Ready for the circular economy?

And intelligent assets? A report from the World Economic Forum says the rapid and pervasive development of digital technologies, along with an understanding of circular economy principles, will drastically change life for the average urban citizen much sooner than we think.

WEF’s report, “Intelligent Assets: Unlocking the Circular Economy Potential,” defines the circular economy as a concept in which materials and products are kept at their highest possible value at all times. It’s all about connectivity: “The exponential growth of connectivity has had a sweeping impact on our society in the last decade. It is widely understood that this increased connectivity between people, products and systems can create significant new sources of value for citizens and economies,” the report says.

“As we look to the next decade, the prevalence of connectivity, through the Internet of Things and the creation of ‘intelligent assets’ will accelerate,” so the question is, how to harness technological advances to enable smarter economic growth, resource and food security, and an improved infrastructure.

The impending digital transformation the WEF envisions has the potential to redefine the very basis of the materials-reliant industrial economy, the report’s Executive Summary continues. “Enabled by intelligent assets, a new model of development gradually gaining independence from finite resource extraction is emerging. Can pervasive connectivity become the new infrastructure enabling effective material flows, keeping products, components and materials at their highest value at all times, thus enabling the coming of age of the circular economy? Such a system would generate, on top of business advantages, multiple benefits for users and society as a whole.

“It would be a system where shared and multimodal transport help citizens to quickly and safely navigate to their destination, even during rush hour. A system where assets are able to signal the need for maintenance before breaking down, and in which local farmers can monitor and regenerate the areas of their land at risk of degradation, while at the same time providing abundant and fresh produce.”

The rapid increase in the number of intelligent assets is “reshaping” the economy. “The number of connected devices is expected to grow to 25–50 billion by 2020, from around 10 billion today. A growing body of research indicates that this Internet of Things (IoT) offers a trillion dollar opportunity, brought about by improved production and distribution processes and, perhaps more importantly, a significant shift in the way products are utilized.” The surge in intelligent assets is expected to “irreversibly transform industries and societies, and when paired with circular economy principles, this transformation has the potential to unlock tremendous value opportunities.”

This circular economy would help “decouple economic value creation from resource consumption.” It encompasses four value drivers – extending the use cycle length of an asset, increasing utilization of an asset or resource, looping or cascading an asset through additional use cycles, and regeneration of natural capital – that can be “combined with one (or several) of the three main intelligent assets value drivers – knowledge of the location, condition, and availability of an asset.”

What’s at stake “is not incremental change or a gradual digitization of the system as we know it, but a reboot: pervasive connectivity rolled out at scale has the power to redefine value generation, whilst helping emerging economies bypass heavy upfront investments and material-intensive solutions.”

For example, WEF posits an ecosystem of intelligent assets-enabled services that could jointly “open widespread access to reliable, grid-free renewable energy. Solar panels could be provided as a service to individuals and businesses without access to the capital to buy solar panels themselves, through weekly online payments.”

It’s a rethinking of value creation and logistics delivery from a straight line to a digitalized circular perspective, a brave new world of extreme connectivity.

Singularity here we come.

Image: From the WEF and the Ellen MacArthur Foundation

White House fact sheet: reducing GHG emissions across the supply chain

 Here are the details from President Obama’s Executive Order that intends to the Federal Government’s greenhouse gas (GHG) emissions 40 percent over the next decade from 2008 levels — saving taxpayers up to $18 billion in avoided energy costs — and increase the share of electricity the Federal Government consumes from renewable sources to 30 percent.

Complementing the effort, several major Federal suppliers announced commitments to cut their own GHG emissions.

For the record, here are excerpts from the White House Fact Sheet:

“Together, the combined results of the Federal Government actions and new supplier commitments will reduce GHG emissions by 26 million metric tons by 2025 from 2008 levels, the equivalent of taking nearly 5.5 million cars off the road for a year. And to encourage continued progress across the Federal supply chain, the Administration is releasing a new scorecard to publicly track self-reported emissions disclosure and progress for all major Federal suppliers, who together represent more than $187 billion in Federal spending and account for more than 40 percent of all Federal contract dollars.

