Peter Klevecz, regional and global customer manager at DHL Express, has witnessed the carrier’s sustainability initiatives throughout the years (including the purchase of 800 million liters of sustainable aviation fuel). Now, he joins Lori on this episode of Unboxing Logistics to discuss the what, why, and how of sustainable shipping.
Lori and Peter kick off the conversation by discussing what the term carbon footprint really means. Peter says, “[a] company's carbon footprint includes all of their direct and indirect greenhouse gas emissions.”
Whatever you do, don’t make false claims about your sustainability efforts. As Peter explains, doing so destroys consumer trust. “Building an authentic sustainable strategy is really the key to enhancing your brand image and gaining that competitive advantage in an ethical way.”
How can you get customers on board with your sustainability efforts? The answer is simple: communicate! “You can actually share with the customer how their decision is impacting the globe. It's a small investment to make a big impact.”
When you share your sustainability goals and initiatives, customers will continue supporting your brand. “Data supports that customers are willing and even happy to pay for sustainable options. They're more loyal to companies that provide them.”
Lori Boyer 00:00
Welcome back, everyone, to Unboxing Logistics. This is the awesome podcast from EasyPost where we dive into all of the latest trends and topics that are happening in the logistics industry. Today, we are talking about one of our most requested topics, and that is sustainability. So, for that purpose, I have brought in the one, the only, the famous, the infamous, Peter Klevecz from DHL Express Americas.
Pete. Pete goes by Peter or Pete, but, you know, people he likes to talk cars with is Pete, so that's why I want to be on the Pete side. Pete, tell us a little bit about your background.
Peter Klevecz 00:43
Yeah. Well, thanks. I'm happy to be here, Lori. Thanks so much for the invite. So from a professional standpoint, 18 years with DHL, 25 years in the logistics industry most of the, started in operations, but most of those years have been on the commercial side of things.
So increasing roles, you know, now in a regional or global capacity. So for some customers I'm the global lead and I orchestrate their business around the world and then some customers, I'm a regional lead and I manage just the Americas for the DHL Express division.
Lori Boyer 01:12
Okay, very cool. So as I mentioned, we are going to be talking all about sustainability today. In fact, the topic, the title of our episode is Green Is the New Black. Because it is a hip and very pertinent topic right now. And Pete is here because he lives and breathes sustainability. DHL, DHL Express are incredible examples of, you know, leading the industry in terms of the work they're doing in this area.
And I know that you're going to bring so much to the table today. So, before we even get started, one of the things I like to do is to get a couple of hot takes. So, a couple of takeaways. If somebody is going to turn it off even right now, you listen to just these few minutes here. What is it, Peter, that people should do?
What is your advice for our audience, for our community out there? What can they do to get going with sustainability? What do you feel like is most important?
Peter Klevecz 02:11
Well, so, really, I think if there's a takeaway, it would be the importance of sustainability in logistics specifically, right? Because it's such a big impact on our climate.
It's really important to kind of look at logistics as critical, right? Probably the biggest contributor. And really just hoping that people will start, right? If there's one message that I can get it across, it's that it doesn't have to be elaborate, doesn't have to be complex, just really need to start. And you'll hear that from me probably as we go through this more and more. So let me know if I say it too much, because really just gets.
Lori Boyer 02:42
I think it's absolutely true. And the great news is, you know, I'm seeing and hearing from a lot of our community, our audience out there that they want to start, and it's just challenging to figure out how and how to fit it in the budget and to fit it in the time. And figuring out all of those aspects is really challenging.
So we're going to get into all of those details. But first, I like to get to know people. We all work in the same industry. We pass by each other like ships in the night half the time, but it's fun to get to know kind of the real side of you. So, one of the questions I wanted to ask you, Pete, is describe for me what you were like in high school.
What were you like? I'll tell you about me. I was kind of the nerd girl. I wasn't a nerd girl. I liked sports and I liked choir and I, you know, hung out with my friends and tried to get good grades. But I was probably boring by most people's standards. So what were you like, Peter?
Peter Klevecz 03:36
Yeah, so interesting. I think leading up to that, I was a bit of a troublemaker. By high school, I kind of chilled out a little bit. I was really working full time, right. So by 15 and a half, I had my own car by 15 and a half, I had a full time job. You know, by 16 I had, well, actually 16 and a half, I had moved out of my parents’ house, living on my own, have my own apartment. So pretty emancipated, I think, for, for someone of that age.
So ended up leaving high school early because I was working full time and high school was conflicting with my employment. So I took the GED, got out and really got into the workforce right away.
Lori Boyer 04:09
That's incredible. Okay. I'm gonna go home and talk to my kids and say hey, look Pete here was like working full time, he was living on his own and got his own apartment. You guys can't even pick up your socks. So, it's inspirational.
Peter Klevecz 04:25
I had that conversation as well with my kids and it didn't really work. So let me know how yours goes.
Lori Boyer 04:30
Okay, awesome. Tell me if you were going to win the lottery, what would you do? What would your life look like?
Peter Klevecz 04:38
All right. Well, so I would have a house, not a big one, but a small house in Switzerland. Probably spend half of the year there. And then probably ...
