All the way to zero: Decarbonizing Latin America’s supply chains

In September this year, we launched the world’s first methanol-enabled ship, highlighting that the path toward shipping decarbonization is possible. Laura Maersk is tangible proof that the technology is available to make the transition, and currently, the industry has followed suit, with more than 100 methanol-enabled vessels in the order book.

However, maritime transportation constitutes just a single component within a more intricate network that encompasses the field of logistics. According to the International Energy Agency, transport accounts for more than a third of CO2 emissions from end‐use sectors. In the ever-changing landscape of today’s world, the logistics sector has become essential in the path towards limiting the climate crisis and paving the way for a sustainable future.

According to the Organisation for Economic Co-operation and Development (OECD), 68% of citizens in Latin America recognize climate change as a very serious threat to their country in the next 20 years. Consumers are asking for more sustainable supply chains, triggering companies and logistics providers to find innovative ways to decarbonize their operations. Sustainability has become ingrained in the strategies of many companies, who are now looking not only at their own produced emissions but at the emissions of their suppliers and service providers.

With increasing customer demand, global targets, pressure from regulators and investors, and new green supply chain laws, sustainable logistics is a must for companies. Likewise, smart supplier management – considering carbon emissions along with price and delivery time as selection criteria — is becoming a decisive competitive advantage for companies.

Nevertheless, the challenges to decarbonize the logistics sector are different. Landside operations depend on local regulations, partners, and available suppliers and technologies in the regions. Latin America stands as an untapped powerhouse in the global energy transition, particularly in transforming supply chains. According to the International Energy Agency, the region has vast renewable energy potential, with fossil fuels constituting only two-thirds of its energy mix, notably below the 80% global average. Renewables, particularly hydropower, account for 60% of electricity generation, making Latin America a promising hub for clean energy production. The geographical and climatic diversity, coupled with extensive coastlines, positions countries like Mexico, Chile, Colombia, and Brazil as ideal candidates for solar and wind energy development. Harnessing these resources through strategic policies could propel Latin America into a pivotal role in renewable energy initiatives, catalyzing the logistics industry’s shift towards sustainability and global decarbonization efforts.

A strategic partner on the road to decarbonizing supply chains

At Maersk, we have set ambitious emissions targets to align our company with the Science Based Targets initiative (SBTi) criteria. These targets encompass a commitment to provide customers with 100% green end-to-end solutions by 2040, including near-term targets to lead the industry with green offerings across a broad range of our product portfolio by 2030.

In Latin America, we have set up a program to expand our landside footprint, not without targeting the main emitting products - landside transportation, contract logistics and cold chain, and air – and offering products that provide emissions transparency for our customers’ supply chain. Elaborating clear roadmaps and the expected development of green products will be necessary to implement the decarbonization levers in the region.

All new and existing facilities will look at implementing energy-efficient technologies and achieve third-party certification of LEED Gold or BREEAM Excellent. We are also committed to transitioning our facility equipment to electric power and using renewable energy sources. For instance, our new fulfillment center in Cajamar in Brazil is certified LEED Platinum including rooftop solar panels, rainwater recapture, and waste management system, felt thermal insulation, and lithium battery material-handling equipment. Our new facilities inaugurated this year in Chile, Peru, Colombia, and Panama are equipped with fully lithium battery electrified forklifts and LED lighting.

In a region with a rich diversity of exports of perishable goods, we are also expanding our footprint in cold chain facilities. We lead the way in sustainable logistics by incorporating natural refrigerants like carbon dioxide (CO2) and ammonia in our cold storage facilities. These refrigerants present a more sustainable alternative to traditional refrigerants compared to conventional refrigerants, with lower global warming potential.

Decarbonizing inland transportation through heavy-duty electric trucks and creating charging station infrastructure benefits supply chains and communities. To achieve climate-neutral landside transportation solutions, we are prioritizing electrification in heavy-duty trucking in collaboration with customers with 100% renewable electricity sourced, as well as identifying one-time emission reduction opportunities within the modal shift. We recently conducted two EV pilot projects looking at electric truck capabilities for customers in Brazil.

Since 2021, we also offer a rail solution with a station and depot situated 30 km around the main fruit production area in Chile. The train can transport goods equivalent to 31 trucks, reducing CO2 emissions by around 70%. Using this same rail solution, we partnered with Nestle Purina on this more energy-efficient route, easing congestion, fostering the growth of surrounding communities, and ensuring precise delivery schedules at the port.

With more than two-thirds of our top 200 customers having set net-zero or science-based targets (SBTi), addressing the emission of our logistics and services value chain emissions is a key priority for Maersk. We are firmly dedicated to not only scaling our operations but also forging valuable partnerships in the search to explore sustainable options in Latin America to meet the growing demand from our customers for environmentally conscious, end-to-end, truly integrated logistics.