Economics and environmental sustainability are often pitted against each other in business — especially when it comes to the movement of freight. But there are several things companies can do today that reduce greenhouse gas emissions and benefit their bottom lines.
FreightWaves asked Eric Beckwitt, founder and CEO of Freightera, headquartered in Vancouver, British Columbia, Canada, about how the company's freight-quote platform works. Users can compare lanes based on cost, time and emissions.
About 130 firms using the platform are achieving 50% or greater reductions in carbon emissions from North American freight shipping operations, and 670 firms are achieving 20% or greater reductions, according to Freightera.
And according to Freightera, which was recently mentioned in an issue of Climate Change — The New Economy focused on the COP26 climate conference, lower-cost carriers are also lower-emissions carriers 86% of the time.
The interview has been edited for clarity and length.
FREIGHTWAVES: How did you come up with the idea for a platform that helps companies choose carriers based on costs and GHG emissions?
BECKWITT: "My background is in environmental science, so I knew the serious impacts emissions from transport were having on human health and the environment. I wanted to find a way to reduce emissions that was nonregulatory and allowed shippers to select carriers based on operational efficiency [and] price.
"We are finding that the most operationally efficient carriers in the Freightera platform are either SmartWay-certified lower-emission carriers or rail."
FREIGHTWAVES: How much potential do you think there is to reduce emissions in freight by improving efficiency or changing the mode of transport without switching to zero-emissions vehicles?
BECKWITT: "The best available data now indicates we can reduce CO2 emissions by 50% to 80% on a per-load basis – depending on the study, vehicle, fuel source and data source – before we start using EVs powered by renewable electricity.
"The source of the reductions vary by transport mode. For road freight, use of diesel engines with a combination of existing fuel-saving and emissions-reduction technologies can get a 37% to 50% reduction in theory. We have carriers achieving a 37% reduction in emissions now.
"Using renewable natural gas with existing trucks can get us about an 80% net reduction in emissions.
"Depending on the study, shifting long-haul freight to rail can get us a 62% to 75% emissions reduction. The net effect is that most nations should be able to hit their 2030 goals using a system like Freightera and existing fleets and technologies."
Read: Net-zero emissions quest needs ‘radical collaboration'
FREIGHTWAVES: How much do you think ZEVs will impact Freightera's platform and ability to reduce supply chain emissions?
BECKWITT: "The gradual rollout of ZEVs will strongly increase performance of Freightera's platform. As zero-emission options become available, lane by lane, shippers will be able to discover them and preferentially use them.
"However, not all carriers will switch to zero-emission-only fleets at once, and those that do will likely make the transition over time to make best use of the economic lifetimes of their current vehicle assets.
"Given that the average ship is used for 28 years, locomotives have a 30- to 40-year life, many vessels and vehicles in production and even used today may still be in use in 2050.
"This means we will need systems like Freightera, which shift freight to the lowest-emission option actually available on the lane each day, potentially for decades even if ZEVs are rapidly deployed worldwide across all transportation modes."
FREIGHTWAVES: How do the cost, emissions and timeliness factors differ among freight movements on the platform?
BECKWITT: "Emission reduction is important, but the lowest possible cost is more important for most of our shippers. Since 2017, when we started specifically promoting lower emission SmartWay-certified carriers and rail, we have found that lowest cost equals lower emissions 86% of the time.
"Regarding transit time, lower-emission road carriers generally have the same transit times as the typical fleets. The 20% to 25% of our shipments that go via rail shipments are generally slower, but on some lanes I understand long-haul rail is now the same speed as road, at least in Canada."
FREIGHTWAVES: How have you noticed customers respond to these factors when they consider switching to lower-emissions transport?
BECKWITT: "For most of our customers, cost and timeliness remain the most important consideration when shipping freight, in addition to service quality. They will use the lower or lowest emission option, provided it is also the least expensive, or nearly so.
"However, the operating costs of ZEVs are much lower than traditional diesel fleets. As battery prices continue to decline, the initial acquisition cost of ZEVs is falling quickly as well. Once they cost the same or less to buy than conventional vehicles, carriers that use them will have a competitive pricing advantage versus traditional fleets.
"Studies and models now predict that road freight costs can decline up to 80% by 2050 as we convert to 100% renewable energy, powered by low-cost leading sources, such as solar and wind, as fleets are completely converted to EVs."
Read: Renewable diesel: Environmental and economic sustainability meet head-on
FREIGHTWAVES: What do you think are the largest barriers to reducing emissions in the freight industry?
BECKWITT: "It depends on the time frame. Between now and 2030, the biggest barrier is giving shippers immediate access to existing lower-emission options, on every lane, every day. That is what Freightera is for.
"By 2030, we expect many manufacturers will have short- and even long-haul heavy-duty vehicles commercially available. At that point, it is a matter of how quickly we can retire the older, polluting fleets and make the transition to 100% zero-emission transport in all modes and then in all regions of the world.
"We expect it will take decades to fully convert global fleets, during which shippers still need to find the lowest-emission option for every shipment."
Read: Why is reducing emissions in freight so hard?
FREIGHTWAVES: Do you have any closing thoughts?
BECKWITT: "I think, as a community, we need to move beyond thinking there is a trade-off between emissions reduction and clean air on one hand and economic growth on the other. By focusing on operational efficiency and waste reduction, we can use less energy and fuel and emit less GHGs and air pollution at the same time. With wind and solar power now the lowest-cost source for new electricity generation, we are entering a period where energy, transportation and production costs can all fall, and sustainable firms, running on 100% renewable energy, can thrive.
"This is very different from investing in depletable resources, like a coal mine or oil field, where in the end, the investment must be abandoned. The implications for the economy are huge. We just need to make the transition as gently as possible, retraining people as we go. There are millions of new jobs in renewable energy coming, and manufacturing needs to reshore as we shorten supply chains and increasingly build a circular economy in North America."
Click here for more FreightWaves articles by Alyssa Sporrer.
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