Rise and shine, Grove readers.
In trucking cutting fuel costs and cutting emissions are one and the same. Why isn't it more of a priority?
Celine King, CEO and founder of GreenIRR, knows all about this.
Her company built a carbon accounting platform that helps trucking fleets (and the Fortune 500 companies that rely on them) measure and reduce their emissions.
The last time she was on the Grove, we talked about her journey founding the company. This week, we’re digging into what it really takes to commercialize climate tech in one of America's most fragmented and change-resistant industries.
Let’s dive in!
In this week's issue
- Who’s watching the data?
- Winning the cost war
- Why regulation isn’t enough
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Who’s watching the data?
GreenIRR pulls from two data sources ~ (1) the tracking hardware already sitting inside commercial trucks and (2) the fuel cards drivers swipe every day.
It then turns that information into a report a fleet manager can act on within two hours.
In most industries, going green means spending more. In trucking, it can work the opposite way. Every gallon of fuel you save also means fewer emissions.
Unfortunately, that hasn't been enough to move the industry toward more sustainable operations.
The problem has less to do with motivation and more to do with visibility.
Fuel cards run through one company, tracking sensors through another, and dispatch software through a third.
None of it talks to each other, so most large shippers still calculate emissions by guessing based on how much they spent on freight. Wild margin for error.
As Celine puts it, "the quality of data impacts the quality of your decisions".
Whats MORE is that better visibility doesn’t solve the other half of the problem.
Newer equipment, alternative fuels, and full electrification still carry a premium today. Until the economics catch up, those upgrades are a hard sell no matter how good a fleet's data is.
Winning the cost war
When a large shipper needs to hire trucking companies, it publishes a request for proposal (RFP). Carriers then compete on things like price, equipment, and increasingly sustainability.
Despite this trend, sustainability teams often have to fight to get that criteria written in. More often than not, they lose.
Procurement teams only real KPI is driving down cost. They pick the winners and rarely talk to sustainablility before the decision gets made.
That means fleets that invest in efficiency often end up losing contracts to fleets that didn't invest at all; simply because they can't compete on price.
Rather than relying on regulation alone, GreenIRR built a platform sustainability teams can use at the negotiating table.
Celine’s building toward something the industry calls 'evidence-based procurement'. This is a standardized way for shippers to compare carriers, so the more efficient fleet can win without needing to be the cheapest.
In one recent case, a mid-market fleet used GreenIRR's data to prove it was hitting a new quarterly emissions requirement from a cosmetics company.
That helped them retain a $3.5 million contract, and the following year, they cut their own fuel spend by 3%, without any new regulation forcing their hand.
At one point, much to my surprise, Celine argues that deregulation is actually good for trucking sustainability. It comes down to what regulation is in practice ~ a compliance ceiling.
Why regulation isn’t enough
Companies report the same few hundred data points once a year when regulation wants them to. It's very different when the market wants them to.
Compliance defines the standard. Competition rewards the standout.
(~ Catchy, huh?)
For example, European shippers are willing to pay a green premium (a.k.a a higher rate) to sustainable carriers. This is baked into their long-term strategy and they award RFPs accordingly.
That kind of pressure has no ceiling.
It only works if a buyer can actually tell which carrier is improving, which is the gap GreenIRR exists to close.
Right now, companies are already preparing for new laws such as California's SB253 and Europe's CSRD, both of which require large companies to disclose their full carbon footprint, supply chain included.
That brings us back to that cosmetics contract from earlier.
The customer already wanted the report, the fleet already wanted to burn less fuel, and the regulation already required the disclosure.
What changed is that someone could finally prove the numbers. Nothing about that is specific to trucking, or even to climate.
Legacy industries rarely run short on incentive. Everyone already agrees the problem matters, and the money to solve it is usually already on the table.
What they run short on is infrastructure allowing an incentive that already exists to actually reach the person who has to act on it.
Where else could GreenIRRs solution fit?
Worth thinking about. Then building reallyyyy quickly.....
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With love, Blake
See you next week!
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