Lori Boyer 04:46
Which half? The snowy half or the warm half? Which is it that you're preferring here?
Peter Klevecz 04:51
I might mix it up a little bit because I do like to snowboard and ski. So I have to do that, but I also really like warm climates. So I'd probably pop in for a bit, you know, around the winter time and then quickly, quickly get out of there.
And then a lot of time in Southern California, I'd probably have a house in Santa Barbara, which is a little bit out of my means. I'm near, I'm like an hour away. But that would be the dream, right? Bounce, bounce back and forth between Santa Barbara and Bielby in Switzerland where my wife's family all live. I could be pretty happy.
Lori Boyer 05:17
Your wife is from Switzerland.
Peter Klevecz 05:20
Lori Boyer 05:21
Oh, that's amazing. And would you keep working?
Peter Klevecz 05:26
Yeah, I don't know that I would do exactly what I'm doing now. I think I would probably keep on the direction I'm going, which is moving towards sustainability. It's become much more of a passion that drives me, you know, in the evenings and the weekends, and it doesn't feel like work.
So definitely would be along those lines. And then, you know, I have this little thing that I call eco classics. I'd probably try to turn that into something, you know, that might have a return.
Lori Boyer 05:49
Okay, I was super interested when we started talking eco classics. You mentioned that to me briefly in the past. Tell us a little bit about what this eco classics passion is. What is it you're doing? So I love how it ties into our topic as well as just to see.
Peter Klevecz 06:07
Yeah, well, I mean, you know don't get me started because this could go on for hours, but you know, I, I grew up in Southern California car culture, you know, had hot rods because those were just in those days called used cars, right?
So in the 70s and 80s, the cheap, affordable cars were Mustangs, Camaros and Chevelles and all those things. So I'm dating myself, but it was also a really cool time to be able to buy a used car for cheap. And so, and then also just by necessity, you know, had to learn how to work on them to keep them running.
So I had that familiarity and then, you know, went into the business world, gave it up for decades and then came back to it, you know, bought a really nice California Special 68 Mustang. But maybe the second or the third time that I had my kids, my little boys in the backseat of that car I just felt wrong, right?
The smell, the exhaust. And, you know, the knowledge that I was using petroleum for recreation, it all just didn't sit right with me. So I started to learn how to use modern technology, electronic ignition, electronic fuel injection, and overdrive transmissions could all be retrofitted to these old cars.
And so I could get better gas mileage, lower tailpipe emissions out of a classic car. So I really started to feel like there's something here, right? Maybe there's a business here helping other people who have this enthusiasm. Or more importantly, at least trying to make the car collector or the enthusiast world sustainable so that my kids could actually appreciate it, you know, 20 years from now.
So it ended up with like a turbo diesel farm truck that runs on biofuel. I put myself through a training on how to convert cars to electric power, and now I have what I believe to be the first ever 1965 classic Mustang converted to 100 percent electric and I'm currently working on another sports car for myself too.
Lori Boyer 07:47
That is so stinkin’ cool. That's super amazing. I love it. I love that you've brought that sustainability mindset into your everyday life, into your passions. It reminds me when I. Okay, so I am a mom and I have. I have 900 children. No, I have 7. I have 7 kids, which feels like 900 sometimes.
Peter Klevecz 08:09
That's a lot of kids.
Lori Boyer 08:10
It is a lot of kids. And one time when they were really little, I took them all to the store and they were with me. Somebody came up to me and was very angry and kind of yelled at me about my carbon footprint and how I was destroying the world.
Peter Klevecz 08:26
Because of your kids, that's horrible.
Lori Boyer 08:27
Because of my kids, right? But since then, I've always been really like, conscious of, okay, I don't want to, well, I love having a big family, I love my kids. I also wanted to be really cognizant of sustainability options, so we're really careful to recycle and, you know, all of those things. So that kind of leads me into our topic.
There are a lot of terms, terms like carbon footprint that have to do with sustainability that I think sometimes we've heard, honestly, when somebody first talked to me about that because it was years ago, you know, when my kids were little, I wasn't even totally sure what it meant and, you know, exactly how was I contributing. And so I want to go over some of the terms. So I'm going to pull them up here so I have them. Let's just get into the nitty gritty. What is carbon footprint? And especially in terms of our shipping and logistics industry.
Peter Klevecz 09:15
Carbon footprint is really the impact that your business has on the world in the terms of you know, moving freight around, right? So every company's carbon footprint includes all of their direct and indirect greenhouse gas emissions that it generates in the course of doing its business. So the shipping industry specifically you know, uses vehicles for the movement of freight, those vehicles burn fuels, and then the result of that burning fuel is production of greenhouse gas emissions, the most common of which being CO2.
So the more a freight company moves, the greater their carbon footprint, because the freight movement is tied to them as indirect emissions, right? So this can be clarified by the understanding of the scopes, which I you know, hopefully we'll get into when you're discussing how you can reduce your carbon footprint. It's good to know how others are measuring it, what governments are looking at, and that really falls into those, those scopes, primarily scope, scopes one, two, and three.
