On Wednesday the 26th of May CILT will host the second in our series of webinars on sustainability. Global Environmental Crisis: Future Challenges for the Transport and Logistics Profession will feature an in-depth discussion with one of the leading British researchers on this subject, Professor Alan McKinnon. Ahead of the webinar, I was lucky enough to spend some time talking to Professor McKinnon, and listening to his thoughts on sustainability, decarbonisation, and the future of logistics. We begin the conversation with a little background about the Professor’s work and career.
“My first degree was in geography, but I’d always been interested in the transport aspects of geography. Then I won a commonwealth scholarship to go over to Canada to do a Master’s in Transport. I wanted to become an academic, so I had to do a PhD. I came back to London to do my PhD at University College London (UCL), and I was planning to do it on freight transport. But around that time, and we’re talking late 70s, the whole concept of logistics was beginning to emerge.”
“The story is actually a bit bizarre,” he says laughing. “I spent the first three months at UCL reading around the subject of freight modal split – how we get freight off the road network and on to the railways. I was walking back to the tube station to head home when my briefcase was stolen and I lost all my notes, three months of work lost. That was a bit devastating. But I then thought, let’s just think again. Is this really the subject I want to research? And I went to one of the business libraries and discovered logistics. Well, it was called physical distribution back then, and that really got me in to logistics. I think my PhD was in fact one of the first ones done in the UK on logistics. So, I always say it was a crime that ended up getting me into this subject area, and this is now my 42nd year in the field.”
The professor is an engaging speaker, quick and animated. I’m relieved I am recording our meeting. I ask him if he has any particular career highlights, things he has found beneficial or is proud of.
“One thing I’ve tried to do throughout my career is stay engaged with the industry, with the external professional and international organisations. So, it’s not as if I’ve just been an academic doing my lecturing and my research. I’ve been involved with several big organisations like the World Economic Forum – I chaired their logistics and supply chain council for two years. I’ve been very much involved with the International Transport Forum, which is part of the OECD, and the European Commission. My connections with these organisations and Parliamentary committees in the UK has got me involved in some big debates on transport and logistics over the years. I think life would have been extremely boring if I had just been 100% an academic. I’ve really enjoyed the external interactions I’ve had.”
You really have to calibrate these environmental concerns for different parts of the world
We then move on to the meat of the conversation, sustainability. We start with a definition. “It can be environmental sustainability, covering all the externalities – such as emissions, noise accidents, loss of biodiversity etc, or it can be narrowly focused on climate and decarbonisation. In some countries it’s air pollution that’s the main environmental concern, rather than climate change.”
“For them, the pollution problem is so much more severe than ours (here in the Europe). We’ve had thirty years of tight emission controls to clean the local air, while many other countries are at an early stage in that process. Also, on the climate change front, the average carbon footprint of someone say in Nigeria is a tiny fraction of that of someone in the UK or Canada for example. So, you really have to calibrate these environmental concerns for different parts of the world.”
The Situation Today
I ask for Professor McKinnon’s assessment of the situation on the ground today.
“How many hours do you have…?” He laughs, pauses, then says “that’s a very hard question to answer. It gets back to what we were saying earlier about environmental impact. If we’re looking at the pollutant gases, like nitrogen oxide or particulate matter, which cause a range of health problems, then in the developed countries tight emissions controls have greatly improved the situation, certainly as far as freight transport is concerned, though we’ve still some way to go.”
So, the problem that these countries have is that they have older and dirtier vehicles moving more and more freight, and in the process heavily polluting the atmosphere
“Elsewhere in the world there is a huge problem still. Particularly in the megalopolises of developing countries. One problem is that many of these developing countries import second-hand vehicles from Europe and North America, and so there is always a five, eight, ten-year delay in these higher environmental standards reaching the transport systems of the less developed world. In addition to that there is a huge growth in the demand for freight transport in these countries.”
“If you look at the OECD / International Transport Forum modelling on this, most of the future growth in freight traffic is going to be in what is today the less developed world. Countries that are at an earlier stage in the economic development process tend to generate more freight movement relative to GDP. So, the problem that these countries have is that they have older and dirtier vehicles moving more and more freight, and in the process heavily polluting the atmosphere.
“Now if we look at CO2, freight probably represents around 8 or 9 percent of energy related CO2 emissions worldwide, and if you add in warehouses and freight terminals, that figure goes up to about 10 or 11 percent. So, it’s not huge, but it’s a significant proportion of carbon emissions worldwide. It’s also a percentage that’s increasing through time because other sectors are decarbonising faster than logistics. Freight transport is considered what they call a ‘hard to abate’ sector for two reasons. One is because of its very heavy dependence on fossil fuel, but also because of the very high rate of traffic growth, and that’s projected to continue for the foreseeable future.”
