The Road to Green Freight: Navigating the Challenges and Benefits of Sustainable Transportation

Amir Taichman
Founder & CEO

As companies and governments around the world increasingly prioritize sustainability, the freight industry has been facing pressure to reduce its carbon footprint. However, many companies are not ready to invest in transitioning to green freight transport.

So, what is Green Freight? 

Green freight is defined as the transport of goods using low-emission or zero-emission vehicles. It includes the use of electric, hydrogen and other alternative fuel vehicles, as well as the use of efficient routing and logistics technologies.

Green freight has been gaining traction in recent years as more companies recognize the environmental and financial benefits of transitioning to low-emission or zero-emission vehicles. According to a 2020 report from the International Council on Clean Transportation (ICCT), there are more than 300,000 electric and alternative-fuel commercial trucks and buses on the road worldwide, representing a 300% increase since 2016. In the United States, nearly 1 in 5 new medium- and heavy-duty trucks sold in 2020 were either electric or hybrid. 

Benefits of Green Freight

Overall, green freight is the practice of utilizing more efficient and sustainable practices when shipping goods. It is a key component of a zero-emissions transportation system and is crucial for reducing greenhouse gas emissions and mitigating climate change. Some of the main benefits of switching to green freight are described below.

1. Reduced Emissions

According to the International Council on Clean Transportation, green freight initiatives can reduce greenhouse gas emissions from freight transportation by up to 30%. This could have a significant impact on global emissions, as freight transport accounts for nearly a quarter of all global emissions.

2. Increased Efficiency 

Green freight initiatives can also help improve efficiency in the supply chain and reduce transportation costs. According to a study by the University of Minnesota, efficient transport and logistics strategies can lead to a 3-5% reduction in total logistics costs.

3. Improved Air Quality

Green freight initiatives can also improve air quality in affected areas. A study by the International Transport Forum found that green freight initiatives can reduce air pollution by up to 50%, particularly in heavily populated areas near major highways.

4. Improved Public Health

The reduction in air pollution from green freight initiatives can also lead to improved public health. A study by the World Health Organization found that air pollution can lead to an increased risk of heart disease, stroke, and other cardiovascular diseases, as well as an increased risk of respiratory illnesses.

Challenges to Green Freight Adoption

Despite the growth of green freight, there are still many barriers to adoption, including cost of transitioning to new technologies. Electric and hydrogen vehicles, for example, are often more expensive than traditional vehicles, making them a tough sell for companies looking to reduce costs. 

The ICCT report found that electric trucks can cost up to two times more than traditional diesel vehicles, and there can be significant upfront costs associated with the installation of charging or fueling infrastructure. Additionally, there are often limited options for financing electric trucks, making it difficult for companies to switch to green freight. 

Nevertheless, more organizations are willing to pay extra for carbon-free shipping. The results of a recent Boston Consulting Group study suggest that 82% of businesses are ready to pay a Premium for more eco-friendly shipping. However, the amount they are willing to spend is not enough to make a major impact on reducing emissions.

How to Encourage Green Freight Adoption

To encourage companies to make the switch to green freight, governments have begun offering incentives such as subsidies and tax breaks. However, these incentives are often not enough to fully offset the costs of green freight.

To make green freight more attractive, companies must find ways to reduce the costs associated with transitioning to new technologies. This could include investing in more efficient routing and logistics technologies to reduce fuel consumption, or partnering with other companies to share the cost of transitioning to green vehicles.

Summing Up

Ultimately, transitioning to green freight is a complex process that requires a significant financial investment. However, the long-term environmental benefits of green freight make it an attractive option for companies looking to reduce their carbon footprint. With the right incentives and cost-reduction strategies, companies can make the transition to green freight more financially viable.