How to Be a Smart Freight Leader

Authors

• Angie Farrag-Thibault

  Former Director, Collaborative Initiatives and Transport and Logistics, BSR

Sophie Punte, Executive Director, Smart Freight Centre

Imagine you are the CEO of a multinational company trying to get millions of shoes, laptops, and candy bars to consumers around the globe. Your global freight supply chain is vast and complex, involving thousands of contractors who use a combination of trucks, trains, ships, and planes to reach your markets. Transportation may represent 10 percent of your company’s operating budget but 25 percent of your corporate carbon footprint.

To remain competitive, you have to keep costs down without compromising the service to your customers. And to remain socially acceptable, you must do this in the most environmentally sustainable way. In other words, you have to be a smart freight leader. And what does that mean, exactly?

Smart freight leaders know that there is a business opportunity in combining cost savings measures with climate mitigation and resilience. First, they recognize that their carbon footprint is a measure of efficiency, and they set ambitious targets to measure, report, and verify (MRV) emissions to track and communicate progress. Second, they devise and roll out action plans with solutions covering fuel, vehicles, freight movement, and modal shifts.

But leadership does not end there. Real leaders look beyond their own boundaries and seek to join forces with other companies to transform the logistics system, which everyone uses. An effective way to drive leadership and reach emission reduction goals can be through joining green freight programs that combine targets and MRV, action plans, and collaboration. These programs reward businesses with an incentive or recognition, e.g. a “label.” Three examples:

• Green Freight Asia has rolled out a four-leaf label scheme for shippers and carriers, helping them turn emission-reduction achievements into marketable selling points.
• The U.S. Environmental Protection Agency's SmartWay program and BSR’s Clean Cargo Working Group have successfully empowered HP, IKEA, Nike, and others to consider emissions footprints when selecting carriers and effectively calculate their Scope 3 transport-related carbon emissions.
• The Lean and Green program in the Netherlands has helped companies such as Unilever, Interface, and Heinz enter into innovative partnerships to achieve double-digit emission reductions in the logistics supply chains they all share.

The business case is clear: By engaging in collective action through collaboration, leaders earn a seat at the table to help shape policies that effect businesses, increase competitiveness, and enhance recognition as leaders among customers and within society as a whole. To be successful, the private sector also needs government to provide a secure environment for deploying smart freight solutions through supportive policies, programs, and institutional frameworks.

BSR and Smart Freight Centre (SFC) work with businesses and their stakeholders to make the freight sector more climate-resilient and competitive. On May 26, BSR and SFC will bring together representatives from business, government, international organizations, and civil society at the BSR Spring Forum Series event “Smart Freight Leadership,” in Leipzig, Germany. We will provide a summary of outcomes from this meeting at the International Transport Forum 2015 and ultimately submit findings to the climate negotiations at the COP21 climate talks in Paris later this year.

The BSR Spring Forum Series 2015 features events throughout Europe dedicated to business action on climate. Attendance is free and by invitation only. BSR will manage the registration process to ensure balanced representation. Please request an invitation by emailing EventRSVP@bsr.org.