Lori Boyer 10:10
Okay, let's, let's talk, let's go right to those, Pete. What, what is scope one? What is scope two? What is scope three? What, what are we aiming for? What even does it mean? Are we talking about mouthwash here? Give me some background.
Peter Klevecz 10:23
Got it. Not mouthwash.
Lori Boyer 10:25
Okay, okay. Check that off my list.
Peter Klevecz 10:27
Well, yeah, thanks for that. So it's really important though. So thanks, thanks for allowing me to dig into it a little deeper. So scope one covers the direct emissions from a company's owned or controlled sources, right?
So like their company vehicles, their corporate jets, that would be their scope one. They own it. They're impacting with it. So that's scope one. Scope two covers indirect emissions from like the generation of purchased electricity. You know, energy heating, all of those things that, you know, it comes to your building, you consume it at your building, but you're not actually producing it.
So that would be scope two, right? Somewhat indirect emissions. And then scope three covers all the other indirect emissions that occur in a company's supply chain. So like if you're hiring a company like DHL to move truck, train, ocean, air transport, you know, the movement of packages that's all going to fall into that scope three.
And the reason that I said earlier, and we'll say again, that, you know, the logistics is the part of the company that they really want to look at is because, you know, 60 to 90 percent of most companies' emissions come in the form of scope three, right? So it's important for them to work on scope one and scope two.
They control it, they manage it, they can do it. But if you look at it as a piece of a pie, the largest pieces of pie is that you know, that indirect freight that they're moving to their consumers.
Lori Boyer 11:44
Okay. That completely makes sense. Different than mouthwash, but way more interesting. So, I love that. So, Scope 3 is really where we're talking our logistics, transportation, and it's a huge impact.
Why is sustainability then? That made me think about the fact that sustainability is such a big deal in our industry. Why do you think that that's coming to head more recently, you know? 20, 30, 40 years ago, we didn't hear about it as much. Why has sustainability become such a buzzword?
Peter Klevecz 12:14
Yeah, well, I think the impact that logistics has has produced so much of it that it really has drawn a lot of attention. Governments and countries are starting to protect themselves because they're recognizing the climate change seems to be an impact and potentially could be reversed. I think most companies started their journey, you know, right around 2015. You know, you had the Paris Climate Agreement where, you know, governments got together and said, listen, we need to do something.
And so they set this goal to not allow the earth to heat by more than 1.5 degrees Celsius between now and 2050. And around that same time, I think another group of companies looking to be responsible in their business started the science based targets initiative where companies could go and commit to certain carbon reduction goals. Like DHL has for, you know, meeting those by 2030, 2050, many companies have carbon neutral goals to meet by 2030 or 2050. And it's really that path, right? And making that commitment to not only your business and your customers, but to the world that this is the path you're going to take and here's how I'd, I'd like to go about it.
Lori Boyer 13:18
Yeah. Do you foresee that this is a trend that's going to grow or continue to have more emphasis? Do you think that it's, you know, going to stick kind of to where we're at? I think some people have been kind of putting off dealing with it. Is that a sustainable? A sustainable. I'm hilarious.
Peter Klevecz 13:35
Yeah, absolutely not. Yeah, absolutely not. We can't ignore it. Right. So if anything, the foot is already being put down on the accelerator to use another car analogy. So governments are accelerating their investment and their protection of themselves. So there are already a number of European and U.S. Legislations that mandate restrictions on certain size companies, larger companies that they then have to measure and have to work towards reducing their scope three emissions.
And that's just becoming law, right? And this is just gonna happen more and more. I was in Florida recently presenting on sustainability. And while I was there presenting, and people were questioning me about, you know, are, is this going to continue? And I said, absolutely. And then another announcement came out on a greater restriction of freight going into Europe on certain goods, where they're expecting manufacturers to measure the production of their goods, measure the transport of their goods, and then make sure that they're doing something to reduce the carbon emissions in some way, or they cannot do business with Europe. That's a pretty big deal.
Lori Boyer 14:40
And Europe's pretty forward-facing, correct? So I'm thinking of our businesses as they're working internationally. It could be that maybe you are located in a state or something here in the U.S. That's not that, you know, regulated. But if you are shipping outside of, to places like Europe or whatnot, those regulations will still apply to you then, correct?
Peter Klevecz 14:59
Yeah, so that's a really important point, right? Because you may not see it in your backyard if people are talking about it, your company is not being expected to do it. But most companies and more and more companies are becoming international. It is the global economy. And so, yeah, the reality is that if you want to do business around the world you probably should be paying a lot of attention to this. But I would also say it's already here and it's going to be coming more aggressively even in the U.S. and throughout the Americas.
Lori Boyer 15:25
Yeah, I agree. So you mentioned being, you know, the kind of goals and, and, even laws that are being put into place for companies to become carbon neutral. EasyPost recently announced that we were, you know, providing free of charge, all of the labels that come through EasyPost will be carbon neutral because we will be offsetting that carbon output. Can you explain to me a little bit different? And I'm super excited about that. I do have to say I just breezed over it, but that's really exciting.
