Decarbonization study: a call to focus on SME road freight carriers

Amsterdam, 28 January 2021 - A new study from Smart Freight Centre (SFC) and the Center for Sustainable Logistics and Supply Chains (CSLS) at Kühne Logistics University (KLU) highlights the crucial role that small carriers play in achieving zero-emission road freight transport in Europe. The report finds that carriers need to strengthen their current commitments and multi-stakeholder collaborations will be essential.

The study, Decarbonizing the operations of small and medium-sized road carriers in Europe, builds on primary research with SME road carriers, supported by the global transport platform Transporeon, who provided anonymized data from over 800 carriers in 32 European countries.

European road freight transport remains one of the most important sectors to decarbonize, with heavy goods vehicles accounting for roughly 20% of transport-related CO2 emissions. In order to tackle GHG emissions from freight transport, governments, shippers, and logistics service providers (LSP’s) are setting ambitious decarbonization targets and strategies. The EU plans to achieve a 90% CO2 reduction in the transportation sector by 2050.

The study by SFC and KLU shows that there are important differences regarding the ability of carriers to decarbonize, depending on their fleet size. While the vast majority of carriers acknowledge the importance of decarbonizing the road freight sector, operators with larger fleets are in a better position to undertake concrete steps to bring down transport-related GHG emissions.

The majority of carriers with under 20 vehicles, on the other hand, see little or no business opportunity in decarbonizing their operations. The study finds that besides the associated costs, uncertainty about customer demand, emission reduction measures and new energy technologies are clear barriers for the carriers. As a result, many carriers lack basic emission calculation capabilities and available operational and technical fuel efficiency measures are often not implemented. This represents a large untapped potential for saving money as well as GHG emissions.

“The aim of the research was to examine European road freight decarbonization from a carrier perspective. The results highlight the crucial role these carriers play, the current shortcomings and the resulting urgent need for all stakeholders to step up their engagement with this sector.”

Moritz Tölke
Junior Technical Manager at Smart Freight Centre

The study outlines that the involvement and commitment of small carriers will be essential to reach decarbonization targets. More than half a million companies provide road haulage services for hire in Europe - 99% of them have fewer than 50 employees. As the amount of freight movement on European roads is projected to increase by almost 50% by 2050, crucial support and incentives are needed urgently from a number of stakeholders in the industry.

“The discussion on road freight decarbonization in Europe is increasingly dominated by the choice of low carbon truck technology and energy sources – essentially a supply-side issue. This research shows that there will also be a major demand-side challenge in encouraging over half a million small carriers to switch to these new vehicles and, until then, to operate their current diesel-powered ones more energy-efficiently. KLU’s work on this subject recognises the need for managerial as well as technological change.”

Prof. Alan McKinnon
Center for Sustainable Logistics and Supply Chains (CSLS) at Kühne Logistics University (KLU)

Looking ahead, the study lists recommendations to multiple stakeholders in the industry on how to support and incentivise carriers on their journey towards a lower-emission freight industry.

“This report points out the necessity and value of collaboration. Road freight carriers, especially SMEs, need the support of freight buyers, OEMs and policy makers to ensure timely and efficient decarbonization. SFC will continue enabling these collaborations towards zero-emission freight together with key stakeholders in the Global Logistics Emissions Council (GLEC) community, including KLU and Transporeon.”

Eszter Toth-Weedon
Senior Partnership Manager, Smart Freight Centre

“Decarbonization is already a decisive factor determining a business success. And the road freight market is no exception to this. We observe that more and more shippers are requiring their carriers to invest in measures limiting CO2 emissions. Transporeon supports such efforts with its solutions that allow to reduce the number of empty runs like e.g. with transport assignment best carrier, optimised route planning and real time visibility.”

Stephan Sieber
CEO, Transporeon

Following a more general environmental progress report on European logistics by CSLS, the study is one of the first to focus on the decarbonization potential of SME carriers in Europe. It provides unique insights into current thinking in the road carrier market on the decarbonization issue. It examines emission calculation capabilities and the rate at which emission reduction measures are being implemented across a sample of more than 800 European carriers in 32 European countries, provided by Transporeon. It also highlights factors driving and constraining efforts to cut fuel consumption and emissions.

The data was supplemented by a more detailed online survey and a series of interviews with a smaller group of carriers to provide additional in-depth qualitative data. The research was carried out as part of Moritz Tölke’s master thesis at KLU.