SUSTAINABILITY IN LOGISTICS PRACTICE
R. Pieters, H.H. Gloeckner and S.J.C.M. Weijers
University of Arnhem and Nijmegen
Reinder.Pieters@han.nl
ABSTRACT
This conceptual paper wants to emphasis the use of the concept of sustainability
within logistics and especially transportation. While working on a new tool to help
companies develop sustainable European networks, we discovered that we wanted
to use a specific concept of sustainability: People, planet and profit. This paper will
first discuss the main concepts of sustainability and show a tool which could aid
decision makers in the choice between networks in Europe. We will show that
making the results of network possibilities visible will aid these decision makers and
show the implications on sustainability.
INTRODUCTION
Effectiveness and cost reduction have always formed the main focus within
logistics, and perhaps always will be. But next to these well known focus points,
society demands more from all branches of industry. Aspects like sustainability
have become en vogue especially since Al Gore’s An Inconvenient truth (GORE
2006) reached a universal audience. Whatever our personal views on these aspects,
sustainability will be one of the aspects on which the performance of an industry
will be judged. Logistics has become aware that it should cope with demands on
sustainability as well. Was earlier sustainability something done by individual
companies, now measures to make logistics more sustainable have emerged with
an emphasis on transportation.
To understand what logistics should do in order to become more sustainable, a
clear cut idea what it implies is needed. But the concept of sustainability has many
connotations. Some authors have recognized over fifty different definitions (PEZZEY
1997). Too much for intellectual comfort and a clear sign that a worldwide general
recognized definition is still lacking. Still All definitions pay homage to one of the
best known definition as given by the Brundtland Commission (WORLD
COMMISSION 1987) which states that:
“Sustainable development meets the need of the present without compromising the
ability of future generations to meet their own needs”
This definition however does not give any clue how to achieve and measure
sustainability. For transportation this lack does not help to monitor her contribution
towards a cleaner environment. This could cause trouble as links have been laid
between the emission of gases and global warming. United Nations Conferences like
Kyoto in 1997 tried to get countries to restrict these emissions. Under the Kyoto
Protocol the European Union (the EU-15) committed to reduce greenhouse gas
emissions by 8% by 2012 compared to 1990. More recently the European Heads of
State and Government (EU-27) decided to reduce greenhouse gases by up to 30%
by 2020. They also established targets of 20% renewable energy and 20% energy
efficiency to be achieved by the same date.
TRANSPORTATION MADE GREENER
With all government attention focused on these gasses, it should not come as a
surprise that also logistics concentrates on reducing truck exhaust. This includes
emission reductions of Carbon Dioxide (CO2), Nitrogen Oxides (NOx) and
particulate matter (PM), which pose the most serious health problems. In December
2007, the European Commission proposed to reduce emissions from heavy-duty
trucks and buses by 80% for NOx and 66% for PM compared to the current
standard caps on pollutant emissions. The Euro standards are part of a broader EU
strategy on clean air, which aims to reduce illness and related health costs, like
premature deaths related to pollutant emissions. From 1 Jan. 2014: the regulation
emission limits will apply to new heavy goods vehicles. The registration, sale and
entry into service of vehicles that do not comply with the standards will be
prohibited (EU 2008).
In some countries restrictions have been set to prevent polluting cars to use certain
areas. As for instance in Germany where whole regions as e.g. the Ruhr Area,
Cologne and Berlin have been turned into so called Umweltzonen or “Environmental
Areas”. In these areas all cars are obliged to carry a label which indicates how far a
car may penetrate an area. Local councils may refuse entry of certain labels within
their own jurisdiction. At present, all trucks which want to deliver goods in these
areas still are excluded from this restriction, but after September 2009 all
exceptions require a special permit. Failing to meet these regulations will be
penalized with a fine of €40 euro and one point in the Flensburg register. All
German traffic violations are with certain points and when the total amount reaches
18 points, the driver licence will be revoked.
