Green Logistics. Strategies, measures and the emerging benefits for companies in the context of green logistics

Table of contents

I List of abbreviations

II List of figures

III Abstract

1 Introduction
1.1 Problem statement
1.2 Objective
1.3 Approach / Methodology

2 Fundamentals of Green Logistics
2.1 Definition of logistics
2.2 Definition of green logistics
2.3 Importance of green logistics in companies

3 Change aspects for companies through green logistics
3.1 Strategic and operational measures
3.1.1 Truck transport
3.1.2 Rail transport
3.1.3 Combined transport
3.1.4 Ship freight
3.1.5 airfreight
3.1.6 Software improvements
3.1.7 Delivery concepts
3.2 Technological measures
3.2.1 Truck transport
3.2.2 navigation
3.2.3 Environmentally friendly buildings
3.3 Supply Chain: Product Carbon Footprint
3.3.1 Benefits of the Product Carbon Footprint
3.3.2 Limits of the Product Carbon Footprint
3.4 Application of green logistics in companies
3.4.1 Hermes
3.4.2 DB Schenker

4 Role of the government in green logistics
4.1 Government catalogue of measures
4.2 Existing programs in the U.S. and U.K.

5 Obstacles and benefits of green logistics
5.1 The obstacles to the implementation of green logistics
5.1.1 Cost
5.1.2 Time factor
5.1.3 Reliability factor
5.1.4 Stocks
5.1.5 Other distribution channels
5.2 The benefits of the successful implementation of green logistics
5.2.1 Economic or ecological benefits for the company
5.2.2 Image improvement of the company

6 conclusion

IV Bibliography

I List of abbreviations

fig. illustration

Ed. edition

or. respectively

CO2 carbon dioxide

DB Deutsche Bahn

et al. et alii

Hg. editor

ISO International Standardisation Organisation

IT information technology

TRUCK lorry

PAS Public Available Specification

II List of figures

fig. 1: Combined transport chain

fig. 2: Comparison of the transport range of trucks, trains and inland waterway vessels with the same energy expenditure

fig. 3: Illustration of the definition of the product Carbon Footprint

fig. 4: Main reasons to invest in a green supply chain

III Abstract

This bachelor research examines the development from logistics to green logistics and how the goals regarding for the future have changed. The paper investigates, if the companies are already aware of the current situation of our environment. It outlines a lot of important measures for companies of how they can improve the efficiency of transportation and how they can create logistics more environmentally friendly.

Previous research has shown that the globalisation and the transport have a very negative effect on our environment, because of the CO2 emission. The findings support the prediction that the companies are willing to change to a green supply chain.

Furthermore, literature that is based on green logistics reveals several reasons why the implementation is inevitable. We conclude that green logistics plays an important role in the future, because all the companies are interested in sustainability.

1 Introduction

1.1 Problem statement

In logistics, priority is given to implementing goals as economically as possible. However, logistics can also pursue ecological and social goals (Vahrenkamp, Kotzab 2012, 48). Therefore, in recent years, a particularly environmentally friendly development has resulted in this field: Green logistics. This development already shows certain tendencies that it is not only a short-term change, but is already regarded as a future trend for companies (Wütz 2010, 8f).

The main goal of green logistics is usually seen as the efficient use of energy. Improved technologies or the optimization of existing processes play a major role. However, these changes are by no means intended to provide less service. It is expected that all measures of green logistics will provide the same performance as before (Sadowski 2010, 5). In order to be able to successfully implement these measures afterwards, strategic and operational changes must take place on the one hand. In addition, it is important that technical progress takes place within the companies (Sadowski 2010,16).

The use of the measures is primarily intended to reduce emissions. Carbon dioxide, which is emitted during production and transport, is to be significantly reduced, as climate change is mainly due to this (Sadowski 2010, 5). Especially in transport logistics, it is essential to pay attention to environmental friendliness. There are many different procurement options and not all of them can be reconciled with green logistics without damaging the carbon footprint (Sadowski 2010, 26).

