The Carbon Number Just Became a Settlement Number, and Most Freight Systems Aren't Ready

Carbon used to be something you reported at year-end. Now it's something you settle on every invoice. That's a completely different bar for accuracy.

The surcharge is the tell. Where carriers once absorbed the cost of carbon, they now pass it through as a discrete line on the freight invoice, a figure that has to be computed, allocated across a shipment, paid, and, more and more often, explained to someone holding an audit checklist. A cost that answers to finance behaves nothing like a metric that once answered to no one.

For years, the emissions attached to a shipment answered to no one. The figure was estimated once, aggregated into a sustainability report, and reconciled against nothing. Transportation execution sat with operations, emissions calculation sat with sustainability, and financial settlement sat with finance: three teams, three systems, three figures that never had to agree.

They have to agree now, because carbon acquired a price and a paper trail at the same moment. When emissions cost real money and that money lands on an invoice, the figure a company pays has to reconcile with the figure it reports.

"Carbon changed jobs," says Ajay Bhaktharahalli Nagesh Hemambika, an SAP Transportation Management and Event Management specialist whose career spans complex transportation and settlement work across major logistics organizations, including Maersk's North American operations and Gulf Warehousing Company in Qatar. "Carbon stopped being a metric and started being a cost. It used to be a reporting output. Now it is a line item that gets charged, apportioned, and settled. And the moment something becomes a line item, it has to be as accurate as the money sitting next to it. Most transportation environments were never configured for that."

Drawing on his experience resolving complex transportation and freight-settlement issues within Maersk's North American operations, Ajay argues that the controls used to protect freight settlement now have to be extended to carbon calculation, because a weakness in one is now a weakness in the other.

That observation changes where a logistics business should control its emissions data: not only in sustainability reporting, but inside the transportation and settlement process that produces the underlying number.

Three Layers That Used to Be Separate

The argument is structural, so the structure is worth seeing. An emissions figure is not born in a sustainability tool. It is produced, whether the organization realizes it or not, by the transportation system along a path that also produces the freight invoice:

Transportation order → freight unit → execution event → distance / mode / equipment → emissions calculation → carbon surcharge → freight settlement → invoice → reporting

Follow that path one way, and it settles money; follow it the other way, and it accounts for carbon. The distance that prices the freight is the distance that drives emissions, and the execution event that confirms the move should refresh both the charge and the carbon figure.

"People treat emissions as a separate workstream with its own tool," Ajay notes. "There's no separate emissions data. There's transportation data, and someone downstream decided to call it emissions data, too. If the distance is approximate, everything built on top of it is approximate: the cost and the carbon both."

The emissions figure comes from the same master data and execution records as settlement does. If your distance logic is approximate, your cost is approximate, and your carbon is approximate right alongside it. You can't be rigorous about one and casual about the other.

Where the Chain Breaks Inside a Transportation System

This is where the case turns concrete, and where a generic sustainability article usually goes quiet. The failure modes are not exotic. They are ordinary configuration gaps in the transportation platform, the kind that stay invisible until an audit or a dispute drags them into the light.

Among the seams he points to are emissions charges configured as manual or lump-sum charge types instead of running through the same calculation sheet as the rest of the invoice. The same gap appears whenever a charge template is validated separately from the calculation engine that should be driving it. The result cannot be traced back to its underlying transportation data, and it does not necessarily recalculate when the route changes.

Distance Basis Divergence

Emissions are determined using planned or geographical distance while settlement runs on actual routed distance, so the money and the carbon are computed from two different numbers from the very first step. On rerouted lanes, the gap widens.

Default Factors Overriding Primary Data

A generic modal average is applied even when carrier-provided primary data exists because the master-data linkage is not maintained, and nothing flags that a default was used instead of a real figure.

Surcharges Modeled Outside the Calculation Logic

The emission or ETS surcharge is booked as a manual or lump-sum charge type that bypasses the calculation sheet, so it cannot be traced back to the freight unit's distance and weight and doesn't recalculate when the route changes.

It behaves like the worst accessorial on the invoice: high-value, low-traceability, and first to be disputed.

Granularity Mismatch on Multi-Stage Moves

Emissions are computed at the order level on a multimodal move that cannot be apportioned by stage. Cost apportioning and carbon apportioning therefore never reconcile across legs.

Stale Recalculation

Charges recalculate when conditions change, but the emissions figure remains at the first estimate because no execution event re-triggers the calculation.

Each of these produces a figure that looks defensible in isolation and falls apart under reconciliation.

