This fireside chat recap is from FreightWaves’ Net-Zero Carbon Summit on Thursday
FIRESIDE CHAT TOPIC: Revolutionizing procurement to decarbonize trucking. railway transportation
DETAILS: Rik Arends, director of the Sustainable Freight Buyers Alliance (SFBA) at Smart Freight Centre, explains the importance of collaborative efforts between customers and competitors as road transport decarbonizes through the electrification of trucking.
“We believe [collaboration] is essential. You can’t do freight decarbonization alone. We don’t have all the answers but through this collaboration we’ve been successful in at least understanding what logistics emissions look like, how to exchange logistics emissions and how we can decarbonize through collective action, particularly in the road freight sector.”
“If we want to get to zero-emissions logistics or low-emissions logistics, it needs to be embedded in procurement. So, how do you actually procure zero-emissions logistics? It’s easy to say, ‘I want to run a truck on the road.’ It’s more difficult to say, ‘I want to run an electric truck on the road.’ That’s not straightforward today. So, how do we make that transition?”
“The role of procurement is critical here because if you think about any supply chain, specifically about road freight, most often companies have outsourced their logistics. They only ask: ‘Can you move my goods from A to B?’ That is generally then outsourced again to small and medium-sized enterprises. And if you think about the transition to electric trucks, small and medium-sized enterprises need to invest almost double the amount of money to get to an electric truck. Capex costs are much higher. Electric trucks are simply two times more expensive today than combustion-engine trucks. That in itself is a real challenge to overcome. At the same time, the ones that are paying for the freight — the freight buyers at the far end — are under pressure to decarbonize their supply chain and they are willing to make that change. So, we help them to aggregate demand and understand the volume of transportation that’s going to be put out there and how to design a collective tender to purchase electric trucks to allow [electric trucks] to enter the market sooner as well as more cheaply, which is much needed here.”
“What we’ve seen in the last two years is that logistics emissions are being reduced and companies are able to grow their operations and reduce their greenhouse gas emissions, something that was not even thinkable two years ago. Nowadays, the technology has become real. Road freight electrification is around the corner for every single segment. I think within a few years you’ll see a revolutionized logistics space with true decarbonization taking place.”
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