Alex Bullard, Author at Global Trade Magazine

Cold chain makes up a large part of the logistics industry, with refrigerated transport a key component of the sector. With more people now doing their shopping online, both for special items and, more importantly, groceries, the number of refrigerated trucks or refrigerated transport units (TRUs) has increased. The refrigeration systems on TRUs need to be powered, with the majority of regular auxiliary engines powered by diesel put into the trucks for fuel also powering generators.

However, TRUs are incredibly bad for the environment. The WHO estimates 4.2m people die each year from air pollution related illnesses. 1 TRU produces anything between 3-15 tonnes of CO₂ per year, making it equivalent to 9 diesel vehicles. Scaled up, 1m TRUs has the same impact on air pollution and emissions as 56m diesel cars. A 2021 research paper concludes that in the UK, TRU CO₂ emissions are 15% higher than a normal delivery vehicle, with nitrogen oxides (NO_X) emissions 18% higher. In the US, light-heavy duty transportation vehicles make up over 80% of its total transportation greenhouse gas (GHG) emissions, TRUs making up to 9% of this total.

It is clear to see there is an emission problem with TRUs, but it creates a difficult situation for companies which provide services using these vans, as solutions have not been cheap. However, many companies are beginning to consider their options for a more sustainable future. There are also small but significant changes that companies can make to reduce TRU emissions. For example, a simple colour change from a dark brown and black to yellows and silvers can produce less emissions due to heat absorption. The weight of the vehicles also impacts the level of emissions. These factors all need to be considered when thinking of how to move away from diesel powered generators.

There may be opportunities arising to address TRU emissions in the not too distant future. In the UK for example, there will be a removal of the red diesel subsidy. TRUs use red diesel to run the vehicles and fridges. It is taxed at 50% less than regular diesel, which has been used as an incentive for the continued use of diesel to run the engines and fridges of the trucks. In 2022, that subsidy will end for all vehicles apart from agricultural. The extra cost for red diesel to fuel the trucks and power generators is estimated to reach at least £1,750 per truck per year. It is at this point in time which offers an unprecedented opportunity for a wholescale change to alternatively powered TRUs.

Hultsteins is a British-Swedish diesel-free refrigerated transportation company. It has proposed the use of its own tried and tested solution to bypass the utilisation of diesel power on board TRUs. It owns a series of trucks in its fleet that counter the use of diesel to power its generators and fridges. The main truck model is called Ecogen, a truck which uses a small electric generator. The Hultsteins system does not fully replace the diesel power but creates a hybrid system. Using both the diesel from fuel and the small electric generator, the hybrid system constantly produces 400V of potential, even when sat idle.

The company states it saves up to 90% of diesel consumption per unit. Hultsteins estimates Ecogen can save 20 tonnes in carbon emissions per unit per annum. Additionally, carbon and nitrogen emissions can be reduced up to 95%. As such, sustainable investors will be looking at this in more detail in the future, with some UK-based road freight companies already looking into this, such as Gist.

More than just the Ecogen system is available on the market, with other companies exploring the use of large-scale batteries and solar panels to power generators. A collaboration between Sunswap and Cenex is aimed at reducing emissions in TRUs through the development of solar powered generators. The energy is stored in high-power batteries, however there is also the scope to include solar panels on the roof of vehicles. This will help companies to reach a variety of demand from customers.

Other companies such as Sainsbury’s are also exploring the opportunity to innovate its own emissions-saving technology, and has rolled out five fully electric TRUs to its fleet in 2021. It is now further investing further in innovation to continue decreasing its emissions. The company claims the new TRUs will help save 4 tonnes of carbon per year.Sunswap itself has secured further funding of £3m from Barclays Bank to accelerate the development of fully electric, zero emissions TRUs, promising between 80-93% global warming impact savings. Although there is still a long way to go, it is clear that some companies are attempting to embrace the chance to make major climate-orientated changes.

We are now two weeks into the Russia-Ukraine war. As the war continues, more and more companies are ceasing operations in Russia, wreaking further havoc on an already incredibly disrupted supply chain.

Productivity in Ukraine’s export sectors has dropped severely, with grain and wheat yield reducing majorly. Before Russia’s invasion, over 60.0% of Ukraine’s exports of grain and wheat went to former Soviet Republics such as Russia, Kazakhstan and Belarus, all major allies of Russia. Ukraine currently holds 11.0% of the world’s grain market – increasing its grain production by 32.0% in 2021 to 85.7m tonnes – and 55.0% of the sunflower oil market. These sectors will be severely impacted by the ongoing conflict in the country. Neighbouring countries such as Poland, which have received huge influxes of refugees, are also showing signs of struggle; VW’s Polish units recently announced it was halting production amid supply chain problems caused by the Ukrainian war.

Re-building after catastrophes such as this war will also come at a great financial expense. In addition, rebuilding efforts will be hindered not only by a shortage of supplies, but also soaring commodity prices. In the medium-term, oil and gas supplies are also running low for Ukraine, with the geopolitical landscape subject to incredible volatility. Raw materials are also seeing shortages, with Ukraine’s trade infrastructure already having taken a large hit that will have large implications down the line for the country regardless of the outcomes from the horrific conflict.

Core metals are also experiencing rocketing prices. Russia produces 14.0% of global aluminium, and, with all factors put into perspective regarding economic sanctions, this will only reduce and cause supply shortages in the future. To add, with a largely reduced number of road freight and trucks making their way into and through Russia, its productivity has started to steadily decline. In Ukraine, with rockets and missiles causing sustained damage to buildings, roads and other infrastructure, the physical act of moving materials across the country has reduced by almost 80.0% in most areas and ceased altogether in the other 20.0%.

Electronics is likely to take the largest hit in the near future, as Russia supplies over 40.0% of the world’s palladium, one of the main resources in the production of semiconductors. Computer chips also require neon, of which Ukraine produces over 70.0% of the world’s total supply. In addition, the two major purifiers for Russian and Ukrainian neon are in Odesa, an area where access is now virtually impossible. Disruption of such supplies is an illustration of the wide-scale global impact the conflict will have, reaching corners of the world presumed to be untouched by the invasion occurring in eastern Europe.

An Achilles Q4 2021 shows data for global supply chains forecasted a tumultuous start to the year, the situation in Ukraine notwithstanding. With the additional tension from the conflict, this will only increase. The restrictions imposed on Russian finances and businesses by the West have caused complete disruption to Russian supply chains, as well as sustained damage to the Federation’s economy. As of March 8 2022, the Ruble is valued at ₽1/$0.0073, entering freefall amidst the sanctions levied on the Russian economy by entities such as the EU, USA, UK and even Switzerland, putting aside its long-standing neutrality in the face of these dreadful acts.

The extent to which local and global supply chains and economies are becoming impacted by the war is slowly becoming clearer. A glimmer of hope is that many regular civilians across Europe are coming to the aid of the refugee issue in western Ukraine, which is reducing human congestion across these normally busy trade and trucking routes. For now, however, the Ukrainian people remain under an unprecedented threat. According to Forbes, the Russia-Ukraine crisis could leave the world facing extended reductions to energy supply, severe sanctions that will likely impact food security as well as rare metal supplies needed to sustain production of key technologies. All of this, coupled with the humanitarian crisis, complicates this unrest further.

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