Domestic trucking emitted 420m metric tons of CO₂ in 2020 (7% of total U.S. greenhouse gas emissions). This volume of CO₂ would fill over 2.2bn 53-foot dry vans (5m if compressed to the density of sequestered carbon). These emissions won’t meaningfully decrease until mid-to-long haul trucks are powered by electricity and other alternative fuels. As we work towards this future, we can help flatten the curve today by staying focused on proven and repeatable steps towards decarbonization.

Energy-Related Emissions of‌ CO₂ by Economic Sector
(Billions of Metric Tons)

Transportation became the leading source of CO₂ emissions in the United States in 2017 after emissions in the electric power sector declined substantially. Within the transportation sector, about 25% of emissions are from medium and heavy-duty trucks. Source

What’s Working

Reducing empty miles. At any given time, over 30% of trucks on the road are pulling an empty trailer. This inefficiency is caused by a lack of coordination across the industry — most shippers and carriers take a load-by-load approach to scheduling freight. Digital freight marketplaces are helping shippers and carriers fill these empty backhauls, but they are also stuck thinking week by week and load by load. When a shipper changes their volume commitment or a carrier switches lanes, the filled backhaul often reverts to empty.

As customer demand for products increases, reducing empty miles becomes an even bigger deal, especially for companies who produce consumables. In 2021, 7 of 9 food majors watched their overall carbon emissions increase even as they reduced carbon emissions associated with their internal manufacturing processes. This is due to where emissions come from — for PepsiCo, Scopes 1 & 2 account for only 7% of the company’s footprint. The remaining 93% are Scope 3 emissions that scale up with business growth in the form of more transportation, more packaging, and more outsourced manufacturing. 

At Leaf, we’re able to guarantee empty mile elimination using freight patterns identified with Leaf Adapt, our data analytics platform that coordinates multi-shipper circuits across the transportation grid. Moving freight continuously in circuits is favored by drivers and also has a positive environmental impact as the CO₂ emissions from empty backhauls are removed. Leaf uniquely schedules (and guarantees) these circuits months ahead of time, making the empty mile elimination repeatable, not just a one-off instance for a single trip.

This is carbon avoidance, happening today, that doesn’t require new hardware, infrastructure, or investment, and it offers immediate cost savings for shippers. As an industry, we must continue to work together to reduce the amount of empty trucks on the road and encourage our shippers to champion this impact within their organizations.

Our megaphone. British Petroleum published the first carbon footprint calculator in 2004 and by doing so, framed global warming as an individualized solution to a collective problem. While BP and other companies in hard-to-decarbonize sectors have not been held accountable for years, the narrative is changing thanks to increasing public awareness. Fortune 500 companies are responsible for over 25% of global emissions — their efforts to decarbonize should be proportionate. 

As these companies incorporate sustainability initiatives into their product offerings and operations, and think of how to maintain profitability without an unsustainable level of growth, we can help by continuing to move their products with fewer-to-zero empty miles.

What’s Not Working

Misleading messaging. As companies balance their pursuit of profit with pressure to address environmental impact, good intentions can lead to messaging that lacks substance. When competing for business, many companies make claims of zero waste or carbon neutrality, meanwhile their conference swag overflows from hotel garbage bins on its way to landfills.

Empty sustainability messaging has the potential to distract well-intentioned customers from options in the marketplace that have a positive (or less negative) environmental impact. It’s easy to recognize the unbelievability of sustainability claims from a fast fashion company that offers tens of thousands of new items each year. In nuanced industries like trucking, it can be difficult for customers to understand what solutions have a real impact on reducing carbon emissions within their supply chain. We should use this uncertainty as an opportunity to educate, not to exploit the latest sustainability trend.

While we understand the role of aspirational sustainability messaging, it must also be honest. The climate crisis is complex. We can pursue progress, not perfection, have grace for sincere missteps along the way, and maintain a commitment to evidence-based claims. This is possible without resting on the laurels of a catchy slogan or successful marketing campaign.

Carbon offsetting. A recent report from Bloomberg Green found that 40% of offsets purchased in 2021 are derived from renewable energy projects, one of the most contentious types of carbon offset:  

“Many renewable offsets came into being just as solar and wind power established themselves as the cheapest source of energy in most countries. Selling offsets for small sums as a way to support the economics of renewables doesn’t provide any real benefit if it’s already cheaper than building new coal or gas power plants.” Bloomberg

Legitimate carbon offsets exist, but they’re expensive and in the minority of what’s available in the voluntary carbon market. Before partnering with an organization that offers offsets, it’s imperative to understand both the source of their projects and their methodologies for counting greenhouse gas removal or avoidance.