Furthermore, there are both voluntary and involuntary reasons for switching to green logistics. Volunteers include improving the image of a company. Companies use it as a competitive advantage over others in the same industry (Sadowski 2010, 7). There are many customers who make their purchasing decisions based on their environmental friendliness (Vahrenkamp, Kotzab 2012, 49). Legal requirements are the involuntary reasons for the implementation of environmentally friendly measures. Many companies are forced to redesign their processes in order to avoid penalties. This, in turn, would also severely damage the company's own image if it were to become public (Sadowski 2010, 8).

The Questions, which therefore result in this work:

- What aspects of change does green logistics entail for companies?
- What strategies and measures are there that can be implemented for companies in the context of green logistics?
- What obstacles can stand in the way of the implementation of green logistics and what benefits do companies achieve from a successful implementation?

1.2 Objective

Within this Bachelor's thesis, the above-mentioned leading questions should be answered in the best possible and detailed way.

First and foremost, it is important to define the concept of green logistics appropriately for this work and to address the essential significance for companies. Since many factors, such as the legal framework or the term carbon footprint, play a role in this, it is essential to refer to the current status.

In order to take a more detailed look at green logistics, individual measures in the field of environmentally friendly logistics will be shown. These measures mainly concern the area of transport, the use of new technologies for better transport planning and the supply chain.

However, the focus should be on the exact elaboration of the benefits for companies from the use of green logistics. Before that, however, sufficient attention should also be drawn to the obstacles. Since the use of improved technologies also entails some prerequisites, such as a sufficient budget, the introduction of these measures is always associated with a well-considered implementation.

1.3 Approach / Methodology

This Bachelor's thesis has a theoretical frame of reference and the methodology is based on a literature study. As a first step, it is important to track down the relevant literature for the respective topic and to read it. With the help of the appropriate literature, a smooth running of this work should finally be made possible. In addition, the leading questions can be answered sufficiently in the course of the work. The literature is based on books as well as articles from logistics journals and publications of companies.

2 Fundamentals of Green Logistics

2.1 Definition of logistics

At the beginning, it is essential to define the concept of logistics in detail so that the change to green logistics is clearly recognizable and unambiguous. The term logistics has its origin in two linguistic roots. On the one hand in Greek Lego (think) and Latin logica (reason), on the other hand in French logement (Accommodation). On the basis of these terms, a relation to today's word logistics is visibly recognizable (Kummer et al. 2009, 250).

Based on the French word logement the term logistics was first used in the military sector in the 19th century. This primarily means the supply of troops (Arnold et al. 2008, 3).

In this day and age, logistics is seen as a very elastic term. This refers to both the provision and the distribution and use of physical goods, material goods and real goods. Storage between the distribution of goods also falls under the term (Pfohl 2010, 3f).

In logistics, it should be noted that communication also takes place optimally during the logistics processes and that the entire logistics network is seen as a whole. Technologies also support logistics today and make planning, control and control easier and manageable (Arnold et al. 2008, 3).

2.2 Definition of green logistics

"Green Logistics is a sustainable and systematic process for recording and reducing resource consumption and emissions resulting from transport and logistics processes in and between companies (International Transport 2010, 16)."

The concept of green logistics has developed over the last few years and has only since become increasingly in focus. In addition to the social and societal demands placed on logistics, there is also the pursuit of sustainability. Environmental protection is therefore more important than ever and that is precisely why sustainability must be taken into account. It is important to make the current logistics more gentle. The conservation mainly concerns the resources, because alternatives are to be found that harm our environment less (Cetinkaya 2008, 62).

The use of energy is to be worked out more efficiently throughout the entire logistics process, so that the logistics processes can be optimized even more and the environment is spared. Improvements are to be made along the entire supply chain, which are to put logistics in a "greener" light (Sadowski 2010, 5).

2.3 Importance of green logistics in companies

In most companies, the main goal of logistics is to make a profit. Social and environmental goals have so far been excluded by companies (McKinnon et al. 2010, 3). However, due to the increasingly important topic of "green logistics", they are seriously considering this direction (Straube, Pfohl 2008, 6). In recent years, companies have come under more and more pressure and are required to make their logistics activities more environmentally friendly (McKinnon et al 2010, 3). The stakeholders, i.e. the customers, the suppliers and the government, demand that companies deal with the current environmental and resource situation. Reasonable action is assumed by the stakeholders (Straube, Pfohl 2008, 6).