But can you help our audience, our community here understand what's the difference between offsetting and insetting?
Peter Klevecz 16:01
Yeah, so it's really exciting, by the way, as the more I read about what EasyPost is doing really excited to see that and how it gets received by the market and the data that comes back for, from, you know, those buyers and what they like and you know how it's going to evolve. So I love that. So in terms of the difference, you know, offsetting is the process of buying emission reduction credits from a third party to offset or compensate for the carbon that you may be emitting. So this is valuable, right?
I mean, we, we need to be doing this. It's really good, particularly for small businesses who maybe don't have a sustainability department and they don't have the time to dig into, you know, the 10 different ways that they could go about this. And so they can work with a company like EasyPost to get that in place right away.
That would be one of those start, right? Just start. And then I would say, as you get, you know, further down the road, or maybe you have greater emissions that you need to take care of. The reality is that offsetting it does not actually reduce the amount of carbon that your company produces.
Right. So really, really good to get those offset credits so that you're then still doing good things, but also good to start looking at how your company can reduce what it's putting out in the first place. And you can think of this as cost savings, right? You don't have to buy as much offsetting if you're insetting.
So insetting, by contrast, is the actual reduction of carbon from your immediate supply chain. So the removal of carbon or greenhouse gas emissions from each of your. And we can track this under, you know, DHL Go Green Plus, which is our version of sustainable aviation fuel. You can actually track down to the specific shipment to the country to the kilogram level what the emissions were.
And then we can also help you reduce it. So I think in this topic of offsetting and insetting, it's also important to bring up the term greenwashing. Because one of the, one of the sort of negative spins that have, I think, erroneously, you know, made people think of offsetting a little differently because they were sort of the pioneers, right?
Offsetting was the first solution. And then there were people who were doing it wrong, just like everything else. There are bad apples. And so if people were using, you know really not via a verifiable or quantifiable offset methodologies. Well, that's where people start to have disbelief that anything's actually being done.
They hear those stories, they think there's nothing good there. And that's not the truth, right? Using reputable companies who do offsetting, absolutely viable. And so I think, you know, we've seen some analysis that says that, you know, 88 percent of Gen Z don't believe businesses' claims on environmental and social governance.
So governance. So building an authentic sustainable strategy is really the key to actually get to you know, enhance your brand image and gain that competitive advantage and do it in a, in an ethical way that's, that's provable, right? Verifiable.
Lori Boyer 18:38
Yeah, absolutely. It's, it's unfortunate that greenwashing and that there were companies that took advantage and created this sort of atmosphere of like, Oh, I don't know for sure if you're, if anything's actually taking place.
Because as you mentioned, there are really, really great programs. Very, you know, certified programs, programs that are supported through great organizations that are creating projects that do help. And I think sometimes businesses shy away from maybe participating in it because they don't want to be greenwashing or they don't want to be putting money into something that's not real.
So, what, what are your recommendations if you are, so for instance, we've got EasyPost, we've got our offsetting program, you know, what are your recommendations for any programs if they're wanting to go do their own offsetting? You know, how do they find a reputable company, third party company to go through? Because anybody can, can go purchase their carbon offsets as well, right?
Peter Klevecz 19:32
Yeah, absolutely. So any mom and pop all the way up to the largest corporations can go pursue this on their own. They don't need, you know, a terrible amount of guidance, but maybe a couple of things. So I mentioned earlier the SBTI.
Or the Science-Based Target Initiative. And so you can go there and look at companies that have subscribed to that Paris Climate Agreement, you know, not allowing the earth to get more than 1.5 degrees Celsius warmer. Yeah. But also there's a company called SGS. I think it's, I'm gonna butcher it.
It's a French company, but it's like Society of General Surveillance. And their job, their entire existence is built around verifying people's claims in this space. And so if companies are working with those organizations, you can you can look at them as reputable or just look at that company's website, right?
So you look, look at EasyPost's website, look at DHL or any other company that you want to do business with and see how they're verifying their claims. So if you don't want to go do that homework yourself, find a trusted company like the two I just mentioned. Or do your homework and go to these websites to, or these, these companies to see how you can validate the claims that are being made.
Lori Boyer 20:37
Yeah, exactly. That's perfect. Okay, so Peter, let's, we talked a little bit about, you know, the option for offsetting and whatnot. Let's just sort of back up. In general, let's say we're talking audience member, if you're retail, if you're ecommerce, what are some basic steps? What are some strategies that they can start to kind of get going? You know, I, you've said it, you've said it, you've said it. Start. The main goal is to start. So how? What, what, what are your recommendations?
Peter Klevecz 21:04
I, you know, I think that particularly, you know, ecommerce, retail, they're in a really unique position here to lead this conversation. And I think there's a pretty easy way.
And that is by sharing the process with their customers, right? So there are a lot of businesses, larger corporations that, that don't deal with the direct consumer and say, don't have that one-on-one transaction to be able to adapt to their needs or, or test things in the market. So because ecommerce and retail have that benefit of direct access with the consumer, they can collaborate with the buyer to, you know, achieve the overall goal, have them help build what that goal is. Providing sustainable options at checkout, right? That's one that's really, really easy. I mean, I think there's some simple programming that you can do that would then make the option available. So your customers can buy in. You're also then building with that consumer a sense of teaming up, right? They're a part of it. It's not, you're doing it and they're paying for it.
