Transport needs to go green, urgently.
According to Transport & Environment (2024), transport accounts for 29% of total greenhouse gas emissions, making it Europe’s leading contributor to carbon emissions. Despite being the only industry witnessing emissions rise since 1990, many corporate and commercial fleets are slow to adopt sustainability measures, often considering them yet another challenge that adds cost and complexity to their operations.
Already three decades ago, however, Michael Porter (1995) demonstrated how well-designed environmental standards can stimulate innovation, significantly improving resource productivity. This not only offsets the cost of environmental improvement but also enhances companies’ competitiveness. Needless to say, the same is true for corporate and commercial fleets in Europe.
Sustainability can make transport a worthwhile investment again.
Primary data from vehicle telematics and transport management service providers show that Europe’s fleets have many levers available to significantly reduce their fuel or energy consumption without reducing their business activities. These levers range from reducing vehicle idling and optimizing tire inflation to improving driving behavior, implementing smart routing, and increasing vehicle utilization.
Each of these levers has a different savings potential, and some are easier to implement than others, as shown in figure 1. What they all have in common, though, is that they offer fleets an attractive return on investment and aid in strengthening their competitiveness. Collectively, these levers can enable a fleet to save up to €280 on fuel for a car each year, up to €1,700 for a van, up to €8,200 for a truck, and up to €6,400 for a bus.
Therefore, if anything, this analysis shows that sustainability in fleets should not be viewed as just another challenge but as a unique opportunity to bolster the industry’s weak margins. By collectively prioritizing sustainability, European fleets stand to save up to €140 billion in fuel costs annually, as shown in figure 2. Such savings could boost the industry’s margins by as much as 6%, making it a business worth investing in again. So, what are we waiting for?
Putting the wheels in motion.
While easier said than done, unlocking these cost savings requires a fleet to take the following clear actions:
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- Adopt digital fleet solutions that enable real-time tire, vehicle, and driver monitoring and active management of end-to-end fleet operations.
- Leverage data and insights to develop new policies and driving improvement programs that work with, not against, your drivers.
- Push your digital service providers to further systems integration that unlocks next-level optimization in routing and vehicle utilization.
Ready to start moving towards more sustainable road transport in Europe? Enjoy the increasingly comfortable ride!
Source(s):
Transport & Environment (2024), State of European Road Transport
Michael Porter & Claas van der Linde (1995), Green and Competitive: Ending the Stalemate