Why Trucking Needs Better Data | Celine King, CEO @ Greener

Oh, today very special episode. For the first time, we have a returning guest on the Grove, a member of the Grove, Selene King. She is a co-founder and CEO at a company called Greener. That's green irr. They do sustainable accounting for the trucking industry. She explains what they do a lot better than I could on

this introduction. But what's exciting about Seline is that you'll see uh about eight months ago our first uh interview discussing uh how she got to the point that she's at with Greener uh her personal journey with entrepreneurship and uh eight months later we're able to talk about all the significant change that has happened in her company since

then and a very different uh go to market approach and very different plan for scale than uh what was previously thought. So very interesting to get her perspective. Now she's much more deeply embedded in the industry uh and drops a lot of very interesting industry knowledge. So very cool uh to be able to

celebrate somebody's uh growth trajectory like that. So I'm looking forward to the next one with her in another however many months to celebrate her continued growth. Thank you as always to our sponsors clean techch growth lab. If you're looking to grow in clean tech they are the people to do it with. And the producers of this podcast

craze and friends. With that, I give you Selene. Oh, welcome to another episode of The Grove. It's a special day. We have one of the OGs of The Grove, Selene King. Welcome. >> Thank you. I'm excited to be here.

>> I It has been such a crazy time for you since we did our last episode and uh we caught up on a call recently. I have all these notes of things that you were talking about that have happened and uh capture them on this episode is going to be great for everybody else. So for

anyone that hasn't seen that last episode or somehow hasn't heard of you, you give a brief introduction of yourself and what you're building. >> Yeah. Um my name is Lane King. I'm the CEO and founder of Greener. And Greener is a carbon accounting platform built specifically for Fortune 500 companies and the trucking fleets that they

contract. So um we essentially have a technology that connects to the only two primary data sources in trucking and logistics which would be telematics uh and then fuel cards. So that hardware component that exists inside of every vehicle and then credit cards that are used by drivers. So, we collect real-time vehicle performance data. We

standardize it and then we provide performance reporting um both through a sustainability lens, an efficiency lens um and we're able to essentially provide visibility that didn't exist before across contracted carrier networks. >> And just like last time, there's a lot in that that I don't understand. So, so, uh, I'm excited to to walk through all

of this because there's a lot of things about regul a lot of similar themes around slowmoving industries, hard to abate industries, >> like regulation, uh, data transparency, uh, you know, long sales cycles, these types of things. But as it relates to trucking specifically, >> you're going to you're you're really going to teach me today. So be before we

get into the the first point of questions though, if we could just revisit one of my favorite questions, which is did you always want to be a founder? Did you always see yourself as an entrepreneur or did something happen at some point where you said this is what I want to do?

>> Um I never envisioned myself being a founder. It felt like I didn't have a choice once the idea and the genesis of greener became more clear to me. Um, I always knew I wanted to have an environmental impact, a positive environmental impact. Um, and I always assumed that I was going to be helping

someone else execute their own vision until I realized that the existing pathways of doing that didn't exactly feel true for me. Um and so once I started to ideulate on the best vehicle for impact within the climate space which is greener um I became obsessed and I became married to the idea and

married to the execution of bringing that idea to fruition and truly to this day believe that the best impact that you can drive is through bringing disruptive technologies to legacy industries. And so that being said, um, love being in control of my own destiny and my own impact.

>> How long has it been, would you say, since you started this journey? Three years. >> Three years commercially, four years from ideiation to present day. >> For your personal journey, what has changed over that time? >> I that's a great question.

I think two things. um my personal growth um and my perspective has like completely flipped on its head where I think I had a misconception of what it meant to build something from scratch, the challenges that come with it and that it is much more of a mental journey than it is a material journey, which is

something that we talked about on our last podcast. Um and then I would say something else that has changed is the market, the regulatory environment, the industry, the external pressures, um that we're building within are completely different from when we first started.

>> Mhm. Well, so uh we did get into a lot of it, the personal journey last time. So, for anybody that's curious, I would say watch that episode because right now >> we're to get into the thick of uh all this stuff that you've learned uh about the industry. Uh and the first thing

that I'm curious about is the really the foundation for why greener is building in this space and it's the relationship between shippers and carriers >> and uh everything that that happens here. So I'm I'm not familiar with this sector. Could you just give a foundational understanding of oh what is a shipper? What is a carrier? How do

they interact? >> Yes. So a shipper is any company with a supply chain. Um so you could think of Mars, you could think of Estee Lauder, St. Cobain, Nestle. um any commodity, any product, any intermediary that goes in a product that needs to be moved from point A to point B and is part of an

existing supply chain, that supply chain belongs to what we would consider a shipper. Um for us, we tend to gravitate towards global supply chains. Um typically larger supply chains that are more complex or sophisticated. Um those tend to exist within the Fortune 500 companies or larger private companies.

