GHG Reduction

Why freight forwarders are crucial to decarbonising supply chains

Greg Herz, Content Lead

Orange image with lines showing moving data and carbon emissions reports.

Businesses everywhere are waking up to the urgent need to decarbonise their supply chains. And when you dive into the stats, it's clear why. According to Accenture, supply chains are responsible for 60% of all carbon emissions globally. McKinsey adds that on average, more than 80% of a company’s total greenhouse gas emissions come from its supply chain. These numbers highlight the immense impact going green in the supply chain can have in mitigating climate change.

With climate disclosure regulations, voluntary carbon reduction targets and consumer demand for sustainable products all closing in, you need to understand how your role as a freight forwarder fits into this complex transition — and what opportunities it presents.

In this blog post, we’ll discuss why freight forwarders like you are essential in helping shippers decarbonise their supply chains. Plus, we’ll look at how you can leverage this unique position to meet customers’ carbon reporting needs and boost your ROI.

Shippers are incorporating sustainability reporting into their business processes

The demand for sustainable transport solutions is experiencing exponential growth as shippers seek to reduce their overall carbon footprint due to various internal and external factors. As a result, businesses are seeking supply chain partners that can help them meet their sustainability targets. For your customers, the first step to decarbonising their supply chains will be to measure and report their carbon emissions. 

Shippers are approaching decarbonisation like they typically would when introducing new operational processes — they start by measuring their baseline, identify quick wins and then set a long-term strategy to hit their wider carbon reduction goals. By approaching sustainability in a way that’s familiar to them, they’re able to adequately manage their carbon footprint reduction while reducing disruption to other business processes. Generally, this means embedding sustainability metrics into their procurement processes and making emissions data sharing and reduction targets standard in every supplier contract — a point emphasised by several key shippers at our COP 28 round table discussion.

Freight forwarders play a key role in the decarbonisation of global logistics

But where do freight forwarders fit into all of this? Shippers are facing a significant hurdle from the outset. To gauge their true carbon emissions baseline and determine where quick reduction wins can be made, shippers need to capture the actual carbon footprint of each freight transaction and each transport leg. Full visibility of the carbon emissions of each transport leg allows them to see the direct cause and effect of any changes they make to their logistics operations, such as modal shifts, incorporating sustainable fuels or consolidating consignments.

To make accurate shipment carbon emissions calculations, you first need shipment data. This shipment data can be anything from very basic data like the origin, destination and weight of a shipment, to more detailed and granular data like fuel receipts from carriers or the specific vessel numbers for each shipment leg. Typically, the more data points available, the more granular and accurate the resulting carbon emissions calculations will be.

This is where you, as a freight forwarder, have a key part to play. As the coordinator of their end-to-end shipments, you have access to your customers’ shipment data. With access to this crucial data, you’re uniquely positioned to provide your shippers with accurate and transparent carbon emissions reports, making you key to the decarbonisation of global logistics.

Shippers are looking to their forwarders to reach their sustainability goals

As shippers start to make emissions data sharing and reduction targets a standard part of every supplier contract, you’ll be expected to provide carbon emissions reports on each consignment or face losing out on tenders. Much like customs clearances, live shipment reports, container utilisation and other standard reports you’re already expected to provide, carbon emissions reports will soon become the norm. 

This development is backed up by the numbers — in our recently published State of Sustainability in Freight Forwarding 2024 Report, over 60% of forwarders said they have customers asking for carbon emissions reports on their shipments. This highlights that shippers already see shipment carbon reporting as the responsibility of freight forwarders. 

But, rather than seeing carbon reporting as a hassle, you should view it as an opportunity to elevate your forwarding services. By supporting customers with accurate and accredited carbon reporting, you’ll help them identify where in their supply chain they can make impactful carbon reductions, becoming a valuable sustainability partner. And the earlier you implement this service, the more you’ll benefit as shipper demand increases.

The benefits of providing shipment carbon reporting

Adding carbon emissions reporting to your forwarding service will provide value for your customers and unlock significant benefits for your business in the process.

Carbon reporting can help you:

Win more business: Stand out in a competitive market and win more tenders by supporting and enabling shippers’ long-term decarbonisation goals.

Enhance reputation: Position your forwarding business as a sustainability leader within the industry, building trust with environmentally conscious clients and strengthening your reputation.

Boost revenue: Add carbon reporting as a premium service, creating new revenue streams while contributing to positive environmental change.

With shipment carbon reporting already standard practice among large freight forwarders, there’s a risk they could grab an even larger portion of the business share if SME forwarders aren’t able to adapt quickly enough.

Start providing value to customers today

Freight forwarders have a pivotal role to play in helping businesses decarbonise their supply chains. By leveraging your unique access to shipment data, you can provide your customers with accurate carbon emissions reports — the first step in reducing their carbon footprint.

Seize this opportunity to boost your business’s reputation, win more tenders and open new revenue streams.

Sign up with Pledge today to access the tools and resources you need to offer carbon reporting on your customers’ shipments. Get started with a 14-day free trial.