Sustainability in the Shipping Industry: Reports of Its Death Have Been Greatly Exaggerated

Last week, I had coffee with a local maritime industry lobbyist who told me: “You know that goal that you set for the Port of Seattle to be ‘the greenest, cleanest, most energy efficient port in North America’?”

I responded, “Yes, the one my fellow commissioners and I unanimously adopted back in 2008? What about it?”

“It won’t help you grow your business, it’s meaningless.”

I can understand my lobbyist friend’s pessimism. Considering that the global shipping industry suffered an estimated $5 billion in losses in 2011, their minds have lately been directed elsewhere, namely on stemming the bloodshed.

There has been an obsessive focus by global shipping lines and their customers – the shippers of goods, or in industry lingo the “beneficial cargo owners” (BCOs) – on reducing costs throughout the supply chain. But the beauty of bringing sustainability into the supply chain is exactly that – it is not only the right thing to do for our planet, it also helps the bottom line.

So despite my lobbyist friend’s skepticism regarding the business case for sustainability, there has in fact been an increasing focus on sustainability by major retailers (such as Target and Ikea) and consumer products companies (such as Nike and Hewlett Packard) that account for a significant percentage of inbound cargo from Asia.

The Port of Seattle is well-positioned to benefit from this industry emphasis on sustainability and greening the supply chain. We believe that the Port’s green initiatives will help attract business and grow jobs for our region.

In 2009, the Port of Seattle commissioned Herbert Engineering Corp. to analyze the carbon emissions of intermodal shipments from Asia to North American markets. The study, which was updated in 2011, found that routing through the Port of Seattle offers the lowest carbon footprint for cargo coming by sea from Asia to major markets in the U.S. Midwest and East Coast.

The Port has marketed our comparatively low carbon footprint both to BCOs and global shipping lines as the “Green Gateway,” and we continue to collaborate with industry to come up with business friendly solutions for mitigating environmental impact.

It is true that the preliminary efforts by these businesses with regard to sustainability were focused on physical improvements such as lighting in warehouses, recycling and other downstream improvements. In the past couple of years, however, we are seeing an increasing shift of awareness to areas of the supply chain such as transportation.

Wal-Mart last fall announced a commitment to drive sustainability deep into its supply chain. It and other large retailers have been leaders in this area.

With the largest retailers taking the lead, we believe that it is only a matter of time before small retailers follow. The Port of Seattle’s position as a leader in sustainability, and the low carbon footprint of shipping from Asia into the Midwest through Pacific Northwest ports, position us well in the minds of these customers when selecting a gateway to ship their goods.

Nike already requires that ocean carriers list the carbon impact of their services as part of its contracting process. Retailers and other shippers have responded positively to the Port of Seattle’s Carbon Calculator tool, finding it useful in their own internal calculations of the carbon footprint of their supply chains.

In fact, we have gotten very positive comments from importers about the way we have implemented our environmental programs. The Port’s eschewing of confrontation in favor of a collaborative approach – working with industry to address environmental impacts – is well-regarded among the international trade community.

Shipping lines are also taking note. We have had excellent participation in our voluntary At-Berth Clean Fuels program, which incentivizes shipping lines to burn low sulfur diesel while at the Port. In each of 2011 and 2012, we saw participation of over 70% by frequent calling ships. Our business friendly approach has been attractive to shipping lines that are considering adding to or expanding services in the Pacific Northwest.

Our goal to be the greenest, cleanest, most energy efficient port in North America encompasses more than just our seaport and more than just air emissions. We are focused on improving air and water quality at both at both our seaport and airport, reducing energy usage at all of our facilities, recycling all sorts of items used by us and by our tenants, and cleaning up contaminated Port-owned properties and restoring those properties to productive use.

The Port of Seattle’s environmental goals and green initiatives are not only the right thing to do, they will help grow jobs for our region.