“Since the Federal Government is the single largest consumer of energy in the Nation, Federal emissions reductions and progress across the supply chain will have broad impacts.  The new commitments announced today support the United States’ international commitment to cut net GHG emissions 26-28 percent below 2005 levels by 2025, which President Obama first announced in November 2014 as part of an historic agreement with China…”

Maritime Industry Goes Sustainable

Shipping lines, shipbuilders, banks, insurers and shippers are joining forces on a major sustainability initiative that’s “designed to help the industry make long-term plans for future success.”

They call it the Sustainable Shipping Initiative/Vision 2040. They even assert that “radical changes” are needed to make the global shipping industry more energy efficient, environmentally-friendly and sustainable for the long haul.

The initiative unites maritime-related companies from across the industry with the NGO’s Forum for the Future and WWF, including:

• Ship owners, charterers and operators: BP Shipping, Bunge, Cargill, Carnival Corporation, China Navigation Company, Gearbulk, Maersk Line, Rio Tinto Marine and Tsakos Energy Navigation.
• Shipbuilders, engineers and service providers: Daewoo Shipbuilding & Marine Engineering; Wärtsilä.
• Banks and insurers: ABN Amro, RSA.
• Classification society (which set technical standards): Lloyd’s Register
• Representing shipping customers: Unilever

Staxxon: Folding the box inside the box

Containerization revolutionized the maritime freight transportation industry more than 50 years ago; those ubiquitous 20- and 40-foot steel intermodal boxes seen in ports and on truck and rail chassis have made cargo handling faster, easier, safer and more efficient.

The next revolutionary phase of containerization might well reside in the vertical folding container from Staxxon Technologies, a clever solution to the old trade imbalance problem of moving and repositioning empty containers from where the freight isn’t to where the freight is.

IMO’s “Mandatory” Vessel Emission Reduction Regime

An International Maritime Organization panel adopted what it is called “mandatory” design and operational measures to reduce greenhouse gases from international shipping.

According to the IMO’s Marine Environment Protection Committee, which has met 62 times on this issue, last month’s action is the “first ever mandatory greenhouse gas reduction regime for an international industry sector.”

EPA’s SmartWay program expands to drayage

Goods movement stakeholders in port areas and the Environmental Protection Agency have launched an initiative that’s designed to help clear the air and reduce emissions in the nation’s port areas.

The EPA SmartWay Drayage Program builds on clean truck programs that have been around at various port regions for several years.

The players with the EPA in the nationwide initiative include: The Coalition for Responsible Transportation and the Environmental Defense Fund. The CRT partners comprise: Best Buy; Hewlett Packard; Home Depot; JC Penney; Lowe’s; Nike; Target; Wal-Mart; and the following port trucking carriers: California Cartage Express, LLC; California Multimodal, LLC; Container Connection; Evans Delivery Company, Inc.; GSC Logistics; PDS Trucking Inc.; Performance Team/Gale Triangle; Total Transportation Services, Inc.; and the Western Ports Transportation.

The launch was announced recently at the Port of Charleston, SC. According to the joint announcement, the program “builds a partnership between numerous goods movement stakeholders including major national retailers, trucking companies, port communities, environmental groups and the U.S. EPA to solve a critical health and environmental challenge: how to reduce harmful air emissions from port drayage trucks.”

Drayage trucks, which haul cargo containers arriving at ports to storage areas, transload centers and nearby distribution centers, are usually old and a major source of diesel emissions in and around port areas. Getting those vehicles off the road is one of the thorniest and most controversial port and transportation issues around.

In a statement, Rick Gabrielson, who is the CRT President and is Target’s Director of Import Operations, said, “This partnership will generate private sector investment in clean technology, improve the environmental quality of our nation’s port communities and demonstrate the commitment we have made as the shipping industry’s leaders to emissions reductions.”