The first offset was created to encourage an electric utility to think about climate change in the absence of market incentives and government regulation. While the early intentions of carbon offsets made sense, offsetting is often misused by companies as a form of pay-to-play. For a small fee relative to their profits, companies can continue their environmentally-damaging practices without actually reducing their carbon emissions. If a firm chooses to participate in the offset market, only legitimate projects should be considered, and these should account for a single component of a decarbonization strategy.

It’s easier for airlines to buy cheap offsets and claim carbon neutrality than for airlines to do the hard (and expensive) work of decarbonizing their core business. This is the difficulty with offsets — they have yet to fundamentally change behavior. Creating a global standard for what offsets can be counted against a company’s compliance targets is one way to start improving the effectiveness of the voluntary carbon market.

What’s Next

We should continue working with manufacturers in hard-to-decarbonize sectors and move their freight in the most carbon-efficient way. This will evolve as new alternative power units are developed and reach cost parity with diesel engines. 

Today, Leaf is working to reduce empty miles by coordinating multi-shipper circuits. In the future, Leaf’s proprietary dataset could support charging networks and electric fleets as manufacturers bring mid-to-long-haul electric trucks to market. This future is closer than you might think — last year, Tesla’s truck completed a 500-mile haul while weighing 81,000 pounds.

Meaningful climate action tends to follow legislation. While we’re logistics nerds, not lobbyists, what can we be doing as an industry to support the electrification of U.S. road freight? The Inflation Reduction Act (IRA) includes a tax credit of up to $40,000 for new medium and heavy-duty electric trucks. The Rocky Mountain Institute outlines additional provisions:

“The IRA includes a new $1 billion Clean Heavy Duty Vehicles rebate program for state, municipalities, Indian tribes, and school associations to convert fleets to zero-emissions heavy-duty vehicles and other funding for disadvantaged communities that could be used to electrify local depots. The IRA also includes expansions and extensions of utility-scale renewable tax credits, which lower utility costs and improve the fuel cost advantage electric trucks have over diesel vehicles by making vehicle charging cleaner and more affordable.” RMI

We acknowledge the tension in our industry when talking about climate change — carbon emissions are largely a function of production and consumption, and enabling consumption is how we make money. As an industry, we can both acknowledge this tension and pursue meaningful, repeatable, and variable carbon reduction when transporting freight.

We welcome your partnership and look forward to working together on this journey to a more sustainable trucking industry. 

The post Sustainability in Trucking: What’s Working, What’s Not, and What’s Next appeared first on Leaf Logistics.

This article first appeared on FoodLogistics.com, authored by Leaf Product Lead Andrea Pope

Whether the motivation to implement sustainability initiatives comes from government regulations, shareholder pressure or changing consumer demands, most corporations today have set goals around sustainability for their businesses.

As corporations set sustainability goals, they pursue a number of strategies to address reducing their footprint. Whether reducing their own emissions or reducing the emissions emitted from the energy products it sells, and companies begin offering more renewable energy sources, prioritizing land stewardship and addressing deforestation, among other initiatives.

These are strong examples for how companies can, and should, pursue sustainability across the various areas of their businesses. However, many of these goals have longer time horizons and require significant capital investment today. In the meantime, business leaders need to consider areas where they can make an immediate impact to start reducing their carbon footprint.

One area where corporate sustainability can find significant traction is in the transportation part of the supply chain.

Where the trucking industry goes green
In many ways the trucking industry provides the backbone for the American economy. Truck drivers help retailers stock their shelves, supply the gas stations and play a crucial role in moving food and beverage items through the chain. However, this critical piece of the U.S. supply chain comes with an environmental impact in the form of carbon emissions. The good news is that truckload transportation is an area where carbon reduction can be addressed in the near term in a capacity that benefits all industry participants.

Electric vehicles are usually the primary item that comes to mind in regard to how the trucking industry is addressing the issue of carbon emissions. Companies are investing in greener transportation. But, updating the technology for electric vehicles requires a significant capital investment. Additionally, there are infrastructure issues such as the lack of widespread charging stations along major trucking routes. This will need to be addressed in order for widespread adoption to occur. While the time horizon for these changes is significant, another area that dramatically drives down the industry’s carbon footprint today is increased network efficiency.

Empty trucks offer an opportunity for sustainability initiatives
Today, 30% of the trucks on American roads are driving empty. Meanwhile, shippers across the country are scrambling to find truck drivers to move their goods. This imbalance causes shippers to scramble for load coverage when there is a surplus of capacity.