Um, and carriers are trucking companies. They're fleets that are contracted um, oftentimes by those shippers to move their freight. Um, or you also have instances where there's private fleets. Um, that would be like a Walmart. Um, where the vehicles are owned or operated by the company. So, um, the simplest way to distill it is shippers are companies

that have a supply chain, carriers are trucking companies. And it's and it's not it's only for the biggest companies where they handle both. >> They it's not uncommon that Walmart for example has their own contracted network in addition to their private fleet.

>> Okay. So what is happening then with because I think one of the easiest uh and lowest hanging fruit as far as sustainability or the conversation around carbon emissions are vehicles >> and uh I mean I guess the image that I have in my head of these like uh of these trucks like these 18 wheelers on

the highway is that they're gross [laughter] you know so what so what is the conver like what is the environment around uh shippers and carriers and regulation and uh you know uh sustainability like how how does all of that fit together?

>> So to paint the most accurate picture trucking is extremely fragmented as an industry. So 95% of fleets operate 20 vehicles or less, which is staggering, right? There's 20 million carriers in the United States. 95% of them are smaller. They're owner operators or their mom and pop shops. Um >> not not that you'll know the answer to

this, but how maybe how is that the case? How has there not been acquisition consolidation? I think if you just think about well there has been um a really interesting this also will context set is co for example there was such a large demand for the movement of goods because of what was happening in the world that a

bunch of people entered the market that never had been in trucking was you know one person one truck because the rates were so high [laughter] >> that's crazy >> and then co went away and the market started to rightsize itself self, you know, supply and demand shifted. Got it.

>> And um you were left with a lot of smaller owner operators, a lot of mom and pop shops, but I would say that trucking is an expensive business to be in. So to procure and to grow your fleet beyond 10 to 20 vehicles is extremely expensive unless you have like highly efficient operations

um and steady cash flow. And so I think that's just the nature of the industry. >> Okay. So, so what what has been the history of regulation as for these companies? >> Yeah. Um, it the trucking industry's relationship with environmental regulation is probably not great. And I think heading into commercialization, it wasn't something

that I appreciated until I started talking to trucking owners and operators where they are 100% valid in feeling frustration with either local, state, or federal regulations because they're so volatile, which is what we're experiencing right now. Um, you're told to do one thing. you invest your capital in newer equipment and then the

regulation that required you to do so disappears um or it swings back the complete opposite way. Um so for us the regulations that are the most relevant are emission disclosure regulations and what's really interesting is they do not always impact the industry directly but they always impact the trucking company's customer. So, um, a lot of

times the scope of these regulations are revenuedriven and because the trucking industry in general has a ton of smaller operators, those operators are not directly in scope, but the companies that they carry for are. Um, and so that's really where we see this. It's a confusing dynamic for anyone to figure out. And then you add volatile

regulatory changes. Um, and a lot of times it just creates freeze because no one knows what's actually going to get put in place, what's going to continue on, what's real, what's not real. Um, yes, I would just also add that the two regulations that are the most important today are California C SB23.

Um, that means any company that makes over a billion dollars in revenue or more and does business in the state of California, they have to report scope one, scope two, scope three. Scope three being the supply chain. >> Um, and then CSRD, which is Europe's regulation.

>> Yeah, I did. There you go. I did have those. So, this is so SB23 is California >> and CSRD is Europe. >> Yeah. And you'll see more and more the US federal regulation is non-existent. So state level regulation has intensified. Um but in a way I think it's been good for the industry.

>> Okay. So so then it's interesting because there's this um there's increasing I guess in Europe and California >> and you know other states but um more as we go into the future. there's pressure to have clarity about emissions data.

>> Yeah. >> And it is really difficult to have that clarity in general about that data. So, um, so that's what's frustrating about it. So, it's I guess my understanding it's less about a shipper being like, oh, I care about being sustainable or I don't care about being sustainable, but it's more like I need clarity of data.

And a consequence of having clarity of data is sustainability. >> Yeah. I think the well two things. I think when the perspective is that I'm only doing this because it checks the box for compliance, it really deters progress. Um because regulation promotes the bare minimum in terms of standards where when you have

market pressure where say for example a shipper has a 20 net zero by 2030 goal and they're going to hit it whether there is regulation or not um that's when it can become a competitive differentiator for those fleets to demonstrate sustainable performance. I also think the story in transportation between sustainability and profitability

has been told wrong where in every other industry sustainability has a tradeoff right until there's cost parity in transportation it is onetoone if you reduce your fuel consumption you're reducing your emissions your pathway of getting there I was going to say doesn't matter of course it does but you can do it through upgrading equipment which

carriers do no matter what because it makes them more efficient You can do it through diversifying your fuel mix. You can do it through electrification, which is a more expensive pathway. Um, but in that lens, and that perspective, transportation's been obsessed with sustainability since the dawn of time.

