How to make sustainability a revenue centre for freight forwarders

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Freight forwarders are facing a number of challenges, including rising fuel costs, increased competition and growing pressure from shippers to reduce their environmental impact. In order to stay ahead of the curve, forwarders need to find new ways to differentiate themselves and create value for their clients. 

In this blog post, we’ll explain how implementing emissions measurement and other climate initiatives in the correct way will enable you to make sustainability a core revenue centre for your freight forwarding business.

The rising demand for sustainable supply chains
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Shippers are demanding sustainability from forwarders

Shippers are demanding sustainability and looking to work with supply chain partners that share their values. The numbers confirm this — according to the HFW & Panattoni European Logistics & Supply Chain Sustainability Report 2023, 72% of shippers now include sustainability targets as part of their tender process.

Additionally, 56% of shippers insist on terminating contracts if ESG targets are not met and 53% have excluded forwarders from tenders for not meeting sustainability criteria. This trend suggests that shippers are increasingly seeing sustainability as a core aspect of their supply chain strategy, with many now refusing to work with forwarders who don’t meet their climate initiatives.

This trend can be largely attributed to the growing awareness of the environmental impact of global trade from consumers, meaning that many shippers are starting to improve the end-to-end visibility of their carbon footprint for the first time.

But consumers aren’t the only factor pressuring shippers into disclosing their emissions data — an increasing number of regulations that require companies to report their emissions, such as the EU’s CSRD and the UK’s SDR, means businesses now need to meet emissions disclosure requirements. While most of these obligations are yet to come into force, shippers are already aligning themselves with forwarders that can give them visibility of their scope 3 supply chain emissions which fall under emissions reporting regulations.

Sustainability can provide new business opportunities for your forwarding business

While all this talk of needing to meet shippers’ sustainability needs might sound daunting — and expensive — it’s important to recognise that when done correctly, sustainability can provide tangible business opportunities and create additional revenue centres for your freight forwarding business. 

Automated emissions measurements as standard

Integrating automated emissions measurement into your customer portal as a standard part of your business offering can help you win new business and drive customer loyalty, resulting in increased revenue. It also greatly reduces the costs and time involved in getting accurate emissions measurements that shippers will soon be more regularly demanding.

Here’s how you can support your clients with automated emissions measurement:

  • Enable clients to meet emissions disclosure requirements: For shippers that need to disclose their emissions to meet regulations, offering the ability to accurately measure and report their emissions data in a way that’s as frictionless and insightful as possible will set you apart from the competition. Additionally, you’re likely to see much less churn from current clients that need to meet these regulations if you show that you are already preparing for this requirement.

  • Help clients earn green credentials: By providing GLEC-accredited emissions reports, your clients can communicate their sustainability credentials on their website. Promoting your ability to help your clients achieve their sustainability goals and earn green credentials at the tender process can help you earn new business, tipping the scales in your favour.

  • Improve client’s decision-making: Automated emissions measurement integrated into your systems can provide you with insights that can be used to improve routing decision-making by enabling you to factor emissions into your logistics services. You can use this data to identify the most energy-efficient routes and modes of transport for your clients based on their individual needs.

What can you do now?

By promoting automated emissions measurement as a standard part of your offering and highlighting its benefits at the quoting stage of your sales cycle, you’ll raise the value of your service when going to tender. This can give you that competitive edge you need to secure more tenders and increase revenue for your business.

Support shippers’ long-term sustainability strategies

Sustainability isn’t only about the quick wins when going to tender. Providing clients with accredited, granular and transparent data on their carbon footprint can help them to develop long-term sustainability strategies — and you should make sure you demonstrate this to prospective clients. This is a crucial element for modern business’s brand strategies as more and more consumers are purchasing climate-responsible products.

Here’s just a few ways you can demonstrate your long-term value to clients through sustainability:

  • Developing emissions reduction targets: You can help your clients set targets based on hard, accredited data, enabling them to set ambitious yet achievable emissions reduction targets. With supply chain emissions accounting for up to 80% of the scope 3 emissions for many companies, reductions of any amount will go a long way in helping them achieve these targets.

  • Identifying emissions hotspots: Help your clients identify the areas of their supply chain that are generating the most emissions. This information can then be used to develop targeted interventions to reduce emissions, building a more sustainable supply chain over time that they can use to market themselves as a more sustainable brand.

  • Tracking progress and measuring impact: Tracking your clients’ progress towards their emissions reduction targets is an integral part of enabling their sustainability strategy. Offering automated emissions measurements on demand enables them to keep on track and promote the progress they’ve made at regular intervals, benefiting their brand reputation.

What can you do now?

Try showcasing your success. For example, adding case studies to your website based on quantitative data is a great way to demonstrate to prospective clients of the long-term benefit you can provide for their sustainability strategy. Clients will see your business as a viable long-term freight forwarding option that delivers more than simple logistics services, increasing client loyalty and building up a revenue pipeline over time.

Position yourself as a sustainability thought leader

Freight forwarders that exhibit thought leadership on emissions and sustainability in the supply chain will benefit more than those that don’t. By offering expertise and advice on how to lower your clients’ carbon footprints in the supply chain, you can gain a competitive edge and increase your bottom line.

  • Attract customers from outside your typical client profile: Businesses are increasingly looking to work with partners who share their commitment to sustainability. By positioning yourself as a thought leader in supply chain sustainability, you can attract new clients who value eco-friendly practices from outside your typical client pool.

  • Increase client retention: Existing clients are more likely to remain loyal if they see that you are committed to sustainability and feel that they can learn from your expertise. By demonstrating your knowledge and innovation in this area, you can build trust, strengthen client relationships and build long-term value.

  • Command premium pricing: Thought leaders can often command premium pricing for their services. Try publishing research such as white papers and reports, and collaborating with industry experts to build your profile as a thought leader in sustainable logistics. By establishing yourself as an authority, you can charge higher rates for your expertise and advice. 

What can you do now?

Sustainability expertise is still relatively new in freight forwarding, so there’s a great opportunity to strike while the iron’s hot and take the lead. Try publishing research, contributing to industry discussions and using quantitive data to inform your strategy to position your business as an expert in sustainable freight.

Driving new opportunities in the freight and logistics sector

Sustainability presents much more than an expensive necessity for freight forwarders to meet shippers’ needs — it has the potential to provide forwarders with new avenues for generating revenue. If you take the initiative now to start integrating automated emissions measurement, offering shippers support with long-term sustainability strategies and positioning yourself as a thought leader, you’ll successfully see your bottom line increase through a growing customer base and the ability to charge a premium for your services.

At Pledge, we’re helping forwarders support shippers with their sustainability goals with our freight emissions measurement tools. Sign up for your 14-day free trial to see how integrated emissions measurements could help you turn sustainability into a core revenue centre for your business.