This is due to the siloed nature of the industry.

The transportation industry historically operates across a series of silos, with each shipper having a limited number of carriers they work with to move their goods. This means that while there may be pockets of excess capacity within a single network, a shipper in need of a truck elsewhere in the industry cannot see or access that capacity. Moreover, even if a shipper can identify excess capacity from another area of the overall transportation market, the existing tools to secure that truck and fit it into their own transportation plan have not existed. But new technologies have largely mitigated this issue, even if they are not in widespread use.

New supply chain technologies offer a path to sustainability and cost reduction
With the explosion of logistics technology companies and initiatives in recent years, efforts have been made to advance the industry by providing new levels of connectedness and visibility across the industry. New companies have emerged to offer real-time freight tracking and supply chain visibility, while others have specialized in automating the outdated processes of communication by building digital freight brokerages and other digital intermediaries.

To access the full article from FoodLogistics.com, click here.

The post How to Build a Sustainable Transportation Plan appeared first on Leaf Logistics.

This article first appeared on CFO.com, authored by Leaf CEO Anshu Prasad along with Chris Gaffney and Mark Shaughnessy

Transportation seems to be the topic of conversation more often these days. From shortages on our grocery store shelves for everyday items we previously took for granted, to the news of a large container ship stuck in the Suez Canal, to more recent news of disruptions in fuel supply in the Southeastern United States, it appears that transportation has suddenly become more volatile and less reliable.

For supply chain practitioners, however, transportation volatility has been a reality for some time. For decades, sophisticated shippers such as Walmart or Coca-Cola have maintained hundreds of relationships to manage the flow of products to stores and customers, requiring a patchwork quilt of solutions. For supply chain professionals, uncertain customer demand, production, and supply variability throughput require a mix of asset-based and asset-light providers. This mix of providers handles the unpredictable surges in transportation demand and requires supply chain professionals to focus entirely on execution with little thought given to the bigger picture of imagining an alternative.

Like in other parts of our economy, COVID-19 and the resulting economic shocks have forced supply chain practitioners and company executives to examine the frailty of their underlying transportation management infrastructure. Specifically, CFOs, many of whom have had to deal with significant transportation budget overruns this past year, are challenging their supply chain and transportation leaders to learn from these latest crises to build stronger, more resilient supply chains that will better serve the needs of their companies into the future.

Four key questions help shape conversations CFOs should have with their chief supply chain officers (CSCO).

1. How will our future supply chain better serve the changing needs of our customers?

More than a cost center, transportation is often critical to how a customer experiences a company’s product. Unreliable transportation often clouds the customer’s perception of the product they’re buying, putting future growth and margin in jeopardy.

Furthermore, as we strive to better serve our customers, we must also understand how their needs are changing, and how their expectations for faster and more reliable service are increasing. How well prepared to meet these rising demands are your transportation management teams, and the systems and providers you utilize?

What additional tools and data are you using today, beyond the RFP and backward-looking benchmark datasets, to meet these needs and not risk compressing your margins?

2. How can we better budget for transportation costs in an increasingly uncertain environment?

While we’ve previously endured cycles of heightened demand and corresponding budget overruns, these peaks and troughs seem to occur more frequently now.

How can we meet today’s demands while balancing investments in the tools and data we’ll need to manage our future supply chains?

Leading shippers have taken steps to take 10% out of their budgets for 2022 and onwards. They’ve done this by investing in technology to see their demand, and the broader network of supply, in a different way. New technologies have given shippers the tools to make deep analytical analyses of their network data to uncover and take advantage of better-matched supply.

3. How can we better manage through periods of volatility?

Our supply chains are interconnected with our suppliers and often extend geographically further than they have before. This means disruptions ripple through our supply chain and transportation plans, with shutdowns and restarts consuming weeks of our bandwidth. How can we be more responsive to changing patterns of demand and supply?

Historically, this volatility was addressed through excess inventory and capital. Today’s competitive landscape does not allow this and in many cases, the balance sheet solutions were not in the right time or place to adequately address volatility.

4. How can we hire, train, and retain the talent we’ll need to help manage a more data-driven supply chain?

Talented, innovative, and ambitious professionals will be attracted to transportation if it is perceived to be valuable to the company, and a driver of competitive advantage. They also want to see sustained investment in supply chain technology and digitization, accompanied by investments in their development and training to better use these tools to deliver value to the company.

To access the full article from CFO.com, click here.

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