Eco-routing trucks to reduce externalities

Freight transportation is fundamental to economic growth, nonetheless, the trucks that haul this freight are pollution intensive, emitting greenhouse gases that affect the health of our planet, and criteria pollutants that adversely affect human health, and are also one of the leading cause for urban congestion and accidents. Can eco-routing trucks reduce freight related externalities? In this blog, we explore the opportunities and challenges in freight eco-routing.

In the past century, global climate change has become a pressing concern for the subsistence of humankind on earth. Swedish scientist, Svante Arrhenius, was the first to establish an anthropological link to the rise in global temperatures in 1896. Ever since then, rigorous scientific evidence has been collected, corroborating the greenhouse gas effect. Transportation is one of the major sectors that contributes to this effect, amounting to a share of 24% global carbon-dioxide emissions. Freight movement, which is typically characterized by high-intensity long-duration travel, renders a major chunk of these transportation-related emissions. Beyond freight’s impact on global climate change, criteria pollutants from urban freight movement adversely affect the health of local communities. The recent trends in freight distribution – the growth of e-commerce and subsequent increase in time sensitivity of demand – have significantly affected urban freight flows, resulting in frequent less-than-truckload urban freight movements on faster routes, which are often not eco-friendly. Such urban freight movement worsens traffic conditions, noise levels, and air quality, which particularly affects disadvantaged communities, where logistic facilities may be concentrated owing to lower property rates. While, such relocation of logistics closer to the urban core also provides opportunities for the use of zero-emission vehicles in last-mile distributions, however, a significant change in the carrier’s fleet can take a considerable amount of time, while there is an urgent need for operational improvement initiatives that could provide efficient alternatives to address global climate change and local pollution impacts. Towards this end, carriers accounting for emissions in their routing decisions (explicit eco-routing), or policy initiatives that can incentivize carriers to implicitly consider the impact of their emissions in their routing decisions (implicit eco-routing) could make more immediate contributions to solving the imminent environmental crisis. Thus, in this blog we explore the opportunities and challenges associated with eco-routing for carriers in the form of the private impacts of eco-routing, and for regulators in the form of the system-wide impacts of network-wide eco-routing in the Southern California Association of Governments (SCAG) region (see figure below).

Southern California Association of Governments (SCAG) region – network and census tracts

To begin with, as with many such green initiatives, we found a lack of incentive for the carrier to eco-route its fleet and account for emissions in its decision-making (explicit eco-routing). Thus, while eco-routing does indeed reduce emissions, the resulting increase in cost to the carrier dissuades the carrier from eco-routing. However, it is important to note that this result is not surprising, since if eco-routing were to result in a reduction in cost, the carrier would have been eco-routing in the first place. Instead, it is important for regulators to consider the potential opportunities wherein the carrier can be incentivized to eco-route. For instance, the carriers routing their fleet on the shortest path observe a substantial reduction in travel time and fuel consumption from eco-routing and thus could be encouraged to eco-route with few monetary incentives. Moreover, considering the overlap between certain conventional routing options (fastest and least cost paths) and eco-routing options, appropriate policy initiatives could encourage the carrier to consider the impact of its criteria pollutant and greenhouse gas emissions. Further, the benefits from eco-routing are best realized in off-peak hours when there are fewer passenger cars in the network. Thus, policy interventions that target such opportunities can instigate the carrier to eco-route and therefore reduce freight-related externalities (see figure below). However, regulators must note that policy measures that incentivize carriers to reduce fuel consumption may not result in reduction in emissions, as is otherwise assumed.

Reduction in emissions in Southern California Association of Governments (SCAG) region from network-wide freight eco-routing

Considering these results, regulators must appropriately valuate emissions for carriers in their policy interventions to ensure an appropriate response from the carriers. Such measures could include mandating carriers to undertake regular training and assessment of their drivers for eco-driving behavior as a prerequisite to subsidies, permits, licenses, etc. In fact, from the regulator’s perspective it is important to consider eco-routing from an equity perspective rather than from a purely monetary perspective. In general, we found a lack of incentive for stakeholders to encourage carriers to eco-route and to account for their externalities in their routing decisions. Nonetheless, these results assume that the benefits from reduced exposure to emissions to be homogeneous across the population, when perhaps such benefits are heterogeneous, with potentially greater benefits from reducing externalities realized for disadvantaged communities in the region than for the population in general. To this end, the regulator could geofence certain disadvantaged communities and restrict carriers’ access to such neighborhoods (implicit eco-routing). This results in the geofenced region observing a significant reduction in externalities, albeit with increased passenger traffic and a marginal but equitable increase in externalities elsewhere. Moreover, the disadvantaged communities other than those within the geofence could also observe a reduction in externalities, particularly criteria pollutant emissions that have an adverse effect on human health. And beyond reductions in emissions, eco-routing reduces driver fatigue by avoiding heavy acceleration and braking events, especially for drivers routing their trucks for expedited service, and can therefore reduce traffic accidents. Thus, overall, freight eco-routing has the potential to reduce transportation-related externalities equitably, and consequently to bridge the gap in transition to zero-emissions as adoption of alternate cleaner modes of distribution gathers pace, through appropriate policy measures that create incentives to encourage eco-routing.