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Weekly Roundup - Disruptions at German Ports, UNICEF Partnerships for Emergency Responses and REWE’s New Distribution Centre

Yulia Fedorova

24 Jun 2024

Global organizations are focusing on reducing Scope 3 emissions—indirect emissions embedded in supply chains, which constitute the majority of companies' total emissions. A significant portion of these emissions comes from logistics activities, particularly road and ocean freight, contributing to at least 7% of global greenhouse gas emissions. Addressing these emissions is crucial for any comprehensive ESG strategy.

Source: McKinsey & Company

Investor and consumer pressure is driving the demand for green logistics. Nearly half of global institutional investors prioritize low-carbon transitions, and over 65% of US consumers seek sustainable products, with many willing to pay premiums for them. Companies are responding by integrating green shipping into logistics programs, and McKinsey predicts that the demand for green logistics could reach $350 billion by 2030.

Source: McKinsey & Company

However, there are significant challenges to decarbonization. Shippers are hesitant to invest in low-carbon shipping due to high costs and uncertain operational viability. Decarbonization technologies face issues such as the disposal of residual assets, production limits on biofuels, and uncertainty around the total cost of ownership. Additionally, unique logistics requirements, such as those in the US utility industry, complicate planning and achieving net-zero goals.

Disruptions at Germany's major ports, including Hamburg, Bremen, Bremerhaven, Brake, and Emden, are expected to worsen shipping delays, logistical issues, and inflationary pressures due to dockworkers striking for better pay. These strikes, which began last week, may significantly impact port operations. Maersk, the world’s second-largest container carrier, has warned of widespread implications on their network, with multiple vessels expected to face delays. Hamburg, Europe’s third-busiest container port, is already operating at 65%-90% capacity, and the strike could lead to severe cargo bottlenecks. Bremerhaven, a major hub for automobile exports and imports, will also be affected, potentially leading to delays in these critical supply chains. Additionally, Germany's inland transport system is under pressure due to recent heavy rain and flooding that affected hydroelectric plants, adding to the logistical challenges.

DSV and UNICEF have partnered to provide rapid emergency responses and strengthen global supply chains, aiming to ensure equitable access to essential supplies for children in need. This collaboration involves DSV providing in-kind flights for swift delivery of essential supplies during emergencies and flexible funding to enable timely support to children worldwide. The partnership focuses on strengthening supply chains, with a regional emphasis on Latin America, and leveraging DSV's logistics network and expertise to improve the efficient delivery of vital supplies for children worldwide. Additionally, DSV employees across the world actively contribute to local initiatives aligned with sustainability priorities and commitments. The partnership builds upon DSV's prior work with UNICEF, including support for COVAX Vaccine Distribution and humanitarian response efforts after the earthquake in Türkiye and Syria in 2023.

The REWE Group has inaugurated a new distribution centre at its Magdeburg Rothensee industrial and logistics centre. The German retailer has invested approximately €250 million in the new building, covering an area of about 49,500 square metres. It is a significant step in central logistics, boasting 50% full automation and positioning Magdeburg as one of the most modern logistics locations in Europe. The new distribution centre will supply food items to nine regional warehouses in the REWE East and North regions and 1,900 stores. The centre has space for 20,000 dry goods items and can dispatch up to 286,000 packages per day via 53 outgates for goods. When fully operational, the facility will employ 270 people, with a focus on manual packing of light and small goods. The facility is expected to save approximately four million kilometers of transport distance every year, contributing to the REWE Group's climate goal.

Read more on recent highlights
Dive deep into research

"Environmental impacts of carbon capture, transport, and storage supply chains: Status and the way forward" by Burger, J., Nöhl, J., Seiler, J., Gabrielli, P., Oeuvray, P., Becattini, V., Reyes-Lúa, A., Riboldi, L., Sansavini, G. and Bardow, A. (2024)

"Maritime supply chain resilience: From concept to practice" by Liu, J., Wu, J. and Gong, Y.(2023)

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Weekly Roundup