True competition starts with giving away the easy stuff

Hanjin Shipping recently released a calculatorthat enables a shipper to calculate CO2 emissions for transporting a container by period, multiple destinations and bill of lading number.” This new calculator, which includes factors from the Clean Cargo working group of BSR, was the latest in a recent series of announcements by freight carriers and logistics service providers (LSPs) on new tools and services to enable tracking of carbon emissions.

These are positive developments and clear indicators that shippers are communicating with carriers about their desire to have carbon footprint data. Hanjin acknowledged it upgraded its previous carbon calculator because “our customers are becoming more and more conscious of their carbon footprint in line with the industry-wide efforts to reduce CO2 emissions.”

Carriers and other LSPs have an opportunity to grow their business by providing services that capitalize on these “industry-wide efforts to reduce CO2 emissions.” To really add value to their clients, though, carriers and other LSPs need to move past simply providing carbon data. Their true value-additive proposition comes from strategic advice or new services that enable clients to reduce emissions — or at least increasing carbon efficiency.

Transparency and Improvement

It is critical that service providers see calculation services only as a means to further efforts and not an end in and of itself. At minimum, I would suggest that LSPs follow the lead of Hanjin by making their greenhouse gas calculation tools free and open to all. Such a high level of transparency will enable all of these tools to be compared, improved and strengthened.

Client Confidence

Fostering this kind of competition will also build the confidence of clients in the accuracy and robustness of the LSP tools. Such a move would also represent an important mind-set shift for the LSPs themselves: an acknowledgement that the real value-add to their clients is in acting on this information.

A Step Further

A second recommendation I have for carriers and LSPs is to go further than simply providing tools for their clients to do the calculations.  It would be much more powerful (and only a little bit more work) to provide their clients with emissions data directly and free-of-charge – regardless if they are asking for it or not.

The strategic value of getting this information to their clients is huge. By taking this step, LSPs will demonstrate again how they understand the pain points of their clients and are a source of solutions. Even if your clients aren’t yet asking you for this information, they likely are starting to have to answer internal questions about their plans for increasing the carbon efficiency of their logistics operations.

By giving away carbon accounting data to their clients carriers and other LSPs will have an opportunity to present their best case on services they offer that would be able to cut emissions and save them some money on freight expenses too. Even if their clients aren’t ready to act on this information right now, companies can leverage this data to inform their clients of their emissions reduction services so they are top of mind when the companies are ready to move forward.