Ask a procurement team who is responsible for the carbon emitted by the truck, ship or plane that moves their goods, and you will often get a surprising answer: « the supplier », « the carrier », or « it depends on the contract ». All three answers are wrong — or at least incomplete. Under the GHG Protocol, freight emissions belong to whoever's value chain they serve, split between Scope 3.4 (upstream transportation and distribution) and Scope 3.9 (downstream transportation and distribution). The Incoterms in your purchase orders decide who pays for the freight and who bears the risk — but they say nothing about who emits. That gap is where a significant share of corporate footprints quietly disappears.
Two categories, one blind spot
Scope 3.4 covers the transportation of goods you buy, from your suppliers to you, when you do not own or operate the vehicles. Scope 3.9 covers the transportation of goods you sell, from you to your customers, under the same condition. In many manufacturing companies, these two categories together represent 5 to 15% of the total footprint — and in trading, retail or e-commerce models, far more. Yet they are among the most frequently misreported categories in Scope 3 inventories.
The reason is structural. When a Chinese supplier sells FOB Shanghai, the buyer naturally counts the ocean freight in its own Scope 3.4. When the same supplier sells DDP Rotterdam, many buyers assume the freight is « the supplier's problem » — and the supplier, who has no reporting obligation toward the buyer's inventory, counts nothing. The emissions did not move. Only the paperwork did.
Incoterms decide who pays, not who emits
Incoterms are commercial rules: they allocate costs, risks and customs responsibilities between seller and buyer. They were never designed as carbon accounting boundaries. But because they are the only logistics variable most procurement teams actually control, they have become a de facto reporting boundary — and a source of systematic error.
| Incoterm | Who pays the main freight | Who should report it (GHG Protocol) | Typical mistake |
|---|---|---|---|
| EXW (Ex Works) | Buyer | Buyer, in Scope 3.4 | Buyer forgets legs arranged by the supplier before handover. |
| FOB (Free On Board) | Buyer (from port of loading) | Buyer, in Scope 3.4 | Pre-carriage to the port disappears from both inventories. |
| CIF (Cost, Insurance, Freight) | Seller | Buyer, in Scope 3.4 | Buyer assumes « the supplier paid for it, so it is the supplier's emission ». |
| DDP (Delivered Duty Paid) | Seller | Buyer, in Scope 3.4; seller counts its own 3.9 | Both parties assume the other reports it — or both report it. |
The rule of thumb is simple: if the freight exists because of your purchase or your sale, it belongs in your inventory, regardless of who signed the contract with the carrier. Payment is an accounting fact; emission is a physical one.
The double trap: blind spots and double counting
Misreading Incoterms creates two opposite errors. The first is the blind spot: a flow that nobody counts, because each party believes the other does. The second is double counting within your own inventory: the same shipment counted in 3.4 by the logistics team's estimate and again in 3.1 because the supplier's product footprint already included delivery. Both errors survive audits surprisingly well, because the numbers look plausible in isolation.
There is also a third, quieter trap: optimisation by contract instead of by physics. Switching from EXW to DDP changes nothing in the atmosphere, but it can make a footprint look smaller on paper if the category boundary is drawn along the contract. Assurance providers are increasingly alert to this — CSRD limited assurance already asks how category boundaries were set, and why.
What the standards actually say
The GHG Protocol Scope 3 Standard defines categories 3.4 and 3.9 by the direction of the flow, not by the contract. ISO 14083, published in 2023, now provides a common method for quantifying transport-chain emissions across modes — road, rail, sea, air, inland waterways — and the GLEC Framework operationalises it for logistics accounting. Together they give you a defensible basis: map the physical flows first, then attribute them to categories, and only then reconcile with contracts.
In practice, the data hierarchy matters more than the formula. Carrier-specific fuel data beats distance-based estimates; distance-based estimates beat spend-based factors. Most companies start at spend-based and never move — which is acceptable for a first screening, but not for a reduction trajectory.
Turning freight from a reporting problem into a reduction lever
Once the flows are mapped, freight becomes one of the most actionable Scope 3 categories — far more than purchased goods, where you depend on a supplier's process. Modal shift (air to sea, road to rail), load optimisation, route consolidation and carrier selection are levers you control directly or through your logistics providers. A buyer that knows its freight footprint by lane and by mode can set concrete asks: this lane moves to rail by 2028, this carrier must report ISO 14083-compliant data, this product stops flying.
This is exactly the kind of lever Net Zero Pulse surfaces at portfolio level: which freight flows weigh the most, which suppliers ship the most carbon-intensive lanes, and where engagement should start. And when a priority supplier's logistics need to change on the ground, the Strategic Suppliers Development Program (SSDP) deploys that coherence in the field — beyond paper commitments.
How the usual tools handle freight
| Tool | What it does well | Where it falls short on freight |
|---|---|---|
| EcoVadis | Rates supplier management systems, including logistics policies. | A good policy score says nothing about actual lane-level emissions. |
| CDP | Standard disclosure categories for 3.4 and 3.9. | Declarative and annual; it records what you computed, not what you missed. |
| Watershed / Persefoni / Sweep | Automated carbon accounting, often spend-based for freight. | Spend-based factors hide the modal and lane choices where reductions actually happen. |
| SGS / TÜV SÜD | Assurance of the inventory you present. | Assurance verifies your method; it does not find the flows you left out. |
| BE-CAUSE (Net Zero Pulse + SSDP) | Maps physical freight flows at portfolio level, prioritises the carbon-heavy lanes, and executes changes with suppliers and carriers — at a cost below the administrative time a questionnaire-only approach already consumes. | — |
What to do on Monday morning
- Pull your top 20 purchase orders and note the Incoterm on each: who arranges and who pays the main carriage?
- For each flow, ask the only question that matters: is this shipment in my inventory, in my supplier's, in both, or in neither?
- Check whether any freight is already embedded in supplier product footprints you use for 3.1 — that is your double-counting risk.
- Rank your freight lanes by spend, then by distance and mode: the top of that list is where primary carrier data is worth collecting.
- If a lane flies, ask why. Air freight is roughly 50 to 100 times more carbon-intensive per tonne-kilometre than sea — and the answer is often habit, not necessity.
“The atmosphere does not read contracts. A shipment emits the same tonnes of CO₂ whether the invoice says EXW or DDP — the only question is whether anyone counts them.”