"None of this is dramatic," Ajay says. "It's a gap that widens one shipment at a time, so slowly that nobody's watching it until a reconciliation forces the question. It accumulates quietly, shipment after shipment, until someone has to explain to a regulator or a customer why the carbon you paid for and the carbon you reported are two different numbers."

Four Regulatory Forces: Why They Are Not Interchangeable

Much of the market confusion, Ajay argues, comes from collapsing distinct obligations into a single word: "compliance."

For a transportation organization, they are four different things, arriving on four different timelines. Precision about which is which is itself part of the expertise.

1. Transport Emissions Calculation Standards

These govern how an organization is expected to calculate the emissions figure. Methodologies such as the GLEC Framework and ISO 14083 govern how a tonne-kilometer becomes a defensible emissions number.

ISO 14083:2023 is the international standard for quantifying transport-chain greenhouse-gas emissions, building on the methodology established through the Smart Freight Centre's GLEC Framework. GLEC Framework v3.2 supplies current emission factors and stays aligned with the ISO standard.

Together, they provide a methodology for turning distance, weight, and mode into a defensible emissions number, including how legs of a multimodal move are split and reconciled.

2. Corporate Sustainability Disclosure Requirements

These govern what an organization must report and have assured, covering upstream and downstream transportation within broader Scope 3 obligations.

Transportation typically sits within Scope 3 of a company's broader emissions inventory. For organizations doing business in or with the EU, corporate sustainability reporting requirements can include the Corporate Sustainability Reporting Directive, or CSRD.

This layer is most exposed to regulatory change, so confirm the specific regime and phase-in relevant to your target audience close to publication rather than treating it as static.

3. Maritime-Specific Carbon Regulation

These sector-specific rules place compliance and cost obligations on the movement itself.

Two regimes are now particularly relevant: the EU Emissions Trading System, which extended to shipping starting in 2024 and reached full phase-in coverage in January 2026, and FuelEU Maritime.

The two address different issues. ETS prices emissions, while FuelEU Maritime addresses the greenhouse-gas intensity of the energy ships use. Both, however, attach a real, dated compliance and cost dimension to specific maritime movements.

4. Commercial Freight Surcharges

These are contractual carbon or emissions surcharges that carriers pass through on invoices.

They are not regulations. They are commercial costs, and they land squarely in the settlement layer.

These four concepts are related but not interchangeable. They feed the transportation chain at different points: one shapes the calculation, one governs the report, one prices the movement, and one hits the invoice.

Treating them as interchangeable is how organizations end up with a paid figure and a disclosed figure that cannot be reconciled.

What Settlement-Grade Carbon Actually Requires

Ajay's constructive point is that the industry does not need a new discipline. It needs to apply the controls of an existing discipline to a figure it has historically treated too loosely.

Settlement-grade carbon accounting, in his framing, means giving the emissions figure the same controls a financial charge already gets.

It should:

• trace back to the execution record that produced it;
• draw on primary data wherever primary data exists;
• recalculate when conditions change rather than remain a stale estimate; and
• reconcile between what is paid and what is reported.

Where automation cannot yet reach, such as an incomplete carrier feed or a lane with no primary source, the answer is a controlled fallback with a documented assumption, not a silent default that no one can later explain.

"A wrong number that looks right is worse than no number at all, because nobody goes back and checks it," Ajay says. "The hard part isn't building the calculation. It's knowing when to trust it and when to make a human look at it.

"The instinct under pressure is to automate hard and hope the numbers are close. But a system that confidently settles on the wrong figure is more dangerous than one that flags where a human needs to look. Knowing where automation can be trusted and where it cannot: that judgment is the whole job."

Where This Goes Next

Ajay expects the gap to widen quickly between companies that treat carbon as a report and companies that treat it as a control.

He points to three developments happening roughly at once: carbon data starting to show up inside the same audits that already check freight-cost accuracy rather than living in a separate sustainability review; emissions traceability becoming an actual line item on carrier and 3PL scorecards during procurement rather than simply a "nice to have"; and more paid surcharges being checked against what companies disclosed, potentially creating uncomfortable restatements at organizations that allowed the two numbers to drift apart without anyone noticing.

His advice to logistics leaders is deliberately unglamorous: do not start with the reporting dashboard.

Start with the transportation and settlement layer, because that is where the figure is now priced and where it will first be challenged.

The organizations that build carbon accuracy into that layer while the pressure is still manageable, he argues, are the ones that will not be explaining a reconciliation failure when the scrutiny arrives.