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    The Paradoxes of Green Logistics: Jean-Paul Rodrigue, Dept. of Economics & Geography

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    The document discusses the paradoxes between green initiatives and the logistics industry. It describes how logistics has prioritized cost and time efficiency over environmental impacts. While distribution costs and inventory carrying costs have declined for manufacturers, the environmental and social costs of increased transportation activity have been externalized. Just-in-time and door-to-door delivery models favor trucking and air transport, which are less energy efficient than rail and ship. The document considers ways logistics could become more environmentally sustainable, such as government regulation, industry actions, and composite solutions.

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    The Paradoxes of Green Logistics: Jean-Paul Rodrigue, Dept. of Economics & Geography

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    The document discusses the paradoxes between green initiatives and the logistics industry. It describes how logistics has prioritized cost and time efficiency over environmental impacts. While distribution costs and inventory carrying costs have declined for manufacturers, the environmental and social costs of increased transportation activity have been externalized. Just-in-time and door-to-door delivery models favor trucking and air transport, which are less energy efficient than rail and ship. The document considers ways logistics could become more environmentally sustainable, such as government regulation, industry actions, and composite solutions.

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    The document discusses the paradoxes between green initiatives and the logistics industry. It describes how logistics has prioritized cost and time efficiency over environmental impacts. While distribution costs and inventory carrying costs have declined for manufacturers, the environmental and social costs of increased transportation activity have been externalized. Just-in-time and door-to-door delivery models favor trucking and air transport, which are less energy efficient than rail and ship. The document considers ways logistics could become more environmentally sustainable, such as government regulation, industry actions, and composite solutions.

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    Attribution Non-Commercial (BY-NC)
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    44 views15 pages

    The Paradoxes of Green Logistics: Jean-Paul Rodrigue, Dept. of Economics & Geography

    Uploaded by

    minus2738602
    The document discusses the paradoxes between green initiatives and the logistics industry. It describes how logistics has prioritized cost and time efficiency over environmental impacts. While distribution costs and inventory carrying costs have declined for manufacturers, the environmental and social costs of increased transportation activity have been externalized. Just-in-time and door-to-door delivery models favor trucking and air transport, which are less energy efficient than rail and ship. The document considers ways logistics could become more environmentally sustainable, such as government regulation, industry actions, and composite solutions.

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    of 15

    The Paradoxes of Green Logistics

    Jean-Paul Rodrigue, Dept. of Economics & Geography Hofstra University, Hempstead, New York, USA. Brian Slack, Dept. of Geography, Concordia University, Montreal, Quebec, Canada.

    Claude Comtois, Dept. of Geography, Universite de Montreal, Montreal, Quebec, Canada.

    Green+Logistics or Green/Logistics?

    Green

    Logistics

    Evocative concepts Origins in the environmental movement


    1990s the decade of the environment.

    New market opportunities


    Recycling. Transport of waste.

    Environmental efficiency Recycling Compliance

    Distributional Possible convergence? efficiency Save time / money

    Convergence?

    Reverse logistics

    Suppliers

    Management of reduction and disposal Reverse distribution


    Collection of damaged or unsold products. Recycling of used products. The manufacturer takes responsibility for delivery as well as take-back.

    Recycling / Reuse

    Supply Chain

    Two reverse channels


    Recycling / reuse (back to the suppliers). Disposal (shipment of nonrecyclable waste).

    Disposal

    Customers

    How green is the logistics industry?


    Journal Intl. Journal of Physical Distribution Logistics Spectrum Logistics Focus % environmental 1.7

    Most important issues


    Reducing packaging and waste. Hazardous waste disposal. Solid waste disposal. Internal costs.

    1.2 4.8

    Least important issues


    Congestion. Land use. External costs.

    Transportation

    Land Use

    Most important

    Least important

    THE PARADOXES OF LOGISTICS: costs

    Driving down distribution costs


    Benefits are realised by the users. 1990-2000 (manufacturing sector, % GDP):

    Distribution costs declined by around 13%. Inventory costs declined by around 5%.

