Thursday, February 18, 2010

Taking the Slow Boat to China and Reducing Emissions

Maersk, the Danish shipping company, has greatly reduced its long distance ship speeds (including on trips from Germany to China) in order to reduce emissions. At the same time, even with greater employee costs that such trips entail, it has reduced its total costs.

This fascinating article in The New York Times discusses how Maersk, as a corporation, considers the strategy of speed reduction to be a win-win situation and this in a world of rush-rush and faster and faster. The article reports that:

Slowing down from high speeds reduces emissions because it reduces drag and friction as ships plow through the water.

That principle holds true in the air and on land. Planes could easily reduce emissions by slowing down 10 percent, for example, adding just five or six minutes to a flight between New York and Boston or Copenhagen and Brussels.

Maersk should be commended for having the guts to go against the grain as a company and for being so proactive in helping the environment.

My research team has been investigating environmental issues that firms are faced with from how to create cost and environmental synergies in mergers and acquisitions, to the evaluation of cap and trade schemes and carbon taxes, to the effects of the deterioration of roads on emissions, to the optimal design of sustainable supply chain networks (something which an expert in the same article implies is hard to do), among just a few topics.

You may find some of our latest research on the website of the Virtual Center for Supernetworks.

In the meantime, it makes sense to, literally, take the slow boat (and plane) to China.