Freight carriers are entities that provide services for performing the physical movement of goods from one place to another. They either own or lease and operate their own truck fleets, rail lines, air vehicles, barges, or marine cargo vessels to transport goods.
Freight carriers are responsible for the physical movements of goods, and can either own or lease vehicles for performing the movement. Carriers must ensure the goods are transported safely, without damage, and are delivered on time. Carriers are one of the key stakeholder groups in green freight programs as they are the direct energy users and emitters of transport-related emissions within supply chains. In green freight programs, carriers are commonly required to commit towards green practices (improved operations and adoption of cleaner technologies), monitor and report relevant data parameters, and take actions towards improving their efficiencies and environmental performance. They benefit from their engagement in green freight programs by reducing their costs of operations through efficiency improvements and improve their corporate image.
The selection of freight carriers by shippers is usually based on the quality and reliability of services and associated costs. Fuel comprises a large fraction of freight carriers’ operating costs, thus, carriers are faced with the challenge of dealing with volatility of fuel prices. To address this, carriers need to improve the fuel efficiency of their fleets, but they need reliable tools, information and support for improving their efficiency in the areas of technologies (e.g. aerodynamic devices and low rolling resistance tires) and strategies (e.g. driver training and incentive programs, improved logistics, and improved maintenance programs), and of verification of manufacturer-specific technologies. Carriers are concerned about managing costs and maximizing profits and business growth opportunities. Because technologies and strategies entail additional costs, freight carriers need to evaluate the type of payback and estimate the cost savings that can be achieved. To maintain competitiveness, carriers need to track and measure their performance periodically. Green freight programs leverage information like these performance metrics to stimulate heightened awareness and competition for carriers and shippers.
In many parts of the world, freight carrier markets are highly fragmented. The fragmentation of the industry acts as a barrier in implementing green freight actions and policies due to the sheer number of players in the industry. The diffusion of technological and non-technological solutions to improve fuel efficiencies and load factors is hindered by the fragmented nature of the carriers. For example, in many developing countries, the majority of road freight carriers are small and medium enterprises and often have low levels of awareness and training related to fuel efficiency improvements and often lack access to low interest financing. Fragmentation also lessens the ability of the carriers to demand supportive policies from the government. Furthermore, the operators are forced to sustain high empty trips and in order to compensate the losses, use overloaded trucks. Small operators are usually subject to low profit margins, and will prioritize cutting costs over environmental performance when they are allowed to do so. Green freight programs can be a good channel for addressing issues related to the fragmentation of the market, particularly if the program has mechanisms to involve smaller players.