I ask if the Professor has noticed a shift in attitude during his engagement with public policy work over the last decade.
“Over my 42 years I’ve been able to research many different aspects of transport and logistics, but over the last 15 or so my focus has been very much on the environmental aspects of logistics, and that’s a time period during which the level of public engagement with the environment has greatly increased. That’s created opportunities for me to work with policy makers and with companies because there’s such interest these days in reducing the environmental footprint of logistics.”
“Also, the spatial scale has extended. So, a lot of my early work was focused here in Scotland, then I got more involved with the Department for Transport at a UK level, then I did work with the European Commission, and then became involved with global organisations. For example, I was one of the lead authors of the transport chapter of the Inter-governmental Panel on Climate Change’s assessment report in 2014.”
The other side of the coin to policymakers is the industry, and I ask how well we’re doing in terms of the attitudes of managers and professionals to these issues.
Is all this happening quickly enough to rescue us?
“I think there is much greater commitment now. There’s been a step change in the engagement of big companies with the climate change issue over the past three or four years. I’ve been working in this area for many years – I think the first journal paper I published on CO2 emissions from logistics was in 1994 and it’s been my main area of research since around 2007. In the early days I think people paid lip service to it. They acknowledged it was a problem, but they weren’t doing much about it. That has now changed. So many big companies are committing to being net zero and are putting in place measures that will help to get them there. So, I think there’s much greater seriousness about this today. And I think that’s quite pervasive. Many of the big logistics and freight forwarding companies are taking the lead here. They’re very actively decarbonising and setting quite ambitious carbon reduction targets. Because so much logistics worldwide is outsourced to these businesses, as they decarbonise, so their clients’ logistics operations are decarbonised as well.”
“The question is, is all this happening quickly enough to rescue us? A lot of my time is spent looking at the climate science, and it’s extremely worrying. We are going to have to achieve incredibly deep reductions very rapidly if we’re going to stay within our carbon budgets, and although many companies are doing great things at the moment, they’re probably not on the right trajectory to get emissions down by the required amount. Sorry to depress you!”
In the later stages of decarbonisation it’s going to get a lot more difficult and expensive
Although not surprising, it is never pleasant to hear such news from someone so well versed in the realities of our situation. I ask if there is the possibility of a tipping point, be it social or technological, after which things might become easier.
“It’s possible, but to some extent it might be the opposite. Certainly, as far as logistics is concerned, we’re in what I call the low hanging fruit phase, where there are many things you can do to cut your carbon emissions which will also save you money. These are self-financing measures that will often give you a fairly rapid payback. But the modelling suggests that harvesting all that low hanging fruit isn’t going to get us to where we need to be. So, in the later stages of decarbonisation it’s going to get a lot more difficult and expensive. Hopefully companies’ early work, much of which is simply applying good business practice will get the process started. Once momentum builds and expertise accumulates, we’ll be better prepared for the tough times ahead when we may have to do some fairly draconian things to get emissions down.”
“You don’t look very persuaded!” I reply that I am, just intimidated by the idea that we’re gathering the low hanging fruit, but the hard bit is yet to come. I then ask about technical innovation and what its contribution may be.
“Yes, along the way there will be technical breakthroughs. Some of the large logistic businesses that have set ambitious targets to be carbon neutral by 2050 know how to go some of the way to net zero, but there’s still a gap. They usually assume that over a 30-year time frame there will be major advances in technology which we don’t know about today, but which will help to decarbonise. The trouble is that we cannot wait for these things to happen. We have to maximise our decarbonisation now. Any further reinforcement from future technological breakthroughs will be a bonus. It would be very reckless simply to wait for some technical miracle to rescue us.”
Aside from the previously mentioned unknown advances, I ask the Professor if there are any developments he can see coming on stream that give him cause for optimism?
“A few things, and one of them is not particularly technological – company collaboration. Again, there is general acknowledgement these days that to get to deep cuts in carbon emissions companies will have to share their logistics assets to a greater extent than they currently do. Because there is a lot of unused capacity in freight vehicles, ships, aircraft, warehouses, one obvious thing we can do to decarbonise is to use all of those assets more intensively. This will often involve companies working together and sharing their assets.”
“Now, having been in this game a long time, I can tell you there has been 30 years of discussion on how to promote supply chain collaboration. Unfortunately, I reckon that it is still the exception rather than the rule. But again, I detect a change in mindset here. Many companies are now getting quite serious about collaboration, not just to cut carbon emissions but often to improve the economic efficiency of their operations.”