And what they lack is, to your point, the infrastructure and the data to prove their performance and their progress. >> It's like you're reading my mind. These are these are notes I already had. So the the the from a carrier's perspective, sustainability equals profitability.

>> Yes, >> that is a point that that you had made. Um fleet electrification >> is something that you just touched on something I have written down. So can you expand on that more? How is that happening now? Where is it going? What is the story around that?

>> Electrification. >> Mhm. So um electrification is such an interesting topic because it originally came down as a mandate through carb through California. If you wanted to carry in the state whether you were headquartered there as a fleet or not there was pressure to electrify in a phased in way um through 2030. Um there

still is something called the clean truck act um clean truck check um through carb but fleets were not given the opportunity to choose whether they wanted to electrify or not. Um they were just told that if they didn't they were going to lose the ability to carry in a particular state which is pretty

intense. There was um the general feeling that the policy makers were not communicating with the industry that they were imposing policy on which is true because anyone knows that the cost of an EV is more expensive. The infrastructure isn't there. The production of EVs is not sustainable for the volume of electric vehicles that

they were requiring to enter the industry. >> Oh, interesting. Um, and so there was that's another great example of a disconnect between environmental policy and an industry that is just a necessity to moving goods across the economy. Um, and so that was a massive massive frustration with California. Then the US sort of deregulated itself. That policy

and pressure eased up. >> Electrification was entirely rejected. And then just in the past few months, we've seen this crazy swing back where almost every fleet that Greener has talked to has plans to electrify. Um they found use cases where it's, you know, at cost parody or more profitable for them. Um or they want to incorporate

it as part of their brand because they can charge a higher rate for moving goods for a particular customer on dedicated EV vehicles. >> Really? >> And that's a green premium. Yeah. >> Wow. Well, first of all, that's encouraging.

>> Yes. >> Second, all the conversation I've had around green premiums is that it was a COVID thing when money was cheap and or even even throughout the 2010s when there was this whole sustainability kick. People were paying more for like sustainable clothes or something.

>> But then after COVID once uh money got really expensive and and you know, everything happened with the economy, green premiums kind of weren't a thing anymore. So you're saying that there is a a place for a green premium just in this in this situation?

>> I think it is not universal across the shipping industry, >> but it's happening. >> It's happening and it's happening for >> That is cool. >> Yeah, we see it from Europeanbased shippers. So >> I mean the way that Europe doubles down on their commitments and their targets is unlike the US. Um, and so we've seen

that sustainability is not included in an RFP or included as a requirement just for compliance. It is part of their long-term strategy as a company. Um, and because of that, they're actually willing to in some cases co-invest in newer equipment like EVs um or just generally >> pay a higher rate or award a higher

volume of freight. So is is this the electrification thing the this the level that it's happening at is it happening fleetwide is it happening per vehicle or something or >> it is happening um across I would say very small well one typically equipment a a portion of the fleet is replaced every year let's just

say um best practice would be 25% of the fleet is replaced once a year so over the course of four years. There should never be a vehicle that's older than four years old. That doesn't happen, but in theory. Um, and so where we've seen electrification is typically first as a pilot like one procuring one vehicle,

one EV >> to replace an older asset. It depends totally on the route of that vehicle. Long haul probably doesn't make sense versus like a dreage fleet that's going port to final destination. Um and then if there is success there, we see like smaller numbers of EVs being incorporated. Three, five, seven. Um

there's one fleet who makes it their entire competitive differentiation. That's Einride. Uh they're European-based really killer company. >> Shout it out. >> Yeah, shout out to Einride. [laughter] Um but yeah, for right now, I would say adoption is slow and it should be slow until there's the infrastructure to support it.

>> Okay. So, so then moving into this idea of uh data clarity. >> So, uh I've written down here a few pieces of data that go into this um this narrative of profitability and things is uh fuel emissions reporting things like this like uh driver experience, idle time. These are just some some things

that you've thrown around, you know, I don't know how they all >> Yeah. So the through the lens of profitability, the most important thing to recognize is that fuel consumption and emissions generated from burning that fuel are directly proportional to one another. There's a onetoone relationship. And so if you for example can reduce your idling, which

any trucking company would try and do to the best of their ability because that's an expense, an unnecessary expense, fuel waste through idling, you're also reducing your emissions a proportional amount. And so um idling is one category where we can see emissions reduction.

