Policies and investments for intermodal, low-carbon, efficient and resilient freight transport and logistics
Compendium of interventions to deliver quick wins and initiate long-term transformations
To translate the vision of the Manifesto for intermodal, low-carbon, efficient and resilient freight transport and logistics into actionable steps, SLOCAT and the Kühne Climate Center have embarked on the development of a compendium of policy and financing interventions.
This compendium identifies complementary 'best value' policies and investment approaches to deliver quick wins and initiate long-term transformations on freight transport and logistics.
Leveraging collective intelligence and best practices from stakeholders, it aims to steer global discussions and enable multi-stakeholder actions.
Explore the interventions
Ambitious, science-based targets, regulations, policies, standards
Economics, finance and investments
Integrated planning and operations
Mandatory, standardised and transparent tracking, reporting and evaluation
Data, research, technology, innovation and capacity building
The suggested interventions are highly complementary and should be implemented in a comprehensive and integrated manner to maximise their effectiveness. For example, establishing carbon dioxide emission reduction targets on freight transport and implementing regulations to achieve 100% of new sales of zero-emissions medium- and heavy-duty vehicles by 2040 are mutually-reinforcing interventions. Technological interventions, on the other hand, are closely related to operational gains and, though to a lesser degree, can also contribute to regulatory and economic improvements. While not all listed interventions can be implemented within a short time-frame, their pursuit can result in significant improvements especially when synergies are exploited between them.
SLOCAT and the Kühne Climate Center, together with ALICE Alliance for Logistics Innovation through Collaboration in Europe, CONCITO, IDDRI, International Transport Workers’ Federation, Smart Freight Centre and UIC International Union of Railways co-initiated the manifesto.
The compendium of interventions benefitted from inputs from the following organisations:
Asociación Sustentar, C40 Cities, Development Bank of Latin America (CAF), CALSTART, European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT), ClimateWorks Foundation, CONCITO, Federation of East African Freight Forwarders Associations (FEAFFA), Institute for Sustainable Development and International Relations (IDDRI), Islamic Development Bank, Ministry of Transport of Kenya, KIFWA Ke, Kühne Logistics University, Ministry of Climate Change of Pakistan, Northern Corridor Transit and Transport Coordination Authority, POLIS Network, REN21, Smart Freight Centre, Ministry of Transport and Highways of Sri Lanka, Sustainable Transport Africa, Trans-Consult, UIC International Union of Railways, United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), World Bank and World Resources Institute.
Ambitious, science-based targets, regulations, policies, standards
-
Problem statement
-
Freight transport accounted for 42% of global transport CO2 emissions in 2019 with a near complete dependence on fossil fuels. These emissions are likely to increase due to the growing demand for deliveries and the transport of goods, as well as the shift towards air freight. If current trends continue, freight transport activity is projected to double by 2050 compared to 2019 levels. As a result, CO2 emissions from freight transport would be 22% higher in 2050 than in 2015.[1] Current transport policies and measures are insufficient to put transport on a decarbonisation pathway in line with the 1.5°C target of the Paris Agreement. Achieving this goal would require the CO2 emissions intensity of trucks to be reduced by more than 94%.[2] Besides the need to tackle its climate footprint, dedicated interventions will be crucial to safeguard the resilience of freight transport and logistics. The negative impacts of transport disruptions on a country’s connectivity and development tend to surpass the significant financial losses in transport assets.
[1] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
[2] International Energy Agency (IEA) (2023), “Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach”, https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach -
Operating context
-
The access to markets and goods is a major enabler of socio-economic prosperity. Yet, long-distance road freight transport and shipping are regarded as ‘hard-to-abate’ sectors. Besides a growing demand, the lack of regulations and the slow pace of operational and technological innovation are key reasons for the continued increase in freight transport emissions. In parallel to being a significant contributor to climate change, the freight transport sector has shown to be particularly vulnerable to its consequences. Extreme weather events are very disruptive to transport systems at both the micro and macro scales with implications for the economy, environment, health and society.[3] Policies, regulations and standards, in turn, have a paramount role in setting the necessary framework for an efficient and resilient decarbonised freight transport system.
[3] Gössling, S., Neger, C., Steiger, R. et al. (2023), “Weather, climate change, and transport: a review”, Nat Hazards 118, 1341–1360, https://doi.org/10.1007/s11069-023-06054-2
-
Opportunity
-
Intermodal, low-carbon, efficient and resilient freight transport solutions are within reach but require support through ambitious, science-based targets, regulations, policies and standards. Despite freight transport’s critical role, it receives limited attention in current policies and standards – an opportunity to set stronger science-based targets and policies. Establishing an enabling environment is essential for scaling up resilient, efficient freight transport and shifting to low-carbon modes. Additionally, providing adequate climate finance to low- and middle-income countries (LMICs) for mitigation and adaptation will allow them to leapfrog to the envisioned freight transport and logistics system.
Freight transport accounted for 42% of global transport CO2 emissions in 2019 with a near complete dependence on fossil fuels. These emissions are likely to increase due to the growing demand for deliveries and the transport of goods, as well as the shift towards air freight. If current trends continue, freight transport activity is projected to double by 2050 compared to 2019 levels. As a result, CO2 emissions from freight transport would be 22% higher in 2050 than in 2015.[1] Current transport policies and measures are insufficient to put transport on a decarbonisation pathway in line with the 1.5°C target of the Paris Agreement. Achieving this goal would require the CO2 emissions intensity of trucks to be reduced by more than 94%.[2] Besides the need to tackle its climate footprint, dedicated interventions will be crucial to safeguard the resilience of freight transport and logistics. The negative impacts of transport disruptions on a country’s connectivity and development tend to surpass the significant financial losses in transport assets.
[1] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
[2] International Energy Agency (IEA) (2023), “Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach”, https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach
The access to markets and goods is a major enabler of socio-economic prosperity. Yet, long-distance road freight transport and shipping are regarded as ‘hard-to-abate’ sectors. Besides a growing demand, the lack of regulations and the slow pace of operational and technological innovation are key reasons for the continued increase in freight transport emissions. In parallel to being a significant contributor to climate change, the freight transport sector has shown to be particularly vulnerable to its consequences. Extreme weather events are very disruptive to transport systems at both the micro and macro scales with implications for the economy, environment, health and society.[3] Policies, regulations and standards, in turn, have a paramount role in setting the necessary framework for an efficient and resilient decarbonised freight transport system.
[3] Gössling, S., Neger, C., Steiger, R. et al. (2023), “Weather, climate change, and transport: a review”, Nat Hazards 118, 1341–1360, https://doi.org/10.1007/s11069-023-06054-2
Intermodal, low-carbon, efficient and resilient freight transport solutions are within reach but require support through ambitious, science-based targets, regulations, policies and standards. Despite freight transport’s critical role, it receives limited attention in current policies and standards – an opportunity to set stronger science-based targets and policies. Establishing an enabling environment is essential for scaling up resilient, efficient freight transport and shifting to low-carbon modes. Additionally, providing adequate climate finance to low- and middle-income countries (LMICs) for mitigation and adaptation will allow them to leapfrog to the envisioned freight transport and logistics system.
What are ‘best value’ interventions?
Freight transport CO2 emission targets, supported by comprehensive actions in national transport strategies, Nationally Determined Contributions and Long-Term Low-Emission Development Strategies.
- Freight transport CO2 emissions could be reduced by 76% below 2020 levels by 2050 with policies that support higher operational efficiencies, optimised routing and asset sharing, freight consolidation, enhanced collaboration in supply chains, shifts to more environmentally-efficient modes such as railways or inland waterways, standardisation and the deployment of low-carbon solutions.[4]
Examples
- New Zealand aims to reduce freight transport CO2 emissions by 35% by 2035 compared to 2019 levels.[5]
- The Science-Based Targets initiative (SBTi)[6] for Transport provides companies with a framework to set and achieve emission reduction targets in line with climate science, specifically tailored to reduce carbon emissions in the transport and logistics sector.
Who needs to act?
- National and subnational governments – set ambitious CO2 emission reduction targets for freight transport; provide policies and legislation; implement strict procurement requirements for public fleets and freight operations; engage in joint public procurement practices to allow for cost and expertise sharing among public authorities while helping to boost demand and supply of low carbon solutions.
- Companies – comply with ambitious targets and lobby governments to enact the necessary frameworks and regulations
- Freight vehicle manufacturers – comply with ambitious targets, shift R&D and manufacturing efforts towards low-carbon technologies
- [4] International Transport Forum (ITF) (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023
- [5] New Zealand Ministry for the Environment (2022), “Towards a productive, sustainable and inclusive economy: Aotearoa New Zealand's first emissions reduction plan. Chapter 10: Transport”, https://environment.govt.nz/publications/aotearoa-new-zealands-first-emissions-reduction-plan/transport/
- [6] Science Based Target Initiative (2024), “About us”, https://sciencebasedtargets.org/about-us
Freight transport CO2 emission targets, supported by comprehensive actions in national transport strategies, Nationally Determined Contributions and Long-Term Low-Emission Development Strategies.
- Freight transport CO2 emissions could be reduced by 76% below 2020 levels by 2050 with policies that support higher operational efficiencies, optimised routing and asset sharing, freight consolidation, enhanced collaboration in supply chains, shifts to more environmentally-efficient modes such as railways or inland waterways, standardisation and the deployment of low-carbon solutions.[4]
Examples
- New Zealand aims to reduce freight transport CO2 emissions by 35% by 2035 compared to 2019 levels.[5]
- The Science-Based Targets initiative (SBTi)[6] for Transport provides companies with a framework to set and achieve emission reduction targets in line with climate science, specifically tailored to reduce carbon emissions in the transport and logistics sector.
Who needs to act?
- National and subnational governments – set ambitious CO2 emission reduction targets for freight transport; provide policies and legislation; implement strict procurement requirements for public fleets and freight operations; engage in joint public procurement practices to allow for cost and expertise sharing among public authorities while helping to boost demand and supply of low carbon solutions.
- Companies – comply with ambitious targets and lobby governments to enact the necessary frameworks and regulations
- Freight vehicle manufacturers – comply with ambitious targets, shift R&D and manufacturing efforts towards low-carbon technologies
- [4] International Transport Forum (ITF) (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023
- [5] New Zealand Ministry for the Environment (2022), “Towards a productive, sustainable and inclusive economy: Aotearoa New Zealand's first emissions reduction plan. Chapter 10: Transport”, https://environment.govt.nz/publications/aotearoa-new-zealands-first-emissions-reduction-plan/transport/
- [6] Science Based Target Initiative (2024), “About us”, https://sciencebasedtargets.org/about-us
Policies and regulations to promote the roll-out of a smart and interoperable recharging and refuelling infrastructure for alternatively fuelled freight transport vehicles.
Policies to encourage slow steaming and wind-assisted propulsion for shipping.
Targets to phase out internal combustion engine vans and trucks and achieve sales of new electric or fuel cell electric freight vehicles as follows:
- 30% of medium- and heavy-duty trucks by 2030.[7]
- 100% of vans from 2035 in leading markets and globally from 2040.
- 100% of all new medium- and heavy-duty trucks by 2040.[8]
Efficiency standards to reduce the carbon intensity of fuels, while also exploring zero emission fuel options and renewable energy.
