The elimination of empty miles and adoption of electric vehicle technology are both needed to decarbonize transportation, according to FreightWaves’ Tyler Cole and Convoy’s Aaron Terrazas.
On this episode of Net-Zero Carbon, Cole, FreightWaves’ director of carbon intelligence, sits down with Terrazas, the director of economic research at Convoy, to learn about the company’s latest research comparing the emission-reduction potential of electric vehicles and the elimination of empty miles.
“Tons of pledges and investments are coming out from governments and corporations around how we’re going to electrify everything, which is clearly a path forward for reducing emissions, but we also always have to call people back to optimizing and reducing waste and reducing inefficiencies. And that’s what the empty miles pledge and campaign is all about,” Cole said.
Empty miles can be addressed today.
“In the longer term beyond the mid-2030s, EVs are the biggest factor, but the 2030s are a long time away,” Terrazas said. “At the root of it, empty miles are expensive.”
Reducing empty miles could save companies’ transportation costs while reducing emissions at the same time. Terrazas said that the focus on empty miles now comes from a place of industry demands to reduce emissions. However, the conversation about reducing empty miles began during the oil crisis in the 1970s, he said, when oil prices were high and companies were looking for ways to save money.
It used to be really difficult to match loads with drivers to prevent empty miles, but technologies such as Convoy’s automated reloads have made this much easier, Terrazas said.
“Automation has proven to be a robust solution over the course of the pandemic, and I think [there will] be more and more investment in that space as we have these national conversations about labor shortages and labor availability,” he said.
Convoy is making sure that its network is available to private fleets for filling scheduling gaps and working together to use capacity efficiently — especially during capacity crunches, he said. The level of volatility since the pandemic began has proven the need to use technology to solve these inefficiencies.
Coles said, “Knowing that transportation is such a huge component of global emissions, it’s definitely a worthy cause to focus and spend time on this.”
The EV details
Convoy started its research with the assumption that, as of 2021, EVs are about 2% of new heavy-truck sales, and they will grow to be 30% between 2025 and 2030. The two agree that this assumption, based on Guidehouse Insights research, was somewhat conservative.
However, Convoy also assumed that the EVs will be charged using clean energy, which isn’t the case everywhere right now.
Cole said the major hurdles to EV adoption are range anxiety and upfront capital. But shippers also consider what Cole called the “total landed cost in supply chain,” which includes balancing proper service level to customers with holding costs, inventory costs and freight costs.
Carbon emissions could start to become part of that total landed supply chain cost if there’s a price put on carbon — something that Cole said may not happen for a decade in the U.S.
Terrazas said: “I think anyone you talk to who is reasonably informed in the freight industry recognizes that it has to be both of these solutions. Larger fleets are definitely experimenting with EVs, but there are so many barriers to mass adoption at this point.”