How to Talk to Your Freight Carriers About Sustainability Measures
November 7, 2023
Government mandates and consumer demand for eco-friendly products are applying pressure on businesses to adopt more sustainable practices. As a result, C-suite leaders are increasingly looking to transportation teams to help achieve science-based targets. Transportation accounts for an average of 23-36% of a product’s life cycle of greenhouse gas (GHG) emissions, making it an obvious starting point for businesses to minimize their carbon footprint. But reducing transportation emissions across a complex, national supply chain network is no small task.
Transportation teams can’t make progress alone, especially when it comes to tackling scope 3 emissions. To achieve meaningful progress, shippers need to effectively engage and collaborate with their carrier partners. However, without the right approach and data, it can be difficult to move forward.
Sustainable freight transportation hinges on collaboration
Scope 3 GHG emissions occur throughout a company’s value chain, making up 90% of an organization’s total emissions. Of these, transportation accounts for nearly 29%. Organizations historically have not been required to report on scope 3 emissions, but that could change as the Securities and Exchange Commission continues to advocate for mandates that would require the tracking and disclosure of these emissions.
Given the interdependence between shippers’ scope 3 emissions and carriers’ scope 1 emissions, it’s not surprising that 70% of transportation leaders say strengthening mutually beneficial transportation contracts with current partners is a key focus area. Transparent and collaborative shipper-carrier relationships can help both parties gain visibility into their emissions and identify areas for improvements.
But while these relationships can support both shippers and carriers in achieving their emissions reduction goals, a number of challenges need to be considered.
Diesel has long dominated the transportation industry, with over a century of infrastructure development and optimization invested in it. Any move toward more sustainable alternatives must contend with this deeply ingrained status quo. In particular, carriers must make investments in new equipment, which often requires longer-term partnerships to justify and offset these costs. Balancing these financial and operational constraints with the urgent need for emissions reduction presents a complex challenge for transportation leaders. Given these hurdles, making progress on sustainability can feel daunting — but you don’t have to solve everything at once. Instead, start with a conversation to engage your carrier partners and initiate progress toward your shared goals.
4 tips to engage in productive sustainability conversations
Whether you’re conducting an RFP or a quarterly review with a core carrier partner, you must be able to effectively navigate sustainability discussions. With a thorough understanding of the alternative energy marketplace and well-defined goals, you can engage in productive, transparent conversations that benefit you and your carrier partners.
Gain an understanding of the marketplace. Before you initiate sustainability conversations with carriers, you need a comprehensive understanding of the alternative energy market. Consider working with a strategic transportation management partner who can provide insights about the availability of alternative fuel types along your lanes. An understanding of your options and their current infrastructures empowers you to ask the right questions and identify specific areas for improvement in your network.
Communicate your objectives. Specificity is crucial when discussing your objectives with carriers. Science-based targets are a good starting point, but you need to set and share specific transportation emissions reduction goals. This is where your marketplace knowledge comes into play. For example, an understanding of the alternative energy options available in certain regions and the emissions reduction potential can help you ask carriers specific questions about how they can help you achieve your goals. If you know there is a renewable diesel station between Long Island and Southern California, you can ask carriers about their plans to incorporate renewable diesel equipment into their fleet or their plans to grow capacity in the next few years.
Explain the “why” behind your goals. It’s important to explain the reasoning behind your objectives, because many of your motivating factors also apply to your carriers. Throughout your discussions, emphasize the importance of emissions reduction from both a regulatory and consumer demand perspective. Highlight how upcoming regulations, like California’s Senate Bill 253, will require you to report on scope 3 emissions in 2027, and shortly after may require drastic emissions reduction. By communicating the external factors driving your efforts, you not only demonstrate their importance, but also foster a deeper understanding of the shared benefits.
Remain transparent and flexible. Transparency and flexibility are vital in a collaborative and effective partnership. One way to promote transparency is by leveraging data to understand the cost and emissions implications of alternative fuels. With unbiased data, you and your carrier partners can analyze alternative energy options and make informed decisions that benefit both parties.
But remember that your carriers also have their own goals, which underscores the importance of adaptability. For instance, a potential carrier may require longer-term partnerships to offset transition costs. While this may not align with your initial plans, embracing flexibility can lead to solutions that benefit you in the long term.
Sustainable freight transportation: An ongoing initiative
Tackling scope 3 emissions reduction may feel daunting, but strengthening carrier relationships can go a long way in bridging the gap between your goals and meaningful progress. By prioritizing mutually beneficial carrier relationships and engaging in transparent discussions, you and your partners can pave the way for a more sustainable future in freight transportation. Most importantly, remember that emissions reduction isn’t a one-time initiative — it’s an ongoing process that requires adaptability and collaboration.
Get in touch with Breakthrough to learn how our CleanMile solution can help you gather data on your scope 1 and scope 3 transportation emissions, establish benchmarks, and set goals you can use to engage your carrier partners.