Slow-Steaming Recommendation places Aggies top in Ethics and Sustainability Case Competition
Dorian Martin, May 20th, 2021
Business Honors Students utilize Mays Transformational Leadership Mindsets in High-Impact Learning event
Mays Business School students Mia Barone ’21, Steven Gooch ’22 and Laura Key ’22 won top divisional honors at the Loyola Marymount University’s International Business Ethics and Sustainability Case Competition. This high-impact learning event, which was held virtually April 8-9, challenged participants to create a solution based on one of the United Nations’ Sustainable Development Goals. The Aggie team proposed that Amazon could protect the ocean’s viability by changing its maritime shipping approach.
Case competitions offer an opportunity for Mays students to further develop their transformational leadership mindset. “Participating in an international case study provides Mays students an opportunity to exhibit the culmination of business competency and experience gained in the classroom and through high-impact activities on a global scale,” said Katy Lane ’02, the director of Mays’ Center for International Business Studies, which sponsored the team in the case competition. “Working as a cohesive team to analyze and clearly communicate their solution is essential to succeeding in the high-pressure environment. In many cases, judges are from companies or organizations seeking to implement the winning solutions to make a positive social impact. These teams clearly display the Mays Transformational Leadership mindset in action.”
Advised by Dr. Daria Panina of Mays Department of Management, the student team focused on the UN goal of conserving and sustainably using the oceans, sea, and marine resources for sustainable development. Their full presentation had to address the legal, financial, and ethical dimensions, and their recommendation had to be a solution that was viable on all counts. As part of this session, the Aggies, who are part of Mays Business Honors program, were questioned by a panel of judges who have executive experience in corporate ethics, compliance, corporate social responsibility, executive leadership, and sustainability. This panel did not include representatives from Amazon, which was the focus of the Mays’ team’s case.
The Aggies recommended integrating the practice of slow steaming into Amazon’s maritime cargo operations. “Right now, there’s a lot of sustainability work being done on the company’s consumer-facing, warehouse-to-door operations–electric delivery vehicles, sustainable mailers, shipment zero goal, etc.–but no responsibility is being taken for the impact of Amazon’s inbound logistics process through their shipping subsidiary,” said Barone, who is majoring in marketing and analytics.
The team’s presentation pointed out that a large proportion of the merchant fleet relies on bunker fuel, which contains a high amount of sulfur. The fleet’s fuel combustion releases large amounts of sulfur and nitrogen oxides, which acidify the marine environment and contribute to reduced calcification, erosion of coral reefs, and adverse effects on human health, especially in coastal communities. One cargo ship creates the same amount of pollution as 50 million cars.
Amazon ships approximately 3.2 million inbound shipping containers per year to warehouses globally; these containers hold $127.6 billion in products. The Mays team recommended that these ships adopt slow steaming. This approach, which reduces the ship’s speed from 20-24 knots to 12-19 knots, reduces the use of fuel and the resultant cargo emissions.
Wide Sustainability Implications
The Aggies also pointed out that slower travel does not result in lower profits. They cited University of Hamburg researchers, who found that profits for many container vessels decline when speeds surpass 20 knots.
The Mays team also believed that their proposal was feasible and environmentally beneficial. “Ultimately, the solution that we proposed is one that is easy to implement within a couple of months,” said Key, who is majoring in supply chain management. “It’s not a large-scale transformation. As they push forward with net-zero goals, making this small change can be very beneficial to the environment long-term. Using slow-steaming and slowing boats down reduces overall fuel consumption.”
The team advocated for more frequent, small shipments of each product to warehouses. Through using freight forwarding, Amazon would be able to combine small batches of multiple SKUs in containers, which would eliminate the need for holding additional safety stocks.
The Aggies believe these recommendations could have wider sustainability implications. “Amazon is a key player in the global shipping industry. Because of the economy of scale, they have the opportunity to set the standard for the industry,” said Gooch, who is majoring in marketing and analytics. “Adopting this practice would make it more acceptable for others to take on some more sustainable practices. Overall, this would have a greater impact on preserving our oceans and supporting those people in the coastal communities who depend on those resources.”