The program “offers great incentives for independent owner operators and trucking companies to replace their older drayage trucks with cleaner, less polluting models,” said Marcia Aronoff, the EDF’s senior vice president for programs. “With the rise in population and the growth of the freight transportation industry, we must be vigilant, forward thinking and creative in finding solutions that reduce toxic emissions and embrace market-based sustainability efforts.”

The drayage program is based on the EPA’s SmartWay Transport Partnership, generally regarded as an innovative and successful collaboration between the EPA and goods movement interests. The voluntary program provides a framework for assessing and addressing transportation-related emissions and energy efficiency while recognizing superior environmental performance through market-based incentives.

Under the program, port trucking companies and independent owner-operators sign a partnership agreement and commit to track diesel emissions, replace their older dirtier trucks with cleaner, newer ones, and achieve at least a 50 percent reduction in particulate matter and 25 percent reduction in nitrous oxide (NOx) below the national industry average within three years.

Then the SmartWay retailers sign a partnership agreement, committing to ship at least 75 percent of their port cargo with SmartWay trucking companies within three years.

“By giving business priority to SmartWay drayage carriers, the program creates a market-driven approach to incentivize emissions reductions at port communities across the country,” EPA says.

This approach has worked well in the Pacific Northwest, where market-based clean truck programs between stakeholders at the ports of Seattle and Tacoma have been around since 2008 and have removed hundreds of dirty drayage trucks from those port areas.

Can Supply Chains Reduce Emissions and Costs?

It’s not necessarily an either/or proposition. Logistics managers trying to optimize supply chains for sustainability and emissions reductions face a tough question: how to implement those goals without breaking the bank.

The conventional thinking is that there’s always tradeoff: A transport company can reduce its CO2 emissions along a supply chain, but at a higher operating cost. Often much higher.

Findings released last month during a webinar sponsored by Finished Vehicle Logistics magazine suggest that in certain cases at least the best of both worlds is possible.

Is Short Sea Shipping Enviro Friendly?

It’s very possible that short sea shipping, long touted as an economically viable and environmentally sound option for transporting domestic cargo and products, is not all it’s cracked up to be from an eco-friendly perspective, according to a Friends of the Earth report.

Short sea shipping is the regional transport—on lakes, bays, rivers, canals and coastlines—of freight by ship and tug and barge units, rather than by truck or railcar.

FOE’s report, funded by the San Francisco Foundation, says the environmental consequences of increased short sea shipping have not received enough scrutiny, especially with regard to potentially harmful health and environmental effects.

Light bulb moment: DHL reducing carbon footprint with lighting retrofit

Global logistics giant DHL is launching a coordinated lighting retrofit program at its Global Forwarding unit warehousing and distribution facilities in the Americas region, part of an “interim target” of reaching a 5 percent improvement in carbon efficiency by the end of year.

The program initially will be rolled out in the U.S. before expanding to Canada and Mexico, the company said.

As part of parent Deutsche Post DHL and its GoGreen climate protection program, which debuted in North America last year, DHL Global Forwarding’s goal is to reduce its carbon footprint by 30 percent by 2020.

Wallenius reduces GHG footprint while delivering lots of cars

Wallenius Wilhelmsen Logistics (WWL), the Scandinavian ro-ro vessel operator and logistics company, cut its greenhouse gas emissions by 32 percent last year, mainly through reduced fuel consumption due to lower volumes and the use of lower sulfur fuels.

The Oslo-based WWL says it also cut sulfur dioxide emissions by 135,000 tons over the nine-year period from 2000-2009, an amount nearly equal to all of the SO2 emissions from road vehicles in the U.S. for an entire year.

The latter point is a little odd as a bragging point because WWL provides factory-to-dealer ocean transportation for the automotive, agricultural and construction equipment industries. In other words, its roll on-roll off fleet of car carriers move a good portion of the vehicles that wind-up pumping all those emissions into the U.S. each year. The company moved 1.23 million units last year by sea; it operates more than 60 “environmentally adapted car carriers and RoRo vessels” in operation on 20 trade routes to six continents.