Think You Have to Choose Between Sustainability and Cost? Think Again

Analyst Insight: The idea that sustainability must come at the expense of cost savings has long shaped supply chain strategy. But as the freight market begins to shift, forward-thinking shippers are proving that cost savings and emissions reductions aren’t mutually exclusive — they’re often one and the same.

For years, supply chain decision-makers have assumed that sustainability comes at a premium. However, forward-thinking shippers are increasingly refusing to make a choice between cutting costs and reducing emissions, and in the process, proving that it was a false dichotomy to begin with.

As shippers prepare for an expected upcoming freight market flip, they’re feeling growing cost pressures. According to Breakthrough’s 2025 State of Transportation Report, 57% of shippers now prioritize cost when selecting carriers. Yet, sustainability also remains a critical focus, as 87% of shippers have set long-term environmental goals for their transportation operations.

With cost control and green initiatives taking center stage, some shippers are charting a smarter path forward by embracing new procurement, route optimization, and fuel management strategies. With these moves, they are proving that reducing emissions isn’t just an environmental win — it’s a financial one, too.

In today’s freight landscape, cutting emissions and lowering costs are two sides of the same coin.

Smart shippers are optimizing routes to minimize fuel use, given that fine-tuning routes to reduce miles driven and empty miles has a major payoff. It not only lowers fuel expenses but also cuts emissions, benefiting both the bottom line and the environment.

Despite these advantages, not all shippers are maximizing this opportunity. Among those with sustainability goals, our data shows that just 36% prioritize route optimization to minimize travel distances, leaving significant cost savings — and sustainability benefits — untapped.

Most shippers are already collecting the rich transportation data they need to optimize routes. It’s simply a matter of finding and investing in the right AI-driven tools capable of determining the most efficient routes. 

With these same tools, shippers can also consolidate shipments, forecast demand more accurately, and even expand the use of intermodal transportation.

Shippers also aren’t the only ones with ambitious sustainability goals. Many carriers are making strides toward reducing fuel consumption, including upgrading old equipment to more fuel-efficient models and implementing technologies that support fuel efficiency like alternative power units and trailer skirts. 

In fact, 67% of carriers cite cost savings as a top factor driving their sustainability efforts. With a strategic approach to carrier partnerships, shippers can take advantage of these carrier-led initiatives via the EPA SmartWay program. 

Our data shows that this strategy is underutilized. While 38% of shippers track Scope 3 emissions, which include indirect upstream and downstream emissions from carriers, 3PLs or suppliers, only 14% of shippers include sustainability in their RFPs and RFIs. 

By overlooking SmartWay considerations in their RFPs, shippers miss a critical opportunity to incentivize environmentally conscious carriers and attract forward-thinking partners who align with their long-term goals.

As infrastructure matures and supply increases, more shippers are embracing alternative energy solutions. Of shippers with set sustainability goals, 30% are strategizing to increase their use of alternative energy sources primarily with renewable diesel, biodiesel and renewable natural gas, with increasing pockets of electric and hydrogen. 

The expansion of alternative fuel availability along with ongoing innovation in equipment has created opportunities for shippers to integrate low-carbon, cost-competitive fuel options compared to diesel.

Programs such as California’s Low Carbon Fuel Standard, and the Hybrid Voucher Incentive Program (HVIP) have been key in accelerating adoption. However, it remains to be seen how these programs may evolve in 2025 and beyond.

Shippers can also better navigate cost shifts by developing a comprehensive energy strategy to minimize costs while maximizing emissions reductions, including the implementation of market-based fuel reimbursements, rather than relying on national fuel-price averages or locking in a fixed price for fuel consumed. 

Recognizing the benefits, more than 39% of surveyed shippers consider fuel reimbursement programs tied to market fluctuations as essential for maintaining financial stability in a volatile economy.  

Embracing a future where sustainability and cost savings are no longer at oddsAs the transportation industry evolves, the most forward-thinking shippers are proving that sustainability and cost savings go hand in hand. By optimizing routes, refining carrier procurement strategies, and adopting alternative energies, shippers can reduce emissions while strengthening their financial positions.

As shippers adopt more innovative, emission-reducing strategies, they are paving the way for a more efficient and forward-thinking freight network. Those who wait risk falling behind, while those who take action now will stay ahead of the curve and help shape the future of transportation.