In recent years, the ocean transportation industry has been under increasing pressure to prioritize sustainability. According to the International Council on Clean Transportation (ICCT), by 2050, ocean-bound vessels—responsible for over 80% of global trade volume—may be accountable for as much as 17% of global carbon emissions, a staggering number compared to the current 3%. That pressure for increased sustainability also brings distinct challenges, including access to data and how to use this data to drive decisions. This article looks at three ways increased data visibility can help shippers and BCOs reduce their ocean freight carbon emissions.
What Does Reducing the Carbon Footprint of Ocean Freight Look Like?
Reducing the carbon footprint of ocean freight is a daunting task because of the dependence on this mode of transport on a global scale. The good news is that with the modernization of ships, the amount of carbon dioxide released per ton of cargo per kilometer decreased by approximately 20-30% between 2008 and 2019. This is one aspect of reducing ocean freight emissions. The industry can continue to move toward more energy-efficient vessels and use renewable energy sources. However, shippers and BCOs have other decisions to make that help lower emissions, decisions having to do with freight procurement.
Increasing Regulatory Pressures Force the Ocean Freight Industry to Reconsider Sustainability Practices
Several recently implemented regulatory efforts aim to help reduce ocean freight carbon emissions and keep stakeholders informed on the sustainability of the vessels and services they use.
The Inflation Reduction Act incentivizes investment in electric trucks, renewable energy, and greener ports through grants for ports to purchase zero-emissions cargo handling equipment. The Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) rating scheme are both measures under the International Maritime Organization (IMO) that aim to help international shipping sustainability. The EEXI sets energy efficiency standards for existing ships based on their size, type, and propulsion, requiring them to meet a certain emission reduction target. The CII rating scheme measures the carbon intensity of a ship's operations and assigns a rating based on its emissions intensity.
Collectively, these efforts represent a step forward in the global fight against climate change, giving a push with funding, as with the Inflation Reduction Act, and introducing methods of indexing sustainability progress, as with the EEXI and CII. The goal is for shippers and BCOs to have better options for greener practices.
As Regulatory Efforts Increase, Shippers Turn to Data for Sustainable Solutions
However, the next challenge for shippers and BCOs is their procurement decisions. They can’t easily use EEXI and CII to inform these decisions. They need additional data to help them understand their trade lanes, routing, and opportunities to improve efficiency; they need ocean freight visibility data.
Increased Visibility Means Improved Sustainability
Shippers and BCOs must start by gathering data on their current operations to make informed decisions on reducing emissions in their supply chains. In-depth, real-time data allows them to see precisely how their goods are moving through the supply chain and where there may be opportunities for improvement. Armed with this information, shippers and BCOs can then make smarter routing decisions that take into account factors of sustainability.
Optimized Data Leads to Optimized Operations
Improving sustainability in supply chains not only benefits the environment but can also provide an added advantage for shippers and BCOs—optimization that helps to reduce costs. To achieve this, they must monitor key performance indicators for efficiency and ensure their containers arrive on time without delays.
Port and Terminal Events Ensure Full-Chain Sustainability
Shippers and BCOs should look for opportunities to increase efficiency throughout the entire shipping process. They must consider port performance through their containers’ port and terminal events to identify any areas of waste, such as delays and inefficient handling, and find ways to avoid this for future shipments, like improving communication.
Improve Sustainability While Increasing Efficiency with Real-Time Data Through VIZION API
With the growing list of reasons to prioritize sustainability, shippers and BCOs can use the resource of container visibility toward this goal while also gaining the benefits of optimized operations. VIZION provides this real-time, enriched data as an easy-to-implement API, allowing companies to understand their container movements in-depth and identify inefficiencies. To learn more about sustainability through data visibility, contact us today to schedule a demo.