With governments, local, national and European, concentrating on the reduction of
emission, it should not come as a surprise to find that most Logistic Service
Providers (LSP) have opted for solutions in this field. These options can be split into
four categories:
1. Cleaner cars
 Modern trucks have become much cleaner as
engines are designed to produce less exhaust.
For instance Scania P-, R-, and T-series have a
12-litre Euro 4 engine that features emission
reductions of NOx by 30 percent and by 80
percent of particulates compared with Euro 3.
 Soot filters can help to reduce the emission of
soot and particle dust. DAF trucks for instance
promises that her trucks can get 50% fewer
particulates by equipping the Euro 5 engines with
a passive soot filter, particulate emissions can be
further reduced by up to 50% to a value of
around 0,015 gram/kWu.
2. Fuel
 Truck engines are designed to be fuel efficient

3. Mileages reduction

4. Alternative modes

thanks to improved aerodynamics, smarter
control of engine auxiliaries as well as lighter
trucks
Biofuel like rapeseed derived biodiesel (RME)
generates less emission as compared to
petroleum diesel. Policymakers would like to see
more biodiesel being used. The EU wants to
increase the use of biodiesel from 2 percent now
to 5.75% of all transport fuels by 2010. The goal
is to increase this to a 10% share in 2010.
This can be achieved by:
 full truck loads, less empty vans will be
using the roads;
 placing shipments to the same destination
in one truck. This implies coordination
between partners and even between
potential LSP competitors;
 getting cargo for the return trip;
 getting bigger trucks like the LZV. In 2004
the
Langere
en
Zwaardere
Vrachtautocombinatie (Longer and heavier
freight combination) or LZV has been
introduced in the Netherlands. The LZV can
be compared with the Road Train from
Australia. An LZV or Ecocombi has a
maximum length of 25,25 meter and
weights 60 ton. A normal truck has a
maximum length of 18,75 meter and the
maximum weight for the Netherlands is 50
ton. As the volume increases but the fuel
use remains almost the same, the fuel use
can be 4 till 30% lower compared to a
conventional truck The Dutch government
wants to gain more insight into the pro’s
and con’s of using an LZV and is expected
to make a final decision in 2012.
Trucks are flexible but not the only way of getting
something shipped. More modes are available.
Transportation by water could be good alternative
for road transport. Planes have the advantages of
speed, but fail in emission.
It is not easy to compare all these aspects with each other as some have hidden
costs. For instance comparing biodiesel with petroleum diesel should also include
the emission generated during production of the fuel. Petroleum diesel emits 85%
of its greenhouse gases at the final stage, when burnt in the engine. By contrast,
two-thirds of the emissions produced by biodiesel occur during farming of the crop,
when cropland emits nitrous oxide (N2O), that is 200-300x as potent a greenhouse
gas as CO2. Another example: during the last decade new truck engines have been
developed which have made them cleaner compared to rail and water.
OTHER WAYS TO LOOK AT SUSTAINABILITY
Just looking at the effects during transportation is evidently not enough. Measuring
the carbon footprint could be of help here. The carbon footprint is a measurement
of all greenhouse gases we individually produce and has units of tons (or kg) of
carbon dioxide equivalent. This includes the primary footprint from direct emissions
of CO2 from the burning of fossil fuels and the secondary footprint or the indirect
CO2 emissions. These are connected with their manufacture and eventual
breakdown like for instance the recycling of trucks. Some companies have tried to
make this carbon footprint visible to its partners. Mars Food BV for instance will put
the CO2 emissions generated by a delivery on the shipment papers (JORRITSMA
2009). They hope it will have an impact on customer order behavior.
An interesting concept is Cradle-to-Cradle (C2C). C2C places sustainability in a very
different setting. According to C2C (MCDONOUGH AND BRAUNGART 2002) the old
idea of sustainability as explained above is wrong. It simply implies that you want
to limit the negative aspects but not consider whether it all could be avoided.
