• HAMBURG| 26 SEPTEMBER 2013

Professor Alan McKinnon

Kühne Logistics University

Hamburg

Adapting Freight Transport to Climate Change

Second BIVEC-GIBET Chair Lecture

University of Rotterdam

23 March 2017

Mitigation

governmental and corporate perspectives

Freight Transport and Climate Change

Lecture 1

IPCC 5AR Synthesis Report 2014

‘Many adaptation and mitigation options can help address climate change, but no single option is sufficient by itself.’

‘Little research has so far been conducted on the inter-relationship between adaptation and mitigation strategies in the transport sector’

IPCC 5AR vol 3 Chapter 8 2014

Inter-relationship between mitigation and

adaptation in the freight transport sector

Liege 18 May 2017

Lecture 3

Adaptation

Lecture 2

Climatic trends and impacts

Vulnerability of freight transport to extreme weather and sea level rise

Scoping research on this subject

Adaptation strategies: challenges and issues

Wider logistics and supply chain perspectives

Positive impacts on freight transport?

Concluding thoughts

Outline

Session 903

Adapting Transportation to Climate Change and Extreme Weather Events

https://www.nap.edu/catalog/24648/transportation-resilience-adaptation-to-climate-change

4th EU-US Transportation Research Symposium (Brussels June 2016)

Adaptation of Transportation Systems to Climate ChangeAlready an Extensive Literature

6

Source: NOAA

Concentration of Greenhouse Gases since 1700

Probabilistic relationship between

GHG concentrations and increase

in average global temperature:

Source: Stern Review (2006)

Annual Greenhouse Gas Index

7

Increase in Average Global Temperature

Source: UK Met Office

Source: NASA Goddard Institute for Space Sciences

IPCC AR5 High and Low Emission Scenarios for 2100

Currently on trajectory leading to 4-5o C average temperature rise by 2100

Source: IPCC AR5 vol 2. SPM

UNFCC COP 21 Conference on Climate Change December 2015

Bottom-up rather top-down approach to securing country commitmentsIntended Nationally Determined Contributions (INDCs)

International agreement to keep average global temperature ‘well below’ 2oC above pre-industrial times and ‘endeavor to limit’ them to 1.5oC

• Paris Accord came into effect: 4th Nov 2016

• No legal sanction on countries failing to meet targets

• Possible US withdrawal from the Accord?

Source: Ed Hawkins http://www.climatechangenews.com/2016/07/27/spiral-tastic-climate-change-in-three-animations/

10

business as usual

current Nationally

Determined Contributions

(NDCs) (post COP21)

Much climate change already ‘in the pipeline’ which we cannot avert

Global Emission and Temperature Increase Scenarios

www.climatescoreboard.org (March 2017)

IPCC’s Recalibration of Risks at Given Global Temperature Increases: AR3, AR4 and AR5

Source: From Risk to Return: Investing in Climate Change Adaptation (2017)

Weather Extremes in 2016

Contraction of summer ice cover in the Arctic

octoberjuly

2016

2012

Mean 1981-2010

Arctic sea ice million sq km

2016 warmest year on record

Average global temperature

1.1oC above pre-industrial era

‘Extreme and unusual’

conditions continuing into

2017https://www.theguardian.com/environment/2016/nov/25/arctic-ice-melt-trigger-uncontrollable-climate-change-global-level

Natural Loss Events (Munich Re)

https://www.munichre.com/site/wrap/get/documents_E1656163460/mram/assetpool.munichreamerica.wrap/PDF/07Press/2015_World_map_of_nat_cats.pdf

Source: IPCC SREX (2011)

Intensity Duration

Frequency

5 dimensions of extreme weather

Spatial extent Timing

Climate Change Impacts

Climate change likely to prove to be non-linear, requiring more rapid adaptation

May be grossly under-estimating the amount of effort, time and resources

that will be required for adaptation and climate proofing

Global Mean Sea-level Change 1993-2016

relative to 1993-2016 mean

15Source: World Meteorological Organisation (2017)

Source: IPCC AR5 (2013)

Representative Concentration Pathways

(highways for evacuation)

(flood risk from sea) (flood risk from rivers)

