December 13, 2023 in PODCASTS
Sustainable Shipping: Carbon Neutral Logistics Explained
Low carbon supply chains continue to play a crucial role in addressing climate change, achieving sustainability goals, and adhering to emerging carbon regulations. APLL is collaborating with the experts at World Kinect Energy Services (WKES) to show you how a carbon neutral supply chain is not out of your reach.
April Chapman (Host): Hello, everyone and welcome to the APLL Pulse podcast where you can uncover new insights from the logistics and freight forwarding industry through the seasoned experts at APL Logistics, a global supply chain provider. We’ll help you keep pace with the current topics impacting businesses, and advance your logistics strategy. Hello, all. Welcome to the APLL Pulse podcast. My name is April Chapman. I am the host as well as the communications and change manager here at APLL. We have an interesting subject for our show today and some great guests. Sustainability is a hot topic for businesses, and APLL is all about helping customers decarbonize and minimize the impact of their global supply chains. We wanted to take the time to fill you in on one of the companies we’ve collaborated with to offer innovative solutions to our customers.
We have quite a lineup today with a total of four guests, two from APLL and two from WKES. So to keep this thing moving, I’m going to offer a quick intro on each guest as they tee up to answer one of my questions. Okay, let’s get started. First up to bat is Patrizia Diamond. Patrizia has been with World Kinect for two years, helping clients with their sustainability journey, guiding them and educating them about the benefits of carbon offsets and why it is essential in their carbon neutrality claim.
Patrizia Diamond: Thank you so much for having me, April.
April Chapman: So we’re going to jump right in. And would you tell us a little bit about who WKES is and what you guys do?
Patrizia Diamond: Absolutely. World Kinect Energy Services manages all aspects of energy at site and at a corporate level. We supply, manage and guide our clients transitioning to a greener future, optimizing all aspects of energy and fuel management in order to decrease costs, consumption and carbon emissions. We help them with calculations, choosing the best projects for their needs and et cetera.
April Chapman: Interesting. So you’ve been doing that for about two years, is that right?
Patrizia Diamond: A little bit over two years. Yes, that’s correct.
April Chapman: So you guys, have you been working in the logistics space then?
Patrizia Diamond: Yes, quite a lot. We have big names in the industry. One of them you might recognize, it’s NCL, Norwegian Cruise Lines. We have been doing quite a lot with them.
April Chapman: Well, I absolutely recognize that because I took my girls on a cruise to the Bahamas in December of last year on Norwegian.
Patrizia Diamond: And you contributed to the decarbonization.
April Chapman: Yes. All right. Well, thank you so much for being here. We’re so glad you joined us today. All right. Next up I’m bringing up to bat is Phil Tran. So Phil has been with APLL for over 20 years, and in that timeframe he’s been in nine different roles. Right now he is currently the Global Head of Ocean and Land Product. So Phil, thanks for joining us.
Phil Tran: April, thanks for having me. I’d like to do a quick introduction what APL Logistics does for the ocean service. So we’re quite unique in our ocean service. We don’t aim to be the largest provider out there, but we aim to be a provider of value. And our ocean product is designed in a way where it’ll give our customers different options based on their supply chain needs. Our ocean service can be anywhere from your regular port to door, port to port services, or all the way to your expedited day-definite service like our ocean guarantee.
Where we focus on value is providing our customers with more than just ocean services. We are on a journey to digitize the user experience. So to save our customers a lot more time, bring efficiencies into their supply chain. And how we do that is by adding standard features in our ocean service because we believe, again, in adding value to our customers’ supply chain. The standard features that we have in all of our ocean services are visibility, milestone tracking, as well as a robust reporting function where we have template reporting or we have customized reporting, anything within our system and all data that we capture will be accessible to our customers.
