Running on empty: how to optimise logistics and slash emissions

This is the fourth in a series of eight snippets about how to decarbonise land freight by 2050. Based on a new T&E study, the series will culminate in a public debate in Brussels in September.

Improved freight transport logistics in the EU could contribute to reduce land freight emissions by 10% by 2050 – compared to a business-as-usual scenario where no improvements take place (see first graph below). To calculate it, T&E used its new European Union Transport Roadmap Model (EUTRM) tool to calculate the contribution of smarter logistics.

The logistics sector is underperforming in Europe. 20% of trucks run empty and, although there is no reliable statistical evidence, partially loaded vehicles are also very common. The inefficient use of trucks leads to too many trucks on European roads and unnecessarily increases the externalities of such vehicles. It can be partially explained by the relatively low costs of road freight transport. Increasing the price of road transport is a way to improve the efficiency of road haulage, the uptake of cleaner vehicles (through CO2 differentiation of road charging), and the attractiveness of cleaner modes.

In the business-as-usual scenario (solid line below), we assumed no improvements in logistics. On the other hand, under the improved logistics scenario, pricing pressure forces companies to be smarter in how and when they use trucks. A truck will operate empty or suboptimally far less often if they’re being charged to do so. This price increase (achievable by means of a toll or through fuel taxation) has no recognisable impact on the economy or trade. Fuel taxes would play a role, but road charging will be used as the tax system to replace lost revenue from a decline in fuel use. As a consequence, we assumed empty trucks would be reduced by one quarter and freight demand would be reduced by 5% from 2030 due to pricing policies. These policies would also help to enable digitalisation of road freight transport, as road is currently too cheap for this technology to be adopted to the extent necessary to have an impact on logistic efficiency.

The European Commission is taking the right steps to unlock the potential described above. They proposed an amendment to the tolling directive (Eurovignette) in May. National governments should introduce, expand and redesign tolls so as to accelerate the market take-up of zero or low-carbon trucks. In parallel, national governments should consider gradually increasing diesel tax, ideally in bigger groupings of countries (to avoid fuel tax tourism). Revenues could be used to fund the transition of the sector.

By combining all of what we called the low-hanging fruit measures described in this and previous snippets (improved fuel efficiency and increased rail modal share), significant reductions in GHG emissions can be achieved. The figure below shows the total cumulative effects of these policies. Combined, the above measures could reduce road freight emissions by 36% compared to the business-as-usual scenario, being especially relevant to large trucks above 16 tonnes, where 44% savings are observed compared to the scenario where no policies are implemented.

Although significant progress can be secured, the trajectory shows that the low-hanging fruit measures alone will not achieve full decarbonisation, and by 2035 emissions will begin to rise again due to ever increasing demand. Evidently, new and ambitious policy is required above and beyond currently employable technology to achieve full decarbonisation. In the next snippets we will analyse different options on how that could be done.

For more details, have a look at section 3.1.3 and 3.1.4 of our new study.

Comments

Terence Bendixson's picture

Comment: 

Is there evidence that haulage firms could reduce their empty running? As it is in their economic interest to do so, do we know that they are neglecting opportunities to obtain return loads? Has this theoretical scenario been discussed with a logistics firm to obtain their understanding of the problem? Terence. Bendixson@livingstreets.org.uk

Samuel Kenny - Freight & Rail Policy Office (T&E)'s picture

Comment: 

There are two aspects to improving the efficient loading of trailers for trucks. One is empty headings while the second is optimally loading the trailer so that there’s no ‘unutilised’ space/weight left in the trailer (e.g. imagine 2 trucks traveling the same route with trailers only 30% filled – it would be better to have 1 truck that is 60% filled). Of course, not every empty heading can be prevented but a lot more could – even more could be achieved when we speak about this underutilised space/weight. A lot of large companies that have business units devoted to supply chain management are investing time and energy into how to make their freight operations more efficient (e.g. combining shipments with other companies to fill trailers). If transport is priced at an appropriate level then such initiatives would become widespread and more of a priority for shippers. There are other bottlenecks at play regarding such combined shipments (e.g. the privacy of freight movements and the liability issues that come with combining shipments) – but where there’s a will, there’s a way. You can afford to be inefficient with the current cost of road freight transport. Increasing this will improve efficiency and the uptake of means/technology for logistics to become more efficient.

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About the author

Carlos Calvo Ambel's picture

Transport and Energy Analyst

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