- Until 2030 biofuels are expected to have the strongest mitigation potential among major transport options.[9] After 2030 electricity and hydrogen are projected to emerge as the key solutions.[10]
- When it comes to biofuels, the focus has been on advanced biofuels that are based on non-food biomass/feedstocks, and stand to result in at least 50% less life-cycle GHG emissions.[11]
Examples
- California Advanced Clean Trucks Regulation mandates the gradual transition to 100% zero-emission truck sales by 2045, signalling the shift away from internal combustion engine vehicles in the freight transport sector.[12]
- European Union (EU)’s ‘Fit for 55’ sets ambitious CO2 emission reduction targets, including the phase out of the sales of new internal combustion engine vehicles by 2035 for cars and 2040 for trucks, while promoting alternative fuels and electrification.[13]
Who needs to act?
- Governments – provide electric vehicle roadmaps; secure infrastructure investments and incentives for alternative modes; set phase-out targets.[14]
- Freight vehicle manufacturers – adjust industry roadmaps and develop alternative vehicle engines; phase out the production of internal combustion engines in timely manner.
- [7] WRI (2023), “Systems Change Lab”, https://systemschangelab.org/transport/transition-zero-carbon-cars-trucks-and-buses#indicator-424
- [8] CALSTART (2023), “Global Memorandum of Understanding on Zero-emission Medium- and Heavy-duty Vehicles”, https://globaldrivetozero.org/mou-nations/
- [9] IPCC (2022), “Summary for Policymakers”, In: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the IPCC. DOI: 10.1017/9781009157926.001.
- [10] IEA (2023), “Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach”, https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach
- [11] ScienceDirect (2024), “Advanced Biofuels Production”, https://www.sciencedirect.com/topics/engineering/advanced-biofuels-production
- [12] California Air Resource Board (2024), “Advanced Clean Truck”, https://ww2.arb.ca.gov/our-work/programs/advanced-clean-trucks
- [13] European Council (2024), “Fit for 55”, https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55/#:~:text=The%20European%20climate%20law%20makes,EU%20climate%2Dneutral%20by%202050.&text=What%20is%20the%20Fit%20for%2055%20package%3F
- [14] McKinnon, A.C. and J. Edwards (2015), “The role of government in promoting green logistics”. In Green Logistics: Improving the Environmental Sustainability of Logistics, 3rd ed.; McKinnon, A.C., Cullinane, A., Whiteing, A., Browne, M., Eds.; Kogan Page: London, UK. https://gc.scalahed.com/recursos/files/r161r/w25826w/McKinno_S1.pdf#page=354
Policies and regulations to promote the roll-out of a smart and interoperable recharging and refuelling infrastructure for alternatively fuelled freight transport vehicles.
Policies to encourage slow steaming and wind-assisted propulsion for shipping.
Targets to phase out internal combustion engine vans and trucks and achieve sales of new electric or fuel cell electric freight vehicles as follows:
- 30% of medium- and heavy-duty trucks by 2030.[7]
- 100% of vans from 2035 in leading markets and globally from 2040.
- 100% of all new medium- and heavy-duty trucks by 2040.[8]
Efficiency standards to reduce the carbon intensity of fuels, while also exploring zero emission fuel options and renewable energy.
- Until 2030 biofuels are expected to have the strongest mitigation potential among major transport options.[9] After 2030 electricity and hydrogen are projected to emerge as the key solutions.[10]
- When it comes to biofuels, the focus has been on advanced biofuels that are based on non-food biomass/feedstocks, and stand to result in at least 50% less life-cycle GHG emissions.[11]
Examples
- California Advanced Clean Trucks Regulation mandates the gradual transition to 100% zero-emission truck sales by 2045, signalling the shift away from internal combustion engine vehicles in the freight transport sector.[12]
- European Union (EU)’s ‘Fit for 55’ sets ambitious CO2 emission reduction targets, including the phase out of the sales of new internal combustion engine vehicles by 2035 for cars and 2040 for trucks, while promoting alternative fuels and electrification.[13]
Who needs to act?
- Governments – provide electric vehicle roadmaps; secure infrastructure investments and incentives for alternative modes; set phase-out targets.[14]
- Freight vehicle manufacturers – adjust industry roadmaps and develop alternative vehicle engines; phase out the production of internal combustion engines in timely manner.
- [7] WRI (2023), “Systems Change Lab”, https://systemschangelab.org/transport/transition-zero-carbon-cars-trucks-and-buses#indicator-424
- [8] CALSTART (2023), “Global Memorandum of Understanding on Zero-emission Medium- and Heavy-duty Vehicles”, https://globaldrivetozero.org/mou-nations/
- [9] IPCC (2022), “Summary for Policymakers”, In: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the IPCC. DOI: 10.1017/9781009157926.001.
- [10] IEA (2023), “Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach”, https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach
- [11] ScienceDirect (2024), “Advanced Biofuels Production”, https://www.sciencedirect.com/topics/engineering/advanced-biofuels-production
- [12] California Air Resource Board (2024), “Advanced Clean Truck”, https://ww2.arb.ca.gov/our-work/programs/advanced-clean-trucks
- [13] European Council (2024), “Fit for 55”, https://www.consilium.europa.eu/en/policies/green-deal/fit-for-55/#:~:text=The%20European%20climate%20law%20makes,EU%20climate%2Dneutral%20by%202050.&text=What%20is%20the%20Fit%20for%2055%20package%3F
- [14] McKinnon, A.C. and J. Edwards (2015), “The role of government in promoting green logistics”. In Green Logistics: Improving the Environmental Sustainability of Logistics, 3rd ed.; McKinnon, A.C., Cullinane, A., Whiteing, A., Browne, M., Eds.; Kogan Page: London, UK. https://gc.scalahed.com/recursos/files/r161r/w25826w/McKinno_S1.pdf#page=354
Standards and regulations can support the resilience of physical infrastructure, networks, users, operators and organisations. Standards and regulations should include features such as redundancy, autonomy of components, collaboration, efficiency, adaptability and interdependence[15].
Example
- The United States’ National Freight Strategic Plan (NFSP)[16] aims to enhance the resilience, efficiency, and adaptability of the national freight transport system by addressing risks such as congestion, extreme weather, and supply chain disruptions.
Who needs to act?
- Governments – build efficient and resilient infrastructure and adequate services[17], share their strategies, policies and experiences to mainstream resilience in freight transport infrastructure and operations[18].
- Companies – develop resiliency strategies for their operations.
- [15] Ta, C., Goodchild, A. V. and K. Pitera (2023), “Structuring a Definition of Resilience for the Freight Transportation System”, https://www.urbanfreightlab.com/wp-content/uploads/2023/04/Structuring-a-Definition-of-Resilience-Freight.pdf
- [16] US Department of Transportation (2024), “National Freight Strategic Plan (NFSP)”, https://www.transportation.gov/freight/NFSP#:~:text=The%20National%20Freight%20Strategic%20Plan,strategies%20to%20achieve%20those%20goals
- [17] Ta, C., Goodchild, A. V. and K. Pitera (2023), “Structuring a Definition of Resilience for the Freight Transportation System”, https://www.urbanfreightlab.com/wp-content/uploads/2023/04/Structuring-a-Definition-of-Resilience-Freight.pdf
- [18] ESCAP (2023), “Ten Guiding Principles for Sustainable Freight Transport in Asia and the Pacific”, https://www.unescap.org/sites/default/d8files/event-documents/Feb28_10_Guiding_Principles_for_Sustainable_Freight_Transport.pdf
Standards and regulations can support the resilience of physical infrastructure, networks, users, operators and organisations. Standards and regulations should include features such as redundancy, autonomy of components, collaboration, efficiency, adaptability and interdependence[15].
Example
- The United States’ National Freight Strategic Plan (NFSP)[16] aims to enhance the resilience, efficiency, and adaptability of the national freight transport system by addressing risks such as congestion, extreme weather, and supply chain disruptions.
Who needs to act?
- Governments – build efficient and resilient infrastructure and adequate services[17], share their strategies, policies and experiences to mainstream resilience in freight transport infrastructure and operations[18].
- Companies – develop resiliency strategies for their operations.
- [15] Ta, C., Goodchild, A. V. and K. Pitera (2023), “Structuring a Definition of Resilience for the Freight Transportation System”, https://www.urbanfreightlab.com/wp-content/uploads/2023/04/Structuring-a-Definition-of-Resilience-Freight.pdf
- [16] US Department of Transportation (2024), “National Freight Strategic Plan (NFSP)”, https://www.transportation.gov/freight/NFSP#:~:text=The%20National%20Freight%20Strategic%20Plan,strategies%20to%20achieve%20those%20goals
- [17] Ta, C., Goodchild, A. V. and K. Pitera (2023), “Structuring a Definition of Resilience for the Freight Transportation System”, https://www.urbanfreightlab.com/wp-content/uploads/2023/04/Structuring-a-Definition-of-Resilience-Freight.pdf
- [18] ESCAP (2023), “Ten Guiding Principles for Sustainable Freight Transport in Asia and the Pacific”, https://www.unescap.org/sites/default/d8files/event-documents/Feb28_10_Guiding_Principles_for_Sustainable_Freight_Transport.pdf
Regional or national modal shift targets drive action. Modal share targets for 2030 and 2050 should be consistent with carbon neutrality by 2050. Shifting the transport of goods from road to electrified rail and inland water transport[19] constitutes one of the most cost-effective measures to reduce CO2 emissions from freight transport[20], while also offering to lower the external costs linked to accidents, air and noise pollution, congestion, and habitat damage.
- Can be rapidly implemented, if dedicated infrastructure (ports and rail) is available.
- Results in higher labour productivity of workers[21].
Example
- India strives to increase rail freight activity from 1.1 billion tonnes in 2017 to 3.3 billion tonnes by 2030 and raise rail freight’s share from 31% to 44% by 2051.[22]
- France established a target to reach 18% by 2030 and 25% by 2050 of rail freight.[23]
Example
- Governments – build competitive, efficient, well-connected railways and inland waterways through regional and/or subregional cooperation operationalising multimodal transport corridors; provide incentives for industries to shift freight transport to these modes.[24]
- Cargo owners – Change logistics organisations and lower transport service levels (time, costs, flexibility…) to support the consolidation of flows and facilitate modal shift (Quotes in comment).
- [19] Bullock, R., Lawrence, M. and J. Moody (2023), “Unlocking Green Logistics for Development”, Mobility and Transport Connectivity Series, World Bank, http://documents.worldbank.org/curated/en/099102423134510604/P1748631851e145c112a61483d1abea15143644fd1e1
- [20] McKinnon, A. C. and M. Petersen (2021), “Measuring Industry's Temperature: An Environmental Progress Report on European Logistics”, DOI: 10.13140/RG.2.2.32088.72961. https://www.researchgate.net/publication/348465509_Measuring_Industry%27s_Temperature_An_Environmental_Progress_Report_on_European_Logistics
- [21] McKinnon, A. C. (2024), “Capability Building for the Greening of Logistics”, Kühne Logistics University Hamburg, https://www.alanmckinnon.co.uk/uploaded/PDFs/Presentations/Capability%20building%20for%20greening%20logistics%20(Dar%20es%20Salaam%20conference%20%20McKinnon%20KLU)%20final.pdf
- [22] Business Standard (2024), “How Rail Freight is Powering India's Express Delivery Future”, https://www.business-standard.com/content/specials/how-rail-freight-is-powering-india-s-express-delivery-future-123121800925_1.html
- [23] Briand, Y., Combes, F., Nierat, P. and H. Waisman (2020), “How the Rail Freight Development Strategy can strengthen the sector’s ambition in France”, https://www.iddri.org/sites/default/files/PDF/Publications/Catalogue%20Iddri/D%C3%A9cryptage/202012-IB0620-EN-freight%20france.pdf
- [24] ESCAP (2023), “Ten Guiding Principles for Sustainable Freight Transport in Asia and the Pacific”, https://www.unescap.org/sites/default/d8files/event-documents/Feb28_10_Guiding_Principles_for_Sustainable_Freight_Transport.pdf
across borders
Regional or national modal shift targets drive action. Modal share targets for 2030 and 2050 should be consistent with carbon neutrality by 2050. Shifting the transport of goods from road to electrified rail and inland water transport[19] constitutes one of the most cost-effective measures to reduce CO2 emissions from freight transport[20], while also offering to lower the external costs linked to accidents, air and noise pollution, congestion, and habitat damage.