And on top of that, we put a dashboard analytics into the ocean product. And this is really designed to help our customers gain insights into their volume, gain insight into their transit times, gain insights into their vendors’ performance. So it’s a whole wealth of analytics to help them fully and better understand their supply chain from origin all the way to the door. Oh, and one thing which is important why we’re all here is we do have a carbon emissions dashboard that is part of the standard services. And that’s really important, right? Because if you put all of that together, it helps the customers see their volume, see their carbon footprint, and with that we can help them gain more efficiencies in their operations.
And by gaining efficiencies in their operations, is really looking at how much volume they’re shipping on the ocean and is it necessary to ship so much volume. How do we take that data and try to help them use less ocean transportation? So like I said, we’re not your typical NVO where we’re trying to ship as many ocean containers as possible. We’re really helping our customers gain efficiency. By having those dashboard analytics we can see their volume per container and we can make recommendations like, hey, your 20 foot is always light, or your 40 foot is always light, you’re shipping 300 40-footers a year, but they’re kind of underutilized.
When we look at your data, perhaps you can cut that by 10%, perhaps you cut that by 5%. So now you’re going to gain more efficiencies, you’re going to have better loadability in your containers, you’re going to save costs and you’re going to do better for the environment. And you can see that impact immediately through the carbon emissions dashboard as part of our standard service offering. So again, our ocean service is really geared towards value.
April Chapman: Yeah, I think I’ve been here for about seven, eight years and visibility has been a push this entire time of just creating more visibility for our customers, more visibility. And I do like the direction that that’s gone in because it does put more information in their hands to make better decisions. And this is just like carbon, nothing was talked about seven years ago, we weren’t putting that up there. People, companies need to know their carbon footprint and we’re able to give them those numbers, which they need anyways. And we have an easy way for them to find them now, access them, make sense about it and move on. I mean, we’re so used to in our culture just having insights. People have insights for their Facebook page. So it’s like everyone is now trained to want to know the stats, give me the numbers, give me the stats. And that’s why I like the direction that we’re going in on the sustainability stuff because they need the numbers and we’re able to help provide them now. Right?
Phil Tran: Yeah, yeah. I mean, it’s one thing to have the insights and intuition, but it’s another thing to have that insight and intuition through the data. Let the data tell the story, and that’s what we’re trying to provide as a value to all of our ocean customers.
April Chapman: Right, right. Well, thank you, Phil. You’re so informative. Thank you so much.
Phil Tran: Oh, thank you.
April Chapman: Okay, we’re going to pull up the next person up to bat. So that would be Eva James. So Eva is APLL’s resident sustainability subject matter expert. All think sustainability, we go to Eva. She has been helping guide our internal, facility level and customer-facing environmental initiatives. So she has been with us for two years and we are very, very lucky to have her. So if you can’t tell, I like Eva. So thanks, Eva, for coming onto the show today.
Eva James: Thanks, April. And actually I’ve been with APLL longer than Phil. I started when I was in preschool. But no, this industry has definitely become my life. I came here straight out of college, straight out of my master’s, and I love doing all things sustainability for APLL.
April Chapman: Well, Eva, since I know you’ve been involved from the beginning, can you explain to our audience why APLL and WKES have come together as collaborators?
Eva James: Yeah, Phil really touched on it at first kind of hinting that everything we do at APLL is inherently trying to make our customers’ supply chains more efficient, which is subsequently more sustainable. We manage shipments that crisscross the globe and this opens the door to so many projects and there’s so many opportunities for us to dive in and help make these end-to-end networks much more sustainable. And that’s our job as a 3PL and as a responsible 3PL to provide interactive and actionable carbon data insights. So we don’t just want to present the data and then run away. We want to present the data and then we want you to do something with it and we want to help you do something with it. And I think that’s so important because a lot of times I think we reach that first step of visibility, but then we don’t keep acting and that’s what we’re pushing for today and we’re pushing for in the future.
