2024 Decarbonization Report

Government pressure

One of the main drivers for these changes is the increasing focus on sustainability and reducing carbon emissions. Governments around the world are implementing stricter regulations and policies aimed at mitigating climate change, which include measures targeting transportation emissions. This will place pressure on companies to find ways to reduce their carbon footprint to meet these requirements and avoid penalties.

Under the Infrastructure Investment and Jobs Act (IIJA), Congress has allocated over $590.7 billion to transportation, with a particular focus on transportation infrastructure. The goal is to promote modernization and reduce emissions across all modes of transportation.

Peer pressure

Companies are also facing increasing pressure from their peers who have already set science-based targets and are proactively taking steps toward meeting emissions targets. A recent survey of Breakthrough clients shows that nearly two-thirds have set up emissions reduction objectives, with one in every four consciously working toward decarbonizing transportation. While reducing scope 3 emissions poses a significant logistical challenge, a trusted transportation management provider can streamline the collection and organization process, as well as offer recommendations to help achieve these goals.

Consumer pressure

Ultimately, it is consumer demand that will determine whether companies are meeting the mark in winning their business. The impact of this is felt by transportation leaders as well. As highlighted in Breakthrough's 2023 State of Transportation Report, a staggering 94% of these leaders acknowledge that the demand for sustainable products from consumers makes emission reduction an even more crucial priority in the coming year. As such, companies must prioritize decarbonization efforts in order to remain competitive and meet the demands of consumers while also following regulatory requirements.

These developments suggest there is a significant shift towards decarbonization in the transportation sector, with the trend expected to gain speed in 2024. The key to staying ahead of the curve is through collaboration and partnerships with trusted transportation management providers who can help navigate the complex landscape of decarbonization. As we move towards a greener future, it is imperative for companies to prioritize decarbonization efforts in order to remain competitive.

Here are three of the most effective strategies to manage the transition toward new synergistic shipper and carrier partnerships:

1. SmartWay

The SmartWay program, administered by the EPA, is specifically designed to assist shippers, carriers, and other stakeholders in reducing their carbon footprint. Through carrier participation in this program, shippers can effectively identify carriers with low carbon emissions and those with room for improvement. Thus, educating carriers about the program and encouraging their involvement has become a top priority for shippers. Currently, there are over 400,000 registered carriers in the U.S., but only 4,000 of them are part of the SmartWay EPA program. To bridge this gap, shippers actively invite SmartWay representatives to their meetings with carriers to discuss the program's benefits and application process.

Just 1% of registered U.S. carriers are part of the SmartWay EPA program.

It is worth noting that even a one-rank improvement in a carrier's SmartWay score can result in a significant 6% reduction in emissions per shipment. In fact, moving from an unranked status to rank 5 can achieve cumulative emissions reductions of over 30%. By establishing strong partnerships with carriers, shippers can demonstrate their commitment to achieving science-based targets and advancing their sustainability efforts.

2. PIlot programs

Shippers and carriers can benefit immensely by collaborating on a pilot program to trial alternative energy-powered tractors. If proven successful, the alternative energy-powered tractor would reduce the carriers' scope 1 emissions and the shippers' scope 3 emissions. To have the numbers make sense for both the shipper and carrier, a multiyear contract can provide the necessary stability and investment needed for carriers to make the switch to alternative energy. By partnering on a pilot program, shippers and carriers can lead the way in building a more sustainable future for the transportation industry.

Trucks equipped with alternative energy sources, such as RNG and electric power, have undergone extensive development and are now ready for comprehensive testing to meet the freight demands of shippers. Knight Transportation has been actively conducting field tests in California on Cummins' X1 SN natural gas powertrain, with ongoing testing scheduled until 2024. The ultimate objective is to achieve a 50% reduction in CO2 emissions by 2035. In addition, the market has shown interest in Freightliner's eCascadias. Frito-Lay, in partnership with Schneider and Freightliner, anticipate an emissions reduction of over 70% compared to traditional diesel trucks for their initial battery electric vehicle (BEV) routes. BEVs are still in the process of substantiating their claims, which is why they are currently limited to short-haul and dray routes.

3. MPG fuel efficiency improvements

Advancements in technology have led to continuous improvements in fuel efficiency for fleets. According to Breakthrough data, diesel trucks have been experiencing an annual increase in fuel efficiency of around 3-4%. In 2023, the average fleet MPG fuel efficiency was an impressive 7.68, a significant improvement compared to previous decades.

When engaging in MPG efficiency improvement discussions with carriers, it is crucial to have access to benchmarks and take into account factors such as shipment weight, route, and the carrier's average fleet age. It is equally important to establish a mutually beneficial agreement that considers the interests of both the shipper and the carrier. This approach helps mitigate any potential service issues that may arise from an imbalanced agreement.

In conclusion, effective communication and collaboration between shippers and carriers play a vital role in achieving science-based targets for reducing transportation emissions. By incorporating specific requests in the RFP process, partnering with transportation emission management technology providers, encouraging participation in the SmartWay program, and exploring pilot programs for alternative energy-powered trucks, shippers can make significant strides towards their sustainability goals. This collaborative effort will not only contribute to a more sustainable future but also position shippers and carriers as leaders in mitigating climate change.

Significantly reduce emissions and cost through mode optimization

While some may resist change, it is important to communicate the benefits of decarbonization and the urgency of the situation. The implementation of multitiered strategies not only presents opportunities for positive and sustainable change, but can also lead to significant emissions reduction and cost savings. The Breakthrough ecosystem of shippers stands to achieve nearly $1.2 billion in fuel and freight savings and 2 billion kgC02e reduction through the implementation of transportation decarbonization strategies.

On a larger scale, the United States' 5th National Climate Assessment report stated the impacts of a decarbonized transportation sector, ''A carbon-free, sustainable, and resilient transportation system would have societal benefits beyond reduced climate change impacts, potentially leading to improvements in air quality, physical fitness, incidence of cardiovascular and respiratory disease, mental health, crash rates, noise pollution, social equity, ecosystems, biodiversity conservation, energy independence, and the economy. When these co-benefits are considered, the benefits of GHG mitigation actions in the transportation sector far outweigh the costs." Using the GLEC framework and targeted emissions reduction strategies, shippers can play a critical role in creating a more sustainable future.