MEASURES TO ABATE GREEN HOUSE GAS EMISSIONS IN LOGISTICS COMPANIES

MEASURES TO ABATE GREEN HOUSE GAS EMISSIONS IN LOGISTICS COMPANIES Uwe, Clausen Simon, Deymann Univ.-Prof. Dr.-Ing. Dipl.-Logist. Chair of Transportation Systems and Logistics Chair of Transportation Systems and Logistics Dortmund, Germany Dortmund, Germany clausen@iml.fhg.de deymann@vsl.mb.uni-dortmund.de Martin, Schmied Jörg, Friedrichs Dipl.-Ing. Diplom - Betriebswirt Öko-Institut e.V. Deutsche Post World Net Berlin, Germany Bonn, Germany m.schmied@oeko.de joerg.friedrichs@deutschepost.de Abstract Within the regulations of the Kyoto Protocol and EU burden sharing, Germany has agreed to reduce Green House Gas (GHG) emissions by 21 % from 2008 to 2012 compared to the 1990 emission level. In contrast to other sectors, the level of GHG emissions rose slightly in the transportation industry. This was mainly due to road transport and in particular caused by the high level of growth in Courier, Express and Parcel services (CEP services) (MacLeod, 2001). The trends toward outsourcing of transport, the increase of e-commerce as well as the gradual industrial integration within Europe make further growth of the market likely (Verron et al., 2004; Petermann, 2001). As a result, the GHG emissions in the logistics sector have to be reduced by means of various technical and non-technical measures. The project “Measures to abate GHG emissions of stationary and mobile processes in logistics companies using the example of Deutsche Post World Net (StaMoLo)” is co-funded by the German Federal Ministry of Education and Research (BMBF). It will develop an approach for a cost-efficient strategy to abate GHG emissions of CEP service providers. The project’s basic approach is a status quo analysis of the GHG emissions of DHL Parcel Germany. The primary objective of the cost-efficiency strategy is to derive abatement measures, which are realisable and prove to have an ecological and economical benefit. For the first time, stationary and mobile logistics processes will be considered equally in an integrative approach. This is important since relevant quantities of emissions are not only caused by transportation, but also by handling processes in the CEP terminals. To compare possible abatement measures and broaden the decision-making process, eco-efficiency analysis is used. The project pursues the goal of making a contribution to the processes in the CEP sector to reduce GHG emissions by identifying win-win solutions with both an improved ecological and economic outcome. In this way, the project will not only lead to environmental improvements, but will also make a contribution to the innovation process and the competitiveness of the CEP sector. 1. Introduction From 1990 - 2005, GHG emissions were reduced by approximately 19 % in Germany. In contrast to other sectors, the level of GHG emissions arising from transport rose slightly between 1990 and 2005 (+1 %) mainly due to road transport (Schmied et al., 2007). In the EU the total GHG emissions of the transport sector have actually increased by 26 % during the period of 1990 - 2004. Due to this trend it is a high priority issue to take action on the reduction of GHG emissions from transports (Mantzos and Capros, 2006; EEEA, 2006). There are three possible approaches to decrease GHG emissions in the supply chain: avoidance, reduction and offsetting (Ody, 2007). From a long-term perspective offsetting is the least effective method. Reduction helps to a limited extent, but “avoidance” should be the generally preferred approach, also for the StaMoLo project. This article is divided into five sections. The project’s approach is a status quo analysis of the GHG emissions of DHL Parcel Germany, presented in section two. The primary objective of the cost-efficiency strategy is to derive feasible eco-efficient abatement measures that are introduced in section three. While the eco-efficiency analysis is described in section four, the final section compares two actions using the methodology. 2. Green House Gas emissions of DHL Parcel Germany Deutsche Post World Net (DPWN) is the world's leading logistics company with more than 500,000 employees. As a result of a strategic project in 2005, the DPWN is now aiming at reducing GHG emissions their road fleet in Europe by 5 % below the given 1990 baseline emissions by the end of 2012 (DPWN Sustainability Report 2006). The subject of StaMoLo is an investigation of options to abate GHG emissions within the DHL Parcel Germany network. Figure 1 shows the process chain from pickup to delivery that will be focused on. Figure 1. Process chain of DHL Parcel Germany The ‘day definite’ parcel network consists of 33 hubs. Owing to the volume they are linked directly or via regional hubs (Clausen et al., 2005). The process chain starts with pickup, using trucks or vans collecting within the local range starting from midday. Afterwards the picked-up parcels are either taken directly to the respective outbound hub or are consolidated in delivery depots and consolidation points in Germany from where they are forwarded to the next outbound hub. When the picked-up parcels arrive at the outbound hub, they are either sorted to the other 32 hubs or allocated to local delivery tours, which are assigned to the outbound hub. Outbound sorting is done by delivery addresses. Linehaul transport between the 33 hubs is conducted overnight, using road based transportation and railway links, the latter for a few selected destinations. After the inbound sort, road based depot feeders leave the inbound hub in the early morning to carry all parcels to the corresponding delivery depots (including joint delivery areas with mail). Shortly afterwards, vans leave the depots to delivery the parcels to the recipients. The described processes cause different shares in the total amount of CO2-emissions and costs as shown in Figure 2. This distinction is necessary to identify the most effective levers to abate GHG emissions. relative share of the stationary and relative share of the stationary and mobile processes in CO2- emissions for mobile processes in costs for parcel parcel delivery delivery mobile: mobile and stationary: pickup mobile: delivery delivery Overhead mobile: stationary: pickup hub 1 mobile: hub-to-hub linehaul stationary: hub 2 stationary: Mobile and stationary: delivery depot hub-to-hub linehaul (StaMoLo, 2007) (ten Hompel and Grün, 2002) Figure 2. Relative share in C02-emissions and costs for DHL parcel delivery in Germany Every stationary process accounts for approximately one-third of the total stationary CO2- emissions caused by DHL’s parcel operations in Germany. Due to the variation in distances and truck utilization, mobile processes, on the other hand, can vary significantly. Mobile and stationary processes combined cause CO2-emission of approx. 0.6 – 0.7 kg per parcel on average (Deutsche Post World Net, 2007). This corresponds to around 0.25 litres of diesel. As figure 2 shows, more than 50 % originate from the delivery. Furthermore, the costs of the remaining three processes are distributed equally. 3. Measures to abate Green House Gas emissions The primary objective regarding the cost efficiency strategy and the subsequent implementation plan is to derive ecologically and financially beneficial abatement measures that can be realised in the near future. The network quality, meaning the combined characteristic of transport costs and service quality must persist (Clausen, 2004). Possible measures to abate GHG emissions are given below. Table 1.