Kuehne+Nagel has started offering sustainable aviation fuel on its myKN cargo quoting platform as part of its promise to become carbon neutral. With sustainability hanging at the forefront of almost every industry discussion in transport and logistics, Marcus Balzereit of Kuehne+Nagel, warns that carbon neutral ambitions do not come cheap, and not everyone is willing to pay the price. In an interview with Payload Asia, the senior vice president for sales and marketing for Asia Pacific gives his take on what it takes to achieve carbon neutrality in Asia Pacific’s logistics sector.

What are some common challenges for Asian retail companies in going carbon neutral?
Many companies are not completely aware of the impact of their operations on the environment. They do not necessarily have the data on how their logistics activities are impacting the environment, and that has to be the starting point in making greener choices.

Even with an awareness of the effects of their shipments on the environment, retailers will need to be able to reduce these emissions and impact. This can be difficult for the retailer to achieve on their own, without affecting their productivity and shipment volumes.

Additionally, going green does not necessarily come cheap. Efforts to reduce waste, cut emissions, and change different parts of the supply chain will come with additional costs. With the competitive nature of the market today, even the smallest difference in price matters to customers. Companies are thus inclined to prioritise customer prices over the greater good of sustainability.

How is Asia’s e-commerce boom further pushing environmental costs, and what Kuehne+Nagel is doing to help businesses in this area?
E-commerce is growing rapidly, with the Asian region predicted to account for 57% of global growth between 2020 and 2025. With this comes an increase in packaging materials, shipping volumes, truck trips, and overall more emissions and environmental impact.

To overcome these challenges, Kuehne+Nagel has invested heavily in new systems and technologies to make our customers supply chain management more efficient – with load and route optimisation, multi-modal solutions, and full visibility of the entire supply chain process. When customers have the visual and quantitative tools to measure their environmental impact, they are more conscious of it, and are more empowered to make a change.

How does Kuehne+Nagel manage customers’ needs and expectations in terms of sustainable logistics solutions? How have they made it easier for customers to meet their sustainable logistics goals?
In 2019, we launched Our Net Zero Carbon programme to support customers in reducing their carbon footprint, and address carbon emissions reduction in the transport and logistics sector. The programme consists of solutions to address full CO2 visibility, carbon emissions reduction and carbon offsetting. This is why we have also signed up to the Science Based Targets (SBTi) due to the importance of reducing our CO2 footprint in our value chain.

While we have made great strides in addressing visibility and reduction, the unfortunate reality is that carbon emissions cannot yet be wholly avoided. This is where carbon offsetting is essential. We can empower like-missioned customers to fully offset their carbon emissions, through investments in nature-based projects that help reduce greenhouse gas emissions by taking carbon dioxide out of the atmosphere. A close collaboration with all partners in the supply chain, especially air and shipping lines, is essential to significantly reduce the carbon footprint of international shipments and for all to achieve their individual sustainability goals.

What does the road to carbon neutrality look like for Kuehne+Nagel and its customers in Asia?
Kuehne+Nagel has been carbon neutral since 2020 for its own emissions under scope 1+2, and we aim to achieve full carbon neutrality including our suppliers’ and customers’ footprint (scope 3) by the end of 2030. This is done through effective resource management throughout all operations, including our partners’ and to provide sustainable services and solutions that prioritise the environment.

We also invest in technology such as big data and predictive analytics, like our seaexplorer platform which allows for real-time updates on port traffic and shipping routes, to give our customers access to the most updated information. Our myKN app similarly provides customers with information regarding multi-modal options for their shipments, and allows them to select more sustainable transport routes and modes, effectively cutting the environmental impact of their logistics activities.

However we must be mindful that achieving carbon neutrality is a huge undertaking, and will require more than new technology, innovative solutions and even fuel transformation. Making this change requires a shift in industry behaviour and culture, and companies who are ready to embrace this will be at an advantage. Kuehne+Nagel continues to work with such like-minded customers and partners to help them make a difference in building a more sustainable world.

What can you tell us about the exclusive partnership with Lufthansa to promote the use of atmosfair’s synthetic SAF? Are there carriers and fuel producers in Asia who can be tapped to do the same?
Kuehne+Nagel’s partnership with Lufthansa Cargo is another milestone in our commitment to sustainable logistics and to maximise our use of renewable sources of energy. This is an initiative that we are very proud to be a part of, as this fuel is considered the fuel of the future, capable of bringing the CO2 footprint of aircraft engines to zero.

Recently, Kuehne+Nagel has also become the first air logistics provider to offer customers the option to purchase Sustainable Aviation Fuel (SAF) instead of fossil fuel for air transport and thus benefit from net zero carbon emissions air freight services. This new add-on is available on all Kuehne+Nagel air freight quoting platforms and channels such as the myKN platform, with price add-on instantly calculated alongside all other transport charges, on a per kilo basis for a single shipment, and presented as a selectable option. Previously, SAF pricing has always been quoted on a per litre or CO2 tonne avoided basis, however it is now linked to the actual weight of a shipment, allowing Kuehne+Nagel to provide a quote in the well-known and customer-friendly “per kg” air freight pricing basis.