Predicted Rise in Sea Level by 2100

Source: Rijkswaterstaat

2014 U.S. National Climate Assessment

Projected rise in average sea level by 2100

18

Rail Freight

Road Freight

19

Inland waterways

Maritime transport

Aviation

Coastal airports at risk from sea level

rise and storm surges

150-200 worldwide

Source: Thomas 2011

Vulnerability of Aviation to Extreme Weather / Climate Change

Rodrigue, 2013 /

Airports Council

International

21

Impact of Climate Change on Freight Transport

performance

demand

operations / services

transport infrastructure

logistics supply chain management

climate protection

other infrastructures

built environment

decarbonisation of other sectors

commodity mix

spatial pattern freight flow

geo-engineering

changes in consumer demand

relocation/rezoning of production

quantity of freight moved

redistribution of population

ECONOMY / SOCIETY

supply chains socio-economic activity

freight movement personal travel

traffic

transport

infrastructure

climate change

common infrastructure: shared benefit from adaptation schemes

differing priorities: allocation of constrained capacity and recovery services

inter-dependences: supply of fuel for passenger vehicles

commuting by logistics employees

consumer switching from conventional to online retailing

Inter-relationship between Freight and Passenger Transport in Adaptation Planning

delimitation of

the transport

adaptation

boundary?

Essence of Climate Change Adaptation in the Transportation Sector(US National Climate Assessment 2014)

protecting the transport system from climatic effects protecting economy and society from

transport system failures

Preparatory phase Disruption phase Recovery phase

US Gulf Coast Langedoc -

Mediterranean

Vermont 2011Central Europe 2013

MTA MHA

MAA MPortA

MPA

MUD

Metropolis

100oF for 30 days

risk assessmentcontingency planning

awareness raisingincreasing tolerances

real-time monitoring‘sense-and-response’ capability

inter-modal co-ordinationmulti-stakeholder networking

maximising resiliencerecalibrating models

refinancinglearning lessons

Three Stages of Adaptation Planning

EU-US symposium case studies

Analysis of the vulnerability and adaptation of transport and logistics to climate change

Analytical methods: ‘learning lessons’ (after Koetse and Rietveld, 2008)

• Geographical: comparing transport planning and operation across different climatic zones

• Temporal: comparing of climatic impacts on transport across different seasons

• Event-based: analysis of transport impact of extreme weather events e.g. Katrina

Disconnect between the climate scientists and the transport engineers : outputs of the climate models failing to meet engineering requirements

– Rare occurrence makes datasets small and sparse

– Extremes are hard to measure -instrumentation often performs poorly under extreme conditions

– Processes that generate extreme conditions are often complex and difficult to model.

inherent difficulty in analysing and planning for extreme weather events

Prof Jennifer Jacobs.

Translating Climate Science Data into Useful Information for Transport Planning

Geographical downscaling of climate data Incorporating downscaled climate data into

transport engineering models

Cornell University

EU Rain project

Relaxing ‘stationarity’ assumptions

can no longer extrapolate from historic data

trends may prove non-linear if ‘tipping points’ are crossed varying time-scales for climate-adaptive decision-making

0 10 20 30 40 50 60 70

ProjectConcept

Construction

in operation

Engineering and Design

AdoptedLong-Range Plan

Years

Facility Service Life

Transport Planning process

in operation

rate of climate change accelerating – need regular

recalibration

assets with differing life-spansand replacement cycles

Source: IPCC SREX Summary

for Policy-makers report (2011)

Scheduling of CC Adaptation for a Highway Authority

Source: UK Highways Agency

Impact of Technology

28

Technology in support of

adaptation and resilience

smart materials: e.g. self-healing concrete

new sensors big data / IoT

Transport technologies creating new

adaptation challenges

Developing Holistic Climate Resilience Strategies for Freight Transport

across critical infrastructures

infrastructural interconnections cause

propogation of disruptive effects

http://www.wunderground.com/blog/JeffMasters/archive.html?year=2010&month=10

‘Climate change increases the risks of cascade failures, where a breakdown in one system has knock on effects on others.’