- Can be rapidly implemented, if dedicated infrastructure (ports and rail) is available.
- Results in higher labour productivity of workers[21].
Example
- India strives to increase rail freight activity from 1.1 billion tonnes in 2017 to 3.3 billion tonnes by 2030 and raise rail freight’s share from 31% to 44% by 2051.[22]
- France established a target to reach 18% by 2030 and 25% by 2050 of rail freight.[23]
Example
- Governments – build competitive, efficient, well-connected railways and inland waterways through regional and/or subregional cooperation operationalising multimodal transport corridors; provide incentives for industries to shift freight transport to these modes.[24]
- Cargo owners – Change logistics organisations and lower transport service levels (time, costs, flexibility…) to support the consolidation of flows and facilitate modal shift (Quotes in comment).
- [19] Bullock, R., Lawrence, M. and J. Moody (2023), “Unlocking Green Logistics for Development”, Mobility and Transport Connectivity Series, World Bank, http://documents.worldbank.org/curated/en/099102423134510604/P1748631851e145c112a61483d1abea15143644fd1e1
- [20] McKinnon, A. C. and M. Petersen (2021), “Measuring Industry's Temperature: An Environmental Progress Report on European Logistics”, DOI: 10.13140/RG.2.2.32088.72961. https://www.researchgate.net/publication/348465509_Measuring_Industry%27s_Temperature_An_Environmental_Progress_Report_on_European_Logistics
- [21] McKinnon, A. C. (2024), “Capability Building for the Greening of Logistics”, Kühne Logistics University Hamburg, https://www.alanmckinnon.co.uk/uploaded/PDFs/Presentations/Capability%20building%20for%20greening%20logistics%20(Dar%20es%20Salaam%20conference%20%20McKinnon%20KLU)%20final.pdf
- [22] Business Standard (2024), “How Rail Freight is Powering India's Express Delivery Future”, https://www.business-standard.com/content/specials/how-rail-freight-is-powering-india-s-express-delivery-future-123121800925_1.html
- [23] Briand, Y., Combes, F., Nierat, P. and H. Waisman (2020), “How the Rail Freight Development Strategy can strengthen the sector’s ambition in France”, https://www.iddri.org/sites/default/files/PDF/Publications/Catalogue%20Iddri/D%C3%A9cryptage/202012-IB0620-EN-freight%20france.pdf
- [24] ESCAP (2023), “Ten Guiding Principles for Sustainable Freight Transport in Asia and the Pacific”, https://www.unescap.org/sites/default/d8files/event-documents/Feb28_10_Guiding_Principles_for_Sustainable_Freight_Transport.pdf
What actions need to be stopped?
Importing and procuring unsafe and polluting vehicles
The extension of a vehicle’s lifespan should be conditioned on the implementation of efficiency improvements (e.g., new, efficient engines or less carbon-intensive fuels).
Supporting future stranded assets
Fossil fuels represent more than 40% of transported freight globally in 2023 [25]. However, projections of fossil fuel consumption show a horizon of decrease, which, in turn, raises the risk of stranded assets.
[25] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
Applying a narrow focus on CO2 emissions without considering the wider environmental, economic and social impacts
Promoting the use of hydrogen for road transport
Hydrogen as a transport fuel has a low energy efficiency. It is an energy carrier that needs to be produced, compressed, transported and converted, resulting in energy losses during each step of the process. Thus, it is a less efficient solution than battery-electric vehicles for road transport. [26]
[26] Smit, R., Zhao, E. and H. Dia (2021), “We must rapidly decarbonise transport – but hydrogen’s not the answer”, The Conversation, https://theconversation.com/we-must-rapidly-decarbonise-transport-but-hydrogens-not-the-answer-166830
Economics, finance and investments
-
Problem statement
-
Current economics, finance and investments do not adequately support the transformation towards intermodal, low-carbon, efficient and resilient freight transport and logistics. Although transport is the largest recipient of infrastructure-related investment globally, receiving around 29% of climate finance, significant investment needs remain insufficiently met. To illustrate, the Climate Policy Initiative estimates that clean transport solutions will cost USD 2.7 trillion annually between now and 2050, which, in turn, constitutes seven times the current spending on transport.[27] As a consequence, regional investment gaps for transport infrastructure by 2040 are expected to be significant, amounting to an estimated USD 0.8 trillion for Africa and USD 1.6 trillion for Asia.[28] These gaps are set to be particularly pronounced across LMICs, which struggle to attract international climate investments due to their unstable macroeconomic and political landscapes, high interest rates, growing levels of debt as well as insufficient understanding and technical capacity to develop bankable projects.
[27] CPI (2023), “Global Landscape of Climate Finance 2023.” Washington, DC: Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/Global-Landscape-of-Climate-Finance-2023.pdf; Caldwell, M., N. Alayza and G. Larsen (2022), “Paying for the Paris Agreement: A Primer on Government Options for Financing Nationally Determined Contributions.” World Resources Institute, November. doi:10.46830/wrirpt.21.00150.
[28] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/ -
Operating context
-
Logistics are highly cost-sensitive, and financial damages can be caused by both exogenous and endogenous shocks, such as pandemics, geopolitical tensions, energy supply shortages, inflation, and not least, extreme weather events. Natural hazards alone inflict an estimated USD 15 billion in direct damage to transport systems annually – with LMICs bearing around USD 8 billion, the highest costs relative to GDP. Beyond physical damage, transport disruptions caused by natural hazards entail severe financial implications, which ultimately trickle down to consumers.[29] In LMICs, for instance, these disruptions lead to an estimated USD 107 billion in annual losses to businesses.[30]
[29] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
[30] World Bank Group (2019), “Lifelines: The Resilient Infrastructure Opportunity”. Underutilized Potential – The Business Costs of Unreliable Infrastructure in Developing Countries. https://documents1.worldbank.org/curated/en/336371560797230631/pdf/Underutilized-Potential-The-Business-Costs-of-Unreliable-Infrastructure-in-Developing-Countries.pdf
-
Opportunity
-
Freight transport and logistics are powerful enablers of prosperity and livelihoods, fuelling international trade, facilitating the efficient movement of goods across borders and safeguarding rapid recoveries during crises. In 2021, the transport sector contributed 7% (USD 6.8 trillion) of the global GDP and employed 5.6% of the world’s workforce (193 million people).[31] In order for societies to continue enjoying the sector’s important socio-economic benefits, however, urgent reforms will be necessary to existing economics, finance and investments to steer the transformation towards intermodal, low-carbon, efficient and resilient freight transport and logistics.
With transport infrastructure and services in LMICs expecting rapid growth, this decade offers a critical window to avoid inefficient, carbon-intensive investments and future costly retrofitting. On an encouraging note, new innovative approaches towards finance are increasing steadily, whereas financial institutions are placing greater emphasis on intermodal, low-carbon, efficient and resilient freight transport and logistics. Policymakers can capitalise on this momentum by implementing a number of economic, financing and investment-related interventions.
[31] REN21 (2023), “Renewables 2023 Global Status Report Collection”, Renewables in Energy Demand, https://www.ren21.net/gsr-2023/modules/energy_demand/03_transport_in_focus/
Current economics, finance and investments do not adequately support the transformation towards intermodal, low-carbon, efficient and resilient freight transport and logistics. Although transport is the largest recipient of infrastructure-related investment globally, receiving around 29% of climate finance, significant investment needs remain insufficiently met. To illustrate, the Climate Policy Initiative estimates that clean transport solutions will cost USD 2.7 trillion annually between now and 2050, which, in turn, constitutes seven times the current spending on transport.[27] As a consequence, regional investment gaps for transport infrastructure by 2040 are expected to be significant, amounting to an estimated USD 0.8 trillion for Africa and USD 1.6 trillion for Asia.[28] These gaps are set to be particularly pronounced across LMICs, which struggle to attract international climate investments due to their unstable macroeconomic and political landscapes, high interest rates, growing levels of debt as well as insufficient understanding and technical capacity to develop bankable projects.
[27] CPI (2023), “Global Landscape of Climate Finance 2023.” Washington, DC: Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2023/11/Global-Landscape-of-Climate-Finance-2023.pdf; Caldwell, M., N. Alayza and G. Larsen (2022), “Paying for the Paris Agreement: A Primer on Government Options for Financing Nationally Determined Contributions.” World Resources Institute, November. doi:10.46830/wrirpt.21.00150.
[28] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
Logistics are highly cost-sensitive, and financial damages can be caused by both exogenous and endogenous shocks, such as pandemics, geopolitical tensions, energy supply shortages, inflation, and not least, extreme weather events. Natural hazards alone inflict an estimated USD 15 billion in direct damage to transport systems annually – with LMICs bearing around USD 8 billion, the highest costs relative to GDP. Beyond physical damage, transport disruptions caused by natural hazards entail severe financial implications, which ultimately trickle down to consumers.[29] In LMICs, for instance, these disruptions lead to an estimated USD 107 billion in annual losses to businesses.[30]
[29] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
[30] World Bank Group (2019), “Lifelines: The Resilient Infrastructure Opportunity”. Underutilized Potential – The Business Costs of Unreliable Infrastructure in Developing Countries. https://documents1.worldbank.org/curated/en/336371560797230631/pdf/Underutilized-Potential-The-Business-Costs-of-Unreliable-Infrastructure-in-Developing-Countries.pdf
Freight transport and logistics are powerful enablers of prosperity and livelihoods, fuelling international trade, facilitating the efficient movement of goods across borders and safeguarding rapid recoveries during crises. In 2021, the transport sector contributed 7% (USD 6.8 trillion) of the global GDP and employed 5.6% of the world’s workforce (193 million people).[31] In order for societies to continue enjoying the sector’s important socio-economic benefits, however, urgent reforms will be necessary to existing economics, finance and investments to steer the transformation towards intermodal, low-carbon, efficient and resilient freight transport and logistics.
With transport infrastructure and services in LMICs expecting rapid growth, this decade offers a critical window to avoid inefficient, carbon-intensive investments and future costly retrofitting. On an encouraging note, new innovative approaches towards finance are increasing steadily, whereas financial institutions are placing greater emphasis on intermodal, low-carbon, efficient and resilient freight transport and logistics. Policymakers can capitalise on this momentum by implementing a number of economic, financing and investment-related interventions.
[31] REN21 (2023), “Renewables 2023 Global Status Report Collection”, Renewables in Energy Demand, https://www.ren21.net/gsr-2023/modules/energy_demand/03_transport_in_focus/
What are ‘best value’ interventions?
Market-based measures provide financial incentives and increased accountability in support of more intermodal, low-carbon, efficient and resilient freight transport and logistics.
Carbon pricing
- Pricing of USD 40 per tonne of CO2 could reduce international CO2 emissions by 7.65%.[32]
Environmental taxation
- When total revenues generated through environmental taxation exceed 3% in Europe, reductions in freight transport CO2 emissions can be realised.[33]
Pricing of all related costs
- Internalising all socio-environmental costs of road freight activities (road wear and tear, congestion, crashes, noise, air pollution etc.) is crucial in getting users to opt for the more environmentally-efficient options.
