How DHL Operations Affect Climate Change
As a world leading mail and logistics providers, DHL ships millions of goods by air, ocean, rail, and road every day, contributing to a significant amount of the world’s carbon emissions. With transport at the core of its business, DHL contributed over 30 million tons of CO2, the main cause of climate change, in 2007 alone (1). This is largely due to its dependence on fuel and high degree of energy utilization to deliver a wide range of customer packages on a daily basis.
While DHL’s operations largely impact climate change, climate change can also adversely affect DHL’s operations and thus its profitability. For example, mail and delivery services are highly impacted by weather. Climate change will bring about rising temperatures, increased weather extremes, and more intense and longer duration of flood/storm events, which add variability to DHL’s process of delivering shipments to customers. Disruptions to air and ground transportation routes, reduced ocean port availability, damage to infrastructure and facilities, and electricity outages impacting distribution networks caused by climate change can adversely affect the performance of one of the world’s leading mail service providers. But how does DHL maintain the performance of its operations and combat climate change in a world where customers are continuously demanding higher quality products/services at lower costs and with faster delivery?
How DHL has Tackled its Contribution to the Causes of Climate Change
In 2008, DHL launched the GoGreen Environmental Protection Program, which aims to achieve 30% carbon efficiency by 2020 through a combination of operational efficiencies and innovative services (2). As the first global logistics company to set a target like the GoGreen program, DHL strove to develop services and innovations that demonstrated how successful delivery performance can be interlinked to deliver sustainable value to society and communities through environmental protection. For example, DHL optimized transportation routes (air, ocean, and ground), invested in hybrid vehicles, improved the energy efficiency of its warehouses, enhanced employee incentives to reduce waste, encouraged subcontractors and customers, and developed innovative technologies to drive reduced CO2 emissions and other environmental impacts in the delivery and storage of mail (2).
Optimizing Transportation Routes
Due to the GoGreen program, DHL optimized its transportation routes to develop “intermodal transport solutions,” which is an innovative system that combines multiple methods of transporting goods to optimize for efficiency and speed, cost-effectiveness, and an environmentally friendly process of goods (3). Instead of asking customers shipping overseas to choose between slower ocean routes (more carbon efficient) or the faster air route (more emissions, expensive), the intermodal solution enables DHL to design an optimal combination of both routes to reduces carbon emissions by half in some examples (3).
Investment in Hybrid Vehicles
To increase fuel efficiency, DHL has also invested in efficient logistics technologies and hybrid vehicles—even promising to replace 90% of 2007’s company owned air fleet by 2020 to meet its GoGreen carbon emissions improvement goal (4). Since launching the GoGreen program, DHL replaced eight of its DHL Express aircrafts with Boeing 777F’s, which emit 20% less CO2. However, replacing these aircrafts required DHL to restructure cargo loading operations given differing size/capacity of the new fleet.
In addition, DHL has heavily invested in hybrid and alternative ground transportation vehicles to cut down on fossil fuel use and reduce carbon emissions by 50% each year. In 2011, DHL launched its “Green-Fleet” of battery powered electrical vans and hybrid trucks in New York, and was the first to trial hybrid trucks in its operations in London (2). Currently, DHL is investing in its GoGreen innovation center where they are working to combine optimization solutions like intermodal transport with new transportation systems like driverless vehicles to “process dynamic route planning and live traffic data to improve pick-up and delivery efficiencies in terms of time, cost, and emissions (2).”
DHL’s GoGreen program also offers B2B logistic consulting services to help businesses reduce their supply chain emissions from actions such as transportation, packaging, and processing, which often surpasses those arising from the operations of a business itself (5).
Additional Steps for DHL to Consider Implementing
Despite the success of DHL’s GoGreen program, there are some greenhouse gas emissions that cannot be avoided through the measures described above. However, DHL is not the only delivery company working to reduce its carbon footprint. UPS and other competitive companies have made the switch to using lower emission natural gas in its operations (6). In an environment where differentiation is fundamental to market growth, how sustainable is DHL’s goal to improve sustainability beyond 2020?
- Greenhouse Gases; DHL Introduces All ‘Green’ Fleet in Manhattan http://search.proquest.com.ezp-prod1.hul.harvard.edu/abicomplete/docview/860239582/5982D5F41BF349BDPQ/9?accountid=11311
- DHL GoGreen Fact Sheet https://www.dpdhl.com/content/dam/dpdhl/presse/specials/gogreen_5_years/factsheet-gogreen-success-story-en.pdf
- DHL Green Optimization http://www.dhl.com/en/about_us/green_solutions/green_optimization.html#express_shipments
- DHL GoGreen Solutions http://www.dhl-usa.com/en/about_us/green_solutions.html
- DHL Climate Neutral http://www.dhl.com/en/about_us/green_solutions/climate_neutral.html
- UPS Switches Trucks From Diesel To Liquefied Natural Gas http://inhabitat.com/ups-switches-trucks-from-diesel-to-liquefied-natural-gas/