Original Equipment Manufacturer


Original equipment manufacturers (OEMs) are the manufacturers that supply freight carriers with the vehicles and the engines which must demonstrate compliance to national exhaust emission standards and regulations on minimum performance standards set by the government. Green freight programs can benefit from interacting with OEMs as they play an important role in introducing fuel efficient and low emissions vehicles and technologies to the program's partners.

Ensuring efficient and low emission vehicle fleets is a significant part of green freight programs. The original equipment manufacturers (OEMs) manufacture the vehicles, and vehicle engines must conform to national emission standards. OEMs also work with third-party technology manufacturers to source green freight technologies such as idle reduction technologies, aerodynamic technologies, selective catalytic reduction technologies and emission retrofit technologies, among others, to produce efficient fleets. While these manufacturers are dependent on the clients’ demand, they can nevertheless influence the demand for greener technologies as a result of their offerings in the market. For example, if there are more efficient trucks supplied in the market with alternative technologies (e.g. natural-gas fueled and hybrid electric trucks), this can change the choices of the carriers and shippers who may opt for greener fleets.

Because they manufacture and thus supply the vehicles or the fleet to the freight carriers which are generally concerned about the operational costs associated with volatility of fuel prices, the OEMs or the vehicle manufacturers must comply with regulations and standards mandated by the government to remain competitive in the industry. In many developing countries, the penetration of OEMs in the vehicle market share is hindered by barriers associated with upfront costs (as compared to alternative options such as second hand or re-conditioned vehicles), and the lack of mechanisms to pressure or incentivize buyers to opt for fuel efficient and/or more environmentally-friendly vehicle options. A green freight program can provide support through information dissemination, or through financing schemes towards cleaning up freight fleets, while the OEMs can contribute to the process by providing information that can be useful for informing vehicle purchase decisions, or through the provision of purchase discounts and/or additional benefits for the green freight program partners.