Driving Out Climate Change: Leveraging data to reduce scope 3 emissions in freight transport

Abstract

Authors: Ellinor Lantz & Linn Modée
This thesis has been a complete collaboration between the two authors. Each author has been involved in every part of the process and contributed equally.

Supervisors: Ebba Eriksson Ahre, Division of Engineering Logistics, Faculty of Engineering, Lund University
Angela van der Sluijs, Head of Transport SMS Logistics, Sandvik

Problem description: Scope 3 freight transport emissions represent a significant portion of global greenhouse gas emissions, making it essential to take action in this area. In response, SMS Logistics has set ambitious, SBTi-validated targets to reduce its climate impact. Achieving these goals, however, requires concrete and targeted measures to turn ambition into progress, as well as building strong business cases to motivate change.

Purpose: The purpose of this thesis is to evaluate the impact of distribution network strategies on scope 3 freight transport emissions, while considering how this affects network performance.

Research objectives: RO1: Explore distribution network strategies for carbon reduction within scope 3, freight transport, and technologies to facilitate these.
RO2: Identify the current distribution network strategies and resulting emissions at SMS Logistics.
RO3: Explore how carbon emissions within scope 3, freight transport at SMS Logistics is affected by different distribution network strategies, also taking into consideration freight cost and lead time.

Methodology: A case study was conducted using a mixed method approach for data collection, i.e., qualitative interviews and observations, plus quantitative data. First, an as-is analysis was conducted. From this, two specific improvement areas were then identified and modelled using a supply chain design software. For each area, a set of decisions affecting the distribution network were modelled and analysed, as a way to exemplify how different distribution strategies can affect CO2, cost and lead time.

Findings: The analysis suggests that both CO2 and costs can be significantly reduced by optimising route choice and shifting transportation mode, however, the impact of the distribution decisions was found to be highly dependent on the baseline configuration.

Conclusion: There are many possible measures for carbon mitigation in freight transport, yet the challenge to take theory to reality remains. Optimization has been shown to be a powerful tool for identifying inefficient distribution network set-ups and for evaluating the impact of new decisions. However, building representative optimization models requires close collaboration with both carriers and internal parties.

Popular Abstract

The Weight of Freight: How Smarter Deliveries Can Lighten the Carbon Load

With global warming at our doorstep, the pressure is on to find smarter, greener ways of doing business. Freight transport alone accounts for nearly 9 % of global emissions – and yet, air freight remains a go-to solution for fast delivery, even when slower, cleaner alternatives exist. In a world where products move faster than ever, understanding the hidden cost of that speed is the first step toward real change.
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The shoes you ordered yesterday might already be halfway across the globe – produced in Asia, sold by a U.S. company, and set to land on your doorstep in Europe by tomorrow. Even if you haven’t placed such an order recently, chances are you’ve marveled at how quickly something bought online appears at your door. But behind that speed lies a vast and often invisible system: a complex web of supply chains stretching across continents.

It’s not just consumers who rely on rapid delivery. Manufacturing companies also depend on fast, reliable supply chains to receive critical components – such as inserts, screws, or drill bits – without delay. Over the past few decades, globalization has enabled companies to produce, sell, and distribute across the globe with incredible efficiency. The question is: at what cost?

To meet tight delivery windows, many companies use air freight, especially when shipping from centralized warehouses to customers around the world. However, air freight emits roughly ten times more CO2 than road freight, and exponentially more than rail or sea, yet this environmental cost is not reflected on the price tag. What’s more, short-haul flights (which are common within Europe) are particularly harmful, as take-off and landing burn the most fuel. Ironically, these short routes are also the easiest to replace with slower, greener modes – without significantly impacting service.

So why haven’t more companies made the switch?

Part of the answer lies in the complexity of modern logistics; it’s difficult to predict how changes in transportation affect emissions, lead times, or costs – especially across a large, global network. That’s where digital twins come in. By simulating the supply chain in a virtual model, companies can test different strategies without touching a single box in the real world. When companies can quantify the impact of strategies, it becomes easier to build business cases which can motivate investments in sustainability initiatives.

In our thesis, such digital twins were created to explore how smarter route selection, changing transportation mode, and fewer unnecessary stock transfers could cut emissions at a global manufacturing company. In one case, simply switching from two to one flight within Europe reduced CO2 by over 40 percent without disrupting customer service. Nevertheless, for the same lane, emissions could be reduced by 94 percent and costs by 61 percent by completely replacing air freight with road. If similar logic is applied more broadly across the distribution network, the potential gains – for both the planet and the business – could be substantial.

Climate targets won’t be met through guesswork. But with the right tools and mindset, even the most complex supply chains can start moving in a better direction, toward net zero, one shipment at a time.

• author: Lantz, Ellinor and Modée, Linn
• supervisor: Ebba Eriksson
• organization: Production Management; Engineering Logistics
• course: MTTM05 20251
• year: 2025
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Supply chain optimization, CO2 mitigation, distribution network strategies, carbon reduction strategies
• other publication id: 6041
• language: English
• id: 9197508
• date added to LUP: 2025-06-18 17:25:53
• date last changed: 2025-06-18 17:25:53