Better route optimization because you're burning less fuel, less left turns reduces fuel consumption and therefore emissions. Um, and so any action that the fleet takes, whether that's an operational change, a driver behavior, an equipment upgrade, maintenance, um, anything that improves or boosts the efficiency of the vehicle or reduces the fuel being consumed through better

behavior is a sustainable action. They're one to one >> and these are and these are all areas that that greener um collects and aggregates. >> Yeah, we provide data on all of those categories. Um I would say one of the most important things for us is historically sustainability data is not actionable. It is created for a report.

it is created retroactively and the time to act shows up at the end of the year in an annual report. Um, and so what we try to do is focus on low latency data. So our data updates every two hours. You can take an action before the end of the day if something doesn't look right. Um,

we try to focus on accuracy, net new accuracy, which is why primary data is our it's our Super Bowl. That's what the company is founded on. Um because machine source machine grade data doesn't lie. Neither does fuel transaction data. Um and then if there is a case of any outlier value, we can

clean it and there's a quality control process. But if I'm a fleet manager, I want to have full trust uh in the integrity of the data so that when I take an action, I know that it was backed up by something that was true.

So, uh, an an analogy that you used that, uh, that I thought was cool because as the millions of people watching this know, I love growth, go to market, sales, or talking to people >> and, uh, in that world, people use CRM to yeah, handle management, um, finance, they have like things like ERP. So is

there it's just when you're talking about aggregating all this data >> in this world I feel like you can't be an aggregator without having an ability to present it as well or even you know have a way to find insights for the customer. So like you're saying sustainability data is often not actionable but in this case it is. So

what is it that that fleet managers have where sales people have CRM, there's finance and ERP? Is there like a standard in this industry? >> There is not a system of record for freight. Um I think part of the problem is that every fleet runs on different systems through different providers and there's a lot of siloed data because of

it. Um, so for example, a fleet uses one fuel card provider, a telematic provider, could be multiple telematic providers, a dispatch system, an order fulfillment software. And so your ability to log on in a day and understand where you're at, how your vehicles are performing, what drivers need coaching, what orders were fulfilled, basically where to direct

your attention is constrained by the fragmentation of these systems. Um, and so one of the most important things that we can do is provide standardization through unifying all of these data points. And then the most important piece of that is we try to think of all of our analytics in a very specific way

which is we need to uncover the trend. We need to discover the cause. So is performance good or bad? If it's good or bad, why? And then if a change needs to happen, can we tie it to an incentive?

So >> if your vehicle is highly inefficient, >> why is that? Maybe it's that it needs to be maintenanced. if you maintenance it, you will then save x number of dollars promotes the action, which is not always the case with sustainable data.

>> So, there's these there's these two terms that I have that I don't know what they are. It's primary emissions and estimated emissions. >> What are those two things? >> So, best practice, holy grail in carbon accounting is that all of your data comes from a primary source. So the great example in transportation is

telematics is primary source data because it is coming from a device within the vehicle that you're reporting on. Um estimated emissions come from you can derive emission factors um from a a various number of sources depending on the level and integrity of the data that you have access to. So for example, at

large companies today that don't necessarily have visibility or access to primary data from their suppliers or from their trucking companies, they will use spend based emission factors. So how much did they spend on transportation and there's an affiliated or associated emission factor based on the number of dollars spent. Um it is highly

inaccurate compared to source level data. Um, but that's not always the company's fault. >> That's standard. Right now, >> it is, I would say, more common than you would >> probably believe. Yeah. Um, the other way to look at it is self-reported data is really common, too, where the company doesn't want to take on the burden of

collecting and doing all these calculations. They'll allow their suppliers to self-report and they'll just take it as, you know, best practice um and incorporate it into a report. How does that usually turn out? >> Um, I would say it depends on the rigor of the sustainability department, organization to organization. I think you could assume that unless there is a

significant portion of your emissions inventory coming from primary data that it's highly inaccurate to assume that a fleet operator or a fleet manager who has never heard of scope one emissions is calculating them the right way. >> Well, because it just seem it just seems that you were just speaking about actions. you were just speaking about

incentive >> um outside of >> regulatory pressure which you know we can talk about or we did talk a little bit about >> the extent of impact that regulation has is the enforcement of it. >> Yes. >> So outside of that you know the the incentive for someone to do really good and accurate job reporting

sustainability data is just if they love the planet. >> Yeah. And I think too to your point though like the what is what is the cost of estimated data like if you have bad data it's expensive because you can't improve what you're not measuring >> which if we look at this through a

shipper perspective and I have no visibility into what goes on in between point A and point B like I contract a carrier the rate is negotiated based off of a DOE rate table instead of based on true evidence-based performance. I have no idea what the carrier's efficiency is. I have no idea what the average age

of their equipment is. I have no idea when they're idling and they're not supposed to. I just know if freight is moved and if it's moved in the time period that we agreed, every single opportunity for better efficiency and consolidation and optimization I have no control over because I don't have access to the data. Um, and so I think that's

when it gets expensive. So then okay so so I think an opportunity for um for there to be incentive is something else that that you mentioned at the beginning that I want to go back to which is RFPs.