They're actually investing themselves, right? So they might get a chance to purchase. So one of the things I know that you've probably seen is when you're making a purchase, you have the option to have it come all in one box, right? You're buying five things and they can either be delivered a little faster in five different boxes.
Or you can have a way today and have them all come in one box. Well, that doesn't seem like a big deal because it's fine. One day, five boxes, one box. Who cares? The reality is five boxes means five trucks coming to your house, right? Five belts that they're going down, five people that are loading it, five vehicles that are come delivered to you instead of one.
So that's a really easy way that a company can make a change by at least offering that to their customers and letting them choose if they'd rather take a day. And save those five vehicle deliveries.
Lori Boyer 22:43
Okay, Pete. I am probably the biggest idiot because you just made this whole like aha in my mind. I always get those offers like hey, do you want it? Everything tomorrow, you know in all the five or in the one and I'm like, well I'd rather I don't know. I just never connected it to sustainability. That's so stupid. But what that says audience, especially retail, ecommerce, your customers are probably stupid like me and may not always get that this is a sustainability issue, initiative.
Okay. Some probably do. Not everyone's as stupid as me. But maybe including it on your website. Like this is five trucks, you know five boxes every time you do a small thing like this, you're helping the environment. And some of that communication I feel like as ecommerce and retail companies, especially because they're working with the direct consumer. Sometimes that communication of those being sustainability initiatives get lost. Do you have recommendations around that?
Peter Klevecz 23:43
Well, yeah. So, I mean, I think you know, one of the things that at least DHL is doing on their website. And it would be very easy for retail and ecommerce to do would be to, you know, have those options at checkout and then put a little hypertext link that goes to their, you know, their trusted partner or to their own built definition of what they're getting right?
So you can actually share with the customer how they're impacting their decision is impacting the globe. And it's a small investment to actually make a big impact. And data supports that customers are willing and even happy to pay for sustainable options. They're more loyal to companies that provide them.
So you really just need to present the options in a, in a simple, comprehensive way where they can simply get a couple of blurbs about what it is they're doing, why they're doing it. And I think that's where, you know, retail ecommerce has an advantage. Because some other industries, they may not think that they can pass the cost on to their customers or can't yet visualize how to do it. But the reality is that they could and they should and they can and they should.
Lori Boyer 24:42
Awesome. So any other tips here for retailers, ecommerce and getting started with sustainability initiatives?
Peter Klevecz 24:50
Yeah, I think sometimes partnering with someone who's already doing it, right? That's one of the easiest ways. So, for a small business, you know, there's a number of challenges. So really just understanding the basic sustainability, right? What is it? Why does it matter? What's the current impact? What's their business's current impact? And what are some tangible steps that they can take to lowering emissions?
And so once there's that basic understanding of what their impact is, they can then make an intelligent decision about doing something about it. You know, I think another is budgeting, kind of preparing for it, planning for it. And then there's, there's other challenges that I think maybe trip people up.
Like, you know, in addition to lowering emissions, depending on your industry, you may have the negative impacts of water consumption or, you know, non-sustainable feedstocks or nonrenewable clothing materials, which all seems to make it more challenging. But I think the good news is you have companies like EasyPost and DHL Express where you can really just partner with them, right? They can give you that head start to start making change easily while you develop your more, you know, meaningful sophisticated plan.
Lori Boyer 25:49
Yeah. And, you know, I think that again, I want to talk a little bit more about challenges. We're going to get into that, but first, I just wanted to comment that this just recently happened here in the area where I am at. And I happen to know there was a new manufacturing company that's coming in, they're expanding, they're building a really big facility.
And I knew because my husband was connected to that, that they are doing some amazing things when it comes to sustainability, to. I'm in Utah, we have a lot of water challenges with being in a desert, not having enough water, and, and they are doing some incredible things to actually improve the environment.
But in the comments of the news articles I read about these expansions, all the comments were, we're all going to die. We're not going to have enough water. Nobody cares about the environment. And, and that's really just a PR issue, right? I think so often companies, when you are doing good things, even if you're a small business, like Pete mentioned, making sure you're communicating, look, we actually are addressing these environmental issues. That news article obviously had failed to point out all of the great things the company was doing to try to offset and inset any sort of problems that would come with building that facility. And so I think sometimes we just got to remember, communicate, share on your social media, put things on your website that show, you know, I know from EasyPost, we have a little badge you can download that shows that you're doing carbon neutral shipping.
Just make sure you're communicating that when you're working in conjunction. The challenges. So what are the challenges that come for businesses as they're starting down this path?
Peter Klevecz 27:24
Yeah, I think you know, budget constraints are kind of a big one. So just so, just like everything else, you really need to plan for it, right? And, and probably the step before that is we need to have acceptance from a greater community, right? The, that, that this emissions reduction mandate is happening, right? Like it or not, it's coming. So the sooner that you adapt that into your business model and just make it the norm, the better and the more your customers will be receptive to it because you're building it as the norm, right? So it shouldn't be something that's separate from the business foundation. It should be embedded in the company's strategy and really seen as a mandate or business as usual.