According to C2C it should be a circle. Whatever you put into a process should once
been used, be used again and again. The old fashion way of recycling by turning
waste in lower grade material should be changed into higher grade material.
For transportation, requiring to overcome friction and using (fossil) fuel, this aspect
alone will be reason enough to have sincere doubts whether it will achieve this goal.
For concepts like transportation may even seem more far fetched or perhaps
unattainable. An additional problem is that it implies that all links in the chain will
have to work together to ensure that all waste generated in this chain is upgraded
when recycled. Funny enough McDonough and Braungart even use transportation
as an example where once C2C almost was achieved. They state that in the time of
tall ships wind provided the energy and trees the material for building the ship. The
wood would disintegrate and the circle would be made complete. They apparently
have not considered the effect of ship building on the environment at that time. The
construction of the Great Armada in 1588 required huge quantity of prime timber.
For this whole areas of Spain were deforested and still show the scars today.
When all partners: logistic service providers, shippers, governments and other
stakeholders all seem to hold different ideas about what sustainability means and
how it can be achieved. How can we ever achieve an agreement on this issue? For
this we would like to use the approach as given by the concept of People, Planet
and Profit (PPP). PPP wants to consider all aspects which could influence a decision
on sustainability. Innovators and initiators are often people that develop business
plans based on a vision and concept. In order to develop the provisioned new
supply chain, it is necessary getting the board and / or external investors prepared
to make, sometimes very large, investments. That requires an acceptable Return
on investment (ROI), both on an economical and strategic level. That in many cases
asks for pre-cost calculations.
Funds from authorities may
help to overcome start-up
costs, but also these funds
always ask for quantitative
underpinnings of the plans,
and quantitative insight in the
predicted benefits of the new
supply chain (external costs,
regional
development
etcetera). So, pre-calculations
of both market costs and
external costs (people, profit,
and planet) in many cases are
necessary as a support to new
sustainable supply chains and
networks that are started up
by companies.
Figure 1 The three P’s: circles of influence
It is this aspect that the Transumo wants to promote. Transumo (TRANsition
SUstainable MObility) is a foundation founded in 2004 by the Dutch Government to
find new ways of making the Dutch transportation sector more sustainable. They
want to help companies build up their European Networks, by offering a set of tools
that not only focus on gaining efficiencies and effectivities, but also help them to
find radical new solutions, also in terms of sustainability. The goal should be to
improve competitiveness within Europe and the world of the Dutch transport sector
(‘Profit’) and to preserve and improve spatial and ecological (‘Planet’) aspects of
mobility, while at the same time improving the social working conditions (‘People’).
EUROPEAN NETWORKS MODEL
One of the themes within Transumo is to develop a tool to aid medium sized
companies (SME) when building up their Supply Chain Networks. These tools should
look at new approaches to use networks differently, looking for alternative forms of
modal transportation and allow a glance in the situation in the (near) future by
setting up new European networks.
The results of European Networks model should be to help companies build up their
European Networks, by offering a set of tools that not only focus on gaining
efficiencies and effectivities, but also help them to find radical new solutions, also in
terms of sustainability. The European Networks model should fit in with Transumo’s
mission to accelerate and/or encourage this necessary transition into a renewed
mobility phase. This transition should lead to improvements that will strengthen the
economy. This model should become operational at the end of 2009.
The general assumption in model building is that the end-users – say in our case
logistics managers – will be convinced by quantitative arguments. Knowing that a
given alternative solution will raise efficiencies substantially, would be enough
argument to convince logistics managers and their board, is the general feeling. In
business practice this does not always appear to be the case. Although we are
convinced that modeling can be a helpful argument, we set ourselves the question
whether any other tools might be of help as well for companies in order to get a
breakthrough in building up a European Network... In certain circumstances for
example tools that help companies in guiding cooperation better, might be more
fruitful than any other tool. Because, failures in inter-firm cooperation processes
range between 60-80 percent of all cooperation project. That is a lot. And then,
cooperation supporting tools might be very effective. In other cases companies may
be better off by making scenario studies; in general transport companies are not
used making scenario studies. In fact that is strange because most transport
companies are extremely dependant on their environment, and in such cases
scenario tools are the best tools, we believe. Can we help them with a dedicated
scenario-tool, was the question we posed ourselves.