UK Committee on Climate Change (2010)

Weather Impacts: Inter-connections between Transport and Energy Infrastructures

D = level of damage P= Probability Source: Royal Academy of Engineering

Developing Holistic Climate Resilience Strategies for Freight Transport

31

across transport modesacross critical infrastructures

modal substitution as a

resilience option

infrastructural interconnections cause

propogation of disruptive effects

across disciplines

Insurance

Climate science

Logistics

Economics

Transport planning

Civil engineering

Behavourial sciences

across stakeholders

not simply an infrastructural responsibility

across jurisdictions

effects of extreme weather and

response mechanisms cross

political boundaries

need new communication strategies and

support tools to facilitate multi-agency

and multi-level co-ordination

presents particular challenges in

the EU, e.g. for the aviation sector

alignment of the resilience

metrics used by infrastructure

providers and users

sharing of information, risks

and costs with service

providers and users

‘the possible climate changes from 2005-2050 and their impact on both the Rhine and Danube

hydrology…..are not likely to be strong enough to induce any significant shift in modal shares.’

Beuthe et al, 2013

Role of Freight Modal Shift in Climate Change Adaptation

• relative vulnerability of different modes in different regions / corridors

• relative cost of climate-proofing different modes

• resulting modal shifts may conflict with climate mitigation efforts

Legal requirement to fit winter tyres

http://heavy.com/tech/2015/10/best-snow-tires-all-season-

online-reviews-hankook-goodyear-blizzak-xice/

http://trafficsafe.org/index.php/haulage-fleets-urged-to-plan-winter-tyre-changes-9641/

40% more traction in extreme winter conditions

Compulsory fitting of winter tyres:

Balance of risk, responsibility and cost between road user and infrastructure provider

maintain adequate inventory of road salt

no mention of winter tyres

Balancing Infrastructure Provider and Freight Operator Responsibilities

34

lower inventory

less redundancy

greater resilience

less disruption faster recovery

critical trade-off

less capacity

operational efficiency

value of business continuity

impact on business

probability of

disruptionhigh

lowhigh impact low

probability

high

Modifying Supply Chain Strategies to Accommodate Increased Climate Risk

• difficult to quantify probability and impact

• depends on actions of other organisations

• complicated by the interaction of several risk factors

• very difficult to build a financial case

Relaxing JIT pressures for climate change adaptation as well as mitigation

35

Day 1 Day 2 Day 3 Day 4 Day 5

All movements of lorries

over 3.5 tonnes

cease at 12am

Most mail services and

parcel deliveries stop

No newspapers

Manufacturers operating

on a just-in-time basis

suspend operations

No supplies of fresh

produce in grocery

outlets

Supermarket stocks of

many perishable /

short shelf-life

product run out,

including bread, milk

and eggs

Milk disposal on farms

More manufacturing in

low-inventory sectors

closes down

Shortage of cash in banks

and ATMs

Construction work ceases

on most building sites

Growth of farmers’

markets

Most petrol stations run

out of fuel

Around 15% of the car

fleet without fuel

Supermarket stocks of

fast-moving grocery

lines exhausted

Introduction of rationing for

fuel and some food

products

Fast food outlets close

Widespread lay-offs from

manufacturing sector

Busier pubs run out of

beer

Slaughter of poultry on

farms

Petrol stations run dry

Most of the manufacturing

sector shut-down

Most non-electrified rail

services suspended

Serious cash shortages

Bus companies reduce off-

peak frequencies,

esp. in rural areas

Gas and water utilities

disrupted by lack of

fuel and spare parts

Congestion at ports stops

off-loading of vessels

Half of the car fleet without

fuel

Large proportion of the

labour force laid-off or

unable to travel to

work

Retail stocks of most

grocery products

exhausted

Almost all manufacturing

closed down

Severe disruption of the

health service

Serious problems from the

accumulation of waste

Range of non-food

products in shops

substantially depleted

Chronology of national-level freight disruption: life without trucks (UK)

Panic buying accelerates the erosion of inventory and collapse of the system

Source: McKinnon (2006)

Concentration of Freight Flows by Node, Corridor and Cluster:

increasing vulnerability to climate change

Container shipping lines focus on ‘hub ports’

