 3. Remember: It s the total lifecycle footprint that matters Transportation is often a small part of the total. You have to do the full analysis to see the big picture 4. Focus on improvements and incorporating CO 2 into business decisions 5. Opportunity: reduce both CO 2 emissions and costs Slide 17
Thank you Contact Information: Lee Kindberg Director, Environment 704-571-2693 NAMENVIRO@maersk.com Slide 18