Online freight platforms: more eco-responsible road transport?

There are a growing number of intermediation platforms in the freight transport sector. While the business models and specialisations may vary between Flexport, sennder, Coyote, Instafreight and OnTruck. What these solutions all have in common is a new prime goal: sustainable development. Today, major groups and the general public call for a more environmentally friendly mode of road transport. What role can these new stakeholders play in revolutionising the sector?

Alexander Emrem, Head of Dispatching at Trans 55 and Graham Major-Ex, Director of Green Business at sennder

1. When tech sets out to tackle road transport

You will no doubt have noticed the gradual digitalisation of the road transport sector. In the mid-2010s, freight exchanges such as timo, wtrans.net and teleroute.com sprang up on the web and, for the first time, acting as digital intermediaries between shippers and carriers.

But the real revolution came towards the end of the decade, when new entrants (sennder, Everroad, OnTruck, etc.) “uberised” the European business. These online freight-forwarding platforms not only connect the shippers, logistics service suppliers, and carriers, they also offer digital solutions (software, Software-as-a-Service and/or applications) to enable this very competitive sector to optimise its performances. As a result, the volumes handled by these platforms (digital forwarder, digital marketplace, tender platform, visibility platforms) have tripled since 2019 and they are expected to handle one out of every two shipping operations by 2027.⁽¹⁾

Four types of platforms coexist in this sector:

1. 1. Digital forwarders:
2. ●Operate in the same way as traditional forwarders
3. ● Digitalise, automate, and optimise the internal processes
4. ● Are responsible for the transport
6. 2. Digital marketplaces:
7. ● Connect the shippers with the carriers
8. ● Simplify and automate the collection of offers
9. ● Do not take charge of the transport
11. 3. Tender platforms: facilitate the tendering process.
    
    4. Visibility platforms: provide a real-time view of the convoy’s position, status, and arrival time.

2. Platforms that expedite the transformation of the road transport sector

Because they use data to optimise loads and itineraries, these platforms provide an assurance of efficiency and visibility for their contacts. Two arguments that are appealing from both an economic and an ecological viewpoint: reducing empty kilometres reduces greenhouse gas emissions.

Some platforms, such as sennder, have made decarbonising road transport their flagship project. Admittedly, the sector is thought to represent more than 15% of the global carbon footprint. ⁽²⁾

Practical solutions including data, HVO (Hydrotreated Vegetable Oils) and electric mobility

These digital freight platforms have many strengths, which stem from collecting and analysing a broad range of data :

• ● Better control of goods and their position in the trailer
  ● Optimised itineraries, fewer empty kilometres, and a degree of process automation
  ● Better fleet visibility and real-time tracking
  ● Digitalised documents

These platforms also hope to help the sector make the transition to biofuels. More specifically, sennder is counting on advanced biofuels, including HVO, which is directly compatible with diesel engines, no modifications required.

The Belgian trucking company Trans55, which has been a partner of the German digital freight forwarder for three years, has carried out nearly 1,000 “green loads” between the Netherlands and France with this biofuel.

The result? A 90% reduction in emissions. But sennder is also banking on “e-mobility”, just like the European truck manufacturers, which have committed to operating on a full-electric basis by 2040⁽³⁾.

3. How does the market see these platforms?

The road transport industry is said to be conservative. When sennder introduced its “green transport” offering in 2020, many stakeholders tried to dissuade it.

“People told us: ‘Nobody wants to pay a single cent more for green transport, don’t even try’. But we had faith in our project and decided to launch it anyway. And we were right, because growth in this segment has skyrocketed. In 2022 alone, the volume of green loads on our platform has increased fivefold” exclaims Graham Major-Ex.

On the carrier side, these platforms are often preferred because of the very wide-ranging business they enable.

Like many small fleet operators in Europe, Trans 55 is unhappy that the price of biofuels and electric vehicles is holding up the transition. Alexander Emrem explains that he usually fills vehicle tanks with HVO in the Netherlands, where this fuel is far more affordably-priced than in Belgium.

Even if there is still a long way to go, digital freight platforms are helping to make the road transport sector more environmentally virtuous. As Graham Major-Ex remarks in conclusion, “More sustainable solutions are readily available. In tech, in the transport sector, it's all about implementation now, building the business cases”.