SIMIC

SHIPPING executives say many companies are proving reluctant to pay the higher prices for alternative fuels and zero-emissions vehicles that can easily double or triple transport costs, reports the Wall Street Journal.
Tim Scharwath, chief executive of DHL Global Forwarding, said talk about sustainability gains often falters when decisions reach procurement departments, where suggestions to use aviation and marine biofuels for transport are vetoed in favour of polluting, but cheaper options.
"It's not happening enough," Mr. Scharwath said. "If you talk to purchasing guys they have one thing to do - to get the best deal. And they get paid for less spend."
The gap between environmental goals and implementation marks a growing fault line as research on sustainable alternatives to traditional freight transport moves into real-world operations.
The broad changes in fuels, infrastructure and transport equipment aimed at slashing carbon emissions are expensive. The maritime industry alone will have to spend some US$3 trillion to eliminate emissions over the next few decades, according to shipping services provider Clarksons. But there is little agreement on how to cover such costs.
A recent study by Boston Consulting Group found that 82 per cent of companies are willing to pay more for sustainable shipping, but what they are willing to pay falls far short of the investment needed to significantly reduce emissions.
Freight executives say electric trucks cost about three times more than regular trucks and can be particularly expensive in parts of Europe where electricity costs are high. Marine and aviation biofuels cost several times more than regular fuels.
DHL, one of the largest forwarders in the world, moves hundreds of billions of dollars worth of freight each year by ocean, air and land. The company has a target of spending up to EUR7 billion (US$7.4 billion) on decarbonisation by 2030. During the past two years, it has spent EUR440 million on measures such as green aviation fuels and electric vehicles, according to company data.
DHL officials say the slow progress is caused in part by a scarcity of alternate fuels and eco-fueled aircraft, ships and trucks. They expect to significantly increase green spending in the next few years as more options become available. But Mr Scharwath said advances will depend on customers' willingness to pay a premium.