SA already has comparatively high logistics costs - calculated at 12.7% of GDP in 2010 - which are likely to increase in the near future because of turbulent oil prices, the proposed carbon tax and possible implementation of the Gauteng e-tolling system.
This is according to Reetsang Mothibi, Imperial Logistics’ senior environmental specialist, who adds in the 8th Annual Logistics Survey for SA 2011 that the industry is also vulnerable to the potential impact of climate change and severe weather conditions, which can disrupt supply chain networks.
Given the current state-of-practice, Mothibi says that much can be done to reduce resource consumption and greenhouse gas emissions. Her list of suggested measures include:
• Developing and implementing energy-efficient technologies for buildings and vehicles
• Redesigning distribution networks to shorten distances and consolidate cargo - decreasing fuel consumption per payload
• Training drivers to employ driving techniques that conserve fuel
• Adding additives to diesel to reduce consumption and emissions
• Driving sustainability through the value chain by forming partnerships with service providers and customers to find innovative ways of curbing consumption and emissions
• Including sustainability requirements in procurement policies.
She says that although these measures are by no means novel, the implementation of “green logistics” only started to gain momentum recently, as environmentally-responsible companies started rolling out environmental requirements to their supply chains through procurement policies.
Apart from harnessing business influence to enforce environmentally-sustainable practices along the supply chain, Mothibi says that government incentives also play a role in encouraging the business sector to implement new technologies, by offering rebates or co-funding energy-efficiency initiatives. “Participating in government incentive schemes enables companies that would otherwise not be able to procure new technologies, to do so, and encourages others to hasten the implementation of such technologies.”
Two such government incentive programmes that logistics businesses can participate in are:
1. Eskom’s Integrated Demand Management programme
The National Energy Efficiency Strategy for SA - last reviewed in 2008 - sets the national target for energy-efficiency improvement at 12% by 2015, to sustainably meet the country’s energy needs. The strategy is supported by Eskom’s Integrated Demand Management (IDM) programme, which aims to promote and implement energy-efficient technologies and behavioural change.
Eskom awards a rebate to participating companies for implementing energy-efficiency initiatives geared towards reducing electricity consumption. Technologies funded include:
• Energy-efficient lighting systems
• Building management systems
• Electric hot water systems
• Process optimisation
Mothibi explains that these incentives are very important because electricity consumption at warehouses and office spaces is the second-largest source of CO2 emissions in the logistics industry after fuel consumption. “The graphic above shows that industrial sites - which include manufacturing and warehousing as well as commercial sites, including retail space and office buildings - account for nearly 60% of SA’s electricity usage. Therefore targeting these sites will greatly reduce SA’s carbon footprint, buffer supply chains against the risks, and cut down on operational costs for businesses.”
2. Industrial Energy-Efficiency project
Mothibi describes the Industrial Energy-Efficiency project - hosted by the National Cleaner Production Centre - as a collaboration between the government and international donors. “Its objectives are to assist companies in reducing their greenhouse gas emissions, and to enhance competitiveness through improved energy-efficiency. The focus areas are energy management systems standard (ISO 50 001), energy systems optimisation, and capacity building.”
The 8th Annual Logistics Survey for SA 2011 was prepared by the Council for Scientific and Industrial Research (CSIR), Imperial Logistics and Stellenbosch University. The full survey can be downloaded from www.csir.co.za/sol; www.imperiallogistics.co.za or www.sun.ac.za/cscm