Logistics companies are companies that provide freight carriers and shippers with logistics services related to supply chain management. In a green freight program, logistics companies can help carriers and shippers achieve efficiency goals by sharing information, identifying improvement opportunities, engage with carriers that have better energy and environmental performance, and help in the recruitment of members.
Logistics companies handle logistics services for freight shipments, and function similar to freight brokers in terms of bridging the gap between shipper and the carrier. Logistics companies are distinguishable from brokers in the sense that brokers focus on moving goods from one point to another, while logistics companies have the industry knowledge, the network, or the physical assets such as truck fleet, terminals and warehouses which give them the capacity to store, manage and process inventory. In some instances, shippers choose to divest truck fleets and storage facilities and outsource logistics operations to logistics providers, hence these are usually called “3PL” or third-party logistics providers. In green freight programs, logistics-related concerns generally involve reductions in energy consumption and emissions in the supply chain, thus, solutions for logistics providers focus on greening their supply chain practices and processes (e.g. by reducing time and distance traveled by the shipment) and the performance of their assets (e.g. by shifting to fuel efficient vehicle fleets). When shippers are able to create a demand for green freight services, logistics providers need to adjust their services in order to meet the demands of the shippers and can engage with greener carriers. They also play a role in identifying opportunities for improvement, as well as in recruiting members to the green freight program.
Logistics companies are able to select fleets based on performance metrics. They need to be able to quantify emissions and minimize the impact of fuel price volatility by developing fuel-efficient solutions. Shippers, carriers, and logistics companies all need reliable data and information on available and accessible fuel-saving technologies and strategies to improve supply chain efficiency. Calculation methods and reporting mechanisms must be developed and the level of detail of disclosure must be agreed upon across all private and public sectors and civil society groups.
Logistics companies require facilities, equipment, human capital and reliable information and communication technology to be able to adapt to evolving markets, and, more importantly, to balance the need to offer value-added services, explore efficient intermodal distribution, upgrade to efficient systems and vehicle fleets to comply with vehicle standards, review the sources of energy they use, reduce fuel or energy consumed, reduce cost pressure and increase profitability, reduce overall supply chain emissions, and optimize supply chain efficiency.