    Environmental costs are externalized


    The environment or society at large pay the indirect costs. The logistics industry has largely escaped governmental attempts to charge for externalities.

    Numerous subsidies. Trucking is less regulated.

    Some estimates put costs as twice the revenue generated by vehicle taxation.

    Logistical Improvements, Manufacturing Sector, 1960-2000


    20 18 16 14 12 10 8 6 4 2 0 1960s 1970s 1980s 1990s 2000s Logistics Costs Inventory Costs Cycle Time Requirements 40 35 30 25 20 15 10 5 0

    % of GDP

    Days

    THE PARADOXES OF LOGISTICS: costs

    Hubbing and the land take


    Airports. Seaports. Distribution facilities.

    Hubbing and local access


    Road and rail connections. Channel deepening. High costs wholly or partially subsidized.

    Feeder

    Hub

    Environmental Pressure

    THE PARADOXES OF LOGISTICS: time/speed


    % of Products Shipped for Just-inTime Manufacturing
    45 40 35 30 25 20 15 10 5 0 1990 1992 1995 2000

    Logistics has given rise to two fundamental features of the contemporary economy:
    Just-in-Time (JIT). Door-to-Door (DTD). Cycle time requirements down by 25% between 1990 and 2000.

    Both favour use of the least energy efficient modes:


    Trucking. Air.

    THE PARADOXES OF LOGISTICS: reliability

    Service reliability is at the heart of logistics


    Delivery time. Delivery on-time. Breakage.

    Modal reliability
    Logistics systems use the modes perceived to be the most reliable:

    Trucks and planes.

    The most energy-efficient modes are perceived to be the least reliable:

    Rail and ships.

    LOGISTICS AND WAREHOUSING


    Delivery units for parts

    Inventory reduction:
    1980: 50% of costs. 1990: 44% of costs. 1999: 36% of costs.

    Moving storage units

    While the manufacturers may achieve economies:


    Inventories are in transit. More links are added to the production chain, with more traffic movements added overall. A form of externality.

    Assembly and warehousing Delivery units for finished goods

    Moving storage units

    Logistics Costs, United States, 1980-1999 (in billions of $)


    1000 900 800 700 600 500 400 300 200 100 0 1980 1985 1990 1994 1995 1996 1997 1998 1999

    Administrative Costs Transportation Costs Inventory Carrying Costs

    LOGISTICS AND E-COMMERCE


    Supply chain

    E-commerce and supply chain management


    Traditional marketing involves consumers going to shopping centres for their purchases. New systems require large distribution centres on the edge of cities from which small parcels are delivered to customers. The system uses the most polluting modes. Disaggregation of retailing can be expected to lead to more tons/km. Higher use of packaging, with concomitant increase in waste generation.

    E-Retailer
    Warehousing

    Customers

    Environmental Vicious Circle of Logistics

    Application of logistics

    Emphasis on trucking and air transportation

    More ton-km transported

    Activities less spatially constrained

    Energy consumption Pollutant Emissions Congestion

    Space consumption Pressure on marginal land

    How will logistics become greener?

    Top down government intervention


    The industry claims that one of the fastest growing cost of warehousing is compliance with governmental regulations. Labor and health regulations (training). Environmental regulations, mainly concerning dangerous substances and fuels. Congestion pricing, road pricing (US) fair pricing (EU). Recent trends show an attempt by governments to internalize cots.

    Diesel fuel: Sulfur to be reduced from 500 ppm to 15 ppm.

    Outcomes uncertain
    Policies may impact differentially on the modes. Contradictory policies between tiers.

    How will logistics become greener?

    Bottom-up, industry action


    Technology will improve the situation (to a limit). Fleet management, vehicle efficiencies. Attitudes will change; greenness can become a marketing tool.

    Composite solutions
    Environmental management and audit systems (EMAS). Will the logistics industry adopt ISO 14000?

    Paradoxical situation
    Problems occur at all spatial scales, from the local through to the global, so a political response is inevitable. There are hopeful signs of greener attitudes in the industry.

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