5 Green Innovations Revolutionizing Sustainable Freight Procurement

The Urgency of Sustainable Freight Procurement

The global freight transport industry is at a crossroads. With freight logistics responsible for 7% of total CO₂ emissions—surpassing even the aviation industry’s 2%—companies must rethink their procurement strategies to ensure a greener, more sustainable future.

But sustainability in freight procurement is not just about reducing carbon emissions. Companies must also navigate extreme weather disruptions, regulatory requirements, and increasing pressure from customers and investors demanding more transparent supply chains.

This guide explores the key challenges facing sustainable freight procurement, strategies to implement greener shipping practices, and the role of technology in making sustainability a reality.

The Challenges of Sustainable Freight Procurement

Before implementing sustainable freight procurement strategies, it’s important to understand the key challenges impacting the industry.

1. High Carbon Emissions from Freight Transport

The freight industry has long been a major contributor to greenhouse gas emissions. Road transport, air freight, and ocean shipping all rely heavily on fossil fuels, making decarbonization a critical priority.

For example, while electric trucks and biofuels offer promising solutions, adoption remains slow due to infrastructure limitations and high costs.

2. Extreme Weather Events Disrupting Supply Chains

Climate change isn’t just a long-term threat—it’s already affecting global supply chains. In 2020 alone, natural disasters disrupted transport routes an average of eight times per week. From hurricanes and floods to wildfires and extreme temperatures, weather-related delays can lead to major financial losses.

3. Pressure from Stakeholders for Greener Logistics

Customers, investors, and regulators are all pushing companies toward more sustainable supply chain management. This includes:

• Regulations like the EU’s Fit for 55 initiative, which aims to reduce emissions by 55% by 2030.
• Consumer demand for eco-friendly shipping, especially in industries like fashion, electronics, and FMCG.
• Sustainability goals set by major corporations, requiring logistics partners to meet stricter emissions targets.

With these challenges in mind, how can businesses make their freight procurement more sustainable?

5 Green Innovations Transforming Freight Procurement

To reduce emissions, increase efficiency, and build a future-proof procurement strategy, companies must adopt proactive sustainability measures. Here are five key innovations leading the way:

1. Route Optimization & Load Maximization

One of the simplest and most effective ways to reduce emissions and fuel consumption is through route optimization and load consolidation.

• Use AI and data analytics to identify the most fuel-efficient routes.
• Maximize truckload utilization by consolidating shipments to avoid half-empty vehicles.
• Leverage digital freight platforms that dynamically match cargo with available transport capacity.

Example: A leading automotive manufacturer cut transport emissions by 30% by adopting AI-powered route optimization tools that reduced empty miles and fuel consumption.

2. Green Carrier Selection & Alternative Fuels

The decarbonization of logistics will require businesses to work closely with carriers investing in sustainable technologies.

• Partner with carriers using biofuels, electric trucks, or LNG-powered ships.
• Implement green carrier selection criteria when managing RFQs and contracts.
• Consider intermodal transport, using rail or sea instead of high-emission road transport where possible.

Example: BMW partnered with Maersk to develop sustainable shipping fuels, achieving a 25% reduction in emissions for their car shipments.

3. Digital Tools for Real-Time Sustainability Tracking

Sustainability isn’t just about reducing emissions—it’s also about measuring progress and optimizing procurement decisions. Digital platforms can track sustainability KPIs, helping companies stay compliant with regulations and meet ESG (Environmental, Social, and Governance) goals.

• CO₂ tracking dashboards provide visibility into emissions per shipment.
• Automated sustainability scoring helps companies choose the most eco-friendly suppliers.
• Freight procurement platforms enable smarter, greener tendering decisions.

Example: IKEA reduced its transport emissions by switching from road to rail transport and working with carriers using liquefied biogas.

4. AI & Automation in Freight Procurement

AI-powered procurement platforms are helping companies automate and optimize freight tenders by:

• Identifying low-carbon carriers
• Suggesting the most fuel-efficient routes
• Reducing unnecessary shipments

5. Blockchain for Transparent Carbon Tracking

Blockchain technology is being used to record and verify emissions data, ensuring full transparency in carbon reporting. This helps businesses comply with regulations like the EU Carbon Border Adjustment Mechanism (CBAM).

Case Studies: Companies Leading in Sustainable Freight Procurement

Several global enterprises are setting the benchmark for sustainable logistics:

🚛 BMW: Partnered with Maersk to develop low-carbon shipping fuels, reducing transport emissions by 25%.

📦 IKEA: Shifted from road to rail and biofuel-powered shipping, cutting CO₂ emissions across its supply chain.

🏭 Hasbro: Implemented real-time emissions tracking and sustainability audits for all freight contracts.

The Future of Sustainable Freight Procurement

The Future of Sustainable Freight Procurement

The path to a sustainable future in freight procurement requires a multi-pronged approach. By integrating optimized routing, green carrier selection, and advanced digital procurement tools, companies can significantly reduce emissions, improve efficiency, and future-proof their supply chains.

💡 The Bottom Line? Sustainable procurement isn’t just about meeting environmental goals—it’s about making supply chains more resilient, cost-effective, and adaptable to future challenges.

This series of posts was first published by SHIPSTA in October 2021. In August 2024, SHIPSTA was acquired by Freightos.