EditEd by AlAn McKinnon, ShAron cullinAnE, MichAEl brownE, Anthony whitEing

GREEN LOGISTICS

Improving the environmental sustainability of logistics

Publisher’s noteEvery possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors.

First published in Great Britain and the United States in 2010 by Kogan Page Limited

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of repro-graphic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses:

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© Alan McKinnon, Sharon Cullinane, Michael Browne and Anthony Whiteing, 2010

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ISBN 978 0 7494 5678 8

British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Green logistics : improving the environmental sustainability of logistics / Alan McKinnon ... [et al.]. p. cm. Includes bibliographical references. ISBN 978-0-7494-5678-8 1. Business logistics--Environmental aspects. I. McKinnon, Alan C., 1953- HD38.5.G696 2010 658.7--dc22

2009037392

Typeset by Saxon Graphics Ltd, DerbyPrinted and bound in India by Replika Press Pvt Ltd

Contents

Contributor biographies vii

Part 1 Assessing the environmentAL effeCts of LogistiCs 1

1 Environmental sustainability: a new priority for logistics managers 3Alan McKinnon1

Introduction 3; A brief history of green logistics research 5; Green logistics: rhetoric and reality 17; A model for green logistics research 19; Outline of the book 22; notes 25; References 25

2 Assessing the environmental impacts of freight transport 31Sharon Cullinane and Julia EdwardsIntroduction 31; Environmental impacts 32; Environmental standards 39; measuring the environmental impact of freight transport 42; Notes 45; References 45

3 Carbon auditing of companies, supply chains and products 49Maja PiecykIntroduction 49; Guidelines for carbon footprinting 50; The carbon footprinting process 51; Success factors in carbon footprinting 59; Case study: carbon auditing of road freight transport operations in the UK 60; Conclusions 65; References 66

iv ❚ Contents

4 Evaluating and internalizing the environmental costs of logistics 68Maja Piecyk, Alan McKinnon and Julian AllenIntroduction 68; Arguments for and against the internalization of environmental costs 69; Monetary valuation of environmental costs 72; Internalization of the external costs imposed by road freight vehicles in the UK 79; Conclusions 93; Notes 95; References 95

Part 2 strAtegiC PersPeCtive 99

5 Restructuring of logistics systems and supply chains 101Irina Harris, Vasco Sanchez Rodrigues, Mohamed Naim and Christine MumfordIntroduction 101; Current state of knowledge of traditional supply chains 102; Green supply chains 111; Gaps in our understanding and priorities for research 116; Consequences and conclusions 119; References 120

6 Transferring freight to ‘greener’ transport modes 124Allan Woodburn and Anthony WhiteingBackground 124; Characteristics of the main freight transport modes 126; Environmental impacts of the main freight transport modes 129; Case study: container train load factors 130; The policy framework 131; Examples of measures aimed at achieving modal shift for environmental benefit 133; Rail and water industries 135; Conclusions 138; References 139

7 Development of greener vehicles, aircraft and ships 140Alan McKinnon, Julian Allen and Allan WoodburnIntroduction 140; Road freight 141; Rail freight operations 150; Air freight 153; Shipping 157; Conclusions 162; Notes 162; References 163

8 Reducing the environmental impact of warehousing 167Clive MarchantIntroduction 167; Scale of the environmental impact 168; Increasing resource intensity 171; Framework for assessing the environmental impact of warehouses 173; Ways of reducing the environmental impact 173; Conclusion 189; References 190

Contents ❚ v

Part 3 oPerAtionAL PersPeCtive 193

9 Opportunities for improving vehicle utilization 195Alan McKinnon and Julia EdwardsIntroduction 195; Measuring vehicle utilization 196; Factors affecting the utilization of truck capacity 199; Conclusion 210; Note 210; References 210

10 Optimizing the routing of vehicles 215Richard Eglese and Dan BlackIntroduction 215; Vehicle routing problems 216; Types of problem 217; Environmental impact 221; Conclusions 224; References 225

11 Increasing fuel efficiency in the road freight sector 229Alan McKinnonIntroduction 229; Fuel efficiency of new trucks 230; Vehicle design: aerodynamic profiling 231; Reducing the vehicle tare weight 232; Vehicle purchase decision 233; Vehicle maintenance 234; Increasing the fuel efficiency of trucking operations 235; Benchmarking the fuel efficiency of trucks 237; More fuel-efficient driving 238; Fleet management 239; Conclusions 240; References 240

12 Reverse logistics for the management of waste 242Tom Cherrett, Sarah Maynard, Fraser McLeod and Adrian HickfordIntroduction 242; Waste management in the context of reverse logistics 243; The impact of waste treatment legislation 246; Reuse, refurbishment markets and take-back schemes 250; Managing waste as part of a sustainable reverse process 253; Conclusions 256; References 259

Part 4 Key issues 263

13 The food miles debate 265Tara GarnettIntroduction 265; Transport and GHGs: is further worse? 266; Transport, the second order impacts and the implications for GHGs 272; Local versus global and the self-sufficiency question 274; Notes 277; References 277

