Who controls transport emissions and who cares? Investigating the monitoring of environmental sustainability from a logistics service provider’s perspective

• DOI: https://doi.org/10.1108/IJLM-11-2015-0197
• Pages: 798-820
• Published date: 14 August 2017
• Date: 14 August 2017
• Author: Fredrik Ralf Nilsson,Henrik Sternberg,Thorsten Klaas-Wissing
• Subject Matter: Management science & operations,Logistics

Who controls transport emissions

and who cares? Investigating the

monitoring of environmental

sustainability from a logistics

service provider’s perspective

Fredrik Ralf Nilsson and Henrik Sternberg

Department of Design Sciences, Division of Packaging Logistics,

Lund University, Lund, Sweden, and

Thorsten Klaas-Wissing

Department of Logistics Management,

University of St Gallen, St Gallen, Switzerland

Abstract

Purpose –The purpose of this paper is to explore the environmental impact of logistics service provider

(LSP) activities in the light of customer priorities and the fragmentation of the road haulage industry in

Europe. It also explores the extent to which LSPs can actually monitor the environmental impact of logistics

activities in the supply chain (SC).

Design/methodology/approach –The research is based on a narrative literature review, an interview

study, a case survey and three in-depth case studies. A framework on sustainability challenges in SCs,

derived from the literature, is used to structure and analyse the findings.

Findings –Despite the ambitious environmental schemes communicated by several LSPs, they show little

interest in, and exert little control over, the actual emissions generated from their transport operations. It is

clear from the results that any real concern from customers for environmental solutions which negatively

influence the cost and time requirements of logistics services is not yet a reality.

Research limitations/implications –This paper implies that LSP sustainability cannot be investigated in

isolation if a company does not manage its proprietary resources (like owning trucks and employing drivers),

but rather engage subcontractors.

Practical implications –Environmental policies among different LSPs appear to be similar as policies,

but differ in practice. This variation of practices emphasises the importance of follow-up control by

environmentally aware buyers of logistics services.

Originality/value –This paper represents a novel approach as to how LSP environmental policies should be

viewed. It highlights the concrete need for action to achieve the environmental targets of 2020 and 2050 for

carbon emissions from road transportation.

Keywords Supply chain management, Logistics service provider, Greenwash, Haulier,

Transport efficiency

Paper type Research paper

1. Introduction

For the past decade, many large companies have published an increasing number of

sustainability reports: corporate social responsibility (CSR) reports and codes of conduct

(Carter and Rogers, 2008), often as part of their annual reports or as separate documents

(Porter and Kramer, 2007). Consequently, these companies are showing an increased interest

in, and paying more attention to, the environmental performance of their outsourced

activities (Pålsson and Kovács, 2014). Considering the high level of outsourcing of logistics

The International Journal of

Logistics Management

Vol. 28 No. 3, 2017

pp. 798-820

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-11-2015-0197

Received 3 November 2015

Revised 5 May 2016

18 July 2016

16 August 2016

Accepted 10 October 2016

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

The authors would like to thank Maisam Abbasi for his contribution in the first study of this research

as well as the reviewers for valuable comments.

798

IJLM

28,3

activities, and the large volume of emissions these activities account for in the supply chain

(SC) (Wu and Dunn, 1994), the environmental performance of logistics service providers

(LSPs) becomes both crucial and challenging to address. Rossi et al. (2013, p. 595) state that

“LSPs feel pressure from their customers, which is the first driver for sustainability […]”.

Lieb and Lieb (2010) also report on LSPs receiving increased attention from their

customers for environmental initiatives (13 per cent of LSPs receive substantial attention

and 50 per cent moderate attention). However, how this pressure or attention is transformed

into practice is not clear from the relevant literature, especially in large networks of actors

involved in supplying logistics services. Furthermore, many firms act in ways to maximise

their own profits and not to maximise SC performance (Narayanan and Raman, 2004). As a

result, despite the considerable impact logistical activities have on the environment, the way

of dealing with environmental challenges in the logistics industry is rather immature

(Isaksson and Huge Brodin, 2013). In the literature reviews on third-party logistics providers

(3PL) by Selviaridis and Spring (2007), and Marasco (2008), for example, environmental

issues are not emphasised as central themes or put forward as areas of interest for further

research. Wolf and Seuring (2012, p. 84) report from their study on procurement of logistics

services that “While 3PL reports an increasing interest in environmental issues, buying

decisions are still made on ‘traditional’performance objectives, such as price, quality and

timely delivery”. In one of the few articles on environmentally focused research from an LSP

perspective, Maas et al. (2012) conclude that environmental differentiation is only a small

part in differentiating LSP offerings and practices, which Isaksson and Huge Brodin (2013)

also confirm.

Currently, several large LSPs, including DHL, DSV and Schenker, have CSR policies, but

many small and medium-sized LSPs still do not. Little research has been carried out on the

challenges LSPs face regarding sustainability (Lieb and Lieb, 2010).

Considering that 3PLs typically own a terminal network but only limited transport

resources (e.g.trucks) (Klaas-Wissing andAlbers, 2010), it is difficult to influenceand monitor

emissions of outsourced logistics activities. Freight transport from an LSP perspective is

crucial to address, but fragmentation in the industry makes both studying and managing

environmental performance very challenging (Sternberg et al., 2013). As shown by

Sternberg et al. (2013), the road transport market (accounting for the majority of transport

emissions) is dominated by small road hauliers, in particular in Europe where small road

hauliers (o20 trucks) make up 70-95 per cent of all road hauliers (Sternberg et al., 2013).

The authors (Sternberg et al., 2013) also show in case studies how the efficiency of logistics

operations suffersfrom co-ordination difficulties between a plethoraof different actors, due to

nested levels of planning and control and a lack of clear areas of responsibility.

How do LSPs perceive and handle the environmentally related requirements of buyers

of logisticsservices? How does the fragmentationof logistics services and the largenumber of

subcontracted service providers, hauliers and subcontractors influence the environmental

work and policiesof LSPs? In other words, how are the environmental policies of 3PLsapplied

in practice, and how do these companies work with their subcontracted transport suppliers?

The purpose of this paper is to explore the environmental impact of LSP activities in

the light of increased customer priorities and fragmentation of the logistics industry, and the

extent to which LSPs can actually monitor and control the environmental impact of logistics

activities in the SC.

The next section provides a literature review followed by the research method.

Employing a mixed method approach, the research is based on narrative literature review

and three empirical investigations: an interview study, a case survey and three in-depth case

studies. The case studies provide deeper insights on the results from the interview and

case survey studies. The results of the studies are presented, followed by a synthesising

discussion, conclusions, implications and suggested further research.

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Monitoring of

environmental

sustainability