Freight 2020: logistical nightmare or golden opportunity?

The last twelve months have been momentous for the Freight and Logistics industry. At the start of the year, the industry was focused on ways to decarbonise. Then the pandemic struck, forcing freight transport organisations and supply chains to mobilise at speed to cope with the shifts in behaviours and demand. AECOM’s Freight and Logistics experts discuss how these twin challenges are shaping the sector, and how industry can respond.

Despite its strategic importance in the movement of goods and the contribution to the UK’s economic health, freight is often overshadowed by passenger transport. Freight is sometimes called the Cinderella industry as it operates in the background without recognition. However, that changed in 2020 as the coronavirus pandemic highlighted the essential role that air, sea, road and rail freight plays in the movement of goods. From facilitating same day delivery services to the shipping of vital personal protective equipment (PPE) and medical supplies around the world, freight was suddenly centre stage.

Before coronavirus hit, each mode had begun not only to prepare for Britain’s departure from the European Union, but also to scrutinise its own impacts on the environment in the face of tough but essential carbon emissions reduction targets. In 2019, transport in the UK accounted for a third of all carbon dioxide emissions, with the large majority coming from road transport. Achieving decarbonisation while continuing to play an integral part in the country’s economic health after the Brexit transition period ends – not to mention the huge logistical challenge of delivering the coronavirus vaccine across the globe – is a mammoth task that lies ahead.

Progress on both fronts is being made. AECOM’s annual Freight Matters report takes an in-depth look at these pressing challenges and discusses some of the innovative solutions developed to address them. It also brings together the latest, and most critical, high-level industry data for road, rail, water and air freight transport from a range of credible sources, alongside expert insight from AECOM’s Freight and Logistics specialists on a range of topics.

The report is of value to those working in the freight industry, involved in freight activity and/or interested in the sector’s growing contribution to the UK economy. It can be used to help inform decision-making, policies and projects. Insights include:

Re-shaping port and sea freight distribution models to help the decarbonisation agenda

The UK’s supply chain model – which includes the location of warehouses, distribution of freight among its ports, and modes of inland distribution – comprises a mixture of distribution facilities, primarily in the ‘Golden Triangle’ in the Midlands, and port-centric distribution facilities.

Almost without exception consumer goods brought into the UK or transported between the UK and Ireland are shipped as unitised cargo, i.e. in containers or trailers. The majority travel the UK leg of their journey by road from their port of entry. The industry will look to reshape this by utilising more carbon friendly non-road modes as part of the decarbonisation agenda.

While this distribution model has functioned well over the last 20-30 years, there are questions about its long-term sustainability, particularly in relation to the UK government’s ambitious target to reduce greenhouse gas emissions to net zero by 2050.

Sustainable supply chains need to offer lower emissions per tonne-kilometre to reduce their impact on the planet.  Sea freight and rail offer the lowest emissions by this measure and can substitute for trucks on many long point-to-point movements. Associate Director, Steve Roberts discusses ways that distribution models could change.

The rise of intercontinental rail freight

The movement of goods using long-distance rail freight routes is nothing new in many parts of the world. Cross-country freight connections are a staple in countries such as the US, where railroads move over two billion tonnes per year across nearly 140,000 miles of track. They are also important in other large countries such Australia.

Now Europe and Asia are catching up. Over the last decade, intercontinental rail freight transport has developed quickly in a comparatively short space of time, marking a key trend in the sector. New rail freight lines now connect China with European markets and are known colloquially as the ‘New Silk Road’, in reference to the historic Silk Road overland trade routes that prevailed for centuries.

So, as the sector looks to decarbonise, Freight Consultant Adam Bardsley examines whether these new rail freight corridors will provide a viable alternative to road, sea and air in the future.

Decarbonisation: how freight is leading the way

The transport sector is a major contributor to climate change – in 2018, it accounted for over 24 per cent of global CO₂ emissions from fuel combustion. While individual freight modes have committed to decarbonisation, the sector as a whole is playing catch up with others such as the UK energy sector, which has reduced its reliance on fossil fuels through the adoption of solar, hydro and wind power technologies leading to a 68 per cent reduction in CO₂ emissions since 1990.

Principal Consultant, Raj Sharma examines the efforts made by each mode to reduce emissions and ask whether better progress could be made if there was a unified approach at national or international levels to achieve emissions reduction goals.