Phil gave a great example about reducing the number of containers that you’re shipping and always increasing your container utilization, but we do so much more than that. We look for operational shifts. Can you move this DC a little bit closer to its end destination? Can you cut those trucking miles? Lately we’ve been presenting a lot of the data around the carbon performance of your carrier matrix, so helping you make more sustainable procurement decisions, which has a big, big impact on your ocean shipping emissions. So it’s really exciting. I mean, there’s so much we can do and, April, I think I’ve even dragged you into some of these projects over the past few years.
April Chapman: And that’s why I know Eva so well. It’s wonderful. It’s a wonderful direction that we’re going in and you’ve done such a good job in leading the charge around here, so we appreciate that.
Eva James: But at some point, all these projects, we can only do so much. There’s still going to be these leftover emissions that the technology and the global alternative fuel supply just cannot keep up with. We cannot put every single shipment on a electric truck and we can’t put every single shipment on a ship that’s powered by biofuels right now, today in 2023. And so until that technology catches up and until we start putting sails back on ships and not using any diesel or not using any gasoline or not burning any carbon at the source, until then we need a more creative solution. And we were not shy about turning to some experts in the field and we really wanted to find a gold standard for this collaboration. So we turned to Peter and Patrizia’s team at WKES because this solution is carbon offsets and carbon offsets are complicated. They are confusing. Even to someone like myself who has studied this industry and has a huge background in sustainability, they are complicated.
And I think that getting started and weaving them into your ocean transportation or your land transportation or just injecting this different type of value into your supply chain decision making, we needed experts at hand. And so that’s where we’re at today. We’re really happy about this collaboration. We’re really happy to kick it off with, I know I have a couple customers who are, as April says, up to bat. So yeah, that’s a little bit of background on why we’re trying to venture out, why we’re trying to get more creative and why we’re trying to just be the best.
April Chapman: Do what we can do and then partner with others that can do the parts that go past what we can do to help our customers. Okay. All right. We’re going to get Peter Molin up now. He is our last guest that’s going to be speaking with us today. Peter is the Head of Carbon Offsets at WorldKinect. In his current role, he is responsible for the carbon offset team serving clients globally with offset supply and advisory services. Peter, thanks for joining us.
Peter Molin: Thanks for having me. Very happy to be here.
April Chapman: Tell everyone where you’re joining us from.
Peter Molin: I am in Oslo, Norway.
April Chapman: Oslo, Norway. Very nice. One day, one day I’m going to visit there.
Peter Molin: Oh, you should, you should.
April Chapman: Can you let us know how offsets work in this context of what we’ve been talking about.
Peter Molin: Sure. Happy to do so. Maybe we can go back to what Phil and Eva explained that you are doing great work in APLL about reducing emissions and making shipments more efficient. But again, as Eva said, there will always be some residual or leftover emissions that you cannot get rid of. So that’s where we come into the picture. So if one of your customers, customer of APLL, and you want to compensate for those residual emissions, you can basically let APLL know and they will set you in contact with us. We will make sure that you get carbon offsets for those residual emissions. So from an APLL customer’s perspective, it’s very easy. You basically say that you would like to compensate for your emissions. We will take care of that. We will connect energy solutions and offset the emissions with a high quality, high environmental integrity project and give you a certificate that proves that you have offset the emissions.
April Chapman: What kind of projects, what are some examples of those projects?
Peter Molin: Yeah, it’s a lot of different projects. I think that the common thing for these are that they are all reducing emissions in some way. For many of the projects they will in addition have other co-benefits. So they can maybe support a local community project. They can support a biodiversity protection project and other such co-benefits. They are all certified by the biggest and most reliable standards on the carbon offset market. We work with three or four of the biggest ones. To give you some concrete examples, it could be building renewable energy to be protecting rainforest. It could be to plant new forests, basically tens or even hundreds of different project types out there on the market. Our job, our very important job is to make sure that we select the high quality and the good ones for you.
April Chapman: So they’re all over the world then?
Peter Molin: All over the world, yes. That’s true.
April Chapman: So if a company wanted to say, I definitely want our project to be in Asia or something like that, no problem.
