Green Giant

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Ude is trying to instill green practices at DHL.

Herman Ude, DHL's boss of global forwarding and freight, explains how being 'green' could actually work for a logistics company.

Herman Ude is a man in a hurry. In just a few hours he should be boarding a flight. Yet he wants to explain how DHL - which he admits produces millions of tons of carbon dioxide every year - is making an effort to be environmentally friendly.

As the CEO of global forwarding and freight for DHL, Ude is keen to trumpet its green credentials. "DHL is the first logistics company globally to announce that they want to reduce their carbon footprint by 30% over the next few years," Ude says, proudly.

With the company's international network linking more than 220 countries and territories worldwide, and employing some 300,000 staff, an effective green strategy could have a significant global impact.

The company also plans to expand across the Middle East, recently opening a new US$50million plus multi-purpose logistics facility in Dubai's Jebel Ali Free Zone.

However, DHL's plans to reduce its carbon footprint are not entirely altruistic, and Ude concedes that its efforts are not only helpful to the green cause but also advantageous from a fuel cost and fuel cost exposure point of view.

From a global forwarding and freight perspective, this makes economic sense, as the cost of fuel constitutes a large percentage of the price for the final customer.

"Typically, our industry is mostly where you trade capacity and you also basically trade the fuel costs that come with it," Ude explains.

"Usually our customers would participate in the fuel increase and when the airlines begin to reduce their rates we may have the opportunity to pass the advantage on to our customers."

"But I believe that the fuel will not really become much cheaper in the long-run and that is why we put a lot of investment into becoming more green," he says.

Ude earnestly explains that investing in energy efficiency  does not necessarily require large amounts of money, and that some of the most effective ways to cut a company's footprint, such as education, are the simplest and the cheapest to follow through.

"It makes a difference whether you put your air conditioning on 22 or 23 or 24 degrees," Ude states. "And we haven't had it here [in the Middle East] yet, but in the head office in Europe we only use recycled paper."

This method of reducing DHL's carbon footprint can also apply to cutting fuel consumption. According to Ude, cutting back is more about intelligence than hybrid motor outfits or technical investments.

He feels that DHL can most effectively minimise its fuel consumption simply by utilising astute logistics. This involves practical notions such as increasing load factors and training lorry drivers to drive with greater fuel efficiency.

"If you go into trucking, depending on where you are, trucks are only full by around 70%. If you put more cargo into a truck, on average it basically goes from a fuel point of view for free. So there is a lot of intelligence that you can put into planning, so that you increase the load factors for the material you move," he says.

It is important to Ude to achieve the maximum environmental effect with minimum cost. This, he says, is partially because the cost of reducing energy consumption and pollution must lie with the company, and cannot be passed on to the consumer, who he asserts is seldom willing to bear the price of helping the environment.

"When fuel becomes more expensive through taxation, or simply is more expensive, people will be more concerned," explains Ude.

"We have some customers who pay more now if they can get better fuel effectiveness or a reduced carbon footprint, but this is still an exception rather than standard. A very small amount of customers would be willing to do that."

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