📘 Case Study
“Profit vs. Planet: The Carbon Dilemma at AeroShip Logistics”
Company Background
AeroShip Logistics, founded in 2002, is a mid-sized global air freight and logistics company headquartered in Singapore. It specializes in time-sensitive deliveries for clients in healthcare, electronics, and fashion across Asia, Europe, and North America.
As of 2024:
- Operates a fleet of 42 cargo aircraft
- Manages 63 distribution hubs
- Annual revenues: $2.1 billion
- Net margin: 9.2%
The company has won multiple client contracts based on its reliable 48-hour global delivery promise.
The Carbon Dilemma
In 2025, AeroShip came under scrutiny after a Greenpeace report listed it among the top 10 worst emitters per shipment km in Asia-Pacific. Competitors like DHL, Maersk, and Amazon Air have already begun transitioning to biofuel, electric drones, and carbon offsetting programs.
Major clients—especially in Europe—are demanding lower-emission logistics, and regulators are signaling new carbon tax zones across EU airspace.
In response, CEO Natasha Lam launched a task force to propose a sustainability plan that balances AeroShip’s competitive speed advantage with ESG compliance and long-term viability.
Strategic Options on the Table
Option A: Carbon Offsetting & Credits
- Purchase verified carbon offsets and join aviation offset programs like CORSIA.
- Estimated cost: $28 million/year to offset 70% of current emissions.
Option B: Sustainable Fuel Transition
- Begin transitioning 30% of fleet to sustainable aviation fuel (SAF) by 2027.
- SAF is 2.5x more expensive than jet fuel but reduces lifecycle emissions by 65–80%.
Option C: Eco-Optimized Routing + Ground Shift
- Use AI to optimize cargo routing, bundle shipments, and shift short-haul deliveries to rail/truck where viable.
- Requires IT investment, process redesign, and client education.
Option D: ESG-Linked Pricing Model
- Introduce a green pricing tier where clients pay a premium for low-carbon shipments.
- Risk: Loss of price-sensitive customers to competitors.
Strategic Dilemma
Natasha and her team must decide:
- Which strategies to prioritize for the 2025–2028 roadmap
- How to protect profitability without greenwashing
- How to future-proof the brand against increasing climate regulations and customer expectations
Snapshot – AeroShip (2024)
| Metric | Value |
| Revenue | $2.1 billion |
| Net Profit | $193 million |
| Emissions/Shipment (avg) | 4.1 kg CO₂e/km |
| % Clients with ESG Mandates | 36% |
| SAF Cost Multiplier vs Jet Fuel | 2.5× |
| Repeat Client Rate | 71% |
| On-Time Delivery Rate | 96.8% |
🔍 Student Discussion Questions
Strategy & ESG Alignment
- Which option(s) from A–D offer the best balance of cost, impact, and competitiveness for AeroShip?
- What are the risks of delaying green transition efforts?
- Should AeroShip position itself as a “green premium logistics brand” or stay mass-market and quietly compliant?
Financial & Operational Impact
- How should AeroShip finance the transition to SAF and IT investments for routing optimization?
- What trade-offs will occur between speed, margin, and emissions?
- Should ESG-linked pricing be optional or bundled into contracts by default?
Customer & Market Strategy
- How can AeroShip retain major clients demanding sustainability without alienating price-sensitive accounts?
- What messaging and branding tactics can position AeroShip as a future-forward but credible logistics provider?
Long-Term Viability
- How will carbon taxes and emissions regulations shape the future of global air logistics?
- What should AeroShip’s sustainability footprint look like in 2030 if it wants to lead the sector?