Environmentally friendly courier deliveries will require alignment among partners on use of low-emission fuel, says DHL executive

·3-min read

The global freight industry needs to cooperate with its aviation and marine transport partners to achieve ambitious decarbonisation goals, according to a senior executive at logistics giant Deutsche Post DHL Group.

A scarcity of low-emission synthetic aviation fuel is one technical issue that needs to be tackled, besides setting up a distribution network to make it available for planes at airports, said Tim Scharwath, CEO of DHL’s global forwarding and freight units.

“It’s important to align these goals with other players, to make sure they also want to use more synthetic fuels,” he said in an interview. “There’s a debate about who pays for it – end consumers, customers, or us. This has just started and I don‘t know where it will lead to.”

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DHL announced in March a plan to plough 7 billion (US$8.31 billion) into alternative aviation fuels, vehicle fleet electrification and carbon-neutral offices, warehouses and logistics buildings by 2030 as part of its goal of becoming carbon-neutral 20 years after that.

The company aims to ensure 30 per cent of the fuel used by its own fleet of aeroplanes and that of its partner airlines is zero-emission, synthetic fuel by 2030.

At least 30 per cent of the fuel used in its line haul – the transport of goods to its planes by air, railway, road and waterways – will also be sustainable if it hits its targets.

“We are also exploring sustainable aviation fuel options with our partner carriers and will make appropriate announcements when there are developments,” said Scharwath.

The company offers its customers low-carbon or carbon-free delivery choices, besides normal non-decarbonised options.

Although demand for the climate-friendly options is not high currently, he expected it to pick up as more consumers and brands make an effort to lower their lower carbon footprint in the supply chain.

The German firm aims to electrify 60 per cent of its car fleet, or roughly 80,000 vehicles, by 2030. Currently, they are used only on shorter trips because of battery capacity limitations, he added.

American rival United Parcel Service (UPS) has a decarbonisation strategy that includes the deployment of 10,000 new electric vehicles between last year and 2024, and raising the use of cleaner natural gas to 40 per cent of its total fuel consumption by 2025.

UPS last month pledged to become carbon-neutral by 2050. Part of this will be achieved by halving its carbon dioxide emissions per package by 2035, besides sourcing 30 per cent of its aircraft fuel from sustainable sources and powering all of its facilities by renewable electricity.

Another US-based courier, FedEx, has a more ambitious commitment – to become carbon-neutral by 2040.

In March, it unveiled a plan to plough US$2 billion into making its vehicle fleet entirely electric by that year, invest in alternative fuels to cut aircraft and vehicular carbon emissions, modernise its aircraft to reduce fuel consumption and pare energy usage and emissions at its 5,000 facilities worldwide.

DHL’s decarbonisation effort is driven by its desire to remain a major player in the industry in the long run, as well as expectations from its employees and clients, Scharwath said.

“It’s also driven by the capital market,” he added. “ESG [environmental, social and governance metrics] are important performance indicators now for certain funds managers. We are seeing a societal shift, and we don’t want to run away from it. ”

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