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Freight forwarders role in decarbonization

Freight forwarders play a crucial role in maritime decarbonization by measuring emissions, aggregating demand for low-emission services, optimizing routing, and maximizing container utilization. They can influence shippers and carriers to adopt greener practices through education and collaboration, leveraging their extensive client networks. By acting as intermediaries, freight forwarders can significantly reduce emissions in global supply chains.

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1 views3 pages

Freight forwarders role in decarbonization

Freight forwarders play a crucial role in maritime decarbonization by measuring emissions, aggregating demand for low-emission services, optimizing routing, and maximizing container utilization. They can influence shippers and carriers to adopt greener practices through education and collaboration, leveraging their extensive client networks. By acting as intermediaries, freight forwarders can significantly reduce emissions in global supply chains.

Uploaded by

jemsshipping
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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How Freight Forwarders Can Contribute to Maritime Decarbonization

A freight forwarder is an organization that helps other companies manage freight


transportation across transport modes and geographies. As freight moves from one
location, like a factory in China, to another destination, like a distribution centre in
Kansas, it will often use multiple modes of transportation. Companies use freight
forwarders to simplify the complexity of handling the planning, coordination,
documentation, reporting and customs clearance across these different transportation
modes and geographies.
Freight forwarders balance the relationship between the shipper (the company that
wants to move cargo) and the carrier (the company that moves it). Being an
intermediary provides an opportunity to wield influence within the supply chain to help
reduce emissions. Here are four ways freight forwarders can support maritime
decarbonization.
1. Measurement and education
The most fundamental decarbonization service a freight forwarder can provide to
shippers is freight emissions measurement. By utilizing established and accepted
methodologies like the Global Logistics Emissions Council Framework, freight
forwarders can help shippers better measure and understand the emissions impacts of
each shipment. Accurate measurement is foundational for understanding the impact
for any decarbonization intervention.
When a freight forwarder is communicating with their clients about the status of
shipments, these client interactions are a useful touch point to educate the shipper on
their total emissions footprint and maritime decarbonization options. By making supply
chain data more transparent, they enable shippers to make low-emission shipping
decisions.
2. Demand aggregation
A single shipper is unlikely to persuade a carrier to shift their operations to use low-
carbon fuels or provide other low-emissions freight services. However, if there are
hundreds or thousands of shippers asking, it sends a more powerful message. This idea
of buyers alliances has been used in many sectors. It's also the core principle behind
the Zero-emission Maritime Buyers Alliance (ZEMBA) for example that pools shippers'
demand for low-emission maritime freight options.
Demand aggregation is a core element of the freight forwarder business model. Some
freight forwarders represent the cargo interests of tens of thousands of clients, and
they can leverage this client roster to secure discounts in freight rates from carriers. For
example, Kuehne + Nagel, a large freight forwarder, claims to have over 400,000
customers.
This leverage could also support the formation of green shipping corridors. When freight
forwarders negotiate cargo rates and volumes, they could commit to purchasing cargo
volume from ocean carriers using low-carbon fuels on specific trade lanes. Focused
efforts targeting specific trade lanes could accelerate broader adoption and lower
costs faster than a more diffused decarbonization approach.
3. Routing optimization and vessel efficiency
When a shipper books a shipment with a freight forwarder, their primary concern is that
the cargo arrives on time and undamaged. It is up to the freight forwarder to arrange the
shipment details such as which ship and how it is routed across the intermodal
network.
How cargo is assigned matters immensely for the shipment's emissions. For example, if
air freight is prioritized over ocean freight, the emissions can be approximately 50 times
higher. While a freight forwarder doesn't control the specific route used a plane, truck,
or ship on any given leg of the shipment's overall journey, they can suggest different
combinations of transport legs that could lower emissions. This is a complex
optimization problem, but it could yield major benefits for freight forwarders and
maritime decarbonization.
Not only can routing be optimized, so too can the transportation asset used. For
example, within the maritime sector, the IMO's carbon intensity indicator (CII) could be
a pragmatic way to compare the emissions intensity of specific vessels. Shippers could
indicate preference with their freight forwarder for their cargo to only be carried on
ships with a certain CII score, thereby lowering the shipper's scope three emissions
footprint.
4. Consolidation and container utilization
Freight forwarders typically know the volume of cargo or the number of pallets that they
move on behalf of their clients. When it comes to shipping containers, how much stuff
that is in the container, as a fraction of available volume, is called container utilization.
Freight forwarders have a financial incentive to move more containers, but a shipper
wants to minimize their shipment costs, which is done by maximizing container
utilization for each shipment. By keeping container utilization consistently above 80%,
shippers need relatively fewer shipments which thus results in relatively fewer
emissions, all else being equal.
Sometimes shippers don't need the entire volume of a container. In this instance,
freight forwarders can help consolidate shipments from multiple shippers into a single
container. This consolidated option is referred to as a less-than-container load (LCL)
shipment. This can also help maximize container utilization, thus reducing emissions.
The path for freight forwarders
Freight forwarders interact with thousands of shippers and carriers. As intermediaries
between these two stakeholder groups, freight forwarders are uniquely positioned as
agents of change for the maritime energy transition. By encouraging emissions
measurement, educating clients, aggregating demand, optimizing routing, promoting
energy-efficient ships, and maximizing container utilization, freight forwarders can
decarbonize global supply chains on a massive scale.

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