Example
- EU Emission Trading Scheme[34]: a cap-and-trade system that limits greenhouse gas emissions from high-emitting sectors by allowing companies to buy and sell emission allowances, incentivising reductions in carbon output.
- Road charges in Europe: Tolls and vignettes for heavy-duty vehicles are based on a vehicle’s CO2 emissions. In 2026, air pollution-related costs will be included in tolls for heavy-duty vehicles.[35]
Who needs to act?
- Governments – define carbon pricing, road pricing, zero-emission fuel deductions and revenue-support for sustainable modes.[36]
- Companies – prioritise the most sustainable transport services across supply chains; for example aviation companies making use of book and claim systems to enable use of sustainable aviation fuels.[37]
- [33] Aydin, C. and Ö. Esen (2018), “Reducing CO2 emissions in the EU member states: Do environmental taxes work?”, Journal of Environmental Planning and Management, 61(13), pp. 2396–2420. doi: 10.1080/09640568.2017.1395731.
- [34] European Commission (2023), “EU Emissions Trading System (EU ETS)”, https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en
- [35] European Commission (2024), “Road charging (tolls and vignettes)”, https://transport.ec.europa.eu/transport-modes/road/road-charging_en
- [36] McKinnon, A.C. and J. Edwards (2015), “The role of government in promoting green logistics”. In Green Logistics: Improving the Environmental Sustainability of Logistics, 3rd ed.; McKinnon, A.C., Cullinane, A., Whiteing, A., Browne, M., Eds.; Kogan Page: London, UK. https://gc.scalahed.com/recursos/files/r161r/w25826w/McKinno_S1.pdf#page=354
- [37] SBTi (2023), “Book-and-Claim for Sustainable Aviation Fuel”, https://sciencebasedtargets.org/resources/files/Call-for-Evidence/251_Lufthansa-Group_2023_Book-and-Claim-for-Sustainable-Aviation-Fuel.pdf
Market-based measures provide financial incentives and increased accountability in support of more intermodal, low-carbon, efficient and resilient freight transport and logistics.
Carbon pricing
- Pricing of USD 40 per tonne of CO2 could reduce international CO2 emissions by 7.65%.[32]
Environmental taxation
- When total revenues generated through environmental taxation exceed 3% in Europe, reductions in freight transport CO2 emissions can be realised.[33]
Pricing of all related costs
- Internalising all socio-environmental costs of road freight activities (road wear and tear, congestion, crashes, noise, air pollution etc.) is crucial in getting users to opt for the more environmentally-efficient options.
Example
- EU Emission Trading Scheme[34]: a cap-and-trade system that limits greenhouse gas emissions from high-emitting sectors by allowing companies to buy and sell emission allowances, incentivising reductions in carbon output.
- Road charges in Europe: Tolls and vignettes for heavy-duty vehicles are based on a vehicle’s CO2 emissions. In 2026, air pollution-related costs will be included in tolls for heavy-duty vehicles.[35]
Who needs to act?
- Governments – define carbon pricing, road pricing, zero-emission fuel deductions and revenue-support for sustainable modes.[36]
- Companies – prioritise the most sustainable transport services across supply chains; for example aviation companies making use of book and claim systems to enable use of sustainable aviation fuels.[37]
- [33] Aydin, C. and Ö. Esen (2018), “Reducing CO2 emissions in the EU member states: Do environmental taxes work?”, Journal of Environmental Planning and Management, 61(13), pp. 2396–2420. doi: 10.1080/09640568.2017.1395731.
- [34] European Commission (2023), “EU Emissions Trading System (EU ETS)”, https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en
- [35] European Commission (2024), “Road charging (tolls and vignettes)”, https://transport.ec.europa.eu/transport-modes/road/road-charging_en
- [36] McKinnon, A.C. and J. Edwards (2015), “The role of government in promoting green logistics”. In Green Logistics: Improving the Environmental Sustainability of Logistics, 3rd ed.; McKinnon, A.C., Cullinane, A., Whiteing, A., Browne, M., Eds.; Kogan Page: London, UK. https://gc.scalahed.com/recursos/files/r161r/w25826w/McKinno_S1.pdf#page=354
- [37] SBTi (2023), “Book-and-Claim for Sustainable Aviation Fuel”, https://sciencebasedtargets.org/resources/files/Call-for-Evidence/251_Lufthansa-Group_2023_Book-and-Claim-for-Sustainable-Aviation-Fuel.pdf
Various financing sources need to be mobilised:
Scaling up public funding through enhanced coordination across government agencies (transport, climate, finance) and public-private dialogues.
Aligning corporate finance and investment plans with economic and sustainability goals.[38]
Granting access to finance to companies that have set climate-related goals or considerations in their operations.
Example
- Climate Investments Funds[39] are financing instruments that provide resources to LMICs for climate related projects. These funds are designed to support the integration of low-carbon technologies and sustainable practices into national development strategies.
- The Green Climate Fund[40] is a global initiative that provides financial support to LMICs for projects that align with climate mitigation and adaptation goals.
Who needs to act?
- International development finance institutions – align their investment and lending activities with Paris Agreement targets; support pilot projects and finance activities in new regions.[41]
- Governments – provide climate and development finance to ensure stability and predictability in addressing their long-term transport investment needs; establish green taxonomies to help direct public and private investments towards environmentally sustainable economic activities.
- Companies – align economic goals with climate and sustainability goals; pursue public-private partnerships.
- [38] McKinnon, A. C. and M. Petersen (2021), “Measuring Industry's Temperature: An Environmental Progress Report on European Logistics”, DOI: 10.13140/RG.2.2.32088.72961. https://www.researchgate.net/publication/348465509_Measuring_Industry%27s_Temperature_An_Environmental_Progress_Report_on_European_Logistics
- [39] Climate Investment Fund (CIF) (2024), “CIF Overview”, https://www.cif.org/
- [40] Green Climate Fund (GCF) (2024), “About GCF”, https://www.greenclimate.fund/about
- [41] Coyne, R. G. et al. (2023), “Expanding Access to Financing for Zero-Emission Trucks in Latin America and the Caribbean”, CALSTART, https://globaldrivetozero.org/publication/expanding-access-to-financing-for-zets-latin-america-caribbean-eng/
Various financing sources need to be mobilised:
Scaling up public funding through enhanced coordination across government agencies (transport, climate, finance) and public-private dialogues.
Aligning corporate finance and investment plans with economic and sustainability goals.[38]
Granting access to finance to companies that have set climate-related goals or considerations in their operations.
Example
- Climate Investments Funds[39] are financing instruments that provide resources to LMICs for climate related projects. These funds are designed to support the integration of low-carbon technologies and sustainable practices into national development strategies.
- The Green Climate Fund[40] is a global initiative that provides financial support to LMICs for projects that align with climate mitigation and adaptation goals.
Who needs to act?
- International development finance institutions – align their investment and lending activities with Paris Agreement targets; support pilot projects and finance activities in new regions.[41]
- Governments – provide climate and development finance to ensure stability and predictability in addressing their long-term transport investment needs; establish green taxonomies to help direct public and private investments towards environmentally sustainable economic activities.
- Companies – align economic goals with climate and sustainability goals; pursue public-private partnerships.
- [38] McKinnon, A. C. and M. Petersen (2021), “Measuring Industry's Temperature: An Environmental Progress Report on European Logistics”, DOI: 10.13140/RG.2.2.32088.72961. https://www.researchgate.net/publication/348465509_Measuring_Industry%27s_Temperature_An_Environmental_Progress_Report_on_European_Logistics
- [39] Climate Investment Fund (CIF) (2024), “CIF Overview”, https://www.cif.org/
- [40] Green Climate Fund (GCF) (2024), “About GCF”, https://www.greenclimate.fund/about
- [41] Coyne, R. G. et al. (2023), “Expanding Access to Financing for Zero-Emission Trucks in Latin America and the Caribbean”, CALSTART, https://globaldrivetozero.org/publication/expanding-access-to-financing-for-zets-latin-america-caribbean-eng/
- Shifting funding away from fossil fuel-dependent activities and prioritising intermodal, low-carbon, efficient and resilient freight transport and logistics.
Example
- California’s Cap-and-Trade Program is used to finance the state’s Sustainable Freight Action Plan.[42]
Who needs to act?
- Governments – reform subsidies and incentives to shift support away from fossil fuels towards infrastructures and operations for intermodal, low-carbon, efficient and resilient freight transport and logistics.
- [42] California Air Resources Board (2024), “Cap-and-Trade Program”, https://ww2.arb.ca.gov/our-work/programs/cap-and-trade-program
- Shifting funding away from fossil fuel-dependent activities and prioritising intermodal, low-carbon, efficient and resilient freight transport and logistics.
Example
- California’s Cap-and-Trade Program is used to finance the state’s Sustainable Freight Action Plan.[42]
Who needs to act?
- Governments – reform subsidies and incentives to shift support away from fossil fuels towards infrastructures and operations for intermodal, low-carbon, efficient and resilient freight transport and logistics.
- [42] California Air Resources Board (2024), “Cap-and-Trade Program”, https://ww2.arb.ca.gov/our-work/programs/cap-and-trade-program
Financing and funding accessible to formal and informal operators for intermodality, network efficiency, fleet renewal, electrification and charging infrastructure for all types of vehicles, zero emission fuels and renewable energy, etc.
Example
- Global Environment Facility provides funding to cities in LMICs to implement sustainable transport solutions, including freight and logistics solutions, through the Sustainable Cities Program.[43]
Who needs to act?
- Governments – create an enabling financial and political environment that provides funding to relevant formal and informal actors.
- [43] Global Environment Facility (2016), “Sustainable Cities”, https://www.thegef.org/what-we-do/topics/sustainable-cities
Financing and funding accessible to formal and informal operators for intermodality, network efficiency, fleet renewal, electrification and charging infrastructure for all types of vehicles, zero emission fuels and renewable energy, etc.
Example
- Global Environment Facility provides funding to cities in LMICs to implement sustainable transport solutions, including freight and logistics solutions, through the Sustainable Cities Program.[43]
Who needs to act?
- Governments – create an enabling financial and political environment that provides funding to relevant formal and informal actors.
- [43] Global Environment Facility (2016), “Sustainable Cities”, https://www.thegef.org/what-we-do/topics/sustainable-cities
What actions need to be stopped?
Investments that are not aligned with the Paris Agreement targets.
Investments in freight transport operations which ignore external costs
Air pollution, biodiversity loss, climate change impact and adaptation, CO2 emissions, noise and safety issues are so-called externalities caused by current transport systems.
Investments that are narrow-focused on a single priority, a single transport mode (esp. road freight transport) or are not sufficient for significant, long-lasting transformations
The introduction of taxonomies which direct financial flows towards fossil fuel-intensive infrastructure and operations
Integrated planning and operations
-
Problem statement
-
Freight transport and logistics are characterised by a spatially fragmented location of resources, production and consumption from “source to end user” involving diverse stakeholders which operate in very different regulatory frameworks. Often the different nodes in the supply chain have been managed in silos without sufficient coordination. This fragmentation, in turn, leads to inefficiencies, higher emissions, and greater vulnerabilities to extreme weather events. Studies estimate that CO2 emissions associated with products vary by 80% depending on storage and transport.[44] It was estimated that urban freight transport in Asia represents 15% of domestic freight activity in the region but is responsible for a disproportionate 43% of domestic freight-related CO2 emissions because of the large number of deliveries of small quantities in congested urban areas.[45] In addition, freight transport is not adequately addressed in land-use planning, whereas freight flows towards and within cities are often underestimated.