>> So what is the role first of all what is the role of RFPs in this industry? >> Um so an RFP would essentially uh a lot of times they're called bids. So, a bid will get released by a shipper and it is a way of collecting information on carriers that are interested in

contracting with that shipper. So, um the criteria that you and I are talking about um essentially like what equipment are you running, how old are your vehicles, things like that. Um they can collect generalized information about the company, where do you operate, if it's going to be a dedicated lane, which vehicles are you going to assign to this

particular bid? um your rate, your history, your performance. Um and then they're able to include sections outside of just like your standard operations, which is for example sustainability or other commitments that you might have to social issues because it matters to that parent company. And so it is a way of collecting as many carriers as they can

to select from. Yeah. reading the RFP and then selecting which carriers they want to contract for 12 24 months. >> Yeah. So, uh you had you had made a comparison between RFPs and regulation >> and RFPs being a form of regulation >> formally or informally. So, how what does that mean? Um, so I would say that

a carrier is opposed to taking action or investing in something unless their customer requires them to, right? If it's not profitable, if it's not making them more profitable. >> Sure. Um and so when you start to see sustainability in the absence of regulation, pressure from your customer base is what's going to determine what you do.

>> Okay. So earlier you had said that there as far as I guess huge picture sustainability. >> Mhm. >> Taking these actions that you could argue there's a financial motive because sustainability equals profitability. >> Yes. But you were saying uh regulation is one way of doing it, but market drivers are a much stronger force in

this direction. And so >> would you say that RFPs are like the regulatory forces in that market driver umbrella? >> Yeah. >> That really create this environment for companies to want to take. >> Yes. I think your ability to understand your if you want to pulse on sustainability in freight, you would read the RFPs that are being released

from global shippers to understand how serious they are. And a lot of times it's not just are you smartway certified? Do you calculate your emissions? It is are you willing to report like an X interval? Can you do it monthly? Can you do it quarterly? What investments are you making in bofuel?

Are you open to electrification? Do you operate EVs? And these things matter to shippers. And so I would say the general rule of thumb in freight is what moves the market is what the customer wants because your revenue is coming from those organizations.

>> So off of that, there's there's two notes to that down, which is evidence-based freight contract. Is that what you just spoke to? which is we need because you were talking about can you report on on this frequency, can you report these things? Is that evidence-based freight contract or is it something else?

>> No, it's actually something else. So something that we've seen a lot of traction um within shipper organizations is around evidence-based procurement which means that if you have access to the true performance of every single fleet in your network you can compare them in a one standardized way two in a fair way. And so the example I can give

you is if fleet A has an average MPG of 8 and fleet B has an average MPG of five, you would probably want to choose the fleet with a higher MPG because they're more efficient. >> Those made up members or is that real?

>> Yeah, those are made up. >> Okay, good. [laughter] Five would be crazy. >> Oh, well, that is standard for the industry. >> That is crazy. >> Yeah. And so, um, if you were going to choose carrier A, >> oh my god, >> which has 8 m per gallon, you could essentially lower the rate that you're

paying them from, I'm making this up, 18 cents per mile to 15 cents per mile, but award them a higher volume of freight so that it's not like they're losing any profitability. >> Sure. >> But you're creating a competitive flywheel for your supply chain. Yeah.

where you're awarding more efficient carriers and over time there's incentive to become more efficient. >> Okay. And so there's a lot that we've talked about that you can do when you have this data that we're talking about about your supply chain and and across your fleet and things like this that you could do. Um, but you're seeing that

legitimately the you're able to collect data that's that's accurate from the level of primary source like we talked about that earlier >> and enable people to do all of these things that you're that you're talking about. Yeah, I can give you two really good examples which would be one of our customers had a requirement from a

leading cosmetics company to report their emissions uh on a quarterly basis and they had never done that before and um we partnered. We were able to provide the report. They retained a $3.5 million contract. They're a mid-market fleet.

It's a lot of money to a mid-market fleet. Very important customer relationship. But after installing greener, they reduced their fuel spend by 3% the 12 months after just through taking better quality action. And so for them, it was not even a tradeoff, you know. Um >> Oh, I hope they gave you at least half

of that [laughter] >> in another life. Okay. So, so then so then continuing with this this shipper carrier um narrative. So we have uh RFPs. Yep. and shippers put RFPs out and then carriers bid on them. >> So something uh that you had spoken about that I've heard you speak about is that shippers put performance standards

uh on these RFPs and like scoring metrics that carriers aren't even aware of. >> Uh and then also there's a whole uh there's a bunch of things to talk about around just general the disconnect between these two segments. So >> there entire there's Yeah, that's something I could talk about all day long. You

>> good thing we got time. >> I know because you have sustainability departments at a Fortune 500 company. Let's just say it's five to six people that are trying to drive long-term strategy and their entire role is based on can they stay on track towards that long-term goal and can they unlock capital from finance to fund initiatives

that will accelerate them towards >> accelerate their trajectory towards that long-term goal. Then you have procurement whose KPIs are around procuring the cheapest possible, right? They're trying to drive down the cost that they're spending procuring suppliers, which in this case would be carriers.

