The big picture
- In the global economy, air freight is indispensable as a fast mode of transport
- While only a small fraction of cargo shipped globally every year is air freight, in terms of weight, these goods account for more than one-third of the value of global trade
- Air freight contributes about 0.5 percent to global greenhouse-gas emissions. Decarbonizing air freight will help slow down climate change.
The challenge at hand
Air freight companies are already optimizing routes and payload planning with advanced analytics to improve the fuel efficiency of operations. Also, air freight executives are exploring options to substitute current jetliners with aircraft that use alternative propulsion technology. For the time being, however, all air freight relies on planes with combustion engines.
This is where sustainable aviation fuel (SAF) comes in. Unlike conventional kerosene, which relies on fossil inputs, SAF is derived from renewable sources. SAF is in short supply, as producers are still scaling up the technology required to make SAF. Currently, demand exceeds supply, and the SAF market is complex, with many new entrants, various technologies, and evolving policies. In this situation, air freight companies need to develop robust SAF sourcing strategies that balance sustainability with resilience and profitability.
Results achieved
Sustainable aviation fuel (SAF) is the most important decarbonization lever for a leading air freight operator we supported. It has put in place a plan to increase the share of SAF across its fleet significantly. With our support, the company has taken the following steps:
- Expanding the portfolio of potential SAF suppliers, including both existing and planned production facilities around the world
- Closing a major SAF sourcing deal to secure sufficient mid-term supply
- Equipping decision makers with better tools to assess potential deals and improve the procurement process
- Broadening the scope of potential partnership options with SAF suppliers—from conventional offtakes agreements to value creating partnerships or even equity joint ventures
The transformation will help make the company and the customers that rely on its services more resilient to future disruptions. At the same time, the company has begun progressing toward reducing the greenhouse-gas emissions of its operations significantly to help slow down climate change.