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14 Sustainability strategies for city logistics 282Julian Allen and Michael BrowneIntroduction 282; Urban freight research and policy making 283; Efficiency problems in urban freight transport 285; Urban freight transport initiatives 288; urban consolidation centres 290; Joint working between the public and private sectors 294; Environmental zones 296; Conclusions 301; References 302

15 Benefits and costs of switching to alternative fuels 306Sharon Cullinane and Julia EdwardsIntroduction 306; The main types of alternative fuels 307; Current use of AFs in the freight industry 316; The future 318; Notes 318; References 319

16 E-business, e-logistics and the environment 322Julia Edwards, Yingli Wang, Andrew Potter and Sharon CullinaneIntroduction 322; Business-to-business (B2B) 323; Business-to-consumer (B2C) 327; Restructuring of the supply chain 330; the environmental impact of e-commerce 330; Case study: Online Books supply chain 333; The future 335; References 335

Part 5 PuBLiC PoLiCy PersPeCtive 339

17 The role of government in promoting green logistics 341Alan McKinnonIntroduction 341; Objectives of public policy on sustainable logistics 344; Policy measures 344; Reducing freight transport intensity 347; Shifting freight to greener transport modes 349; Improving vehicle utilization 351; Increasing energy efficiency 353; cutting emissions relative to energy use 355; Government-sponsored advisory and accreditation programmes 356; Conclusion 357; Note 358; References 358

Index 361

Contributor biographies

Julian Allen is a Senior Research Fellow in the Transport Department at the University of Westminster, where he is involved in research and teaching activities relating to freight transport and logistics. His current research interests are urban freight transport, the impact of manufac-turing and retailing techniques on logistics and transportation systems and the history of freight transport.

Daniel Black is a Research Associate at the Department of Management Science in Lancaster University Management School. His research interests include the environmental impact of vehicle routing and sched-uling decisions, stochastic inventory control and optimization problems with particular reference to developing computer-based models.

michael Browne directs freight transport and logistics research at the University of Westminster. Recent projects include: research on the energy use implications of global sourcing, potential benefits from improved city logistics strategies and forecasting future trends in logistics. He has worked on studies for Transport for London, the European Commission, the UK Department for Transport, the Research Councils and commercial organizations. He represents the University on many external committees and boards and chairs the Central London Freight Quality Partnership.

tom Cherrett B.Sc., Ph.D, MCILT is a Senior Lecturer in the Transportation Research Group, University of Southampton. His main research areas include developing sustainable strategies for the collection and disposal

viii ❚ Contributors

of waste and the distribution of goods in urban areas, including distri-bution strategies for sustainable home delivery. He has considerable experience in the areas of incident detection and journey time estimation using urban traffic control infrastructure. He has management and logistics experience from working in the chilled distribution sector.

sharon Cullinane gained her PhD in logistics 20 years ago from Plymouth University. Since then she has continued to lecture, research and publish in the field of transport policy and the environment around the world. Her most recent post was as Senior Lecturer at Heriot-Watt University in Edinburgh. Prior to that she was employed at the University of Hong Kong, Oxford University, the Egyptian National Institute of Transport, the Ecole Superieur de Rennes and Plymouth University. She is now an independent consultant. She is widely published internationally.

Julia edwards is a Research Associate at the Logistics Research Centre in the School of Management and Languages at Heriot-Watt University, Edinburgh. She joined Heriot-Watt in 2006, as part of the multi-university ‘Green Logistics’ project. Prior to that she was a Senior Lecturer in Environmental Management at the University of Wales, Newport. Dr. Edwards has been researching and teaching in the areas of transport and environmental issues for the last 16 years. Currently, her research interests include carbon auditing of supply chains, e-commerce and the envi-ronment, and consumer travel and shopping behaviour.

richard eglese is a Professor of Operational Research at the Department of Management Science in Lancaster University Management School. His research interests concern mathematical and computational modelling for logistics and focus on optimization techniques, particularly heuristic methods, applied to problems of vehicle routing and scheduling. He has worked on a variety of applications including food distribution to super-markets and winter gritting for road surfaces. In 2010–2011 he is President of the Operational Research Society.

tara garnett set up and runs the Food Climate Research Network based at the University of Surrey (www.fcrn.org.uk). Her work focuses on the contribution that the food system makes to greenhouse gas emissions and the scope for emissions reduction, looking at the technological, behav-ioural and policy options. She is also interested in the relationship between emissions reduction objectives and other social and ethical concerns, including human health, animal welfare, international development and biodiversity.

Contributors ❚ ix

irina harris is a research student at Cardiff University. Her research project on ‘Multi-Objective Optimization for Green Logistics’ is jointly supervised by Cardiff School of Computer Science and Cardiff Business School. The objective is to investigate the feasibility of building a multi-objective optimization decision support tool for modelling the physical infrastructure of a logistics network where traditional and environmental objectives are considered simultaneously. The approach focuses on producing a set of viable alternatives for a decision-maker in contrast to calculating objectives as a constraint or prioritizing them.

