While medium- and heavy-duty (MHD) vehicles are crucial for the transport of goods and for facilitating a robust domestic economy, they are responsible for an outsized 23% of transportation-related greenhouse gas emissions—despite making up only 5% of on-road vehicles. The U.S. MHD sector consumes more than 55 billion gallons of fuel annually, contributing to a dependence on a global oil market in which supply and prices are heavily impacted by foreign countries that do not share American values. As prominent users of MHD vehicles, shippers and carriers have a prime opportunity to take a leading role in reducing U.S. oil dependence and minimizing harmful emissions.
In recent years, shippers and carriers have taken strides to address their outsized impact. A 2023 survey conducted by Uber Freight and FreightWaves indicates that over three-quarters of large companies have sustainability goals and public commitments toward freight electrification. They also found that 13% of shippers are already operating electric vehicles (EVs), with another 27% considering deploying some in the near future. Despite momentum within the industry, early-stage electrification still poses a chicken-and-egg paradox for shippers and carriers in which fleet owners can point to the lack of supply for electric MHD freight vehicles and infrastructure, while vehicle manufacturers can point to a lack of demand for the same thing, hindering progress.
To cut through this paradox, the Electrification Coalition interviewed stakeholders at the cutting edge of electrification from eleven organizations, including shippers, logistics providers, real estate companies, and charging providers. Interviewees ranged from startups to multi-national Fortune 500 companies. The following recommendations have been formulated to help shippers and carriers accelerate their electrification efforts, moving the industry forward.
Key Recommendations
1. Shippers: make clear commitments to electrification
Shippers should proactively make clear and transparent commitments to electrify their supply chain, communicating commitments to their carriers. One shipper interviewed by the EC believed their carriers were not receptive to electrification until the shipper made its sustainability commitments more explicit. Shippers generally prefer to maintain their existing carrier pools throughout the transition to electrification, so strong sustainability signals from shippers can encourage carriers to electrify to stay in a shipper’s carrier pool.
2. Carriers: develop electrification and decarbonization plans
Carriers should develop transition plans for adopting electric trucks and restructuring their operations accordingly. For example, carriers should evaluate whether they can offer dedicated EV fleets to specific shippers. Efficient use of a dedicated EV fleet can make high utilization more certain, maximizing the operational savings associated with EVs’ lower fuel and maintenance costs and justifying the upfront capital costs of electric trucks. Carriers also need to devise suitable charging schedules. One logistics provider explained that electric tractors can increase opportunity charging by taking advantage of a “drop and hook” model, where tractors drop off the entire trailer, use a nearby charger, and hook onto a new load rather than waiting for the trailer to be unloaded and reloaded.
One carrier interviewed noted that partnering with a dedicated charging and logistics provider helped them follow through on their electrification commitments when the available infrastructure was not ready to meet the demands of their fleet.
3. Design a two-stream request for proposal (RFP) bid process
One logistics provider discussed the benefits of creating separate streams for submitting RFPs, allowing carriers to submit separate diesel and alternative fuel bids. Alternative fuel bids are evaluated under different criteria, and funding is typically allocated from a discrete alternative fuel budget. Having two streams enables carriers to submit two bids for the same process, increasing the likelihood of success. An interviewed shipper that split its RFP process into diesel and alternative fuels noted that this practice prevents electric trucks—for which the supply chain is not yet at scale—from competing directly with diesel trucks. Separate evaluation of alternative fuel bids creates space for carriers to specialize, which can be an advantage for smaller carriers who, as one interviewed carrier indicated, are more likely to embrace electric trucks to carve out a niche in the industry.
Over half of interviewees (55%), including three Fortune 500 shippers, were confident that shippers would be willing to pay slightly more for carrier services that allowed them to meet emissions reduction goals.
4. Collaborate on data sharing and metrics
Data sharing and metric development between shippers and carriers enable everyone to align strategies, streamline operations, achieve sustainability goals, and reduce costs. One opportunity for collaboration is for shippers and carriers to establish a joint baseline emissions inventory. Doing so provides a clear starting point, allowing easy and accurate measurement of emissions reductions from electrification. Establishing baseline emissions can start the conversation between shippers and carriers, laying the foundation for further collaboration on electrification.
5. Consider cost analysis across facilities
Shippers and carriers that have facilities in multiple cities or states should consider a holistic view of the costs associated with electrification. Savings from electrifying one facility may offset some of the costs of electrification at another, especially when grants and incentives are available only in certain regions. Evaluating financial costs and benefits at an aggregate level can be a solution when individual facilities don’t “pencil out” and can pave the way forward to broader electrification.
Toward an Electric Future Together
Freight electrification requires close collaboration between shippers, carriers, and other logistics stakeholders to realize emission reduction goals and reduce oil consumption while facilitating an effective and profitable movement of goods. Alignment on the path towards zero emissions helps avoid standstills where parties are each waiting for the other to make the first move. Following these recommendations constitutes a significant first step toward saving billions of gallons of oil, eliminating emissions, and leading the way to clean freight movement across the country.
Are you a shipper or a carrier interested in transportation electrification? Email freight@electrificationcoalition.org to learn more about the EC’s Electric Freight Consortium, and email pen@electrificationcoalition.org to learn more about the EC’s Port Electrification Network.