Most Anglo-Saxon models assume that relations in principle are linear, and boil
down to costs. At the same time intermodal opportunities do not have a high
priority in traditional modelling, nor do PPP-objectives. So we decided to build a
model – or at least a set of tools, that is different in these aspects. That means, a
model that is able to deal with irregularities – suppose, for example, that a planned
transport flow has to pass another terminal that expected within the corridor
Rotterdam - Ruhr – Russia. We opt as well for a multi-layering model, on the one
hand operating on an international scale, and on the other side offering ‘simple’
lane-calculations.
The goal of the model is to be a really helpful tool for companies, that offers them
insights in the opportunities of different modalities, keeping sustainability in mind.
The model should help policy makers as well in judging companies in terms of
sustainability, position within international Supply Chains, corridors, and
opportunities for intermodal and energy friendly transport. The goal of the model is
to be a really helpful tool for companies, that offers them insights in the
opportunities of different modalities, keeping sustainability in mind. The model
should help policy makers as well in judging companies in terms of sustainability,
position within international Supply Chains, corridors, and opportunities for
intermodal and energy friendly transport.
THE STRUCTURE OF THE EUROPEAN NETWORKS MODEL
The European network Model has a simple frame. It consists of three independent
tools which can be used to support each other (WEIJERS 2009). These tools were:
1. A calculation tool for distances and possible alternative modes. The user can
give his starting point and the location of his clients. The tool will generate a
visual overview of the route by the chosen mode and also make visual the
various alternative using modal shift and alternative modes like river barge,
short sea or train. If the user has given his financial data, he can see not only
the effects on the environment and lead time, but also the costs.
2. The scenario tool (SCHWARTZ 1991) is for allowing the user to simulate
possible situations for himself, the customer, partners and/or other
departments. Using a step by step method the user will be guided to make a
scenario, determining for himself the key drivers and learn to use his
imagination. This could be a great tool to help logisticians to think “out of the
box”.
3. And
finally
the
cooperation tool. Supply
chains are made and
broken by the quality of
the partners in this
chain.
Mismatches
between links in the
chain could hinder the
effectiveness
and
efficiency of the whole
operation. With this tool
the user can fill in a
questionnaire
and
determine whether a
mismatch might exist
and
suggestions
are
generated
for
improvement.
Figure 2 the layout of the European Networks
model
The result of the model is to get an overview of what consequences a scenario
would have on aspects like speed, costs and emission as is shown in the two figures
below:
Figure 3 result scenario minimal distance
Figure 4 result scenario minimal CO2 emission
By defining different scenarios and applying correct data an idea of what could be
done and which consequences it would have are made visible. All possible road,
water, rail and some air links form the basis to calculate the various networks. As a
result the various possible modes of transportation can be made visible in Google
Earth:
Figure 5 Transport possibilities for a certain network
CONCLUSIONS AND RECOMMANDATIONS
Transportation will have to put sustainability high on its agenda without forgetting
what its main tasks are: being efficient and generating profit. Looking at aspects
like fuel use or emissions alone will not be sufficient. A decision on sustainability
(Planet) should also be financially sound (Profit) as well as being supported by the
stakeholders (People).
The European Network tool makes implications of choices visible and should help
decision makers to decide how to setup a European Network. Not just on aspects
like costs but also on aspects like sustainability with a well balanced chain to
support it. Understanding the impact of sustainability on such a situation should
helps decision makers to make the right choice. With this model LSP can
understand better how he will be able to serve social aspects like sustainability
without losing touch with the (financial) reality. The scenario tool in the model
allows the user to image possible futures and consider possible actions.
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