Reduce impact from freight and logistics

Transport of goods using vans and HGVs is a major source of emissions and fossil fuel use in the UK.

SMEs that provide logistics can reduce impact by driving more efficiently, switching to electric vehicles and using different modes of transport.

Check our section on supply chains for guidance on using green providers if you use logistics services.

Reduce emissions and save money as a logistics provider
Start by measuring current costs and emissions
Drive more efficiently
Retrofit vehicles
Switch to alternatively fuelled vehicles
Switch to electric vehicles
Electrify your fleet before the deadline
Use electric cargo bikes for ‘last mile’ deliveries
Switch to rail or waterborne freight
Find finance and support

Reduce emissions and save money as a logistics provider

If your business provides logistics services to other businesses, there are a number of ways to reduce emissions and save on running costs.

These include:

driving more efficiently
retrofitting existing vehicles
switching to alternative fuels or electric vehicles
switching to rail or water freight

The benefits of these changes include:

saving money on fuel and driving fees in major cities
passing on savings to your customers to remain competitive
enhancing your reputation as a green business
preparation for future laws and regulations
no tax on using a zero emission company van for private use
plug-in grants for low emission vehicles – for example, up to £2,500 for small vans and £5,000 for large vans

Start by measuring current costs and emissions

It can be helpful to start by creating an annual emissions and cost inventory for current logistics activities. This creates a baseline to measure against after you take action.

Fuel and maintenance costs can be calculated by adding up bills or running a report in your accounting software.

Once you have an estimate of fuel usage, use the Energy Saving Trust’s ‘Fuel Cost Cutter’ tool on their Freight Portal to find out which actions it can help you save.

Emissions can be calculated based on the litres of fuel used or miles travelled using:

air, rail and HGV freight
your transport fleet
your company vehicles

Input research into a spreadsheet and make calculations. Use the GOV.UK conversion factors template to get a rough idea of your emissions across different modes of transport.

You could consider hiring a consultant to help you redesign your approach.

Drive more efficiently

Changing driver behaviour was a popular way to save on emissions and costs, according to a 2020 survey of SMEs that provide logistics (PDF).

This research showed that fuel efficiency driver training:

had the shortest payback period of all efficiency measures
saved an average of 15% on fuel use and carbon emissions

Other ‘quick wins’ for increasing efficiency include:

tyre pressure management
route and load planning
improving aerodynamics
using telematics systems

Check Freight Portal’s guidance on efficient EV driving techniques: ‘Six quick wins’.

Retrofit vehicles

Certain types of commercial vans and HGVs can be retrofitted to use less fuel and create less emissions.

This can involve:

installing extra parts to the exhaust system
converting the vehicle to use lower emission fuels

This can help save on fuel costs and avoid driving fees in major cities that have clear air zones.

Check Energy Saving Trust’s clean vehicle retrofit scheme to find out if your fleet is eligible for upgrades.

Switch to alternative fuels

Low carbon fuels and other alternative fuels can provide greenhouse gas savings compared to standard fossil fuels. The range of alternatively fuelled commercial vehicles that can use these fuels is increasing.

You can run or adapt existing vehicles to use:

higher blends various forms of biodiesel (including FAME and HVO)
compressed natural gas (CNG) or liquefied petroleum gas (LPG), including biomethane
battery electric
hydrogen fuel cells

Some of these options offer lower tailpipe emissions and relief from driving fees in cities, though you need to work out how to source the fuel and keep vehicles supplied.

Check Energy Saving Trust’s ‘Freight Portal’ for more guidance on alternative fuels.

Switch to electric vehicles

The cost and driving range of commercial electric vehicles (EVs) is improving over time. These make sense to consider if:

your existing fleet is at the end of its lifecycle
you don’t need to move freight long distances
you can charge the vehicles in line with your business operations

You should however consider if the battery type matches range, as battery packs are heavy and take up space.

Government grants of up to £25,000 are available depending on the type of commercial EV.

Find out more about how to switch your electric vehicles and bikes.

Electrify your fleet before the deadline

SMEs will eventually need to electrify their fleets or find alternate modes of transport.

Getting started on the transition as soon as possible makes sense to stay ahead of regulations and avoid a rushed transition.

Cars and vans

From 2035 there will be no new sales of fossil fuel-only cars and vans.

You will still be able to use a fossil fuel-powered car or van after 2035 and these vehicles will continue to be available on the second-hand market.

Heavy goods vehicles (HGVs)

The current policy is to phase out sales of new non-zero-emissions HGVs weighing 26 tonnes and under by 2035, with all new HGVs sold in the UK to be zero-emission by 2040.

Use electric cargo bikes for ‘last mile’ deliveries

Electric cargo or ‘e-Cargo’ bikes have batteries that provide assistance while riding.

These make sense to consider if you:

make ‘last mile’ deliveries in city centres
need to make several deliveries in close proximity
don’t need more than 50 miles of range per day
have loads of 250 kg or less

Electric cargo bikes usually cost between £3,000 and £12,000.

Check Energy Saving Trust’s ‘Freight Portal’ for more guidance on e-Cargo bikes.

Switch to rail or waterborne freight

As compared to traditional road or air freight, moving goods by rail or water produces far less carbon emissions per mile.

Each rail freight journey takes 70 HGV road freight movements off the road.

Points to consider are the:

destination of goods and timeframe
type of goods, for example, short shelf life goods may not be suitable
locations of destination hubs
choice of shipping line and their carbon emissions

Visit the Energy Saving Trust’s ‘Advice for large fleets to reduce costs and emissions’ for support for large fleets.

The UK government has a grant scheme to help freight businesses switch modes of transport. You must show that the cost of rail or water shipping is higher than using roads.

The grant subsidises rail and waterborne freight to make it the more financially attractive option.

Check GOV.UK’s guidance on applying for grants.