The inadequate planning for adaptation to climate change impacts contributes to insufficient action for the resilience of freight transport and logistics. The more frequent incidence of extreme weather events due to a changing climate thus present increasing challenges for freight transport and logistics. Under the current policy scenario, the transport sector could experience a near total (97.8%) infrastructure loss by 2050, the most severe compared to any other sector.
[44] Herold, D.M. and K.H. Lee (2017), “Carbon Management in the Logistics and Transportation Sector: An Overview and New Research Directions”, Carbon Management 8, 79–97, DOI: 10.1080/17583004.2017.1283923. doi:10.46830/wrirpt.21.00150.
[45] ATO (2024), “Bridging the Gap: A Deep Dive into NDCs and Transport Policy Landscapes in Low- and Middle-Income Asian Economies”, https://asiantransportoutlook.com/analytical-outputs/ndc-analysis/ based on International Transport Forum (ITF) (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023 -
Operating context
-
Freight transport demand is closely tied to consumption patterns and prices, which are affected by the price elasticity of each product category. Demand management is also shaped by external factors, such as market acceptance.[46]
The length and fragmentation of supply chains have exploded due to new manufacturing, transport and logistics and communication technologies services available, as well as in response to international economic regulations promoting trade liberalisation. As of 2021, an estimated 70% of international trade involved global value chains.[47]
Integrated planning and operations are also relevant in urban areas. Even though urban freight transport only makes up 5% of total freight activity, it is estimated to account for 28% of total freight transport GHG emissions.[48]
[46] Ghisolfi, V. et al. (2022), “Freight Transport Decarbonization: A Systematic Literature Review of System Dynamics Models”, Sustainability 14, 3625, https://doi.org/10.3390/su14063625
[47] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
[48] ITF (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023
-
Opportunity
-
Private operators are the main stakeholders conducting freight transport activities, thus any operational improvements are a major opportunity for cost reductions. Rising geopolitical tensions and the current global energy crisis have disrupted supply chains and brought about massive increases in fuel costs. Freight and logistics operators can transform existing challenges into opportunities to drive efficiency, reduce emissions, cut operational costs, and boost resilience by adopting integrated planning and operational practices. Furthermore, the internationalisation of supply chains offers new business opportunities to access new markets and reduce costs through international trade competition. Not least, there is also an opportunity to reduce transport demand by optimising location, thereby shortening global supply chains.[49] Better integrated planning represents the ‘Avoid’-pillar of the Avoid-Shift-Improve framework, providing a key opportunity to cut emissions and other negative impacts through the reduction or altogether avoidance of transport.
[49] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
Freight transport and logistics are characterised by a spatially fragmented location of resources, production and consumption from “source to end user” involving diverse stakeholders which operate in very different regulatory frameworks. Often the different nodes in the supply chain have been managed in silos without sufficient coordination. This fragmentation, in turn, leads to inefficiencies, higher emissions, and greater vulnerabilities to extreme weather events. Studies estimate that CO2 emissions associated with products vary by 80% depending on storage and transport.[44] It was estimated that urban freight transport in Asia represents 15% of domestic freight activity in the region but is responsible for a disproportionate 43% of domestic freight-related CO2 emissions because of the large number of deliveries of small quantities in congested urban areas.[45] In addition, freight transport is not adequately addressed in land-use planning, whereas freight flows towards and within cities are often underestimated.
The inadequate planning for adaptation to climate change impacts contributes to insufficient action for the resilience of freight transport and logistics. The more frequent incidence of extreme weather events due to a changing climate thus present increasing challenges for freight transport and logistics. Under the current policy scenario, the transport sector could experience a near total (97.8%) infrastructure loss by 2050, the most severe compared to any other sector.
[44] Herold, D.M. and K.H. Lee (2017), “Carbon Management in the Logistics and Transportation Sector: An Overview and New Research Directions”, Carbon Management 8, 79–97, DOI: 10.1080/17583004.2017.1283923. doi:10.46830/wrirpt.21.00150.
[45] ATO (2024), “Bridging the Gap: A Deep Dive into NDCs and Transport Policy Landscapes in Low- and Middle-Income Asian Economies”, https://asiantransportoutlook.com/analytical-outputs/ndc-analysis/ based on International Transport Forum (ITF) (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023
Freight transport demand is closely tied to consumption patterns and prices, which are affected by the price elasticity of each product category. Demand management is also shaped by external factors, such as market acceptance.[46]
The length and fragmentation of supply chains have exploded due to new manufacturing, transport and logistics and communication technologies services available, as well as in response to international economic regulations promoting trade liberalisation. As of 2021, an estimated 70% of international trade involved global value chains.[47]
Integrated planning and operations are also relevant in urban areas. Even though urban freight transport only makes up 5% of total freight activity, it is estimated to account for 28% of total freight transport GHG emissions.[48]
[46] Ghisolfi, V. et al. (2022), “Freight Transport Decarbonization: A Systematic Literature Review of System Dynamics Models”, Sustainability 14, 3625, https://doi.org/10.3390/su14063625
[47] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
[48] ITF (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023
Private operators are the main stakeholders conducting freight transport activities, thus any operational improvements are a major opportunity for cost reductions. Rising geopolitical tensions and the current global energy crisis have disrupted supply chains and brought about massive increases in fuel costs. Freight and logistics operators can transform existing challenges into opportunities to drive efficiency, reduce emissions, cut operational costs, and boost resilience by adopting integrated planning and operational practices. Furthermore, the internationalisation of supply chains offers new business opportunities to access new markets and reduce costs through international trade competition. Not least, there is also an opportunity to reduce transport demand by optimising location, thereby shortening global supply chains.[49] Better integrated planning represents the ‘Avoid’-pillar of the Avoid-Shift-Improve framework, providing a key opportunity to cut emissions and other negative impacts through the reduction or altogether avoidance of transport.
[49] SLOCAT (2023), “Transport, Climate and Sustainability Global Status Report – 3rd Edition”, https://tcc-gsr.com/
What are ‘best value’ interventions?
Pricing and costs of products and transport services.
Reduction of goods and transport demand through repair, reuse and recycling of goods and shortening of transport distances through favouring circular and local economy.[50]
Improvements in information and communication technologies[51] leading to less in-person travel, more sustainable consumption patterns and better product repairability.[52]
Land planning and comprehensive approaches to the integration of loading bays, intermodal terminals, distribution centres, recycling facilities, electric charging.[53]
Example
- Amazon manages freight transport demand through advanced logistics optimisation, strategic placement of fulfilment centres, collaboration with local delivery partners, and investments in electric vehicles and automation.
Who needs to act?
- Governments – provide guidelines on how to manage freight transport demand; enact regulations and planning standards; apply integrated land use planning.
- Companies – integrate demand management measures within their logistics operations.
- [50] Briand, Y. et al. (2024) “A pathway design framework for national freight transport decarbonization strategies”, Climate Policy, 1–17. https://doi.org/10.1080/14693062.2024.2412709
- [51] Ghisolfi, V. et al. (2022), “Freight Transport Decarbonization: A Systematic Literature Review of System Dynamics Models”, Sustainability 14, 3625, https://doi.org/10.3390/su14063625
- [52] DDP Initiative (2023), “DDP Annual Report 2023”, https://ddpinitiative.org/ddp-annual-report-2023/
- [53] Touratier-Muller, N. and J. Jaussaud (2021), “Development of Road Freight Transport Indicators Focused on Sustainability to Assist Shippers: An Analysis Conducted in France through the FRET 21 Programme”, Sustainability 13, no. 17: 9641. https://doi.org/10.3390/su13179641
and trade development
Pricing and costs of products and transport services.
Reduction of goods and transport demand through repair, reuse and recycling of goods and shortening of transport distances through favouring circular and local economy.[50]
Improvements in information and communication technologies[51] leading to less in-person travel, more sustainable consumption patterns and better product repairability.[52]
Land planning and comprehensive approaches to the integration of loading bays, intermodal terminals, distribution centres, recycling facilities, electric charging.[53]
Example
- Amazon manages freight transport demand through advanced logistics optimisation, strategic placement of fulfilment centres, collaboration with local delivery partners, and investments in electric vehicles and automation.
Who needs to act?
- Governments – provide guidelines on how to manage freight transport demand; enact regulations and planning standards; apply integrated land use planning.
- Companies – integrate demand management measures within their logistics operations.
- [50] Briand, Y. et al. (2024) “A pathway design framework for national freight transport decarbonization strategies”, Climate Policy, 1–17. https://doi.org/10.1080/14693062.2024.2412709
- [51] Ghisolfi, V. et al. (2022), “Freight Transport Decarbonization: A Systematic Literature Review of System Dynamics Models”, Sustainability 14, 3625, https://doi.org/10.3390/su14063625
- [52] DDP Initiative (2023), “DDP Annual Report 2023”, https://ddpinitiative.org/ddp-annual-report-2023/
- [53] Touratier-Muller, N. and J. Jaussaud (2021), “Development of Road Freight Transport Indicators Focused on Sustainability to Assist Shippers: An Analysis Conducted in France through the FRET 21 Programme”, Sustainability 13, no. 17: 9641. https://doi.org/10.3390/su13179641
Route or distribution and load optimisation for more efficient demand management.
Modular packaging and boxes.
Asset sharing, open warehouses and transport networks.[54]
- The sharing of fleets and assets can enable a more efficient use of infrastructure and vehicles. Combined with intelligent transport systems it increases the vehicle loadings, reduces fuel consumption, emissions, air pollution and costs.[55]
Example
- Cargomatic[56] is a US-based digital platform that connects shippers with available truck capacity in real-time. By enabling load optimisation and asset sharing, it increases the efficiency of local freight transport, especially in urban areas.
Who needs to act?
- Logistics companies – pursue operational efficiency improvements through fleet and asset sharing, the creation of multi-modal hubs and the adjustment of vehicle size to current demand.
- [54] ALICE (2019), “A Framework and Process for the Development of a Roadmap Towards Zero Emissions Logistics by 2050”, https://www.theconsumergoodsforum.com/race-to-zero-hub-resources/a-framework-and-process-for-the-development-of-a-roadmap-towards-zero-emissions-logistics-by-2050/
- [55] ITF (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023; ITF (2020), “Transport Climate Action Directory – Freight transport: asset sharing and digital platform”, https://www.itf-oecd.org/policy/freight-transport-asset-sharing-and-digital-platform
- [56] Cargomatic (2013), “On-Demand Capacity for an On-Demand World”, https://cargomatic.com/
Route or distribution and load optimisation for more efficient demand management.
Modular packaging and boxes.
Asset sharing, open warehouses and transport networks.[54]
- The sharing of fleets and assets can enable a more efficient use of infrastructure and vehicles. Combined with intelligent transport systems it increases the vehicle loadings, reduces fuel consumption, emissions, air pollution and costs.[55]
Example
- Cargomatic[56] is a US-based digital platform that connects shippers with available truck capacity in real-time. By enabling load optimisation and asset sharing, it increases the efficiency of local freight transport, especially in urban areas.
Who needs to act?
- Logistics companies – pursue operational efficiency improvements through fleet and asset sharing, the creation of multi-modal hubs and the adjustment of vehicle size to current demand.
- [54] ALICE (2019), “A Framework and Process for the Development of a Roadmap Towards Zero Emissions Logistics by 2050”, https://www.theconsumergoodsforum.com/race-to-zero-hub-resources/a-framework-and-process-for-the-development-of-a-roadmap-towards-zero-emissions-logistics-by-2050/
- [55] ITF (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023; ITF (2020), “Transport Climate Action Directory – Freight transport: asset sharing and digital platform”, https://www.itf-oecd.org/policy/freight-transport-asset-sharing-and-digital-platform
- [56] Cargomatic (2013), “On-Demand Capacity for an On-Demand World”, https://cargomatic.com/
Fees and congestion charges
- Such measures will promote the use of more appropriate and cleaner vehicles in urban areas.
