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Sustainability: An inroad for higher freight rates?

Oct. 13, 2015
One of the more interesting tidbits that emerged from last week’s CNG Industry Leaders Forum put together by Gain Clean Fuel and hosted by Anheuser Busch at its Biergarten facility attached to its St.
One of the more interesting tidbits that emerged from last week’s CNG Industry Leaders Forum put together by Gain Clean Fuel and hosted by Anheuser Busch at its Biergarten facility attached to its St. Louis, MO, brewery centered on the high priority status sustainability still receives among many shippers.

And therein may lay an opportunity for motor carriers to gain a better rate for their services – something I’ve noted in this space before – if they adopt proven sustainability practices.

Anheuser Busch and Unilever in particular touted the important role sustainability plays within their respective corporate strategies at the meeting, and neither of them are what you might call “small fry” shippers by any means.

Unilever is a $67 billion consumer products company, whereas Anheuser Busch generates $43 billion in annual revenues, spending $1 billion on transportation and tendering some 750,000 loads per year.

Fabio Baldassari, logistics procurement group manager for North America at Unilever, noted that his company’s 20-year plan is to double the size of its business while halving its “environmental impact,” reducing emissions, water usage, etc. – not just to be a good environmental steward, or solely to reduce costs, but also to attract and keep the next generation of customers.

“We talk a lot about ‘conscious consumption’ at Unilever because to the next generation of consumer, it is no longer just about the dollar amount they pay for a product,” he explained. “It’s about the philosophy you believe in as a company and your plan to reduce your environmental impact. Otherwise, they will not buy your product.”

Such “commitment” to sustainability might just pay off for consumer brands, at least according data compiled by the 2015 Nielsen Global Corporate Sustainability Report.

In the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%, the firm noted

To gain better insight into the factors that influence consumer sentiment and purchase behavior, Nielsen polled 30,000 consumers in 60 countries across the globe and asked them how much influence factors such as the environment, packaging, price, marketing, and organic or health and wellness claims had on their consumer goods purchase decisions. Here are some of the findings:

  • Some 66% percent of global respondents say they are willing to pay more for sustainable goods, up from 55% in 2014 and 50% in 2013.
  • It's no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. Consumers across regions, income levels, and categories are willing to pay more, if doing so ensures they remain loyal to their values.
  • Indeed, those earning $20,000 or less were actually 5% more willing than those with incomes greater than $50,000 to pay more for products and services that come from companies who are committed to positive social and environmental impact (68% vs. 63%).
  • Millennials continue to be most willing to pay extra for sustainable offerings, with almost three-out-of-four respondents (73%) saying they are willing to pony up extra money, compared to 50% in 2014.
  • The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more for “sustainable” goods, is equally strong – some 72% in 2015 compared to 55% in 2014.
  • When it comes to sales intent, commitment to the environment has the power to sway product purchase for 45% of consumers surveyed.
  • Commitment to either social value or the consumer’s community is also important buying criteria, with each influencing 43% and 41% of respondents, respectively.
  • Finally retail data backs up the importance of those “sustainability” influencers as in 2014, 65% of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value.

Thus, if consumers are willing to pay more for goods made by companies that demonstrate true “sustainability” programs, then it is not too far a stretch to figure that those companies would pay more for “greener” transportation solutions – especially if said “greener” solutions help maintain the higher-price buy-in among consumers.

And just maybe that helps generate an extra revenue boost for carriers necessary to fund higher paychecks for drivers. Or a way to get shippers to adjust their supply chain strategies to create more driver-friendly freight as well as cargo with less of an environmental impact.

It’s something for trucking companies and their customers to ponder at the very least.

About the Author

Sean Kilcarr 1 | Senior Editor

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