Lori Boyer 28:00
Okay, I just had to say that totally is, I can see your, your key takeaway from the beginning was you gotta know what's important. Right? This isn't going away. You've got to know and come away from this knowing you need to start something. So I love that. Small businesses it seems like have the great opportunity because they're just sort of starting out to just get it embedded into the fabric of who they are. Bigger companies, that's a little trickier.
Do you have recommendations for trying to get buy in? You bring in a whole change management person. What do you do here?
Peter Klevecz 28:35
Yeah, well, you know, I think the sooner that we get that sort of acceptance, then that strategic thought could be applied, right? So it's going to be different for every company. But the sooner that you get to it, the sooner you can implement those tangible changes.
It's also important for folks to note that while it's urgent, right, it's kind of an urgent issue. There's no expectation that folks are going to be eliminating their carbon emissions overnight. So maybe finding like-minded businesses, right? Like EasyPost or DHL and join with them or join organizations like Science Based Targets Initiative and view the SGS.
But just make a plan and stick to it, right? But again, just a reminder that, you know, consumers will pay and they do want to be a part of it. So make a plan that includes your customer and some form of customer-facing contribution. This will help sort of facilitate and support some of those challenges.
Lori Boyer 29:22
So you referred a little bit to budget earlier. What can we do cost-wise? How can we help with the whole cost issue? Is it just an acceptance? Are there other things they can do that aren't going to break the bank?
Peter Klevecz 29:37
Yeah, I really do think the key is to involve the end consumer, right? The sooner that we make this the norm and understand that this is a mandate. This is not a company trying to make a couple extra bucks. This is a company trying to reduce their carbon footprint because governments are making them do it. And it's kind of the right thing to do. Really having some confidence behind your conversations, right? So understanding, reminding your customers that this isn't a luxury to have, right?
This is a necessity and having those conversations with a form of confidence. You kind of get that additional buy-in. Again, it becomes the norm. And to have that confidence, you need to remember that consumers want this, right? They expect to pay for it. They're going to be loyal to it. So for decision-making parties and people closer to the topic, like logistics and sustainability directors you know, I would really start to look at, you know, one budgeting, right?
And so who should be helping them? And you know, I'll say in its sales, human resources and marketing, right? So right now, I think there's been a trend. So because freight comes out of logistics, everyone looks to logistics to solve the problem within each organization, right? They just point to the logistics team. And even the companies that have sustainability people, so people with sustainability in their titles. Those folks do a good job of measuring and understanding what the solutions could be and all of that. But there still seems to be a tendency, at least from my experience, to point to logistics and say, okay, here's what we need. Go fix it, logistics and operations team.
And the reality is that's just not going to work, right? They have budgets they have to meet as well. So I think it's really important that marketing leaders and sales leaders and human resources leaders understand that they are going to be having conversations with their prospective clients and their prospective recruits that are going to mandate that they have some integrity behind the conversations that they have and the recruitment that they're doing, the selling that they're doing. And by each of these departments having a sustainability strategy, a sustainability budget, they can help decide what's going to happen because it's going to drive their customers' behavior.
And they have some integrity around their conversation that they're actually taking action. Because not only does the company have a strategy, that team, that group has their own vision as well. So really making it all inclusive and not just looking to the folks that put labels on boxes to solve the whole problem.
Lori Boyer 31:51
So what I'm hearing you say is that sustainability is a whole business problem, a whole business initiative, not just a logistics initiative. I love that. I love that idea of sustainability being woven into each department. You know, how are we attacking it from sales, from marketing, from, because it is a people issue.
It is a, you know, just like implementing a new software isn't just a tech issue, it's the whole company issue, you know? Sustainability is the same, so that's awesome. Are there some businesses that you feel like are doing this well, that you really admire, who have been good examples of sustainability that we can kind of check out to try to see how to, you know, follow their lead?
Peter Klevecz 32:34
Yeah, so I would say there's, there's a couple that I think of when I think of this. And so one of them you know, I don't know if I have permission to say their name, but I know what they do internally is they host a, during April of every year, which is the birth month of the U.S. They host a sustainability month speaker series. And what they do is for the entire month they have conferences and they invite the entire global employee base of this company to attend these meetings, whichever ones they want.
And they get to hear from sustainability professionals. They get to hear about science and they get to hear from the company themselves what they're doing well, maybe what they're struggling with. And they're really candid, right? So warts and all, they show everything that's happening. And I think this builds a lot of trust and loyalty within this, these employees that their company is actually looking at it, right, caring about it.
And then, in addition, they're showing the individuals things that they can do within their scope of control within their departments or even day to day at home. So I really admire the approach that they've taken to, to host this, take the time, take the money to host this and be candid about what they're doing and what they're not yet doing. I find that really impressive.