Example
- Zero-emission zones for logistics in Rotterdam are set to be implemented in 2025.[57]
Who needs to act?
- National governments – design national urban mobility plans, giving local governments the authority to enact such measures.
- Local governments – enact regulations for urban areas and develop urban freight plans.
- Companies – acquire cleaner fleets, explore alternative modes and approaches for urban areas.
- Freight vehicle manufacturers – research and produce a larger variety of freight vehicles, e.g., cargo bicycles, small electric vans, trucks with overhead charging features.
- [57] C40 Knowledge Hub (2019), “Roadmap ZECL: Moving towards Zero Emission City Logistics in Rotterdam in 2025” https://www.c40knowledgehub.org/s/article/Roadmap-ZECL-Moving-towards-Zero-Emission-City-Logistics-in-Rotterdam-in-2025
Thumbnail image by Philipp Böhme via Qimby
or sustainable
urban logistics plans
Fees and congestion charges
- Such measures will promote the use of more appropriate and cleaner vehicles in urban areas.
Example
- Zero-emission zones for logistics in Rotterdam are set to be implemented in 2025.[57]
Who needs to act?
- National governments – design national urban mobility plans, giving local governments the authority to enact such measures.
- Local governments – enact regulations for urban areas and develop urban freight plans.
- Companies – acquire cleaner fleets, explore alternative modes and approaches for urban areas.
- Freight vehicle manufacturers – research and produce a larger variety of freight vehicles, e.g., cargo bicycles, small electric vans, trucks with overhead charging features.
- [57] C40 Knowledge Hub (2019), “Roadmap ZECL: Moving towards Zero Emission City Logistics in Rotterdam in 2025” https://www.c40knowledgehub.org/s/article/Roadmap-ZECL-Moving-towards-Zero-Emission-City-Logistics-in-Rotterdam-in-2025
Thumbnail image by Philipp Böhme via Qimby
- Distributing investments across modes and infrastructure options can ensure resilience and efficiency.[58]
- Multimodal connectivity increases operational efficiency and resilience and decreases logistical costs and GHG emissions, while enabling shifts towards more efficient transport modes.[59]
Example
- The Belt and Road Initiative is a global infrastructure development strategy initiated by China. It aims to enhance connectivity between Asia, Europe, and Africa by developing a network of multi-modal freight transport corridors.[60]
Who needs to act?
- Governments – provide frameworks through specific planning standards; and investments to increase connectivity.
- Companies – work with governments to improve operations and planning; and implement new operational approaches.
- [58] Verschuur, J. (2024), “Enhancing Freight Transport Resilience Through Analytical Frameworks: Applications to Central and Southeast Asia”, Working Paper, International Transport Forum, Paris, https://www.itf-oecd.org/sites/default/files/repositories/sipa-methodology-decarbonisation.pdf
- [59] ITF (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023
- [60] Council on Foreign Relations (CFR) (2023), “China’s Massive Belt and Road Initiative”, https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative
Thumbnail image by Image by U.S. Army Corps of Engineers via Flickr
transport infrastructure
- Distributing investments across modes and infrastructure options can ensure resilience and efficiency.[58]
- Multimodal connectivity increases operational efficiency and resilience and decreases logistical costs and GHG emissions, while enabling shifts towards more efficient transport modes.[59]
Example
- The Belt and Road Initiative is a global infrastructure development strategy initiated by China. It aims to enhance connectivity between Asia, Europe, and Africa by developing a network of multi-modal freight transport corridors.[60]
Who needs to act?
- Governments – provide frameworks through specific planning standards; and investments to increase connectivity.
- Companies – work with governments to improve operations and planning; and implement new operational approaches.
- [58] Verschuur, J. (2024), “Enhancing Freight Transport Resilience Through Analytical Frameworks: Applications to Central and Southeast Asia”, Working Paper, International Transport Forum, Paris, https://www.itf-oecd.org/sites/default/files/repositories/sipa-methodology-decarbonisation.pdf
- [59] ITF (2023), “ITF Transport Outlook 2023”, https://www.itf-oecd.org/itf-transport-outlook-2023
- [60] Council on Foreign Relations (CFR) (2023), “China’s Massive Belt and Road Initiative”, https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative
Thumbnail image by Image by U.S. Army Corps of Engineers via Flickr
What actions need to be stopped?
Suboptimal truckload and running empty miles.
87 million tons of CO2 emissions are attributed to empty miles every year in the US.[61]
[61] Convoy (2022), “Empty miles are everyone’s burden”, https://www.freightwaves.com/news/white-paper-empty-miles-are-everyones-burden
Siloed planning and fragmented policies that miss a system-wide thinking approach.
Mandatory, standardised and transparent tracking, reporting and evaluation
-
Problem statement
-
The freight transport sector lacks unified, standardised approaches towards the tracking, reporting and evaluation of its environmental impact which makes it difficult to enable comparison or to assess the scale of its negative impacts. Often, tracking, reporting and evaluation initiatives are based on voluntary participation and since their use is typically limited to the early adopters, their impact and their usefulness to identify the most urgent and impactful actions remains limited. Mandatory standards ensure a greater impact than voluntary programs and allow for raising ambition in a phased approach.
-
Operating context
-
The movement of goods is embedded in a highly complex and fragmented system and involves a wide range of stakeholders across regions. Freight and logistics industries are typically made up of small operators, exposed to intense competition and earning small profit margins. The combination of these factors have made the introduction of mandatory systems for tracking, reporting and evaluation particularly challenging. As a result, mandatory standards remain scarce to date, with the majority of national and regional initiatives being industry-led and voluntary in nature.
-
Opportunity
-
There are major opportunities to enact mandatory, standardised and transparent tracking, reporting and evaluation. Stakeholders will be equipped to better understand their situation and needs and compare possible optionsThe provision of adequate information on the environmental footprint of various freight transport services as well as on the available alternatives empowers consumers and businesses to opt for the most sustainable options. Stakeholders able to demonstrate significant progress in reducing their environmental footprints through transparent tracking and reporting stand to increase their chances of accessing scarce flows of climate financing. Ultimately, this will result in optimised operations and more effective actions.
The freight transport sector lacks unified, standardised approaches towards the tracking, reporting and evaluation of its environmental impact which makes it difficult to enable comparison or to assess the scale of its negative impacts. Often, tracking, reporting and evaluation initiatives are based on voluntary participation and since their use is typically limited to the early adopters, their impact and their usefulness to identify the most urgent and impactful actions remains limited. Mandatory standards ensure a greater impact than voluntary programs and allow for raising ambition in a phased approach.
The movement of goods is embedded in a highly complex and fragmented system and involves a wide range of stakeholders across regions. Freight and logistics industries are typically made up of small operators, exposed to intense competition and earning small profit margins. The combination of these factors have made the introduction of mandatory systems for tracking, reporting and evaluation particularly challenging. As a result, mandatory standards remain scarce to date, with the majority of national and regional initiatives being industry-led and voluntary in nature.
There are major opportunities to enact mandatory, standardised and transparent tracking, reporting and evaluation. Stakeholders will be equipped to better understand their situation and needs and compare possible optionsThe provision of adequate information on the environmental footprint of various freight transport services as well as on the available alternatives empowers consumers and businesses to opt for the most sustainable options. Stakeholders able to demonstrate significant progress in reducing their environmental footprints through transparent tracking and reporting stand to increase their chances of accessing scarce flows of climate financing. Ultimately, this will result in optimised operations and more effective actions.
What are ‘best value’ interventions?
By improving supply chain visibility, companies will be enabled to better understand their impact, assess suppliers and access climate financing.
- This would allow stakeholders to monitor, report and identify the key areas for improvement. It will make it easier to achieve any goals and monitor long-term progress towards them. Not least, such transparency can enhance trust and credibility among current and prospective investors, thereby increasing stakeholders’ chances of accessing climate finance.
Expansion to Scope 3 emissions
- Companies mainly focus on Scope 1 (direct) and Scope 2 (indirect) emissions from their operations. Including Scope 3 (indirect emissions occurring outside a company’s own operations) would allow companies to take responsibility for their full environmental impact in a holistic approach.
Accounting for transport solutions and the associated abatement costs for companies.[62]
Example
- Global Logistics Emissions Council (GLEC) Framework harmonises the calculation and reporting of GHG emissions across multimodal supply chains.[63] It follows the ISO 14083 for the quantification and reporting of GHG emissions arising from transport chain operations.[64]
- CountEmissions EU provides a common framework to calculate and report transport GHG emissions, both for passenger and freight transport.[65]
- GHG Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard provides relevant information on scope 3 categories and guidance on reporting of scope 3 emissions.[66]
Who needs to act?
- Governments – implement standards for accounting and evaluation.
- Logistics providers – set up sustainable logistics strategies and emission reduction targets. A group of advanced logistic providers can encourage shippers to act and make environmentally friendly procurement policies.[67]
- Companies – publicly capture their targets, emissions and activities in Sustainability Reports.[68]
- [62] Smart Freight Center (2023), “Voluntary Market Based Measures Framework for Logistics Emissions Accounting and Reporting”, https://smart-freight-centre-media.s3.amazonaws.com/documents/SFC_MBM_FRAMEWORK_2023__27_6_23.pdf
- [63] Smart Freight Center (2023), “The GLEC Framework”, https://www.smartfreightcentre.org/en/our-programs/global-logistics-emissions-council/calculate-report-glec-framework/
- [64] International Organization for Standardisation (ISO) (2023), “Greenhouse gases — Quantification and reporting of greenhouse gas emissions arising from transport chain operations”, https://www.iso.org/obp/ui/en/#iso:std:iso:14083:ed-1:v1:en
- [65] European Commission (2023), “Count your transport emissions - CountEmissions EU”, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13217-Count-your-transport-emissions-CountEmissions-EU_en
- [66] Greenhouse Gas Protocol (2011), “Corporate Value Chain (Scope 3) Standard”, https://ghgprotocol.org/corporate-value-chain-scope-3-standard
- [67] McKinnon, A. C. and M. Petersen (2021), “Measuring Industry's Temperature: An Environmental Progress Report on European Logistics”, DOI: 10.13140/RG.2.2.32088.72961. https://www.researchgate.net/publication/348465509_Measuring_Industry%27s_Temperature_An_Environmental_Progress_Report_on_European_Logistics
- [68] Gliese Foundation (2020), “ Container carriers: the ranking, scores, and highlights ”, https://www.gliesefoundation.org/the-ranking-scores-and-higlights
By improving supply chain visibility, companies will be enabled to better understand their impact, assess suppliers and access climate financing.
- This would allow stakeholders to monitor, report and identify the key areas for improvement. It will make it easier to achieve any goals and monitor long-term progress towards them. Not least, such transparency can enhance trust and credibility among current and prospective investors, thereby increasing stakeholders’ chances of accessing climate finance.
Expansion to Scope 3 emissions
- Companies mainly focus on Scope 1 (direct) and Scope 2 (indirect) emissions from their operations. Including Scope 3 (indirect emissions occurring outside a company’s own operations) would allow companies to take responsibility for their full environmental impact in a holistic approach.
Accounting for transport solutions and the associated abatement costs for companies.[62]
Example
- Global Logistics Emissions Council (GLEC) Framework harmonises the calculation and reporting of GHG emissions across multimodal supply chains.[63] It follows the ISO 14083 for the quantification and reporting of GHG emissions arising from transport chain operations.[64]
- CountEmissions EU provides a common framework to calculate and report transport GHG emissions, both for passenger and freight transport.[65]
- GHG Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard provides relevant information on scope 3 categories and guidance on reporting of scope 3 emissions.[66]
Who needs to act?