World’s 50 busiest container ports 2012

Increasing vessel size limits

port access

Source: UNCTAD (2012)

http://www.movehub.com/blog/busiest-shipping-container-ports

Concentration of Freight Flows by Node, Corridor and Cluster:

increasing vulnerability to climate change

37

Increased use of hub and spoke networks Channelling flows through corridors

Malacca Strait (2010)

25% of world seaborne trade

33% of crude oil flows

Centralisation of inventory

‘square root law of inventory’

Regional clustering

Focused production

Agglomeration benefits

vs

Supply chain risk

Regional clustering of production

agglomeration benefits

vs

supply chain risk

Product A

Product B

Product C

Product D

Distribution

Nationally-

based

Production

Focused

Production

in pan-

European

plants

Source: Cooper 1993

Concentration of hard-drive production

30% drop in global production

Thai floods 2011

38

exposure of location to extreme weather

vu

lne

rab

ility

of

pro

ce

ss

to e

xtr

em

e w

ea

the

r

Auditing exposure to weather-related risk across the supply chain

Multiple-source from areas with differing risk profiles

Modifying Supply Chain Strategies to Accommodate Increased Climate Risk

Source: Maplethorpe. 2015

Climate Change Vulnerability Index 2015

Role of the Logistics Service Providers

• advising on supply chain risk: attaching greater weight to climate risk

• LSPs vary in their capability for dealing with supply chain disruptions

• an increasingly important criterion for LSP selection ?

EU EWENT project: (Ludwigson, 2012)(‘impacts of extreme weather on freight transport and logistics in Europe’)

Low willingness to increase organisational / channel robustness through• physical preparedness• acquisition of risk management skills

Poor understanding of weather-hazard probability – exacerbated by:• intra-organisational differences in the assessment of weather risks• under-estimating wider consequences of weather-related disruptions

Failure to commit sufficient resources to risk management and contingency planning

Typical views among logistics managers:

climate change is a longer term phenomenon that future generations of logistics managers can deal with.

bad weather is just another risk factor that can be accommodated within existing risk management / business continuity procedures

Managerial Attitudes and Responses

Infrastructure: risk assessments, stress tests and cost-benefit analyses (CBA)

41

Integrating climate risk

assessment into the management

of transportation assets

Stress testing to determine

vulnerability of transport

infrastructure and services

Revising CBA methodologies to

incorporate risk-adjusted discounted rates

and life-cycle costing of transport assets

Measuring and benchmarking the relative

cost-effectiveness of an extended range

of adaptation options

Determining the ‘right’ level of

transportation resilience

Measuring ‘adaptive capacity’ of

transport users as well as the

infrastructure.

value of benefits from extra £80 million investment in winter resilience measures

great uncertainty in financial modelling

Measuring and benchmarking the

relative carbon intensity of an extended

range of adaptation options

Need to minimise

‘carbon rebound’ effects

EU EWENT project estimated cost of extreme weather on the transport system of the EU 27 in 2010: €15.5-21.5 bn

Positive Impact of Climate Change on Freight Transport?

Source: WMO (2017)

Concluding Thoughts

• Adaptation studies are currently preoccupied with infrastructure planning; need more emphasis on the adaptation and resilience of logistical operations and services

• In the longer term climate change more force a relaxation of established business practices that currently increase supply chain vulnerability

• Need to broaden the scope of research on climate change adaptation in the freight / logistics sector to include the demand as well as performance impacts of climate change.

• In the field of freight transport / logistics, the climate change research agenda is currently dominated by mitigation.

• It is likely that this balance will tilt towards adaptation as the frequency and severity of weather-related logistics disruptions increases.

• There is a danger that adaptation efforts will prove very freight-transport intensive bringing them into conflict with pressures to decarbonize logistics.

• Need to examine more closely the inter-relationship between adaptation and mitigation in the freight transport / logistics sector.

Kühne Logistics University – the KLUWissenschaftliche Hochschule für Logistik und UnternehmensführungGrosser Grasbrook 1720457 Hamburg

tel.: +49 40 328707-271fax: +49 40 328707-109

e-mail: Alan.McKinnon@the-klu.orgwebsite: www.the-klu.org

www.alanmckinnon.co.uk

Professor Alan McKinnon