The challenges facing the logistics industry

THE logistics industry in Malaysia should prepare itself for some dramatic changes in the way products are handled, stored and transported when permissible carbon footprints on products traded across borders become mandatory. With various strong global initiatives on sustainability under way, it may not be too long before our exports which do not tally up the right carbon footprints will not be allowed to be traded across borders.

 

Products which are not shipped in “green ships” for instance, or handled at a port that is not green compliant, or transported via a truck that is not environment-friendly or stored in a warehouse that does not go green, may be banned in the trade across borders. Malaysia as a heavily trade-reliant economy and 24th leading exporter nation, can ill-afford such disruptions to its trade.

It is not unforeseeable, like the way now all aircraft (regardless of their nationalities) that fail to acquire the Emission Trading Permit to fly in and out of the European Union are banned (from March 2013), that it may not be long before ports may turn away ships that are not green. But, of course, before they do so, ports themselves must turn green hence, the green port .

As the carbon footprints on products receive greater attention, it is inevitable that the whole transportation and logistics chain will come under scrutiny. Products packed in plastics will have higher carbon footprint tally than if packed in recycled cardboards boxes. Similarly, agricultural exports that use chemical fertilisers will receive higher carbon footprint than if grown organically.

The same goes for carbon footprints on garments, fresh or frozen meat, rubber products, electrical and electronic products and so on, and of course the leather shoes that you wear which packs lots of carbon!

The initiatives and developments to ensure sustainability of the logistics industry are unstoppable. Our policy planners need to incorporate greening of the transport and logistics sector because trade is at the core to this. While such initiatives are already adopted, including by the Transport Ministry and other relevant agencies, there is a need to map out a more comprehensive sustainability development policy with a view to not just protecting our environment and, more importantly, to ensure sustainability of our trade which is the nation’s life-line. The policy approach could include fiscal and financial incentives or mechanisms to encourage the adoption of technologies and techniques that contribute to reducing CO2 emissions. It is hoped that the ongoing National Transport Strategy study by The World Bank (to be completed in November 2014) and the Logistics Performance and Trade Facilitation Study (to be completed in June 2014) commissioned by the Economic Planning Unit would also address these concerns.

In this regard I would think the players in the logistics chain have to take their own initiatives to think sustainably and apply sustainability, including forging collaboration and partnerships, like between shipping lines and port terminal operators and other transporters. Other supporters of sustainable future must also be involved in creating sustainability awareness programmes beyond green building, green technology and green belts, not only for the logistics players but for all strata of society.

The higher learning institutions must actively promote this part of sustainability as a requisite for any undergraduate course. In some countries collaborative strategies to cost-effectively reduce CO2 emissions among players in the logistics chain have been adopted successfully. It is time we go the same path to engage in strategies to simultaneously advance environmental, economic and community sustainability.