Decarbonising the Maritime Supply Chain: Assessing the Contribution of Shippers

Most of the research so far undertaken on the potential for decarbonising shipping adopts a supply-side perspective. It focuses on ship design issues and the operating practices of shipping lines. The proposed research aims to complement this research by examining the role that the users of shipping services (i.e. the demand-side) can play in the process. These shippers (or cargo owners) have an increasing interest in measuring and reducing total CO2 emissions from their global supply chains, most of which contain at least one deep-sea movement. Most lack detailed information about energy consumption and emissions across these chains and can exert only a limited amount of leverage on the carbon intensity of the vessels. If one extends the boundary of the carbon accounting beyond the ship to include port operations and transport feeder services, shippers' influence over this wider maritime system expands. Carbon emissions from this more broadly defined 'maritime supply chain' are the result of complex interactions between various stakeholders, including shippers, shipping lines, freight forwarders, port operators and carriers providing port feeder services. A conceptual framework has been constructed which shows how the inter-relationship between the quantity of containerised goods exported / imported and shipping-related CO2 emissions pivots on a series of eight key parameters. Shippers can influence, to varying degrees, six of these parameters through their choice of deep-sea and feeder mode and carrier, the structure of their maritime supply chains, consignment routing, container loading and the scheduling of container movements. (This leaves energy efficiency and the carbon intensity of the energy used on feeder and deep-sea services outside their area of influence.) The main objectives of the research are to analyse the extent to which the logistical decisions of shippers currently affect the carbon intensity of maritime supply chains and consider how the companies could play a more active role in the decarbonisation of these chains, both individually and collaboratively.The data required for this analysis will be obtained from four focus group discussions, around fifty company interviews and a series of detailed case studies within the Scotch whisky industry, one of the UK's main export sectors which relies heavily on deep-sea container services and is strongly committed to decarbonising its global supply chain. The research will model the potential CO2 savings across the maritime supply chain from six decarbonisation initiatives either led or supported by shippers: switching to lower carbon transport modes and carriers, improving container loading, rerouting of containers to minimise CO2 emissions, reconfiguring supply chains to exploit empty backload capacity on sea container services and adjusting logistical systems to accommodate longer maritime transit times. It will also analyse, at a company level, the sensitivity of these decarbonisation initiatives to varying shadow prices for carbon. The research will inform the development of future government policy on low carbon shipping and provide guidance to shippers on the measurement and reduction of CO2 emissions across their deep-sea supply chains.

Impact Summary The main benefit of the project will lie in improving our understanding of the logistical context for future decarbonisation initiatives in the shipping sector. It will reveal the opportunities for extending these initiatives beyond the vessel and maritime operating practices to involve other stakeholders in the maritime supply chain, particularly shippers. It will also examine and model the logistical trade-offs that will have to be made on the landward side of this supply chain to cut CO2 emissions or at least restrain their growth. The results of this work should be of particular interest to government and its independent advisory agencies, such as the Committee on Climate Change and Commission for Integrated Transport, in their formulation of future climate change policy for the transport sector. The government's decision to include international shipping services in future CO2 emission targets, makes British shippers' use of these services a very pertinent area of research. Direct benefit from the project should accrue to those companies and organisations participating in the focus groups, interviews and case studies. They will be provided with summaries of results and, in the case of those supplying the necessary operational and economic data, company-specific feedback on decarbonisation opportunities and costs. The offer of such feedback should help to incentivise participation. More general guidance will also be offered to shippers on the most cost-effective ways of measuring and reducing CO2 emissions from their deep-sea supply chains. This could include examples of best-practice among the sample of shippers taking part in the research. The dissemination of this advice and best-practice case studies could be undertaken in collaboration with major trade associations representing shippers' interests with which we have close links, such as the Freight Transport Association, European Shipper's Council, the Scotch Whisky Association, the Institute of Grocery Distribution and the European Chemical Industry Council (Cefic). Shipping lines, freight forwarders, port operators and rail / road container carriers will also benefit from gaining a deeper insight into the factors constraining decarbonising at the shipper end of the maritime supply chain. Advice will also be provided to these stakeholder groups on ways of easing these constraints. This may facilitate the development of carbon reduction programmes across the chain. Such supply-chain-wide initiatives will also be encouraged by the focus group discussions and dissemination workshops. These industry forums will create valuable networking opportunities for managers and officials with responsibility for environmental improvement and carbon reduction in their organisations.