Clive marchant is a senior teaching fellow at Heriot-Watt University, Edinburgh, where he teaches freight transport systems as well as distri-bution centre design and management. He is an active member of the Chartered Institute of Logistics and Transport as well as member of the Warehouse Education Research Council in the USA. Prior to obtaining a Masters at Edinburgh and Heriot-Watt Universities he had a 25 year career in the third party logistics sector encompassing roles in operational management and the design of distribution networks and warehousing.

sarah maynard BSc, MSc, is a researcher at the Transportation Research Group (TRG), University of Southampton, UK. Since joining TRG in 2004 she has specialized in waste transport research and has been involved in a number of projects funded by the Engineering and Physical Sciences Research Council. Recent research has investigated the transport impacts associated with household waste recycling centres and the benefits of using reverse logistics processes to collect returns and waste generated by different retail supply chains in urban centres.

Alan mcKinnon is Professor of Logistics and Director of the Logistics Research Centre at Heriot-Watt University, Edinburgh. A graduate of the universities of Aberdeen, British Columbia and London, he has been researching and teaching in freight transport/logistics for 30 years and has published extensively in journals and books. Alan has conducted studies for numerous public and private sector organizations, and has been an adviser to several UK government departments and parlia-mentary committees and various international agencies. He is also a member of the World Economic Forum’s Global Agenda Council on the Future of Transportation.

fraser mcLeod (B.Sc. in mathematics, M.Phil. in passive sonar) is a Research Fellow with the Transportation Research Group, University of Southampton, with over 20 years experience of working on transport-related projects. In recent years his work has focused on Intelligent

x ❚ Contributors

Transport Systems (ITS), freight distribution and on the logistics of collecting household and trade waste. The common theme of the research is to suggest methods for improving transport efficiency and evaluating them through the use of simulation modelling, routeing and scheduling methods and mathematical analyses.

Christine mumford obtained her PhD from Imperial College, London in 1995, and is a Senior Member of the IEEE. She is currently a Senior Lecturer at Cardiff University in the School of Computer Science. Her research interests include evolutionary computing and other metaheuristics, multi-objective optimization, and applications focused on combinatorial optimization, particularly vehicle routing, logistic network design, sched-uling, timetabling and cutting and packing.

mohamed naim is a Professor in Logistics and Operations Management at Cardiff Business School. He is a Chartered Engineer and a Member of the Institution of Engineering and Technology and the Chartered Institute of Logistics and Transport. He is a Director of the Logistics Systems Dynamics Group and the EPSRC funded Cardiff University Innovative Manufacturing Research Centre. Mohamed is a former Editor-in-Chief of the International Journal of Logistics and is an Advisory Committee Member for the International Symposium on Logistics.

maja Piecyk is a Research Associate in the Logistics Research Centre at Heriot-Watt University in Edinburgh. She has MSc degrees in economics and logistics. Her research interests focus on the environmental performance of supply chains and sustainability of freight transport operations. Much of her current work centres on the CO2 auditing of busi-nesses and the forecasting of long-term trends in the energy demands and environmental impacts of logistics.

Andrew Potter is a senior lecturer in transport and logistics at Cardiff University. His research has particularly focused on how freight transport can become more integrated within supply chains. While much of the focus has been on traditional supply chain performance measures, more recently consideration has also been given to environmental performance. He has published in a wide range of logistics and operations management journals. Andrew is also a member of the Chartered Institute of Logistics and Transport (UK).

vasco sanchez-rodrigues has a first degree in Chemical Engineering from the Simon Bolivar University in Venezuela and an MBA from the University of Cardiff. Since 2005 he has been a researcher in the Cardiff

Contributors ❚ xi

Business School, initially on the Fabric-to-Furniture project and over the past three years on the multi-university Green Logistics project. His main research interests are the trade-offs between supply chain management and green logistics under conditions of uncertainty. He is now in the process of completing a PhD on this topic.

yingli Wang is a lecturer in logistics and operations management at Cardiff Business School. Before working at Cardiff University, she had a variety of managerial roles in Nestlé China, before completing an MBA in the UK. Her current research focuses on the application of technology in B2B logistics and transport management. In particular, her research has focused on electronic logistics marketplaces. This research formed the basis for her PhD thesis, which won the CILT(UK) James Cooper Memorial Cup in 2009.

Anthony Whiteing is a Senior Lecturer in the Institute for Transport Studies at the University of Leeds. His main areas of expertise are in freight transport economics, distribution, logistics and supply chain management. An academic with some 30 years experience, he has been involved in a wide range of UK and European research projects primarily in the field of freight transport, and is the Principal Investigator on the ‘Green Logistics’ research project.

Allan Woodburn is a Senior Lecturer in Freight and Logistics in the Transport Studies Department at the University of Westminster, London. He is involved in a wide range of teaching, research and consultancy activities in the field of freight transport, both within the UK and interna-tionally. Allan completed his Doctorate examining the role for rail freight within the supply chain in 2000. Since then, his main research focus has been on rail freight policy, planning and operations, focusing specifically on efficiency and sustainability issues.