How Freight Brokers Could Land More Business By Being Green
Click here to listen to our interview on Spotify.
About 29% of all greenhouse emissions come from the transportation industry. Matt McLelland is the VP of Sustainability and Innovation at Covenant Logistics, one of the largest transportation companies in the United States. We talk about his role and how customers are demanding greener carriers.
Can you give us a background of what your position entails?
“The way I would describe the job is that I have the most interesting job in the company,” Matt said. “If something bad happened and they had to lay people off, I would be the first one.” Matt has no day-to-day responsibilities concerning budgets, bottom lines, or revenue expectations. “My job is to spend time researching and looking at the future and advising our executive leadership.” Some of the issues that he focuses on include:
- Decarbonization of freight
- Battery electric trucks
- Hydrogen trucks
Why does Covenant take a strong position on environmental sustainability?
“All carriers, to some extent, have an authentic desire to be good corporate citizens,” Matt said. “We try to recycle; we use technology to minimize our environmental impact.” Covenant is different because they work with their shippers to minimize their environmental impact. “When you start looking at these new technologies,” he said. “There are still some things that we can all do.”
- Electric does 150 miles.
- Hydrogen trucks do 500 miles.
- Diesel on a full tank will do 800-900 miles.
Covenant’s customers actively solicit their input on environmental sustainability. “We are starting to make those investments and working with them to make that happen,” he said.
What kind of changes will happen in the next few years?
As a freight broker, the customer cares about price, on-time, and safe delivery. “Some of the larger shippers are starting to add some more criteria to this list,” Matt said. “They require you to work with fleets operating more efficiently.”
Walmart has a project called Project Gigaton. They want to eliminate a billion tons of greenhouse gas emissions by 2030. “They will lean on their partners to achieve that number.” He said. Their partners include brokers and carriers.
Other carriers that take a strong position on environmental sustainability include:
Are there any regulations in place against non-compliance?
“I guess the regulation is, do not lie to your customers,” Matt said. “There is something called ‘green-washing,’ which is presenting yourself as greener than you are; it is not a crime.” He predicts that in the not-too-distant future, shippers will ask to know the greenhouse output of potential carriers. So there is a way to come up with that number. It depends on:
- type of truck
- type of fuel
- length of haul
- other variables
How does Covenant find green carriers?
“One thing you could do is build a list of fleets that have an ESG (Environmental, Social, and Governance) or CSR (Corporate Social Responsibility) document,” Matt said. These are documents that give all interested an idea of what the company believes in:
- concerning the environment
- diversity, equity, inclusion
- company governance
- role company plays in the community
“Covenant has a corporate social responsibility report,” he said. If you download it, you will have a crystal-clear idea of its values related to those areas.
What is the motivation behind a shipper wanting a greener truck?
“For some, that is what their customers are demanding,” Matt said. “Sometimes it has to do with a company’s position on a political or social issue.” Leaders of certain companies feel strongly about it, which is their motivation. “I do not think anybody’s motivation is profit because being more sustainable and greener is often more expensive.”
What are some of the expected changes in California in regards to environmental sustainability?
Matt said that every state is going to be different. California typically leads the charge when it comes to regulation. The state, in the future, is going to outlaw the sale of:
- gas-powered chainsaws
- backpack blowers
Every truck that enters the port of Long Beach must be registered. It stays on the registry for ten years. After next year, no more diesel trucks will be registered.
Do you work with a team at Covenant, and what is a typical day for you?
On an average day, he starts by reading the Wall Street Journal because it is a good pulse on the business. FreightWaves is another source of industry information for Matt. He also goes to conferences. The power of networking (meeting people face-to-face) lies in:
- seeing the latest of what is going on
- meeting peers
- developing and fostering relationships with like-minded people
Would you predict that Covenant will be a leader in environmental sustainability?
“I am not going to tell you that we are the greenest,” Matts said. “I do feel like we are more aware and cognizant.” Covenant acquires new trucks every two to three years. This allows them to:
- keep up-to-date with technology
- to keep an up-to-date fleet
“We are looking at autonomous technology and figuring out the more efficient operation of the fleet,” he said. “We are not the greenest but leading the charge.”
Any last words of business wisdom?
“Buy low, sell high, be nice to animals, call your mom,” Matt laughed. “There is a lot of power to networking.” Even though we live in a world where we have pivoted to working from home, people should never forget the power of face-to-face communication. “It is not just about sales,” he said. “the more people you know, the more information you can share.”
Matt is also a big believer in work-life balance. “I know we didn’t talk about all the crazy things I do in my free time,” he said. “Chad the Van is hand gliding, trail running and white water kayaking, camping.” So it is good to be dedicated and hardworking. It is also good to look forward to experiences outside of work.