With an economy that relies heavily on imports and exports, it’s no surprise that Sweden is also dependent on efficient transportation—after all, Swedish companies have to ship to and from the entire world. Virtually all large Swedish industrial companies operate in international markets, with offices and manufacturing facilities on multiple continents. One of these is the Swedish-Swiss electrical engineering giant ABB.
ABB works to make its freight transport climate efficient, for example by consolidating freight flows, reducing weights and volumes, slimming down packages, increasing the proportion of deliveries that go directly to end customers, reducing partial deliveries, and by carefully tracking lead times and choosing the right transportation solutions.
Local units of the company are assigned targets such as reducing the use of courier deliveries, increasing the proportion of direct deliveries, and switching from plywood to lighter corrugated packaging. This approach reduces both emissions and transport costs, and ABB says there is no conflict between environmental and cost targets.
Nonetheless, ABB has concluded that perhaps the most important measure to reduce greenhouse gas emissions is through a focus on efficient international logistics. Carbon dioxide measurements made at one of ABB’s divisions shows that emissions allocated to Sweden constitute less than 1 percent of total emissions for the division, a finding that led ABB to broaden its perspective to include logistics solutions.
This means directing larger volumes of air cargo freight to Scandinavian airports for trans-shipment to Singapore, avoiding truck transport to major European hubs such as Frankfurt. Analysts concluded that efficiency and emission targets were both well served by flying planes fully loaded directly from Scandinavia to the final destination. In short, increasing emissions from Swedish transport can help achieve reductions in total emissions, because smart logistics solutions require handling the climate issue as a global problem.
Reducing total impact
With its substantial engagement in imports and exports, ABB saw a need to review its total international transport impact, and then take appropriate action. At the same time, the company says, local and national efforts remain necessary. ABB argues that environmental work cannot be separated from the company’s overall operations, but must be integrated into the continuous improvement efforts undertaken in purchasing, sales, product development, ordering and inventory control.
Taking a holistic approach to logistics and climate change means first getting a detailed picture of where the emissions occur and the size of various sources. Then the search can begin for emission reduction and efficiency opportunities, both at the local and global level. ABB says its work on reducing emissions from transport is built around measurement, analysis, targeting and follow up, giving the company the tools it needs to set priorities.
Article published in June 2010