Entrepreneurs know that their transports not only cause noise pollution, but also air pollution, which makes a significant negative contribution to climate change (McKinnon et al. 2010, 4). The CO2emissions have risen steadily since the time of industrialisation and are now 30% more than before. This increase is due to industry and deforestation for later land use. The true extent of climate change has only become clear in recent years through new scientific research methods (McKinnon 2010, 4). Some forecasts show that the CO2-Emissions will even double in the next 100 years if measures are not taken in time by companies. (Houghton 2004, 23f)

Austria has taken a first step in the right direction with the Kyoto Protocol. In the period from 2008 to 2012, Austria was to reduce its greenhouse gas emissions by 13% compared to the base year 1990 (Umweltbundesamt GmbH 2007, 59). However, this could not be adhered to. The main culprits for the failure were the sectors of industry and transport (Umweltbundesamt GmbH 2007, 62).

In most cases, it is even the smaller companies that dare to make a start and switch to more environmentally friendly measures. As an obstacle, companies often indicate an information deficit or excessive costs, which prevent them from making changes. But logistics plays a major role in the environment and there are also some steps that can be carried out cost-effectively (Logistics today 2009, 40f).

3 Change aspects for companies through green logistics

Companies have long been aware that they have to take certain measures to make both logistics in general and transport more environmentally friendly (Sadowski 2010, 16).

In logistics, these measures concern transport, warehousing, vehicles and information technology. First and foremost, the strategic and operational areas need to be adapted. There is great potential for savings here, which is not yet sufficiently exploited by companies. In this area there are many possibilities to make logistics "greener" (Sadowski 2010, 16f).

Technical measures must also be taken so that the changes in the strategic and operational area can continue to be implemented more efficiently in the future. These measures must go hand in hand, otherwise the actions of companies will not bring about sustainable positive development (Sadowski 2010, 27).

In the course of all these improvement measures, a significant change in the entire supply chain can be observed. The road to this fundamental improvement is very lengthy, but it pays off in the long run (Sadowski 2010, 53).

3.1 Strategic and operational measures

As mentioned above, it is important to start with the strategic and operational areas, as it is easiest to orient yourself at the beginning where you can start as a company (Sadowski 2010, 16).

These areas also include the optimization of transport, in which the savings potential exists above all in fuel consumption. Through measures in this area, the driving style should be optimally chosen so that the environmental impact is as low as possible. With proper planning, the transport becomes more environmentally friendly and, despite the measures, the goods arrive at the desired location at the right time, as required by the customer (Sadowski 2010, 17).

Forwarders are important integrators here, who collect the goods from the customer and deliver them to the specified recipient. You must also choose the means of transport that is best suited for delivery (Vahrenkamp, Kotzab 2012, 54).

The following are possible means of transport for the transport of goods (Schulte 2005, 171):

- Truck transport
- Rail transport
- Combined transport
- Ship freight
- Airfreight

3.1.1 Truck transport

As the most used transport vehicle, the truck is clearly recognizable. Experts believe that there is great potential for improvement, especially in the driving technique of the drivers (Sadowski 2010, 17).

The truck is so popular as a means of transport because the road network in Europe is well developed throughout europe and thus every destination is easier to reach than with other means of transport (Schulte 2005, 171).

Simple measures, such as reducing the maximum speed, switching earlier or driving ahead, can lead to fuel savings. The reduction in transport weight also has a positive effect on fuel consumption (Wittenbrink 2011, 114f).

Although all these measures lead to a lower speed, this is already sufficient to save 5 – 10 % of the previous fuel (Sadowski 2010, 17).

Furthermore, it is of course possible to transfer the transport to another, more environmentally friendly means of transport and thus achieve savings. Means of transport, such as rail or ship, generate far less CO2-Output, as a truck (Sadowski 2010, 18). In addition, rail transport is far less dependent on the weather and is therefore considered more reliable in bad weather. The capacity of a truck is also limited, due to certain weight limits in isolated countries and the size of the truck (Schulte 2012, 171f).

