Demand for greener freight is on the rise, but there’s much to do

Freight makes up a big part of the carbon footprint of almost every Australian business and individual, whether it’s materials for a new office block that need transporting or the coffee beans for your morning espresso.

A swathe of reports including the Infrastructure Audit report has emphasised the need to replace high-emissions air and road freight with lower emissions sea and rail, but to get there is complicated.

There is also a need for careful analysis of supply chains and customer demand so lower-emissions freight options can be used where possible.

According to Scott Brunelle, a spokesman for third party logistics company BCR Australia, demand for green freight is growing, with two distinct groups at the forefront.

One is large multinational organisations that have a corporate social responsibility policy that prioritises reducing carbon emissions. They may be undertaking carbon reporting such as the Carbon Disclosure Project, with freight constituting a Scope 3 emission under the Greenhouse Gas Protocol, calculated according to the Corporate Value Chain standard.

The other group comprises companies looking for greener solutions, such as small-to-medium enterprises that have either a company commitment to sustainability or a customer base that regards it as important.

Brunelle says five per cent of the firm’s clients fall into either of these category, but he expects that number to grow.

“We are very much geared around customer needs, and if they are focused on sustainability, they always disclose that to us. Whether its something that’s mandated or that it’s the company CSR policy,” he says.

In terms of the carbon emissions Brunelle says sea freight is “the obvious choice”. It is also substantially cheaper than air freight.

“That is the number one thing we proactively recommend to customers,” he says.

But sea freight takes more time so it requires better planning in terms of both supply chain and customer needs. The location of inventory warehousing is another factor. If it’s away from direct rail links it will increase the emissions-intensive road component of the freight task.

Complicating the issue is “just in time” delivery, used by a growing number of companies.

It’s a model that can result in air freight, the most emissions-intensive of all the four modes, added to the mix.

“Firms need to look at their supply chain design, and companies have many options in how they configure that,” he says.

Infrastructure improvements can help. For instance growing the rail network. Currently most inter-modal nodes that allow for the transition of freight between sea and rail often involve a road component.

Growth in intermodal nodes, such as that planned for Moorebank in Sydney’s south west, and the improvement of rail links, will also make the freight task safer and more efficient.

Brunelle says larger ships will also help reduce emissions, but Australian ports would need to be expanded to accommodate this.

A consolidation warehouse offshore coupled with multiple on-shore warehouses in the major cities could reduce the need to pack and unpack freight. Using sea freight to major city ports as full container loads can also minimise on-shore road component, Brunelle says.

Coastal shipping for intra-national freight can also work well.

A downside is that coastal freight is far slower than by air – between 11 and 16 days from Brisbane to Perth, nine days from Sydney to Perth and five days from Melbourne to Perth.

“It all gets down to planning. If you plan with this in mind, it’s easy to do, and it is a massive win in carbon terms,” Brunelle says.

Companies such as BCR are also engaging in sustainability within the organisation.

The company has retrofitted LED lighting throughout its head office, upgraded forklifts to more energy-efficient equipment, installed rainwater harvesting and reuse, and overall energy efficiency measures are underway.

One of the company’s domestic transporters that shifts containers between wharves and customers recently upgraded its fleet to lower-emission Euro 5 compliant prime movers that use select catalytic reduction to make the engine run more efficiently and reduce harmful exhaust gases, and fitted speed limiters to contain speeds to 100 km an hour.

More options – slow down, it saves carbon

A 2011 Centre for International Economics report, The Environmental Credentials of the Trucking Industry, found a numbers of measures could reduce carbon emissions.

This includes limiting truck speeds, improving driver training in fuel-conserving techniques, increased use of biodiesel and improved maintenance regimes.

But the real win for the national carbon accounts would be getting as much intra-country freight as possible onto rail.

A 2011 Deloitte Access Economics report, The True Value of Rail, says rail accounts for almost half of land-based freight, with 249 billion tonne kilometres transported in 2010. However, 207.4 billion tonne kilometres carried by road transport vehicles in 2010 accounted for 10 times the level of carbon emissions – 30.4 million tonnes of CO2 equivalent, compared to 3.1 million for rail.

This is despite issues identified in the report, such as rail rolling stock, including diesel electric locomotives that are 40 years old or more and therefore emit higher levels of fuel emissions than newer locomotives.

“The emissions from rail transport could therefore be reduced by increased electrification of rail networks and substitution into less emissions intensive sources of electricity,” the report says.

Another major issue is the bottleneck on the north-south freight line between Melbourne and Brisbane. This is caused by the one-only inland freight line from Melbourne to Sydney, shared with the passenger train network.

There is a proposal to develop a second inland freight line to resolve this issue.

Currently, most rail freight comprises bulk commodities moving from mining areas to the ports, with iron ore comprising 56 per cent of the total rail freight volume in 2012-13, according to the Australasian Rail Association’s Trainline 2 report.

The report, developed in collaboration by ARA and the Bureau of Infrastructure, Transport and Regional Economics, showed that in 2012-13 more than 80 per cent of the total land freight task east-west corridor was moved by rail; and 60 per cent of containerised freight moves by rail east to west.

More than 90 per cent of the non-bulk freight task is transported by rail on the Central Corridor between Adelaide and Darwin.

“Rail and road compete strongly over long-distance journeys on the East–West corridor, with rail moving around 60 per cent of containerised freight in the market. On the North–South corridor, however, rail currently does not compete strongly with road, moving an estimated 30 per cent of freight between Melbourne and Brisbane,” the report says.

ARA’s acting chief operating officer Phil Allan says enhancement of short haul rail between the state’s ports and intermodal terminals is “an issue of most importance to the industry”.

“With the estimated volume increase in NSW, projects like duplicating the Port Botany rail line and ensuring the increase in mode shift to rail, will be vital to ensure the continued prosperity of the state’s economy,” Allan says.

“Innovation and technological advancements to infrastructure are also ways to help boost the efficiency of rail, which was highlighted when Pacific National launched its two new $30 million Rail Mounted Gantry Cranes at the Chullora Sydney Freight Terminal in February this year.

“This project will double the yearly capacity from 300,000 to 600,000 Twenty-Foot Equivalent Units and increasing the overall efficiency of the movement of freight in Sydney. It has been estimated that this initiative will remove up to 100,000 truck journeys from roads between Port Botany and Sydney’s west each year, which will not only dramatically decrease congestion on roads but will also create a safer, less emissions intensive alternative by moving more freight on rail.”

Allan says long haul rail freight infrastructure also needs attention in order to create greater efficiencies for primary industries, including upgrading existing regional freight lines and connections to the Inland Rail network.

“The federal government has re-committed $300 million of existing funds for pre-construction works on the Inland Rail. We are hoping for a stronger, clearer and more significant long-term funding commitment to Inland Rail from the 2016/17 Budget.”