How digital should help companies accelerate the low-carbon transition of transportation

Vague
Freight, it is obvious, weighs heavily on global warming. However, beyond a few symbolic actions related to clean engines, few companies manage to take concrete and effective action to reduce their greenhouse gas (GHG) emissions. Why is this? There are many obstacles, but many of them can be overcome thanks to digital technology.

We could go back at length to the role of freight transport in global warming. We know that it accounts for about 10% of global emissions. More worrying still, the trajectory is in all likelihood upward, despite increasingly low-emission motorizations. This is the combined effect of e-commerce and its fragmented last-mile flows as well as the lengthening of supply chains. On this last point, the COVID crisis has temporarily halted the phenomenon, but we should not be under any illusions.

What are the options for getting out of this situation? Many of them are undoubtedly political, but this is not what we are interested in. At the company level, we already know that technical advances in vehicles will not be enough. The subject is urgent, and it would be irresponsible to wait for a miracle solution to appear and/or become economically viable.

The key to low-carbon transport is with the principals… under certain conditions.

In fact, most of the levers are on the side of the companies giving the orders. On the one hand, as customers, they have a certain incentive power with their transport providers. On the other hand, this does not mean, however, that they should offload their responsibilities to their service providers. In fact, shippers are, along with any 3/4PLs working on their behalf, the only ones who, in principle, have an overall view of their transportation activities-and their environmental performance.

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It is this vision that is essential for making the right observations and making the right decisions. However, this is all very theoretical. In reality, companies that give orders are rarely able to take advantage of this “privileged” position. For a long time, it was due to a lack of willpower. But with the widespread awareness of global warming – and all the implications it has on customer expectations in particular – this is less the case.

In reality, it is now the means, and in particular the tools, that are the problem. While technical progress is obviously not the solution to all problems, we will see that a good part of them can be solved by digitization in the right way.

Provided, however, that the digital solutions that propose to take up the challenge do so within a constrained budgetary framework. Indeed, make no mistake about it, good intentions, however sincere they may be, may come up against very tight budgets in companies. The current period, unfortunately, is forcing companies to cut costs. An innovative, efficient and simple to use but expensive tool might not be very successful…

The neverending challenge of transport data

The first subject, which comes up systematically when we talk about transport optimization, is that of data. Of course, to be able to control transport emissions, it is necessary to be able to calculate these emissions. This is a delicate task. For the calculation to correspond to a tangible minimum reality, many variables must be included. What mode of transport is used? What type of engine? How far is it traveled? To this, we must add the transport segment: messaging? Consolidation? LTL ? Express ? From these segments emerge various operating schemes. In short, the calculation of GHG emissions from transport is like transport itself: complex.

Moreover, it is well known that transport data is generally of poor quality, unreliable and very heterogeneous due to a wide variety of tools. Finally, this data is most often fragmented, i.e., it is largely produced by transport operators – transport being, of course, a largely subcontracted activity.

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Of course, the carriers could do the calculation themselves, as they are closest to the physical service. Moreover, in France, they have a legal reporting obligation which, in theory, should solve the problem. Unfortunately, due to divergent methodologies and nomenclatures, we once again find ourselves at the end of the chain with heterogeneous data that is neither consolidatable nor comparable as it stands.

To meet this double challenge – overcoming the complexity of flows and continuously processing unusable data – requires specific calculation tools. They must be able to standardize heterogeneous data, but also to integrate all the subtleties mentioned above – mode, motorization, segment, pattern, distances traveled, etc. In many cases, since the information is held by transporters and not necessarily accessible, the tool must be able to model certain factors, such as transport networks, precisely – which also contributes to their homogenization.

Understanding, managing and analyzing GHG emissions: indispensable

Once the data has been standardized and consolidated, it must be restored in an appropriate manner, to allow both its management and analysis. The objective here is twofold. On the one hand, it is a matter of obtaining a snapshot of the emissions and the various factors at source – and, of course, to be able to follow the evolution of this snapshot in order, for example, to ensure that it is in line with its reduction objectives.

On the other hand, the primary objective is to analyze its environmental performance in order to make the right observations. It should be remembered that without these observations, it is impossible to set realistic and ambitious objectives and, above all, to identify the right paths to follow to achieve them. This means being able to filter the data in an appropriate manner in order to isolate and zoom in on all the key components of “carbon” performance. Which carrier is the biggest contributor? Which transport segment? For which site of departure? Which day of the week? What is the reason for this?

It is in the form of dynamic dashboards that the information will be most usable. Here again, technology – in this case business intelligence and/or dataviz tools – must be enriched with business expertise. You need to identify the right indicators, the right filters… Nothing very different when it comes to managing costs or quality of service, although there is one important difference: know-how in terms of transport GHG emissions is still much less developed within companies.

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Driving the low-carbon transition in transport: impossible without simulation

Once the activity has been well controlled and the most promising avenues for reduction identified, a decision-maker will unfortunately still find himself quite deprived. Indeed, a path is no more than that until its potential effects have been minimally anticipated – especially on a subject as little known as reducing the carbon impact of transport.

As such, simulation of change is key. In order to engage in structural optimization – changing the carrier, the transport segment, the departure site – certain information is required. Is this optimization really the best available to me? And is it really worth it, in other words, how much will it reduce my GHG emissions?

Here again, the implications in terms of data and models are immense, since it is not only a question of making the existing available, but also of “predicting” the alternative, taking into account the need and shipping profiles, and above all comparing this alternative with others.

In other words, it is impossible for a company to take concrete, thoughtful and concerted action on GHG emissions from transportation without having powerful digital tools at its disposal. These must imperatively cover the triptych described above: calculation, piloting and simulation. They must do so in a context that is doubly complicated: climate emergency and economic crisis. So we need to move quickly – which excludes the deployment times of 6 months or more that can be seen for some solutions – for a reasonable budget – companies cannot currently devote tens of thousands of euros a year to this subject. The necessary technology and expertise exists. All that remains is to combine the two under the right conditions.