Photo: Fquasie, CC BY-SA 4.0, via Wikimedia Commons

New report by Professor Alan McKinnon details how lower income nations can best decarbonise logistics

The World Bank recently released a comprehensive report authored by Professor Alan McKinnon, a renowned figure in the logistics field, that examines the challenges and potential solutions for decarbonizing logistics in Lower Middle-Income Countries (LMICs).

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Titled “The Decarbonization of Logistics in Lower Income Countries,” the report provides numerous insights into how logistics carbon emissions can be best cut in LMICs.

In particular, the report highlights five main strategies, or “decarbonisation levers,” which can be adapted to meet the specific needs and circumstances of these nations.

The five decarbonisation levers

  • Constraining the growth of freight demand
  • freight modal shift
  • optimized vehicle loading
  • fuel efficiency
  • shift from fossil to renewable energy

In it conclusion, the report stresses that generalisations about LMICs are difficult due to their geographical, economic, and political diversity. Nonetheless, Professor McKinnon says their research does provide valuable insights that can be of interest to policymakers, managers, and researchers.

One of those insights relates to a study concerning South Africa, in which it was discovered that country-specific Road Transport Management System (RTMS) initiative and adherence to delivery slot times significantly influence road freight emissions.

Over the next three decades, the report projects substantial increases in CO2 emissions from domestic freight transport in non-OECD countries, making it imperative to address these issues.

According to the report, for many LMICs, three of the five decarbonisation levers – freight modal shift, optimised vehicle loading, and increased fuel efficiency – offer significant potential.

However, taking effective action in these areas requires a range of measures, such as building intermodality into supply chains, curbing truck overloading, phasing out fuel subsidies, upgrading truck and locomotive fleets, and encouraging energy-efficient practices among logistics workers.

The report also emphasises the importance of adopting measures with relatively low or negative carbon mitigation costs in the short to medium term. These measures collectively have the potential to significantly reduce the need for “defossilizing” energy, a concept aligned with the fifth decarbonisation lever.

However, the challenge of constraining freight demand (lever 1) is more complex and risky, especially for countries in earlier stages of economic development. One way the report finds that LMICs can avoid locking themselves into carbon-intensive logistics systems is by capitalizing on digitalisation, which provides businesses with flexibility to reduce carbon emissions.

Transitioning from fossil to renewable energy (lever 5) presents its own set of challenges, given LMICs’ reliance on imported trucks and relatively carbon-intensive electricity. Nevertheless, LMICs can leverage microgeneration of solar energy, harnessing the vast photovoltaic footprint of warehouses, factories, freight terminals, and trailers.

Another key recommendation is the transfer of advice, good practice case studies, and training in sustainable logistics from High-Income Countries (HICs). Professor McKinnon says that such support is crucial, as highlighted by research in Nigeria, which underscored barriers to the adoption of ecological innovations in logistics.

The report also underscores the role of global, regional, and national green freight programs in disseminating information about decarbonisation and incentivizing local carriers to reduce emissions. It commends large logistics providers, freight forwarders, and shippers with global operations for playing a crucial role in this transition.

Regional alliances that promote the decarbonisation of transport have emerged as a promising trend. These initiatives create opportunities for freight modal shift, improve truck utilisation on cross-border routes, and encourage the supply of low-carbon fuels.

The report provides a series of public policy interventions for each of the decarbonisation levers, consolidating them into a logistics decarbonisation toolkit. This toolkit highlights how the same policy instrument can influence several decarbonisation levers and the potential trade-offs with other economic and social policy goals.

Finally, while limited research exists on the net impact of these policy tools in various LMIC settings, the report emphasises that, as experience and knowledge in this field grow, LMIC governments can play a more active and targeted role in the logistics decarbonisation process.

Photo: Fquasie, CC BY-SA 4.0, via Wikimedia Commons