How Carriers of All Sizes Can Become More Sustainable

The following is a contribution from Ava Barnes of Alvys.

The trucking industry is at a crossroads when it comes to sustainability, facing both challenges and opportunities in the push to go green. This is particularly true for carriers. With the election of President Trump, trucking companies may see regulatory pressure ease over the next four years. However, this reprieve could be temporary, as future administrations may impose stricter emissions standards, leading to significant increases in compliance costs.

Global initiatives like the Paris Agreement and the European Green Deal have set ambitious goals, such as net-zero emissions by 2050, and many governments are offering incentives to encourage greener operations. Trucking companies are under close scrutiny, as the transportation sector contributes heavily to CO2 emissions, with trucks accounting for much of the growth in emissions from heavy-duty vehicles over recent decades.

Carriers must balance the current regulatory relief with the need to prepare for stricter demands likely to return after President Trump’s tenure. This period provides trucking companies with some breathing room to strategically invest in green technology that aligns with future sustainability requirements. While these investments come with upfront costs, they also deliver significant benefits such as fuel savings, stronger customer loyalty, and improved efficiency. By treating this temporary reprieve as an opportunity rather than a pause, trucking companies can position themselves for success in an increasingly eco-conscious world.

The shift toward sustainability will be costly

There are several factors carriers must focus on as they evaluate the cost of building more sustainable fleets and operations. First, there are the upfront costs of green technology, from electric trucks to charging and fueling infrastructure. According to McKinsey, zero-emission trucks have a 40 percent disadvantage in total cost of ownership — costs that can be reduced through subsidies and less expensive components (such as fuel-cell systems), but which will remain high for the foreseeable future.

While many carriers are prioritizing biofuels and natural gas over zero-emission trucks, these alternatives are more expensive than diesel and other traditional fuels. The process of decarbonization will likely drive up freight rates, especially as the cost of alternative fuels and other green technology remains high. Aside from the price tag of green investments, there could be a considerable impact on business as customers react to higher rates. Fines and regulatory compliance costs could increase this financial strain even more.

The benefits of sustainability in trucking

Despite the high initial costs of the green transition, greater sustainability offers carriers a wide range of benefits. Electric and hybrid trucks provide long-term fuel savings, and in some cases these trucks will have lower maintenance costs. A wide range of technological advancements — from hybrid engines to predictive cruise control — will decrease fuel costs in the coming years. Meanwhile, McKinsey projects that the cost of electric medium and heavy-duty trucks (as well as trucks that use alternative fuels) will reach parity with conventional trucks before 2030.

A focus on sustainability will also improve carriers’ reputations and increase brand loyalty. According to Boston Consulting Group, 70 percent of end consumers are willing to pay a 5 percent premium for green products. A 2023 survey found that 80 percent of shipping customers would pay more for green shipping — and the extra amount they’re willing to pay has been rising steadily. It’s clear that the zeitgeist is shifting toward greater sustainability, and the carriers that meet this demand will have a competitive advantage.

How small and mid-sized carriers can go green

Investments in alternative fuels, electric trucks, and other green technologies may seem daunting — especially for smaller carriers that make up the majority of the industry. However, there are many strategies that will help these carriers go green more cost-effectively. For example, carriers can use route optimization tools to reduce fuel use and improve delivery times. Geotab reports that route optimization can reduce mileage by 15 to 30 percent, which will result in significant fuel savings. Small carriers can also consolidate loads to limit wasted space and improve efficiency.

Cooperating with other companies can be a significant efficiency booster for small carriers. At a time when between 20 and 35 percent of trucking miles are empty, freight pooling can address this problem and help companies reduce their environmental impact. The same applies to shared distribution centers, which can cut down on last-mile emissions. Small carriers can also focus on driver training — the American Transportation Research Institute reports that the driver  is one of the biggest factors affecting fuel economy. Finally, small carriers can take advantage of increasingly powerful and accessible digital platforms that will help them optimize loads, improve workflows and logistics, and identify costly inefficiencies. 

While the shift to green operations may be intimidating for many small carriers, they have never had more ways to improve efficiency and decrease the size of their carbon footprint.

A new era of sustainability in the trucking industry

While it will take time for the emergence of electric and hybrid fleets, there are many other ways to reduce costs and increase efficiency. A 2023 whitepaper published by the International Council on Clean Transportation found that several categories of green improvements to internal combustion trucks will pay for themselves in just two years, such as weight reduction, aerodynamics, and tire rolling resistance. Michelin reports that fresh tire treads can improve rolling resistance from between 30 and 50 percent.

Smaller carriers can focus on improvements like these before making huge investments in low or zero-emission trucks. Carriers of all sizes must take advantage of government grants, subsidies, and tax credits that reward steps toward improving fleet sustainability. For example, California’s HVIP program provides discounts between $20,000 and $240,000 to purchasers of green medium and heavy-duty vehicles. Companies can also look into federal tax breaks such as the Commercial Clean Vehicle Credit, which provides a $40,000 incentive to businesses that purchase qualified trucks.

In light of temporary regulatory relief, this is the ideal time for carriers of all sizes to develop cost-effective sustainability strategies that future-proof their businesses. Smaller carriers, operating on tight margins, may find this especially challenging, but creative solutions can help reduce emissions without breaking the bank. By focusing on sustainability now, carriers can prepare for stricter regulations in the future while strengthening their operations and remaining competitive.

Special thanks to Ava Barnes of Alvys for contributing this piece.