And so it becomes this race to the bottom where sustainability demands that there is a sustainability section on their RFPs because they want to be working with sustainabilityminded, innovative, forwardthinking fleets that are going to help them stay on track towards that long-term goal. But ultimately the decision-making process on who gets selected is left with

procurement who only cares about rate. And so you have a disconnect at the top and then you have a disconnect between shippers and carriers where there's this unbelievable amount of pressure to invest in sustainable tech to invest in sustainable equipment to invest in sustainable fuels. There are hundreds or thousands of fleets that have done that

that have shared that information in RFPs and lost the bid to a more inefficient unsustainable carrier because their rate is cheaper and that's not fair right >> so that is when we talk about evidence-based procurement bridging the gap between procurement and sustainability that they are working off the same set of data >> um and then it does not become a

trade-off and essentially you can reward carriers ers that have actually made the investment in sustainability. >> But so are you saying that they they lose to more inefficient uh more inefficient companies because they because of two I mean it's the same coin because the company that has a higher rate has one because they're

being more sustainable. >> I think that in any case procurement will always be a race to the bottom. I would say that if you look at it this way, it is right now more expensive sometimes to invest in newer equipment. It's more expensive sometimes to invest in alternative fuels.

>> Does the unsustainable fleet have a lower rate because they are not taking the steps to be more sustainable and at the moment are costly? I think that that is true to an extent where if you are not spending a portion of your budget to just we'll call it be more efficient because that's really what it is.

>> Um you probably are able to have a lower rate or offer a lower rate as a carrier if that makes sense. >> Yeah. Yeah. Got it. Okay. So in general shipper and carrier disconnect what is this narrative?

>> I think it is back to incentive like if you think about it in the most simplest of terms their customers are asking them to invest their own dollars into technology and equipment and behaviors that they're not willing to financially partake in. So it would be like me saying, "Hey, if you don't

procure 10 EVs and spend $3 million doing that, you can't carry for us, but oh, by the way, if you do do that, we're not going to increase your rate." So there is this massive of course disconnect but frustration where you want to have a good relationship with your customer but it feels like your customer is beating you

over the head with all of these demands and expectations that are financially extraordinarily expensive at times or even just I would say trivial expenses that they're still not willing to pay you for. And so the amount of hoops that a fleet has to jump through just to win a contract that is not significantly

more profitable than other contracts um is is pretty intense and I would say pretty disappointing sometimes. >> So So is that um I guess is that the the major is that the is that the major disconnect between shippers and carriers? Is is there also something one when they're uh working together and and the

relationship is happening? Is there also is there also something that creates friction there? I mean we just talked about all the data visibility type of things. So if these two companies have completely separate >> um and I'm I guess I'm just trying to draw like a nice bell around it for for me to understand. So when this

relationship is happening between a shipper and a carrier, both of them have different relationships to sustainability or reporting or regulation. >> Yeah. >> That see because there's not a high standard of data visibility across that relationship, it seems like a good opportunity for friction.

>> Yeah. >> So where where does first of all is that true? >> It is. Um I would say that there's this misconception which makes sense but from the trucking and logistics industry that if they share sustainability data with their customer and it could be that their performance looks poor that they're they will be penalized and

that's not true but that's a fear that makes sense. Um what shippers are looking for is willingness to share the data regularly. Um and then proof of progress. They want to see that incrementally every year if possible that you're at a minimum maintaining your efficiency but in a best case scenario that you're having slight

efficiency gains because it benefits both of you. Um the disconnect from my perspective is split in half. It's at the top that sustainability and procurement do not communicate when it comes to procuring the carriers setting the rates. Awarding sustainability does not exist. So the incentive is broken.

It is pressure to invest in sustainable practice without a willingness to pay more for that investment >> which is frustrating. >> Right. So where so then where do you sit like where does your company sit where does the solution sit in that?

>> Yeah. So the power of high credibility data visibility uh an easy way to share data being a third party administrator so that carriers are protected from sharing data that they wouldn't otherwise want their customers to see and vice versa. um basically just levels the playing field where you can understand why you're

getting the rate that you are. You can advocate for yourself as a fleet if you have that data to say, "Hey, I did invest in this and I did improve my performance x% since last year. This is what the our new alternative fuel stack.

This is our plans for the future." >> Yeah. And like no, we're not going to accept that rate. And as a shipper, you're motivated to say, "Wow, like I can compare you against these other hundred carriers and I can see that like your performance is better and because of it, I'm going to award you this

higher volume." >> Right. >> Well, I mean that's I just wrote that down. Sustainability not rewarded. >> Yeah. >> Traditionally. So that's >> that's the problem. >> That's that's really powerful. I love that. Um Okay. Regulation. So you you had said something which I think is so funny is deregulation is good for trucking.

