The transportation sector is the largest source of U.S. greenhouse gas (GHG) emissions. Medium- and heavy-duty vehicles are the fastest-growing source of transport emissions, driven by the expansion of e-commerce and consumer demand for fast delivery. Trucks’ disproportionate impact on emissions and community health underscores the urgency of adopting cleaner, more efficient technologies and practices.

In 2024, As You Sow engaged several freight and logistics companies with large fleets, seeking information about their progress toward Paris-aligned climate transition plans. Given the companies’ limited emission reduction commitments, we filed shareholder proposals on behalf of four investors, seeking disclosure as to how Old Dominion Freight Line, Ryder System, Saia, and XPO planned to reduce their Scopes 1 and 2 GHG emissions in alignment with the Paris Agreement.

Long considered one of the hardest-to-decarbonize sectors due to the weight and energy demands of large trucks, advancements in battery technology are changing the landscape. By 2030, battery electric truck models across vehicle classes are expected to reach cost parity with diesel as a result of electric trucks’ lower operating costs and greater energy efficiency.

Truck manufacturers aren’t waiting. The five largest heavy-duty vehicle makers – representing over 85% of U.S. production capacity – are already retooling their factories to build zero-emission models. Industry giants like Daimler and Volvo have pledged to sell only zero-emission trucks by 2040. Daimler's Freightliner states, “The electrification of medium-duty and heavy-duty commercial trucks is underway, marking a critical development in the transportation industry.” Freightliner’s battery-electric heavy-duty tractor “is already in operation by a number of North American fleets today, and this technology will become much more commonplace over the next several years.” In 2023, more than 70% of all newly registered zero-emission trucks were heavy-duty tractors, a clear signal that the heavy-duty segment is accelerating toward change.

Major companies with large private fleets – PepsiCo, Sysco, and Walmart – are deploying electric trucks, pushing their freight partners to keep up. At the same time, major freight customers are pressuring trucking and logistics providers to expand low-carbon services: 550 North American companies have set emission reduction targets for Scope 3 emissions, which include emissions from contracted transportation. Lowering transportation emissions enables these companies to align with climate commitments, enhance brand reputation, and mitigate supply chain risks.

While momentum for zero emission vehicles is building in the market, the Trump administration has perversely made opposing electric vehicles a core part of its platform, threatening to roll back federal and state emissions regulations and freezing funding for EV charging infrastructure. These policy shifts add uncertainty for companies working to decarbonize their operations and supply chains.

But, investors and industry leaders can’t afford to wait. Other nations are racing ahead on clean transportation. To stay competitive, freight companies must keep pushing forward – piloting alternative vehicles, working with manufacturers on new specifications, and engaging utilities to expand charging infrastructure. The more proactive the industry is, the smoother the transition will be to clean, sustainable, and efficient freight.