Peter Molin: No problem. We are very happy to tailor projects for you so we can find projects that location or with specific co-benefits or that are supporting specific sustainable development goals for you. A lot on the market that we can find the right one for you.
April Chapman: You’ve done all the hard work pulling them all together so we know what those options could be, right?
Peter Molin: Exactly, exactly.
April Chapman: All right, I have one more question for you. So what do you see as the future outlook for the use of offsets within hard to tackle areas of our global supply chain?
Peter Molin: I think first of all, it’s important to remember that offsets are, they’re not a final solution to climate change, but we like to call them a bridging mechanism while waiting for better solutions to come to the market. So as Eva said, we don’t see a lot of low emission or zero emission shipping yet. I mean, we see sails coming back, but we still don’t see a lot of hydrogen or ammonia or other zero emission fuels in shipping. So while waiting for that, I think carbon offsets is one of the very few options that a company would have to compensate for the emissions that are related to shipping.
I can also say in addition to that, the carbon offset market is evolving all the time. It has been around for about 20 years. It has over those 20 years continuously improved in terms of regulatory frameworks, methodologies and standards that are getting more robust. We see more scrutiny on the projects, and that’s also something that’s going to continue in the next year. So I think we’ll see a lot of great quality projects coming into the market in the next five years and 10 years and decades.
Eva James: I have something to comment on that. I mean, I know that I feel like I’ve seen the emergence of this offset market firsthand, but not from sustainability perspective. Even when purchasing a flight through any service nowadays, you can click a button and it says, “Would you like to offset this flight?” And I think that’s the easiest comparison I can make to what we’re trying to do at APLL. You need to ship this container from Vietnam to LA. Okay, well, do you want to offset the environmental impact of shipping that container? It’s very simple when you think of it that way. The background mechanisms and those projects and all of the certifications that go into ensuring that you’re purchasing a verified incredible offset, that is where it gets more complicated. But at the end of the day, yeah, I think Peter hit it right on the head when he said, this market has been around, but it’s really growing in popularity and it’s really growing in its significance in being that bridge until we get to a point where we can really have a zero carbon end-to-end supply chain.
Peter Molin: Yeah. I can also mention, I think if you think of what you said about making things more efficient and do whatever you can to put less containers on the ship, so to say, and also by gathering all these data that we have around emissions, we can use that and then you can use the offsets in the exact way they were supposed to be used. As you said, it’s easy to click a button and buy an offset when you’re flying or when you’re shipping something. When you do that, you should know that there has been a lot of efforts in the background to reduce all the emissions that we can, and then for the residual emissions, you can offset them. In such a case, the alternative is really between offsetting or not doing anything at all. In those cases, it’s definitely best, better to offset than to do nothing.
April Chapman: Just reminds me that no one person, no one company lives in a vacuum. We are working all together on this planet, and there’s certain things, I’m sure there’s been a lot of companies that have wanted to do something or have had a heart to want to do something like this for a long time. But then again, putting it all together and making it all happen, it’s a job in and of itself. It’s a company in and of itself, and so it’s great to collaborate with you to be able to meet these needs and these desires that people had to do good things. And to see that just this collaboration of what we’ve started, what’s going to happen, and when we look back in five or 10 years, what’s been done on this planet that is good because of that, and that’s exciting to me. That’s exciting to kind of be in the place where we’re looking forward, but we will be looking back one day. Patrizia, Phil, Eva and Peter, thank you for sharing your expertise with us today.
Patrizia Diamond: Thank you.
Peter Molin: Thank you very much.
April Chapman: And to our audience, thank you for joining us. If you are an existing APLL customer and want to take advantage of this new opportunity to minimize your emissions, please reach out to your account manager. See you next time on the APLL Pulse podcast. Thanks for joining us today. If you like what you heard or if you have any questions about today’s episode, reach out to us at email@example.com. Make sure to subscribe to us on your favorite podcast apps. You will also find us on LinkedIn or visit us at apllogistics.com. We’ll see you next time on the APLL Pulse podcast.