Pressure Builds on Maersk and Logistics Industry to Increase “Green Shipping”

If you are not familiar with Maersk, you should be. The Danish giant touches your life more than you would think, and the $57 billion shipping behemoth is also transforming, albeit slowly, how it conducts business. The results could have an impact on how products are shipped across the globe’s oceans. And starting this summer, the company has ventured into “green shipping.”

No group of stakeholders can put pressure on a company to the degree investors can, and this is even true of the titans within the shipping and logistics industries. Earlier this summer a cross-industry coalition, the Sustainable Shipping Initiative, hosted an event at which a Dutch bank representative noted the way in which containers ships are financed will slowly change. More investors will demand transparency and environmental performance—as in those pesky, or in the case of the shipping industry, the massive amounts of carbon emissions emitted into the earth’s atmosphere.

We all hear the mantra how we should all be “buying local,” which is a noble, but often unrealistic idea for several reasons. First, international trade has been the foundation of the global economy for centuries. Companies’ supply chains are becoming more complicated, which means your car, mobile phone, or to creep you out — your favorite snack — could have parts, or ingredients, from several countries. And consumers in a more mobile world want and covet products from the homeland—walk into your local Costco, check your metropolitan area’s demographics, and scope out some of the products available in that local warehouse store’s aisles.

At the same time, shipping fuel is amongst the filthiest energy used on the planet due to its sulfur content. Additionally, it contributes almost three percent to global CO2 emissions—or about the same amount as a major global economy. And with 90 percent of international trade relying on ships and boats, emissions will only go up if the industry does not change.

So what is Maersk doing?

The company has already voluntarily used cleaner fuel for routes including ports in some of the world’s most polluted cities; in Hong Kong, for example, Maersk has pressured the Hong Kong government to mandate cleaner fuels so other companies could not use dirtier, and therefore, cheaper fuel. Similar programs are underway in Virginia, New Zealand, Singapore and Sweden.

But the biggest step is a new line of ships the company is rolling out at the cost of billions of dollars. The Triple-E claims to be the Dreamliner or A380 of the seas: bigger, more efficient and more environmentally responsible. According to Maersk, the Triple-E will cut emissions by 50 percent per container shipped. The ships’ engines run at lower propeller revolutions than other ships of its class, and uses larger propellers, with the result of less propulsive power required.  A waste heat recovery system uses heat from the ship’s exhaust to propel the ship and therefore it requires a smaller engine. What is interesting about the ship’s design is that in an era where the emphasis is on bigger and faster, Maersk actually designed the engine to run at a slightly slower speed—contributing to the reduction in CO2 emissions while at the same time having room for more containers than older ships.

Meanwhile the company is making more improvements within the rest of its fleet and has already seen results. After an increase in emissions between 2010 and 2011, last year Maersk reported an eight percent reduction in its overall CO2 output.

Overall Maersk has a goal to reduce its CO2 emissions 40 percent from 2007 levels by 2020. The company insists it is several years ahead of schedule on this front, but the reality is Maersk and its competitors within the shipping industry must strive to do more more. Fossil fuels are rising in price, consumers are more open to buying local and recent climate disasters indicate climate change is clearly underway. And as investors become more discerning about their portfolios, they are going to look everywhere—even at company like Maersk, a foundation of global and national economies.

Based in Fresno, California, Leon Kaye is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

[Image credit: Maersk]