Lori Boyer 33:41
That's so cool. And one of the things I really love about that is that is totally scalable to whatever size your business is. You're getting buy-in from your employees. Just like you were referring to earlier that you've, you've got to get people to care. You've got to see, you know, get it woven into the fabric of who you are as a business.
And you know, you can have three employees and in April do some sort of fun sustainability initiatives. You can do something to show transparency and to really just let's put our heads together. Let's get our consumers on board even and what can we do? So that's awesome. That's such a great example. I love it.
Peter Klevecz 34:17
So Google was also an early adopter of carbon neutral, actually carbon negative which I don't know if this makes sense to people because my son didn't quite understand it. That carbon negative is actually a good thing. So, carbon negative means that their climate impact is measured in negative numbers, right?
So you emit less than zero carbon dioxide. And so this is something that Google Incorporated company-wide wide and they have this very robust team of sustainability experts that do their due diligence and their checks and balances. And I really admire and appreciate that dedication to absolute, you know, industry-leading attempts at or at success at carbon reduction.
Lori Boyer 34:57
That's amazing. I love that. You've mentioned before when we've chatted about the importance of diversification in your efforts. Can you share a little bit more about that? How, what great companies are doing or, or what some good best practices are if you're wanting to diversify your efforts?
Peter Klevecz 35:14
Yeah. So I think just like most companies in the shipping industry don't ship with one carrier, right? They have niche players that do their specialist thing and, and that's probably the best way. Not only because those people do that thing the best. And so you want to utilize their strengths. But also because you don't want to put all your eggs in one basket, right?
Maybe one of those companies has a work stoppage for some reason. And then you're having to shift your, so just, just like that, you know, not put all your eggs in one basket from a shipping standpoint, you may not be in your best interest to invest in a single carbon reduction path, right? So there's so many avenues to pursue in the form of carbon reduction.
I think it'd be a mistake to lock into one and call it one and done. Because as technologies advance even just within the confines of the production of, of sustainable aviation fuel itself, which is a huge benefit to the industry. Those changes, you know, adaptations going to occur and what it looks like now that might look very different in a year. Certainly in five years is going to look very different. So invest, right? Invest now, but diversify your portfolio just like you would with any other investment.
Lori Boyer 36:16
Okay, that brought up a couple of questions for me. So if you are approached or you see a cool idea, but you would lock into a contract for five years or something, what would you do? Are you saying that that's not a positive thing to do? Or or is it good or is it you know, what are what are your what are your opinions on that?
Peter Klevecz 36:35
Yeah, so I kind of had to break this into two buckets when I thought about this question because on one hand if you're buying fuel, right if you're making a fuel purchase you own your own planes.
And so you need liters or tons of fuel, then maybe a long-term agreement is better, right? That's why companies hedge on fuel. So it could be better to do it long-term because you probably get a lower cost per liter. If you're buying in large quantities. So DHL themselves, you know, recently invested in 800 million liters of sustainable aviation fuel, which locks us in to have this amount through 2026.
And we've already now signed a new agreement that takes us with, you know, has more and takes us beyond that. So in that way, you know, you get the better cost per liter by making an investment. On the other hand, most companies are not buying fuel for their jet, right? They want to reduce the carbon emissions of their scope three.
So in that case, if you're partnering with an easy EasyPost or a DHL Express you may not want to lock in for five years because what it looks like in five years is going to be really different. And you wouldn't have the agility to adapt to that new technology. So if you're partnering with a company for carbon reduction on your freight, purchasing offsetting or any of those things, other than buying fuel directly, I would think that there is potentially financial risk to do anything beyond two or three years. Sustainable aviation fuel, what we call Go Green Plus, is shaping up to be drastically different in five years with developments in, like, algae technology and other sources that it's going to come from. And the cost base could change as well. I don't know if that would be up and down.
Lori Boyer 38:10
Are you pulling my chain, Pete? It's really from algae?
Peter Klevecz 38:13
Yeah, so I've reading a lot about this development where they're actually growing algae that has the energy content can be converted to sustainable aviation fuel. It's not, it's not there yet, but it's one of those things that by 2027, that could be a reality, so that's not very far from now. So if you're thinking in terms of one- to three-year agreements, you won't have bought beyond what the technology is really ready to support for improvements that might come around.
Lori Boyer 38:41
Holy pancakes, Pete, that is amazing. Okay, I totally want algae fuel. So that was actually my other question. So sustainable fuel, that's like really interesting to me and not something, obviously I didn't know the algae stuff. Totally new. Help me understand what it is that DHL and DHL, you know, Express. What, what are you doing with fuel? And that's obviously huge. You guys are flying planes all over the place, right? So.
Peter Klevecz 39:06
Yeah, and that really is it. So there are companies who may have a really big profile of ocean freight. And so they may think, Oh, I should probably spend my carbon reduction efforts around ocean freight. And maybe you should. But if only 20 percent of your freight is moving via air, you probably should be looking at air, right?
It's, it's that piece of the pie. It's that seven, eight percent you know, piece of the pie that is where that scope three benefit can really come from. And so when DHL looked at this, I mean, we are heavily invested in electric vehicles and we're investing in hydrogen and we are optimizing our loads and we're doing all of the things that the company should do to reduce their scope one and scope two emissions.