- Governments – implement standards for accounting and evaluation.
- Logistics providers – set up sustainable logistics strategies and emission reduction targets. A group of advanced logistic providers can encourage shippers to act and make environmentally friendly procurement policies.[67]
- Companies – publicly capture their targets, emissions and activities in Sustainability Reports.[68]
- [62] Smart Freight Center (2023), “Voluntary Market Based Measures Framework for Logistics Emissions Accounting and Reporting”, https://smart-freight-centre-media.s3.amazonaws.com/documents/SFC_MBM_FRAMEWORK_2023__27_6_23.pdf
- [63] Smart Freight Center (2023), “The GLEC Framework”, https://www.smartfreightcentre.org/en/our-programs/global-logistics-emissions-council/calculate-report-glec-framework/
- [64] International Organization for Standardisation (ISO) (2023), “Greenhouse gases — Quantification and reporting of greenhouse gas emissions arising from transport chain operations”, https://www.iso.org/obp/ui/en/#iso:std:iso:14083:ed-1:v1:en
- [65] European Commission (2023), “Count your transport emissions - CountEmissions EU”, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13217-Count-your-transport-emissions-CountEmissions-EU_en
- [66] Greenhouse Gas Protocol (2011), “Corporate Value Chain (Scope 3) Standard”, https://ghgprotocol.org/corporate-value-chain-scope-3-standard
- [67] McKinnon, A. C. and M. Petersen (2021), “Measuring Industry's Temperature: An Environmental Progress Report on European Logistics”, DOI: 10.13140/RG.2.2.32088.72961. https://www.researchgate.net/publication/348465509_Measuring_Industry%27s_Temperature_An_Environmental_Progress_Report_on_European_Logistics
- [68] Gliese Foundation (2020), “ Container carriers: the ranking, scores, and highlights ”, https://www.gliesefoundation.org/the-ranking-scores-and-higlights
Compulsory public disclosure by large companies and enterprises engaged in freight transport activities of key sustainability data, including risks and impacts on social and environmental issues.
- Environmental, Social and Governmental (ESG) criteria are a leading approach to ensuring transparency about a company’s performance, impacts and risks.
Example
- The EU’s Corporate Sustainability Reporting Directive (CSRD) provides transparency about the environmental and social impacts of companies.[69]
Who needs to act?
- Governments – mandate transparent, open data sharing as part of broader sustainability reporting.
- Companies – disclose information related to the mandatory reporting mechanism, adjust practices to current regulations and anticipated future regulations.
- [69] European Commission (2024), “Corporate sustainability reporting”, https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en
transparency standards
Compulsory public disclosure by large companies and enterprises engaged in freight transport activities of key sustainability data, including risks and impacts on social and environmental issues.
- Environmental, Social and Governmental (ESG) criteria are a leading approach to ensuring transparency about a company’s performance, impacts and risks.
Example
- The EU’s Corporate Sustainability Reporting Directive (CSRD) provides transparency about the environmental and social impacts of companies.[69]
Who needs to act?
- Governments – mandate transparent, open data sharing as part of broader sustainability reporting.
- Companies – disclose information related to the mandatory reporting mechanism, adjust practices to current regulations and anticipated future regulations.
- [69] European Commission (2024), “Corporate sustainability reporting”, https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en
Using S.M.A.R.T. indicators to identify an assessment framework allowing enough flexibility to reflect specific regional and mode-related contexts.
Example
- Logistics Performance Index is a benchmarking tool created by the World Bank to measure the performance of countries in terms of logistics. It assesses how efficiently goods can be moved across borders, focusing on the ease of transportation, customs efficiency, and overall infrastructure.[70]
- Monitoring, reporting and verification regulations for shipping require shipping[71] companies to track, report and verify CO2 emissions and fuel consumption to ensure environmental accountability and compliance with emission reduction targets.
Who needs to act?
- Companies – explore a comprehensive set of indicators reflecting decarbonisation, sustainability and resilience goals.
- [70] World Bank (2023), “Logistics Performance Index”, https://lpi.worldbank.org/
- [71] European Maritime Safety Agency (2023), “MRV Regulation”, https://www.emsa.europa.eu/reducing-emissions/mrv-changes.html
Using S.M.A.R.T. indicators to identify an assessment framework allowing enough flexibility to reflect specific regional and mode-related contexts.
Example
- Logistics Performance Index is a benchmarking tool created by the World Bank to measure the performance of countries in terms of logistics. It assesses how efficiently goods can be moved across borders, focusing on the ease of transportation, customs efficiency, and overall infrastructure.[70]
- Monitoring, reporting and verification regulations for shipping require shipping[71] companies to track, report and verify CO2 emissions and fuel consumption to ensure environmental accountability and compliance with emission reduction targets.
Who needs to act?
- Companies – explore a comprehensive set of indicators reflecting decarbonisation, sustainability and resilience goals.
- [70] World Bank (2023), “Logistics Performance Index”, https://lpi.worldbank.org/
- [71] European Maritime Safety Agency (2023), “MRV Regulation”, https://www.emsa.europa.eu/reducing-emissions/mrv-changes.html
- Stakeholders benefit from adapting qualitative assessment criteria to global agreements, such as:
- the 2030 Agenda for Sustainable Development;
- the Paris Agreement on Climate Change; and
- the Sendai Framework for Disaster Risk Reduction 2015-2030.
Activities can be compared against the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs): SDG 3 (Good Health and Well-being), SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), SDG 13 (Climate action), etc.[72]
Example
- Smart Freight Centre’s Conformity Assessment Scheme in support of the GLEC Framework promotes a database of validation and verification entities.[73]
Who needs to act?
- Governments – evaluate their activities on decarbonisation, sustainability and resilience.
- Companies – implement net-zero 2050 strategies and reflect SDGs implementation and adaptation and resilience targets throughout their business practice.
- [72] United Nations (2015), “Transforming our world: the 2030 Agenda for Sustainable Development”, https://sdgs.un.org/2030agenda
- [73] Smart Freight Centre (2023), “SFC Conformity Assessment Scheme”, https://www.smartfreightcentre.org/en/our-programs/global-logistics-emissions-council/smart-freight-centre-conformity-assessment-scheme/
- Stakeholders benefit from adapting qualitative assessment criteria to global agreements, such as:
- the 2030 Agenda for Sustainable Development;
- the Paris Agreement on Climate Change; and
- the Sendai Framework for Disaster Risk Reduction 2015-2030.
Activities can be compared against the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs): SDG 3 (Good Health and Well-being), SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), SDG 13 (Climate action), etc.[72]
Example
- Smart Freight Centre’s Conformity Assessment Scheme in support of the GLEC Framework promotes a database of validation and verification entities.[73]
Who needs to act?
- Governments – evaluate their activities on decarbonisation, sustainability and resilience.
- Companies – implement net-zero 2050 strategies and reflect SDGs implementation and adaptation and resilience targets throughout their business practice.
- [72] United Nations (2015), “Transforming our world: the 2030 Agenda for Sustainable Development”, https://sdgs.un.org/2030agenda
- [73] Smart Freight Centre (2023), “SFC Conformity Assessment Scheme”, https://www.smartfreightcentre.org/en/our-programs/global-logistics-emissions-council/smart-freight-centre-conformity-assessment-scheme/
What actions need to be stopped?
Ignoring the carbon footprint of products and services.
Transport activities in the industry sector are responsible for about 7% of total global GHG emissions.[74] Companies and industries need to address all scopes of emissions, starting with the measurement of their impact and the evaluation of potential measures.
[74] Miklautsch, P. and M. Woschank (2022), “A framework of measures to mitigate greenhouse gas emissions in freight transport: Systematic literature review from a Manufacturer’s perspective”, Journal of Cleaner Production, Volume 366, https://doi.org/10.1016/j.jclepro.2022.132883.den
Shifting responsibility for emissions, pollution, health costs and other externalities to other geographies and stakeholders.
Focusing only on tank-to-wheel emissions instead of well-to-wheel emissions.
Data, research, technology, innovation and capacity building
-
Problem statement
-
Different stakeholder groups face distinct challenges across world regions due to significant gaps in data, research, technology and innovation, which in turn continue to hinder progress towards intermodal, low-carbon, efficient and resilient freight transport and logistics. In many countries, data critical to the planning, monitoring and evaluation of freight and logistics operations is privately owned and scarce. This, in turn, complicates the estimation of low-carbon pathways for freight transport, thereby hindering policymaking and investment decisions.[75] These issues are particularly pronounced in LMICs, where resource limitations exacerbate data gaps and prevent policymakers from enacting informed policy and investment decisions while limiting their access to international climate finance.
[75] Jaramillo, P. et al (2022), “Transport”. In IPCC: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change.
-
Operating context
-
The freight and logistics sector is highly competitive, with diverse stakeholders, including operators with large fleets and privately owned data, pursuing their own interests. In this context, transitioning towards intermodal, low-carbon, efficient and resilient freight transport and logistics necessitates addressing data-sharing barriers while acknowledging the specific needs of LMICs.
Rapidly growing demand for goods transport is increasing pressures on already scarce infrastructure and congested freight corridors. Better utilisation of the current system can be achieved through the sharing of data, the uptake of technology and innovative solutions, as well as through capacity-building and training programmes, which ensure workers have access to the skills needed for the freight and logistics sector of the future.
-
Opportunity
-
The freight transport sector is experiencing an increasing use of data and technology with new approaches filling knowledge gaps. Any of the interventions listed below will further enable this trend.
The transformations envisioned by the compendium of interventions will necessitate new training and changes in workforce skills, ultimately leading to the creation of new jobs.
Different stakeholder groups face distinct challenges across world regions due to significant gaps in data, research, technology and innovation, which in turn continue to hinder progress towards intermodal, low-carbon, efficient and resilient freight transport and logistics. In many countries, data critical to the planning, monitoring and evaluation of freight and logistics operations is privately owned and scarce. This, in turn, complicates the estimation of low-carbon pathways for freight transport, thereby hindering policymaking and investment decisions.[75] These issues are particularly pronounced in LMICs, where resource limitations exacerbate data gaps and prevent policymakers from enacting informed policy and investment decisions while limiting their access to international climate finance.
[75] Jaramillo, P. et al (2022), “Transport”. In IPCC: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change.
The freight and logistics sector is highly competitive, with diverse stakeholders, including operators with large fleets and privately owned data, pursuing their own interests. In this context, transitioning towards intermodal, low-carbon, efficient and resilient freight transport and logistics necessitates addressing data-sharing barriers while acknowledging the specific needs of LMICs.
Rapidly growing demand for goods transport is increasing pressures on already scarce infrastructure and congested freight corridors. Better utilisation of the current system can be achieved through the sharing of data, the uptake of technology and innovative solutions, as well as through capacity-building and training programmes, which ensure workers have access to the skills needed for the freight and logistics sector of the future.
The freight transport sector is experiencing an increasing use of data and technology with new approaches filling knowledge gaps. Any of the interventions listed below will further enable this trend.
The transformations envisioned by the compendium of interventions will necessitate new training and changes in workforce skills, ultimately leading to the creation of new jobs.
What are ‘best value’ interventions?
