Shippers and carriers face increasing pressure from retailers, customers and investors to reduce emissions. Standardization, greater awareness, commitment to action and ease of implementation could help companies, large and small, track and reduce their emissions.
“One of our objectives is to allow shippers to send their individual goals for sustainability,” Priya Rajagopalan, chief product officer at FourKites, told FreightWaves. “Especially now, we see a lot more shippers with very specific goals around their sustainability mandates and wanting to see that reflected in our dashboard how they’re making progress towards it.”
End-to-end visibility platform provider FourKites provides a sustainability platform for customers that calculates “emissions data at the load-level using the actual distance traveled, weight and mode,” Rajagopalan said. Shippers and carriers have the option to share their emissions data with retailers or other companies they are working with downstream.
Many shippers are making efforts to make their fleets greener, and they want to share that data with potential or existing customers to give them a competitive advantage, Rajagopalan said. They also may want an easy way to track their progress toward their own sustainability goals.
Importance of standardization, valuable data
Carriers, especially smaller ones, do not have the resources to dedicate to tracking different sustainability metrics using different guidelines for all of their various customers. Making a standard set of metrics and guidelines for tracking emissions would help, Rajagopalan said.
“Today what we’ve found in working with our customers is it’s actually quite difficult for shippers to even understand their carrier footprint when suppliers manage the transportation,” Rajagopalan said. “There has to be a convenient and accessible way to share this data, so it’s not this custom project.”
FourKites has initiated conversations with shippers about gathering data for emissions calculations. Shippers said it takes weeks internally to gather the information needed from different divisions for the Environmental Protection Agency’s SmartWay program.
Smaller carriers especially do not have the resources to tailor the emissions data they collect or the way they collect it for each shipper or retailer customer. “Standardization becomes the key to scaling it efficiently,” Rajagopalan said.
In addition to standardization, there is a push in the industry to gain access to primary emissions data.
“Primary data is always the best, but it’s not necessarily realistic across the entire network in the immediate term, especially when you think about global supply chains,” Rajagopalan said.
Given the time and effort needed to gather data to calculate emissions using default values, acquiring access to primary data could prove to be even more challenging.
Retailers and shippers often pay many different carriers to move goods. It would be quite a feat to arrange for all of the carriers a company relies on in a year to measure and report primary data to calculate emissions.
Rajagopalan said collaboration among shippers, suppliers and carriers along with more regulation could make it easier.
“Ultimately, I think the biggest thing that will move the needle will just be greater awareness but also a commitment to what’s making it happen,” she said.
Dealing with privacy, trust
One of the main reasons some are pushing back against collecting emissions data is because of concerns about how the data may be used.
In the past, visibility was “seen as this strange thing,” Rajagopalan said. Companies were hesitant to share location data because there was “anxiety around how that information might be used and consumed.” However, she said once all of the parties come to the table to discuss how they will use the data related to location, timeliness or emissions and why it matters, things typically are resolved rather quickly.
“Now, if you think about location data, it’s ubiquitous,” she said. “Carriers enter into an agreement with a shipper knowing they’re expected to provide it. And I think that sustainability will go exactly the same way.”
She predicted sustainability inclusions will be part of agreements in the near future. Some carriers are eager to include sustainability data because it may give them a competitive advantage in an area other than cost, timeliness or customer service. Tracking emissions data also can help carriers keep track of their progress toward their own sustainability goals.
In Europe, using emissions data is more typical than in the United States. Demand coming from the industry and from those paying for the freight is what will drive progress.
Rajagopalan said the transition from seeing emissions calculations as extra steps to becoming standard practice will “happen in very short order.”