The other potential game changer it seems to me is digitalisation
“The other potential game changer it seems to me is digitalisation, which is this collective term for a whole range of IT, communication and artificial intelligence developments which will have a big impact on logistics, including on its carbon footprint. Again, much of this is to do with how well we use the assets, to match up available capacity with loads for example. We did a survey with the European Freight and Logistics Leaders Forum last year to which over 90 senior logistics executives responded. One thing on which there was a high level of agreement was that the next five years will see a digital transformation of logistics. It’s already underway, but the feeling is it’s going to ramp up, and that’s going to be really beneficial in environmental terms.”
“Another thing which people think could be a gamechanger is 3D printing. This can allow you to streamline your supply chains and reduce product wastage. But there’s currently a debate on this subject; some doubt it will have much net effect on freight traffic levels and emissions, while others think it could be transformational. Again, it’s not going to happen quickly. It may be the late 2020s or early 2030s before it has much effect. There’s a general feeling that 3D printing has had ‘a good pandemic’. A lot of companies have started using it for the first time and that has demonstrated its wider application.”
The Role of CILT
Finally, we move on to the role of CILT Members, and I ask what role the wider Institute can play in the move to a sustainable logistics paradigm.
“Raising awareness and fostering debate on the subject is important, and I think the Institute has been doing that effectively. In fact, I’ve had the pleasure of participating in some of its decarbonisation sessions.”
“Once you’ve alerted the transport and logistics profession to the scale and urgency of the challenge, you need to move more into training mode to equip professionals with the right knowledge and skills. I also think that there’s another role for CILT in advising and lobbying government. Government is regularly consulting on ways to improve the environmental impact of logistics which gives the Institute an opportunity to influence public policy. So those three things, fostering debate, training professionals, and advising governments, seem to me to be the most important.”
“As to members and professionals in general we need to raise their awareness of the issues. It partly depends on the role they perform as to how much leverage they can exert on the carbon intensity of the logistics of a business. Some can directly influence the level of carbon emissions through, for example, a decision on transport mode – do we send this consignment by road or rail? Or a vehicle purchasing decision – to what extent should the company be investing in battery-powered vans as opposed to diesel ones? So, for them it’s more than just an issue of awareness. They will really have to get the right skill set to weigh up the environmental options and assess their implications for cost and service.”
Now you’ve got to factor in the carbon emissions. That is a change of paradigm
“It’s all about trade-offs. The mentality of senior logistics managers has until recently been all about balancing economic efficiency against service quality. You’re providing a certain standard of service to your customer and doing that as efficiently as possible. Now you’ve got to factor in the carbon emissions. That is a change of paradigm. There may come a time when the minimisation of emissions becomes the dominant factor, forcing businesses, for example, to sacrifice some service quality in an effort to decarbonise. We are, after all, in a ‘climate emergency’ and this is going to require a major change of outlook by transport and logistics professionals around the world.”
I thank Professor McKinnon for his time. It has been an enjoyable conversation, and a very informative one, if at points more than a little concerning. I very much look forward to his upcoming CILT webinar.
Alan McKinnon is Professor of Logistics in the Kühne Logistics University in Hamburg, Professor Emeritus at Heriot-Watt University, Edinburgh and a Chartered Fellow of the CILT. A graduate of the universities of Aberdeen, British Columbia and London, he has been researching and teaching in freight transport / logistics for over 40 years and has published extensively in journals and books on many different aspects of the subject. Much of his recent research has been on the decarbonisation of logistics and in 2018 he published a book on the subject. Alan has been an adviser on logistics to several governments, parliamentary committees and international organisations, including the OECD, World Bank, United Nations, World Economic Forum, European Commission and the Intergovernmental Panel on Climate Change. He was chairman of the World Economic Forum’s Logistics and Supply Chain Council and a member of the European Commission’s High-Level Group on Logistics. He was a founder member of the CILT’s Logistics Research Network and won the Institute’s Sir Robert Lawrence award in 2003.
Registration for Global Environmental Crisis: Future Challenges for the Transport and Logistics Profession is open now, please follow this link to register. The webinar is scheduled for 12:00 – 13:30 BST on Wednesday the 26th of May and will feature Professor McKinnon in discussion with CILT Secretary General Keith Newton.
The conversation will begin by reviewing the extent of our industry’s contribution to air pollution and global warming problems, moving on to discuss GHG emissions from the movement of freight, examine future trends and targets, and explore what can be done to decarbonise freight transport operations. The talk will conclude with a discussion of the skills that transport and logistics professionals will need to acquire to be able to manage this decarbonisation process.