GCC ‘can slash transport emissions with sustainable logistics overhaul’
GCC countries have a “critical opportunity” to advance their net-zero commitments by transforming their transport and logistics (T&L) sector, according to new research from Strategy& Middle East, part of the PwC network.
The sector, responsible for a quarter of global greenhouse gas emissions, offers significant potential for impactful change.
Analysis suggests targeted measures could reduce regional carbon emissions from T&L activities by 20 to 40 per cent.
With all GCC nations committed to net-zero emissions by 2050 or 2060, the environmental impact of logistics cannot be overstated.
Its influence extends beyond its own footprint, acting as an enabler for nearly all economic sectors, from manufacturing to retail. Decarbonising logistics offers an unparalleled multiplier effect, with its potential exceeding its already large direct footprint due to its integral role in the region’s economy.
“Globally and across the GCC, transport and logistics is a high-emission sector that plays a pivotal role in enabling and influencing various parts of economies,” said Strategy& Middle East partner Maha Raad. “Decarbonisation is critical, and there’s an opportunity to initiate this domestically, creating a strong impact on agendas.”
For the GCC’s rapidly growing markets, there’s a broad awareness that without near-term action, carbon emissions are projected to rise, threatening regional sustainability efforts.
The Strategy& Middle East research underscores the need for a paradigm shift in logistics operations, moving beyond incremental improvements towards innovative, sustainable practices that don’t compromise efficiency or economic growth.
Meaningful decarbonisation in the GCC’s T&L sector hinges on collaboration among governments, industry leaders, and stakeholders. A tailored framework is needed, with distinct measures for both cross-border and domestic logistics.
For cross-border logistics (air and sea transport), emission targets are being set by supranational bodies like the IMO and IATA.
GCC countries must adapt regulations, such as vessel emission limits, and adjust infrastructure, for instance alternative fuel bunkering in ports, to align with international standards, potentially playing a leading role in accelerating the future fuels agenda.
For domestic logistics, shifts include moving from the just-in-time (JIT) model to a balanced supply chain management approach; transitioning from speed-prioritised delivery schedules to capacity optimisation; and adopting multimodal delivery systems integrating greener transportation modes.
The transition from JIT, which prioritises efficiency and speed but often results in higher emissions, to a balanced approach allows for recalibrating operations to achieve both economic and environmental goals.
Optimising capacity through strategies like dynamic routing and load consolidation addresses inefficiencies while reducing underutilised vehicle trips. Integrating multimodal systems, including expanded rail and maritime transport in countries like Saudi Arabia and the UAE, offers significant potential to reduce long-haul emissions while driving operational savings.
“For the GCC, composed of fast-growing, dynamic markets, meeting sustainability targets will be an even greater challenge than in other regions,” said Strategy& Middle East principal Hamza El Mounhi. “However, with the right focus on technology, innovation, and collaboration, the region can set a global standard for decarbonised logistics.”
Governments can play a crucial role by enforcing international standards, incentivising green practices and fleet deployments, and defining acceptable emissions standards. Investments in green fuels and technologies, such as hydrogen and biodiesel, further position the GCC as a global leader in sustainable logistics innovation.
Private sector stakeholders, including carriers, logistics service providers, and cargo owners, are equally pivotal. Carriers and logistics providers must adopt international standards, reconfigure logistics networks for greater efficiency, and deploy green technologies like electric vehicles. Cargo owners can embrace predictive analytics to optimise inventory management and operations while rethinking rapid delivery expectations.
Consumers also play a role by choosing products and services from companies prioritizing sustainable practices.
The GCC’s logistics sector has the potential to become a global sustainability leader, contributing to the region’s net-zero goals and broader economic resilience and competitiveness. With decisive action and collaboration, the sector can deliver transformative outcomes for the environment and the economy.
“The path to net zero is not just about incremental change,” concluded Ms Raad. “It requires a rethinking of traditional approaches, driven by innovation and underpinned by collective commitment. The GCC has the vision and resources to make this transformation a reality.”
Source: https://www.gdnonline.com/Details/1343925