>> It is. [laughter] >> Okay, let me rephrase. You're right. Deregulation is good for trucking sustainability >> for Yes. >> So that seems backward to me. it. Um, well, it's interesting because all of the reg Well, I'm just going to broadstroke quickly share that environmental regulation set by the EPA is a different type of environmental

regulation than the one that helps or hurts greener. Okay? So, um, like for example, you saw this 2009 endangerment finding repeal, um, that came from this administration that basically said that carbon dioxide is not considered a harmful gas.

>> Mhm. >> Which on a personal level, it's kind of like what are we doing? Yeah. Right. >> Right. It's like that's a a public health hazard, but that is an uh engine and emission threshold like that impacts the OEM. that doesn't impact um like the pressures to disclose your carbon footprint. Um in the same way that

there's EPA engine phase regulations for OEMs and again they got repealed but the OEMs had already like manufactured their cars through what 2030 and it's probably going to get put back into place and so they're just going to double down on what they've already built. But um I think that the reason I think

deregulation is good for sustainability and trucking and logistics is because there's a ceiling when it comes to regulation. It is a reporting fire drill. It is entirely compliance driven. You're expected to disclose these 300 things. You do it once a year. You're done. You're not rewarded for it. Um and it is just a a time, labor and financial

cost to prepare. When it is deregulated and the pressure is coming from your customer, there's no ceiling. >> You can there's opportunity to differentiate yourself >> and an opportunity to essentially be rewarded for it, >> right, >> from your customer. Yeah.

>> Wow. Interesting. That is so crazy for me to try to make sense of because uh there is just in in in climate tech, clean tech, whatever word you want to I like climate tech, but whatever word you want to use >> for this space there there's there's so and deep tech in general, you have to use regulation

to like create a market and subsidize the companies that are building it until it creates until the the the cost structure >> Yes. allows companies to exist >> prosperity. >> So the so the relationship between regulation and climate tech in my head has always been >> yeah you can overregulate it can create

some uh public perception that may not be helpful in general but like very tangibly uh there's a lot of climate tech that's driven by uh or at least accelerated by regulation. It's really interesting to hear that in this particular case because of it's it's not that like oh we're deregulated we can do whatever we want. It's more so

like the the drivers for this industry this hard to bait industry to become more sustainable if more of it comes from the market than regulation then we're better off >> there 100 times over always going to be more responsive to the market than regulation.

>> Yeah. >> Always. And I think also what you just described is very true in the sense that when the market is when climate is intensely deregulated. It's not that the vertical collapses, it's the way that you talk about the technology within climate tech that changes and it is better, cheaper, faster, more efficient.

>> It's not if you don't do this, you're going to get a penalty or fine, comply or die. And that was where Greener started. Y >> and it does not work. It doesn't work for trucking. It probably doesn't work for any industry.

>> Um okay. So, so quickly because I do want to I do want to cover um these notes I have about where you guys are going and what this means. So, uh last two things about regulation. First thing is when there's uh when there's regulation that applies to a company that's in Europe or I guess well no this

is Europe specific. So if a company's headquartered there or they operate there or whatever and then they operate here also and this is and you know federally there's not the same regulation. How does a company deal with that?

>> Yeah. So Europe um has [clears throat] been a core accelerant of sustainability strategy globally even for US headquarter companies because very similar to when you see state level regulation that's very broad in scope. Europe is also very broad in scope where I could be a US headquarter company, but if I have a subsidiary that operates in

Europe that does over $150 million in annual revenue, I have to disclose my entire carbon footprint, including my US supply chain operations. And so whether a single policy exists in the United States at a federal or a state level suddenly becomes irrelevant because I'm doing the same type of reporting fire drill >> and having to maintain my strategy and

my commitments because I'm subject to European regulation. And so I think a lot of times that's why you see the Fortune 500. Maybe they're not publicizing that they're sticking with their sustainability commitments cuz it's not advantageous in this market, but nothing has changed about their process because they know that they're they're a global company.

>> Yeah. >> Mhm. >> And that's that's really interesting. Um and so and and then something uh something else that you had mentioned that I don't understand is regulation and capital cycles are different. >> Yes. So the best way that I can describe this is well two ways. when the policy is overturned and it impacts

equipment. So like emission testing for engines is repealed. The threshold that the EPA sets for what an engine is allowed to emit is then either taken away or it's increased. the cycles that equipment are produced on and purchased on are much longer than the regulatory cycle of four years if a new administration comes in and

overturns things. And so you could just generally think of it going like this, right? It's like every four years it goes back and forth, back and forth. probably not to the extreme that it is in today's current market or with this administration. But because of that, it is extremely I would say advantageous for the OEMs

and for the fleets um to not assume that this will always be something that's deregulated. Um, and I think that's when in a similar way when you see companies that double down on they're just going to stick with their guns in case this comes back into effect, it's more sustainable for the business to actually

assume that this will again become regulated. Um, and so that is I don't know if that makes sense. Well, so so you're so you're saying that from a business perspective, businesses have to in in this industry with capital cycles that are that are much longer than regulatory cycles.