3.1.2 Rail transport

Rail transport is a good alternative for road transport and contributes greatly to the reduction of CO2 Emissions at (Sadowski 2010, 19).

It is also clear that companies are interested in switching to rail transport, but only very few have a rail connection to the rail network. There is interest in this, but there is also a need for action. An expansion of the rail network can be very cost-intensive (Wittenbrink 2011, 161).

Therefore, the freight forwarders see the criticisms in this means of transport that there is a low flexibility and one is dependent on an existing rail network. In addition, the costs are comparatively high when transporting small quantities (Wittenbrink 2011, 162f).

Rail transport is therefore the only means of transport without a clear quality feature. Road transport is considered to be very flexible and cost-effective. The ship freight has an enormous cost advantage over the other means of transport and the air freight is considered extremely fast. Nevertheless, there is a tendency towards the use of rail freight and also towards combined transport by truck, because the companies want to transport more consciously (Pfohl 2010, 157).

3.1.3 Combined transport

The transport of goods that are shipped internationally usually involves two or even several means of transport. There is a distinction here between broken traffic and combined transport. Broken traffic is when the goods are not transported in fixed loading units. In combined transport, there are fixed loading units and these cause little effort when transhipped to other means of transport (Schulte 2005, 174).

Abbildung in dieser Leseprobe nicht enthalten

fig. 1: Combined transport chain

Source: own presentation based on Schulte 2005, 174f

In combined transport, a distinction can be made between the following types (Schulte 2005, 175f):

- combined container transport
- piggyback service
- Roll-on/roll-off traffic

Combined container transport involves the transport of a container. These are transported with the help of truck transport, rail freight, ship freight or air freight to the customer. During this transport, the container is repeatedly transhipped to another means of transport (Schulte 2005, 175). Piggyback transport combines transport by road with transport by rail. The truck is responsible for the delivery of the goods to the transshipment station and the collection of the goods at the destination station (Schulte 2005, 175f). In roll-on/roll-off traffic, trucks are loaded onto the deck of a ship for transport (Arnold et al. 2008, 736f)

3.1.4 Ship freight

Shipping is even more efficient than rail transport with the same energy consumption and is therefore the most environmentally friendly in comparison (Sadowski 2010, 19). In shipping, a distinction can be made between inland waterway vessels and seagoing vessels (Schulte 2005, 173). The transport range of truck, train and barge is very different with the same energy expenditure and on the basis of the graphic below it is clearly visible that the barge wins this race (Sadowski 2010, 19).

Abbildung in dieser Leseprobe nicht enthalten

fig. 2: Comparison of the transport range of trucks, trains and inland waterway vessels with the same energy expenditure

Source: Federal Water and Shipping Administration (WSV) 2009

In addition, the ship freight pays off in terms of costs with a large number of goods, since the transport is cheaper than by train (Schulte 2005, 173).

The disadvantage of shipping, as in the case of rail transport, is the lack of flexibility. One is dependent on existing waterways and can only actually fulfill the delivery with the help of a combination with other means of transport (Pfohl 2010, 156f).

3.1.5 airfreight

Air transport is considered to be the most polluting means of transport, since the transport of freight, as its name suggests, takes place in the air. The CO2emissions in the air have a much more negative effect than those in road traffic. However, it should be noted that due to globalization, usually only air freight comes into question, since the goods should be available as soon as possible (Sadowski 2010, 22f).

Air freight is also often used because it is considered very reliable. In addition, relatively little effort has to be made for the packaging. Thus, costs are eliminated at this point (Vahrenkamp, Kotzab 2012, 282).

The point of criticism of air traffic is the low flexibility, since the flight times are fixed and thus short-term scheduled flights are very expensive (Schulte 2005, 173).

It is the responsibility of the companies to consider the aircraft as a means of transport only if there are no other possibilities, otherwise it will lead to high emissions. Here, the understanding of end consumers is also required, because they may have to accept longer delivery times (Sadowski 2010, 22f).

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