By Damiana Serafini, Transport Manager at the World Business Council for Sustainable Development (WBCSD).

Did you know that traffic and road congestion cost the European Union (EU) around €100,000,000,000 every year? That’s approximately 1% of the EU’s GDP . The combination of increased private vehicle ownership  and rising demand for freight means we urgently need to take steps to address mounting pressure on road infrastructure. 

Freight is responsible for 7% of global CO2 emissions - this is set to quadruple by 2050 . The increase of last mile logistics (urban delivery of goods) is particularly problematic given its immediate effects on the local population. The challenge is to decarbonize and increase efficiency so that there are fewer vehicles carrying the same, or greater, volume of goods.

Logistics expert Alan McKinnon, Professor of Logistics at Kühne Logistics University and author of Decarbonizing Logistics: Distributing Goods in a Low Carbon World, identifies improved asset utilization as one of few decarbonization measures in the logistics sector that closely aligns with good business practice and offers low-carbon mitigation costs . Improving the efficiency of assets could translate to enhanced revenue from assets for businesses as well as fewer traffic jams for everyone else.

So how can we put this into practice? FreightShare Lab (FSL) is a collaborative research project working on developing a platform to improve asset utilization and reduce the number of freight transport vehicles on the road. This means that one vehicle could consolidate loads from several companies to deliver in one journey .

FSL’s dynamic data and asset sharing platform will enable route and load optimization while simultaneously providing development opportunities to small and medium enterprises that could potentially reduce costs and emissions across fleets by approximately 20% . At the heart of the project is an optimization algorithm from Route Monkey -  through better planning of routes, tasks and schedules this algorithm is able to reduce total fleet mileage by up to 20% and increase productivity by up to 30%. One fleet of 1,500 vehicles found it was able to increase deliveries per vehicle by one third after deploying Route Monkey’s solution.

For FreightShareLab, enhancing this algorithm will effectively collate vehicles, depots and other assets from multiple companies, treating them as if they were one fleet. In this way, it can further reduce empty-running of trucks and vans, reduce the number of vehicles operating in congested urban areas, and therefore substantially cut costs and emissions.

Freight and logistics operations are notoriously difficult to decarbonize – to keep warming to well below 2°C we urgently need to adopt and develop smart solutions in the transport sector. These solutions offer a bold step forward.