Total emissions from container shipping in the first 10 months of 2024 are up 13.8% globally compared to 2023 and on track to set a new all-time record for the full year. 

The latest data, released and analyzed by Xeneta and Marine Benchmark, shows the increase in emissions in 2024 is primarily a result of conflict in the Red Sea and longer sailing distances around the Cape of Good Hope as well as record high volumes.

There is an irony in the fact that the Red Sea conflict has also brought huge volatility in ocean container shipping rates, meaning tackling carbon emissions drops down the priority list for industry stakeholders at a time when it is breaking records for the wrong reasons.

Convincing shippers to focus on carbon reduction is not easy when spot rates are increasing 400% from the Far East to North Europe and more than 560% into the US West Coast, as they did earlier this year.

You can act on carbon emissions – during good times and bad
199.7 million tons of CO2 have been emitted by container ships in the first 10 months of 2024. To highlight the longer-term trajectory, this is 9.5% higher than in the first 10 months of 2021 (the current highest full year on record) and makes the International Maritime Organization’s (IMO) target of net zero by or around 2050 seem extremely ambitious.

Despite shippers facing huge operational and financial challenges, it does not mean carbon emissions cannot still be factored into their freight procurement strategy.

Some shippers choose to pay surcharges for green transportation of their containers, but they are in the minority.

However, all shippers can use the Xeneta and Marine Benchmark Carbon Emissions Index (CEI) to monitor, understand and potentially reduce their carbon emissions without it adversely impacting freight spend.

The in-platform CEI measures carbon emissions across 48 ocean container shipping trade lanes.

Choosing carriers based on carbon performance as well as price
If you are a European shipper currently in negotiations for a new long term contract, achieving the optimal freight rate will be your top priority. But you can use the CEI during negotiations to get a fuller picture of what a carrier is promising.

The below is an example using data in the Xeneta platform to compare two carriers on the backhaul trade from North Europe to the Far East.

Carrier A has an average spot rate of USD 411 per FEU (40ft container) and actual transit time of 46 days.

Carrier B has a lower average spot rate of USD 358 per FEU and actual transit time of 54 days.

When looking at carbon emissions, Carrier A had a CEI score of 164.2 in Q3, while Carrier B scored 102.1.

Carrier B – the best performing on this trade – is emitting more carbon per tonne of cargo compared to the start of 2018, but it is still performing considerably better than Carrier A.

Therefore, a shipper could select Carrier B as their chosen service provider and benefit from lower rates and lower carbon emissions – as long as they are also happy to accept longer transit times.

The above example on the North Europe to Far East backhaul demonstrates that securing the lowest possible freight rate does not mean you cannot also work towards lowering carbon emissions in your supply chain if you are able to use a range of data to strike the right balance.

Source: Xeneta