We Need to Talk! Dialogue Between Industry and Research Can Make Logistics “Go Green”

You and Prof. McKinnon have been invited as guests to a wide variety of events in recent months. What types of events have these been?

Moritz Petersen: We have recently been talking mainly about these two studies which deal with sustainability and, more specifically, the reduction of CO2 and other greenhouse gases in logistics. Unfortunately, all of the events have been exclusively online, yet still very diverse nonethleless. They have included giving classic presentations about the results of our studies, a webinar with the German Logistics Association (BVL), and a podcast by Transporeon. For one article, I went on a digital walk with the representative of a commercial vehicle manufacturer. Other contributions have included a major online event on green transportation held by Handelsblatt, and the “Transporeon for Future” hackathon where KLU featured on the jury. Two of our students and their team had a successful application idea at that event. In addition, we continue to listen to and read what our colleagues are doing in both theory and practice.

What were you able to take away from these events?

Moritz Petersen: Overall, I have made three main observations. First, and this is very positive, I find more and more attention is being paid to the issue of sustainability and, in particular, CO2 reduction. My second observation, however, is that the discussion is getting far too hung up on annual figures. If we are only talking about targets for 2030 or 2050, then we are pushing the issue too far into the future. In fact, we need to take care of it right now, because we are talking here about what little remaining budget of CO2 we are still allowed to use. Third and finally, we are seeing a high need for new skills.

I would also like to add a fourth observation: there are many positive signals and new alliances in industry. Already at this moment, there are many projects that are being pursued with passion. For logistics as a whole, however, we must not be lulled into believing what is happening right now will be enough.

In order to achieve the goal of decarbonization in logistics, a number of things must be set in motion quickly. What can knowledge transfer—i.e. communication, dialogue, consulting—contribute to this?

Moritz Petersen: Alongside research, knowledge transfer is one of two main areas we focus on at our research center. But we should be careful not to see knowledge transfer as a one-way street between universities and companies. It clearly goes in both directions.

That means you also gain something of importance from this interaction?

Moritz Petersen: Absolutely, and to be perfectly frank, it is the operational reality. For us, this interaction is crucial in being able to ultimately define the scope of the research agenda and avoid researching past needs.

What does the research center offer to stakeholders in industry but also in politics where the framework conditions for environmental protection must be created?

Moritz Petersen: On the one hand, we drum up support for the issue as loudly as possible and claim its urgency loud and clear. Because it's not always so obvious. If you look at road freight in Germany over the past twenty-five years, their CO2 emissions have fallen by a third. That means a third less fuel is burned per ton kilometer. That sounds good, but with an 80% increase in road transport volumes over the same period, in the end it means that CO2 emissions are now 20% higher than in 1995, not lower.

Secondly, we talk to companies about their individual opportunities to reduce CO2. The challenge is immense, and every company has very different prerequisites when it comes to logistics.

Moritz Petersen: And a third point that is important to me is that small companies are a very relevant part of logistics. But they don't have a department that continuously monitors issues like alternative drive trains and fuels. Many are uncertain regarding the diversity of battery-electric, hydrogen, biofuel, etc., and therefore prefer to wait and see. Vehicle manufacturers are making big bets on what will prevail. And also, because there will be huge pots of funding, there is very intensive lobbying and, in some parts, almost disinformation when it comes down to this. This is where our research center makes an important contribution: we make independent, fact-based assessments. Science is predestined for this task.

On the one hand, a large part of the green transformation needs to be completed within this decade. On the other hand, the transport sector is strongly characterized by small and medium-sized enterprises. That said, what are the prerequisites for successful decarbonization?

Moritz Petersen: Across Europe, 99% of road haulage companies are small and medium-sized enterprises (SMEs) with fewer than 50 employees. The trucks of these small companies end up producing the emissions. At the same time, road freight accounts for around 65% of CO2 emissions from all transport modes worldwide.

So how can we reach these SMEs? One of the two studies we did focused on SMEs. And half of these SMEs surveyed say they don't measure and document their CO2 emissions. But in fact, it is not complicated at all to get started with it. The reason they don't do it is because there is no demand for it. 76% of the companies say that very few of their customers, i.e. the large shippers or logistics service providers, even ask for such information. This will change in the medium term when environmental targets set by large companies also have to be met for their supply chain. Then the big players will have to rely on the small ones to do something.

And in what ways can SMEs already be reached today?

Moritz Petersen: Representatives of the big players tend to use classic formats such as conferences. They have the time for it, and it's part of their job to attend. But one positive side aspect of the current pandemic situation is that these events, which have been forced to go online, are now much more accessible to SMEs than ever before. That means it's now possible to drop in on such events for half an hour during a lunch break.

In the future, we want to put special emphasis on SMEs at the center. We are currently applying for funding for a research project that deals precisely with their situation in road freight transport which is: ambitious reduction targets, a confusing technological landscape, little time to deal with it, and large shippers who simply expect things to happen.

What is the contribution of education and further training to the green transformation of logistics? What are you already involved in?

Moritz Petersen: The contribution is potentially very significant. I found one of the findings of our study with large shippers and logistics companies interesting: the majority say that there is a lot to learn and the range of topics could not be wider. "What does sustainability even mean?" is a macro issue. There are also highly operational topics such as measuring and reporting emissions, but there is also how to strategically embed reduction targets or how to engage your team and supply chain partners. Industry is signaling a great deal of demand in this area. As a university, we are naturally trying to meet this demand in a variety of ways.

The political framework is also important for the transformation. Does the research center act in an advisory capacity in the political sphere?

Moritz Petersen: Politicians say they want change and have all the regulatory powers to shape this change. Of course, this should preferably be based on empirical evidence provided by science. We also provide information. Alan McKinnon has spoken on this in various hearings, for example in the Irish Parliament.

Empirical evidence, however, is often a tricky business. Merely providing it is not enough. We saw this again at the end of April, when news broke that the Constitutional Court had declared the German Climate Protection Act unconstitutional, because it is not far-reaching enough and pushes important decisions too far into the future. What the sociologist Ulrich Beck stated in 1986 about gender parity unfortunately also describes the climate policy of the German government and the behavior of some large companies quite well: We see "verbal open-mindedness with simultaneous behavioral paralysis". („verbale Aufgeschlossenheit bei gleichzeitiger Verhaltensstarre“.) So there's a lot of work to do ahead of us.

Is there anything else that is currently on your mind we should talk about here?

Moritz Petersen: Yes. Overall, the pandemic has created a greater awareness of logistics and that this is an extremely relevant sector. Even more so, the blockade of the Suez Canal at the end of March made the vulnerability of international supply chains clearly visible to the public. Even my 3-year-old son would ask me every morning if the ship was still blocking the canal, and we would watch as the traffic jam got bigger every day. Logistics is unsurprisingly a very present topic at home anyway, but media coverage has exacerbated that. So, the fact that logistics has moved more into the public consciousness in the last year is, I think, quite good for the industry from many angles.

Thank you.

More information:

• Prof. Moritz Petersen
• Center for Sustainable Logistics and Supply Chains (CSLS)
• CSLS study: Toelke, M.and McKinnon, A.C. (2021) Decarbonizing the operations of small and medium-sized road carriers in Europe. Smart Freight Centre (Amsterdam) and Kühne Logistics University (Hamburg).
• CSLS study: Insights on the decarbonization of European logistics from the perspective of over ninety senior executives: “Measuring Industry’s Temperature – An Environmental Progress Report on European Logistics”