>> Yeah. >> They still have to find a way to comply to regulation, but in reality given the structure of their business, it's hard to like map exactly. >> It's really hard to know what is going to go on.

>> It complies. >> Yeah. And I think like if you if we take this 2009 endangerment repeal for example or we take >> the EPA removing the phases of stricter emission standards for the engines, >> the primary OEMs that would be producing the engines that just got deregulated have already produced them to that

standard like years in advance of when they're going to become commercially available. Right. >> So for them to remove the process of what it took to get those engines up to standard or to make their technology less efficient is more expensive than just complying.

>> Okay. All right. So lastly um on on this uh on this regulatory thing I just wanted to know we mentioned CSRD >> Mhm. >> Europe >> Europe >> SB253 >> Mhm. California. What is scope 3 disclosure? Investor-driven scope 3 disclosure.

>> Scope 3 in general um means any emissions that are produced upstream or downstream of the reporting company. >> Okay, >> there are 15 categories. Um and two of those 15 categories are upstream emissions associated with transportation and distribution. Downstream emissions associated with transportation distribution. It's like very complex nomenclature for the supply chain. So

the supply chain falls under scope three and because of these regulations and because of shareholder pressure because of investor consumer pressure um large brands large organizations and companies have to disclose scope 3 which includes the supply chain. Um and that's where the lack of visibility becomes a concern.

>> So so we talked we talked a lot about uh past contexts for me. Mhm. >> So that I can know what we're talking about. Talked about present day, but uh where what's the regulatory environment looking like you know the next 6 12 18 months like how is this going to impact companies uh in the future?

>> I think near term you can expect that SB23 filings are due August of 2026 this year. So in 2 months and um that will be in effect. Um it is considered a grace period where the rigor and the assurance and the standards at which you disclose.

Um there's more flexibility in how what you disclose is being evaluated compared to what is planned for 26 sorry for 27 28 29 30 and into the future. It's supposed to phase in with intensity. Um and then I would expect that CSRD stays the course. You will have push back from companies as always, but um I think

unlike the US, you can always anticipate that Europe as a whole will continue to require some level of disclosure. Um as far as other things to expect, there's a few states that have put in place copycat regulations to California's SB23.

>> Wow. very broad scope uh private or public companies that make over x number of millions or billions of dollars um that do business in state. >> So do you know like are are we able to talk about which states those are at the moment?

>> New York, Washington, and I believe Oregon, but that might not be right. >> Wow. >> Yeah. >> Good for them. I love that. >> Yeah. Uh all right. So this has been insane for me. This has been uh a fire hose of information. Uh it's it's been a whole college course on

uh shipping, carrying, trucking, procurement, um regulation, data management, all of the stuff that we talked about. And it's amazing that like um the intensity I think that you absorb all this information with like being in the industry talking to your customers having the success >> that you have. So what is the the big

picture narrative here? Like whether we're talking about sustainability or not, what I'm gathering from uh our our conversation and this one is something I actually wrote down which is it's it's about clarity of data across across the board. Just being able to manage your business better. I mean, is that >> um is that something you you'd agree

with that that's a a big like a big picture theme for greener or you know what what is it that uh you guys are are doing outside of just helping the planet, you know? Yeah, I think it's exactly what you said where the most impactful actions can only be made with like I I guess the best way to say

it is the quality of data impacts the quality of your decisions. When you don't have any data at all, you can't take an action. And so, um, trying to provide data that never existed before to the people that have the ability to make a change that is impactful, um, is ultimately what we're trying to do and

to create infrastructure so that fleets are rewarded for their sustainable and efficient performance. >> Yes, that that should be on a sticker. I think that's great. >> Yes. Um, so before before we cut, um, is there anything off the top of your head given this conversation else that you wanted to to speak on? Anything I could

just write down? Then we could I could just ask you and you could ramble about it. >> I don't think so. I feel like we covered everything. >> Yeah, you covered a lot. >> Yeah. Thank [laughter] you so much. That was like perfect.

>> All right, then. Uh, are you sure? Just last last chance just to get like again, we could even cut it. I don't know about any of this information. No, I I I feel really good about everything that we talked about. I'm excited.

>> All right, great. So, in the end, thank you for coming back. Thank you for being a part of the growth. It's been unbelievable to see how much success you've had uh in the last seven, eight months. Uh I'm so excited for, you know, the next seven to eight months and uh and to see where you go. So, thank you

for uh running through this and uh I look forward to the next one. >> Thank you. Thanks for having me.