Information and communications technology and digital platforms.[76]
- Digital tools can support a shift to less carbon-intensive modes, increase the load and occupancy rates of vehicles and improve operations.[77]
Example
- In the EU, Digital Transport and Logistics Forum (DTLF) brings together public and private stakeholders to develop solutions for multimodal freight transport. It focuses on creating a harmonised framework for data sharing.[78]
- Uber Freight: Digital Freight Matching Platform that matches shippers with truck drivers to optimise freight movement and reduce empty miles.[79]
- In the case of the EU, digitalisation could increase railway capacity by more than 20% on many network lines without the need to build additional tracks.[80]
Who needs to act?
- Governments – adopt regulations for data sharing, ensure “data commons” protection and facilitate collaboration between stakeholders.
- Companies – create and contribute to platforms, actively and openly share data and activities.
- Freight vehicle manufacturers – embed new tools and technologies in the vehicles and operations.
- [76] ITF (2021), “Transport Climate Action Directory – Multimodal freight interfaces”, https://www.itf-oecd.org/policy/multimodal-freight-interfaces
- [77] Touratier-Muller, N. and J. Jaussaud (2021), “Development of Road Freight Transport Indicators Focused on Sustainability to Assist Shippers: An Analysis Conducted in France through the FRET 21 Programme”, Sustainability 13, no. 17: 9641. https://doi.org/10.3390/su13179641
- [78] European Commission (2024), “Digital Transport and Logistics Forum (DTLF)”, https://transport.ec.europa.eu/transport-themes/digital-transport-and-logistics-forum-dtlf_en
- [79] Uber Freight (2023), “Can empty miles in freight be eliminated?”, https://insights.uberfreight.com/network-optimization-reducing-empty-miles
- [80] Lotz, C., Ott, A., Stern, S., and T. Vandieken (2020), “Digitizing Europe’s railways: A call to action”, McKinsey, https://www.mckinsey.com/featured-insights/europe/digitizing-europes-railways-a-call-to-action
and exchange
Information and communications technology and digital platforms.[76]
- Digital tools can support a shift to less carbon-intensive modes, increase the load and occupancy rates of vehicles and improve operations.[77]
Example
- In the EU, Digital Transport and Logistics Forum (DTLF) brings together public and private stakeholders to develop solutions for multimodal freight transport. It focuses on creating a harmonised framework for data sharing.[78]
- Uber Freight: Digital Freight Matching Platform that matches shippers with truck drivers to optimise freight movement and reduce empty miles.[79]
- In the case of the EU, digitalisation could increase railway capacity by more than 20% on many network lines without the need to build additional tracks.[80]
Who needs to act?
- Governments – adopt regulations for data sharing, ensure “data commons” protection and facilitate collaboration between stakeholders.
- Companies – create and contribute to platforms, actively and openly share data and activities.
- Freight vehicle manufacturers – embed new tools and technologies in the vehicles and operations.
- [76] ITF (2021), “Transport Climate Action Directory – Multimodal freight interfaces”, https://www.itf-oecd.org/policy/multimodal-freight-interfaces
- [77] Touratier-Muller, N. and J. Jaussaud (2021), “Development of Road Freight Transport Indicators Focused on Sustainability to Assist Shippers: An Analysis Conducted in France through the FRET 21 Programme”, Sustainability 13, no. 17: 9641. https://doi.org/10.3390/su13179641
- [78] European Commission (2024), “Digital Transport and Logistics Forum (DTLF)”, https://transport.ec.europa.eu/transport-themes/digital-transport-and-logistics-forum-dtlf_en
- [79] Uber Freight (2023), “Can empty miles in freight be eliminated?”, https://insights.uberfreight.com/network-optimization-reducing-empty-miles
- [80] Lotz, C., Ott, A., Stern, S., and T. Vandieken (2020), “Digitizing Europe’s railways: A call to action”, McKinsey, https://www.mckinsey.com/featured-insights/europe/digitizing-europes-railways-a-call-to-action
- The creation, adaptation and substitution of jobs must be ensured through a just transition and capacity building.[81]
- Ecodriving training and incentives can lead to fuel savings of 5-15%.[82]
- Zero-emission trucks require different skills, often less maintenance.[83]
- Maritime decarbonisation can support up to four million new jobs globally by 2050.[84]
Example
- In the US, SmartWay Transport Partnership is a program run by the Environmental Protection Agency that includes a significant focus on workforce training for eco-driving and fuel-efficient practices in the freight industry.
- Logistics Skills Alliance (LSA) is a collaborative UK initiative that brings together government, industry and education providers to address the skill gap in the UK’s logistics sector.[85]
Who needs to act?
- Governments – elaborate and fund training programmes, design requirements and standards for officially-recognised training and establish certificates.
- Companies – invest in workforce skills, conduct trainings and ensure flexibility to accommodate a changing environment for workers.
- [81] UNECE (2011), “Green and healthy jobs in transport: launching a new Partnership under THE PEP“, https://unece.org/DAM/thepep/en/publications/THE.PEP.Green.Jobs.e.pdf
- [82] McKinnon, A. C. (2024), “Capability Building for the Greening of Logistics”, Kühne Logistics University Hamburg, https://www.alanmckinnon.co.uk/uploaded/PDFs/Presentations/Capability%20building%20for%20greening%20logistics%20(Dar%20es%20Salaam%20conference%20%20McKinnon%20KLU)%20final.pdf
- [83] McKinnon, A. C. (2024), “Capability Building for the Greening of Logistics”, Kühne Logistics University Hamburg, https://www.alanmckinnon.co.uk/uploaded/PDFs/Presentations/Capability%20building%20for%20greening%20logistics%20(Dar%20es%20Salaam%20conference%20%20McKinnon%20KLU)%20final.pdf
- [84] Global Maritime Forum (2024), ”Decarbonisation of shipping could create up to four million green jobs”, https://globalmaritimeforum.org/press/decarbonisation-of-shipping-could-create-up-to-four-million-green-jobs/
- [85] Logistic Skill Alliance (2024), “2030: Logistics Vision”, https://www.lsa-skills.co.uk/events/2025-logistics-vision
and logistics
- The creation, adaptation and substitution of jobs must be ensured through a just transition and capacity building.[81]
- Ecodriving training and incentives can lead to fuel savings of 5-15%.[82]
- Zero-emission trucks require different skills, often less maintenance.[83]
- Maritime decarbonisation can support up to four million new jobs globally by 2050.[84]
Example
- In the US, SmartWay Transport Partnership is a program run by the Environmental Protection Agency that includes a significant focus on workforce training for eco-driving and fuel-efficient practices in the freight industry.
- Logistics Skills Alliance (LSA) is a collaborative UK initiative that brings together government, industry and education providers to address the skill gap in the UK’s logistics sector.[85]
Who needs to act?
- Governments – elaborate and fund training programmes, design requirements and standards for officially-recognised training and establish certificates.
- Companies – invest in workforce skills, conduct trainings and ensure flexibility to accommodate a changing environment for workers.
- [81] UNECE (2011), “Green and healthy jobs in transport: launching a new Partnership under THE PEP“, https://unece.org/DAM/thepep/en/publications/THE.PEP.Green.Jobs.e.pdf
- [82] McKinnon, A. C. (2024), “Capability Building for the Greening of Logistics”, Kühne Logistics University Hamburg, https://www.alanmckinnon.co.uk/uploaded/PDFs/Presentations/Capability%20building%20for%20greening%20logistics%20(Dar%20es%20Salaam%20conference%20%20McKinnon%20KLU)%20final.pdf
- [83] McKinnon, A. C. (2024), “Capability Building for the Greening of Logistics”, Kühne Logistics University Hamburg, https://www.alanmckinnon.co.uk/uploaded/PDFs/Presentations/Capability%20building%20for%20greening%20logistics%20(Dar%20es%20Salaam%20conference%20%20McKinnon%20KLU)%20final.pdf
- [84] Global Maritime Forum (2024), ”Decarbonisation of shipping could create up to four million green jobs”, https://globalmaritimeforum.org/press/decarbonisation-of-shipping-could-create-up-to-four-million-green-jobs/
- [85] Logistic Skill Alliance (2024), “2030: Logistics Vision”, https://www.lsa-skills.co.uk/events/2025-logistics-vision
Encourage partnerships that spur innovation and joint action – to share best practices, agree on uniform tracking and decide on accounting of fuel consumption and emissions – and co-build roadmaps and pathways compatible with national climate and economic development objectives.
Example
- ALICE Knowledge Platform is a collaborative digital tool that facilitates knowledge sharing and innovation among logistics and supply chain professionals to enhance efficiency, sustainability, and competitiveness in the industry.[86]
- The “Deep Decarbonization Pathways” is an international policy research initiative supporting the enhancement of analytical and engagement capacities in countries. It brings together academia, private and public actors to explore and co-design sectoral pathways and roadmaps anchored in their national circumstances. It facilitates discussions with all actors around short-term stakeholder-specific measures to implement to reach both national development and climate objectives.[87]
Who needs to act?
- Governments – seek participation in multi-stakeholder partnerships on the global and regional level, establish or enable such platforms within the country.
- Logistics companies – participate in and lead multi-stakeholder partnerships, provide financial support to academia.
- [86] ALICE (2024), “ALICE Knowledge Platform”, https://knowledgeplatform.etp-logistics.eu/
- [87] IDDRI (2024), “Deep Decarbonization Pathways”, https://www.iddri.org/en/reseau/deep-decarbonization-pathways
Encourage partnerships that spur innovation and joint action – to share best practices, agree on uniform tracking and decide on accounting of fuel consumption and emissions – and co-build roadmaps and pathways compatible with national climate and economic development objectives.
Example
- ALICE Knowledge Platform is a collaborative digital tool that facilitates knowledge sharing and innovation among logistics and supply chain professionals to enhance efficiency, sustainability, and competitiveness in the industry.[86]
- The “Deep Decarbonization Pathways” is an international policy research initiative supporting the enhancement of analytical and engagement capacities in countries. It brings together academia, private and public actors to explore and co-design sectoral pathways and roadmaps anchored in their national circumstances. It facilitates discussions with all actors around short-term stakeholder-specific measures to implement to reach both national development and climate objectives.[87]
Who needs to act?
- Governments – seek participation in multi-stakeholder partnerships on the global and regional level, establish or enable such platforms within the country.
- Logistics companies – participate in and lead multi-stakeholder partnerships, provide financial support to academia.
- [86] ALICE (2024), “ALICE Knowledge Platform”, https://knowledgeplatform.etp-logistics.eu/
- [87] IDDRI (2024), “Deep Decarbonization Pathways”, https://www.iddri.org/en/reseau/deep-decarbonization-pathways
Fostering knowledge exchange and technical assistance across regions and countries to support leapfrogging to sustainable, lo- carbon transport.
- The interventions and their associated examples featured in this compendium can be replicated and scaled up. Through technical assistance the activities can be adjusted to specific contexts.
Example
- The United Nations Economic and Social Commission for Asia and the Pacific produced a manual for sustainability and energy efficiency of the freight sector, which can guide approaches and exchanges.[88]
- The Drive to Zero Global Implementation Hub Network helps businesses transition to zero-emission medium- and heavy-duty vehicles.[89]
Who needs to act?
- Governments – identify their technology-specific objectives in their Nationally Determined Contributions, transport strategies or other relevant policy documents.
- Companies – participate and lead in multi-stakeholder workshops, technical assistance activities, take associations and interest groups.
- [88] United Nations Economic and Social Commission for Asia and the Pacific (2024), “Manual: sustainable and energy efficiency of the freight transport sector”, https://www.unescap.org/kp/2024/manual-sustainable-and-energy-efficiency-freight-transport-sector
- [89] CALSTART (2024), “Global Implementation Hub Network”, Drive to Zero, https://globaldrivetozero.org/tools/network/
and cooperation