Supply chain emissions are a significant driver of climate change, responsible for around 60% of global carbon emissions. Given this vast impact, it is imperative to rethink how products are manufactured, transported, and distributed to align with global carbon-reduction and net-zero goals. Reducing supply chain emissions not only supports climate action but also leads to substantial cost savings for companies, investors, and consumers.
One of the most promising strategies for cutting supply chain emissions is electrification, especially in transport. Electricity generated from renewable sources, combined with the energy efficiency of electric motors, makes electrification a feasible solution for reducing emissions across supply chains. Consumer markets have already witnessed a rapid uptake in electric vehicle (EV) adoption, aided by government subsidies and growing awareness about the cost-efficiency and performance benefits of EVs. In the U.S. alone, there are currently 2.4 million EVs on the road, with the numbers rising rapidly. However, the challenge is to bring similar momentum to electrifying the supply chain, especially in heavy-duty vehicles (HDVs) used for transporting goods.
Focusing on Heavy-Duty Vehicles and Their Emissions
Heavy-duty vehicles are a natural target in the effort to reduce supply chain emissions. These large trucks, capable of carrying up to 80,000 pounds of cargo, make up just 10% of vehicles on U.S. roads but contribute 28% of greenhouse gas emissions in the transportation sector. A major source of this pollution comes from the diesel fuel they burn, particularly when idling at loading docks to power refrigerated trailers. Refrigerated trailers, or transport refrigeration units (TRUs), consume approximately 0.8 gallons of diesel per hour, regardless of whether the vehicle is moving. Over a year, a single TRU can consume more than 6,500 gallons of diesel, leading to millions of tons of CO2 emissions and substantial fuel costs. Across a large fleet, these figures multiply, creating a massive environmental and financial burden.
Electrifying these HDVs is an obvious solution, but current technology is not yet sufficient to fully replace diesel in many use cases. Electric trucks still face limitations, including lower range, higher costs, and slower charging times compared to diesel alternatives. As battery technology improves, electric HDVs will eventually become more viable for long-haul transport, but large-scale adoption is likely years, if not decades, away.
Electrifying Refrigerated Trailers for Immediate Impact
While full electrification of HDVs may be a distant goal, electrifying refrigerated trailers presents an immediate, impactful opportunity for reducing supply chain emissions. There are around 500,000 TRUs operating on U.S. roads as part of the cold chain, ensuring that perishable goods are kept at safe temperatures throughout their journey. However, these units contribute significantly to supply chain emissions due to their reliance on diesel fuel. When idling, each TRU emits CO2 and consumes diesel continuously, costing up to $5,600 annually per unit and releasing up to 11 million tons of CO2 each year.
Shifting to hybrid or fully electric TRUs can address these emissions and cost issues efficiently. By converting TRUs to operate on electricity when idling, supply chains can significantly reduce emissions and fuel consumption. Hybrid-electric TRUs, which can alternate between diesel and electric power, allow operators to plug in at loading docks instead of running the diesel engine. This switch could reduce operating costs by up to 75% and decrease emissions by as much as 95%. Moreover, hybrid-electric TRUs are only slightly more expensive than traditional diesel units, offering a rapid return on investment—often within just a few months of deployment.
Additional Benefits for Distribution Centers
Electrifying refrigerated trailers not only helps reduce supply chain emissions but also provides new revenue opportunities for distribution centers (DCs). By allowing DCs to sell electricity to TRUs, electrification creates an additional revenue stream that can generate up to $600,000 annually. This model encourages DCs to gradually upgrade their facilities, adding electric charging stations as demand grows, and fostering a supportive infrastructure for an electrified cold chain.
The environmental benefits are also significant, as switching to electric power reduces diesel emissions in and around distribution centers, leading to improved air quality and contributing to the sustainability commitments of both DCs and the companies they serve. In the future, the sale of electricity to electric TRUs could become an integral part of the DC business model, supporting greener supply chains while providing financial incentives for facility upgrades.
Overcoming Longstanding Emission Challenges in Heavy-Duty Logistics
Heavy-duty vehicles have been substantial contributors to climate change since their inception, with emissions steadily increasing alongside the rise in consumer demand. Supply chain electrification is essential to curbing these emissions, but achieving full truck electrification at scale remains a long-term goal. By strategically focusing on refrigerated trailers as a first step, companies can address a major source of supply chain emissions and set the stage for broader electrification efforts.
This phased approach also has the potential to create powerful advocates for supply chain electrification. Early adopters who benefit from the cost savings, reduced emissions, and operational improvements associated with electric TRUs will likely support further electrification initiatives. As these advocates demonstrate the benefits of electrification, they will drive industry-wide change and support the technological advances needed to eventually electrify entire fleets of HDVs.
Building Momentum with Electrified Cold Chain Logistics
While fully electrifying the cold chain is a complex task, incremental improvements in specific areas can make a significant difference. Electrified cold chain logistics is not only a practical solution for reducing supply chain emissions today but also a necessary first step toward more sustainable logistics systems. As hybrid-electric and fully electric TRUs become more prevalent, companies will gain valuable experience and insights, creating a smoother transition to broader electrification in the future.
Implementing electrified TRUs also provides a blueprint for scaling these changes. By developing a network of electric charging infrastructure and fostering partnerships with DCs to support electricity sales, companies can build the necessary foundations for further electrification. As battery technology and charging infrastructure continue to advance, the shift to electric TRUs will support a sustainable logistics model that reduces costs, improves efficiency, and minimizes environmental impact.
Strategic Steps Toward Sustainable Supply Chains
The need to address supply chain emissions has never been more urgent. Electrification offers a viable path to reducing these emissions, but it requires a strategic approach to overcome the limitations of current technology. By focusing initially on the electrification of refrigerated trailers, companies can achieve immediate emissions reductions, substantial cost savings, and create a scalable model for further electrification. This phased strategy allows companies to reduce supply chain emissions significantly without waiting for full truck electrification technology to mature.
As electrification efforts expand, the industry will continue to benefit from the cost, environmental, and operational efficiencies made possible by electrified cold chain logistics. Ultimately, companies that lead the way in reducing supply chain emissions through electrification will be better positioned to meet regulatory requirements, improve sustainability, and create competitive advantages in an increasingly eco-conscious marketplace.
Reducing supply chain emissions is not just a regulatory or environmental obligation but a business opportunity that can enhance resilience, profitability, and long-term success. Electrified cold chain logistics is the next logical step in this journey, making a powerful case for widespread adoption across the supply chain industry.