As if the business world needed yet another acronym, “ES&G” has quickly worked its way into the vocabulary of corporate America. Intended to replace existing labels like “Corporate Social Responsibility”, the term “Environmental, Social & Governance” describes the measures that companies take to protect the environment, adhere to human rights & labor standards, and how they govern their activities in these (and other) areas.
How ES&G Impacts Logistics
Whereas all companies must strive to be good corporate citizens, Full Truckload transportation is ripe with opportunities for shippers and carriers. Of course, the big headline for ES&G in trucking is pollution and the industry’s efforts to reduce its carbon footprint. With the U.S. trucking sector emitting over 420 million metric tons of CO2 last year, and a 55% increase in greenhouse gasses from 1990-2020, there’s no disputing that much work remains to be done in the FTL sector.
In addition to the all-important goal of reducing the carbon footprint, there are opportunities for the trucking community in both the social and governance aspect of ES&G, too. With factors that include a shipper’s need to work with fully licensed and insured carriers, driver safety, and the desire to award business to minority, women, and/or veteran-owned firms, there are multiple ways in which shippers and carriers can raise the bar for ES&G.
While innovations like Electric Vehicles show long-term promise for trucking, the question is what can be done right now to improve performance in all facets of Environmental, Social & Governance. As a member of the U.S. FTL community, Emerge is not only committed to ES&G within our own ranks, our Freight Procurement Platform offers features that augment our customer’s internal initiatives. Here’s a few of the ways in which we help shippers and carriers with their ES&G efforts.
Use the Emerge Freight Procurement Platform to reduce empty miles.
It is estimated that upwards of 25% of a carrier’s time on the road is spent on empty miles. In other words, one out of every four miles that a carrier drives is dedicated to hauling air. Needless to say, carriers don’t want to run non-revenue miles that wear down equipment and suck up driver hours of service, and shippers don’t want to have the cost of empty miles baked into their rates.
Whether it’s used for a Dynamic RFP or a spot rate, the Emerge Freight Procurement Platform allows shippers and carriers to align loads with the location and availability of equipment to dramatically reduce empty miles. Taking that process a step further, access to real time information on available loads also allows carriers to better manage hours of service considerations for its drivers.
Basically, if a carrier has knowledge of a shipment ten miles from its current location, as opposed to running empty to pick up a load two hundred miles away, the carbon footprint is reduced accordingly. When considering the millions of empty miles wasted every year in the U.S., the impact that the Freight Procurement Platform is having reducing the FTL carbon footprint is substantial.
Pre-Vetting of carriers for compliance & governance.
From a risk management perspective, shippers need to know that they are dealing with carriers that are fully licensed and insured in accordance with U.S. Dept. of Transportation standards. With over 45,000 marketplace carriers on the Emerge Platform, shippers can be assured that they work with top carriers that meet all regulatory requirements.
In addition to its vetting feature, the platform also helps carriers manage driver hours of service. While it’s important to state that the deployment of Electronic Logging Devices and compliance with hours of service for drivers is the carrier’s responsibility, those same carriers can use the platform to assign loads to drivers whose hours of service are within the time parameters of pickup & delivery locations.
Award business to Special Designation carriers.
In recognition of the need to support all types of truckers, the Emerge Freight Procurement Platform was designed to help shippers do business with minority, women, and/or veteran-owned businesses. A great example of this capability is found in our Dynamic RFP platform, where a shipper can specify that a certain percentage of loads be awarded to a woman-owned business. Equally applicable to spot rate shipments, a shipper can quickly award a load to a veteran-owned business that’s looking for a chance to prove how great their service really is.
From a social responsibility perspective, shippers should do their best to award part of their loads to Special Designation firms. Unfortunately, it’s been hard for shippers to do business with these carriers because they were unaware of their capabilities, or conversely, the trucker couldn’t gain access to the right contacts. With the Emerge Freight Procurement Platform, all barriers to doing business are removed, and everyone competes on an even playing field.
Back in the 1970s, Harvard professor John Kenneth Galbraith famously told a conference of profit-driven CEOs that, “You can do well by doing good”. Of course, he meant that the goals of doing the right thing and making money didn’t have to be mutually exclusive. In fact, he went on to demonstrate that when properly executed over the long-term, being a good corporate citizen and earning a profit actually go hand-in-hand.
The above statement applies to the FTL shipping industry, and when put into practice, there are benefits for shippers, carriers, and society in general. Unfortunately, the challenge for the FTL community has been to find ways in which companies can go from good intentions to daily execution. Without question, the Freight Procurement Platform has bridged the gap between shippers and carriers and stands as an enabler for ES&G in the trucking business.
When using the platform to reduce empty miles, everyone wins from a financial perspective, all while reducing CO2 emissions. Governance is also improved with Emerge because shippers know in advance that they’re working with pre-vetted carriers that adhere to all regulations. Last but certainly not least, Emerge’s ability to assign loads to Special Designation carriers adds an aspect of social responsibility previously unavailable to the FTL shipping community.
Taken as a whole, the Freight Procurement Platform really is the “vehicle” that allows the entire FTL community to “do well by doing good”!