But the reality is that more has to be done. And so we see sustainable aviation fuel as the path towards that. So it reduces, sustainable aviation fuel, use of it reduces carbon emissions in aircraft by up to 80, maybe even 90%. And as these new fuels come along, it will just get better. So that's why we went out and purchased literally tons and tons and tons of sustainable aviation fuel.
In fact, we have purchased the largest amount, I think over the last two years and, and still going of this fuel, not only because we believe in it as the most immediate, real reduction of carbon emissions but also so that we could share it with our customers who can't go buy the fuel. And they can use the credits from that use of sustainable aviation fuel to reduce their scope three emissions.
And so that we've branded as Go Green Plus. Right. So we bought sustainable aviation fuel. We're passing, or our customers can invest in the use of it to get carbon credits. And that package, that product is called Go Green Plus.
Lori Boyer 40:47
I love it. So we're just about out of time, but I wanted to ask you if there's any cool new initiatives, anything coming up in the future that are really get you excited. Are, you know, are we going to see a fleet of electric classic cars delivering, delivering our goods? That may be out of our scope. But what, what initiatives, what gets you excited for the future?
Peter Klevecz 41:11
The greater use of electric vehicles. I don't think that you'll see it in long haul aircraft, but for example, DHL will soon be taking delivery of 14 Alice aircraft, which are small light electric aircraft.
It's a single pilot. Maybe they're married, but there's just one of them. A single pilot can fly these for short-range, lighter weight. So this would be good for, you know, from hub to hub intra U.S. And we're planning to roll these out in the Americas. So we'll have 14 of these electric aircraft. And I can't wait to have these things in the air and on the ground.
To the earlier point about, you know, algae-based, I know there are others. So I don't want to lock into just one path. But just the advancements that are coming in sustainable aviation fuel and the prevalence of it. Right? So there are more and more companies. I feel like every other week I read about a new investment in a sustainable aviation fuel factory, right?
A manufacturing plant that's going to start producing it, which should help to cover the demand, which is very high, but it's going to increase, right? So that supply has to be there so that the cost doesn't get excessive. I'm excited about, you know, like solid-state batteries and some of those initiatives, and there's been an advancement in jet aircraft engines.
So right now, when we blend that sustainable aviation fuel in a jet, the FAA will only allow a blend of up to 50% sustainable aviation fuel mixed with regular jet fuel in aircraft today. But companies are testing and have already flown jets with passengers that are using 100 percent sustainable aviation fuel.
All we need is approval by the FAA and we can really double, literally double the amount of, sustainable aviation fuel that is brought in, which then is that 80 percent reduction in carbon emission that we're talking about. So really excited for a lot of those changes. And also the uptake on the products that we have.
Announcements like EasyPost has made in making these things available to our customers so that they can invest as well in an easy way.
Lori Boyer 43:01
Okay, I love it. This industry is shifting rapidly. Like you mentioned, so I am definitely going to have to have you back. The second you get algae fuel, you better be texting me.
I mean, like, Lori, let's talk about the algae fuel. Because it's incredible. There are amazing things going on. You had, I want to sum up a few of the great points that I felt like you made today. You really were impactful to me and I'm sure to our community as well. But number one point, just start. This is not going away, you guys.
This is something that is going to be important in our future not just for the world, but for our business as well. Make sure that, you know, if you're small and starting out, partner with people. Partner with people like EasyPost or DHL Express or, or any other companies at looking at ways of offsetting as you grow and get bigger.
How can you, you know, reduce your own output that you're doing? Make sure that you're communicating. I loved how you said to collaborate with your customers. Work with your customers on creating some of this and then please make sure you're communicating and sharing with everyone what you're doing. Not only does that make you, you know, build a lot of loyalty with your customers, but it also kind of pushes your competition to step up the game. And we all win. We all win at the game when we, when we save the environment. So any final words, Pete, how, how could people get in contact with you if they're wanting to learn more?
Peter Klevecz 44:28
Well, so going to the DHL website is a really good start. Probably going to the EasyPost website too for more information. But reaching out to DHL. If you just search sustainability or Go Green Plus or Go Green on our website, you'll find a lot of resources.
And then if you want someone to contact you, that's there as well. And then if it gets more complex or sophisticated, I probably would be brought in. So that might be a really good path to go to. And then there's some links that I can provide that you can decide to share with your listeners if need be.
Lori Boyer 44:56
Perfect. We can put those in the description. Pete, are you on LinkedIn or anything? If somebody wants to hit you up about classic cars.
Peter Klevecz 45:04
Yeah, either one or sustainability.
Lori Boyer 45:05
Okay, perfect. I'll throw that in too then.
Peter Klevecz 45:11
Lori Boyer 45:12
Okay. Well, thank you so much. This has been really exciting, really enlightening, and I am really motivated to get out there and get going. So thank you so much for being here.
Peter Klevecz 45:23
Thank you, Lori. I appreciate the opportunity to talk about my favorite subject.
Lori Boyer 45:26
I love it. Thanks so much everyone for being here. It was fantastic. We'll see you all next time.