Emerging Reefer Challenges in Latin America

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Authorship

Gordon Wilmsmeier and Ann-Kathrin Zotz, Economic Commission for Latin America and the Caribbean (ECLAC), Santiago, Chile

Publication

In an effort to create awareness of energy efficiency in international supply chains and to establish infrastructure energyefficiency indicators, the Infrastructure Service Unit of the Natural Resources and Infrastructure Division of the United Nations Economic Commission for Latin America and the Caribbean is conducting research on energy consumption and efficiency in terminals in the Latin American and Caribbean (LAC) region and beyond.

Background

Economic development has traditionally come with a transformation of mobility. Mobility constitutes an ontological absolute for emerging societies. Nevertheless, the emerging demand for human and goods mobility comes at a cost, and at the same time, raises demand for energy. The traditional geography of production and consumption is changing, accompanied by a shift of industrial production. Thus, economic growth and development is leading to a new configuration and scale of supply chains and sustainability challenges. To date, transport and freight logistics have been inherently based on the consumption of fossil fuels (ECLAC, 2013). Over recent years, the energy consumption of the transport sector in Latin America reached more than 2,000 million ton equivalent petroleum (tep), representing one third of the regional energy matrix. On average, the transport sector’s share of the region’s overall energy consumption increased from 27% (1990) to 35% (2010) (Latin American Energy Organization (OLADE), 2013). Port throughput in LAC increased from 12.6 million TEU in 1997 to 46 million TEU in 2013 (est.). Paired with the expansion of container activity over the last two decades, LAC experienced a changing geography of trade. This in itself constitutes a strong increase in the trade between Asia and LAC. In the containerised industry, volumes have seen particularly high growth rates in the reefer trade (BTI, 2012). In general, containerised reefer trade has been one of the fastest growing market segments in the liner shipping industry to and from LAC. Reefer cargo requires constant  refrigeration to maintain the quality of the product and thus consumes a significant amount of energy while moving in the supply chain. Hence, reefer trade poses an additional pressure on efficient energy consumption besides the energy required for regular port activities and operations. Despite changes in scale and structure of LAC container trade, energy efficiency measures and strategies are hardly present in the region’s ports and terminals. As a matter of fact, only one port, the Port of Arica (Terminal Puerto Arica (TPA), 2012) in Chile, has been certified with the ISO 50001 energy efficiency standard. In line with efforts to increase the sustainability of supply chains, energy consumption has been emerging as an important topic as it is directly connected to the three pillars of sustainability: the social, economic and environmental dimension. A reduction in energy consumption has direct impacts on emissions, reduces costs in the supply chain and, in developing regions, contributes to energy security. Acciaro, Ghiara and Csano (2013) argue that coordinated energy management cannot only lead to energy cost-savings, but also a port’s role as an ‘energy manager’ can generate new businesses opportunities. For these reasons, port authorities and concessionaries should actively engage in the identification of energy flows and sources within their terminals (Acciaro, 2013). Governments are increasingly focusing on, and pressing for, more climateresponsible strategies. However, these initiatives and policies usually focus on emissions as a symptom of industrial activity, but not on the causes, of which energy consumption is one. Thus, a detailed understanding of energy consumption in logistics supply chains is a necessary first step to engage in strategies and policies towards more sustainable performance. Hence the question arises: What are the sources of energy consumption in the terminal? The authors argue that the main challenge is to identify the energy sources, usage time and assign the energy consumption to certain port operations.

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