Driving Green Logistics

Logistics firms can have a big environmental impact, but many have few resources to take on environmental initiatives.

Go beyond manufacturing to build sustainable supply chains.

Much research has focused on green technologies and practices in the manufacturing industry. But what about companies in other parts of the supply chain? How can sound management result in green logistics?

Logistics firms can have a big impact, but often possess few resources.

Logistics companies provide services such as warehousing, transportation, inventory management, order processing and packaging, implying they can have a substantial environmental footprint. As many are also small businesses (82 percent of firms surveyed had fewer than 300 employees), logistics firms can be dogged by resource and knowledge constraints.

Chieh-Yu Lin and Yi-Hui Ho (both of Chang Jung Christian University, Taiwan) analysed the factors that influence the adoption of green logistics using a survey of 322 logistics firms in the Shanghai and Shenzhen areas of China. Green practices investigated include the adoption of fuel efficient vehicles, electricity management systems and solar energy systems.

Researchers looked at organizational factors (firm size and quality of HR systems, for example), the business context (pressure from customers or government and uncertainty in the business setting) and technological factors. Technological factors, like the relative benefits of new technologies and innovations, how well suited they are to a firm’s needs and how easy they are to understand and use, are a relatively new focus for research.

Understand enablers & barriers for green logistics.

The results show that technological factors can impact technology adoption aimed at green logistics: firms were more likely to adopt green technology and practices when they offered a clear advantage and weren’t too complicated. Green practices were also more likely to be adopted if firms provided support, such as extra resources and training, increasing employee motivation for adoption and when they were subjected to regulatory pressures and/or received government support.

Uncertainty in the business setting, in the form of frequent and unpredictable changes to technology or customer preferences, inhibited firms from adopting green practices.

Customer pressure is not as significant a factor in the adoption of green practices for logistics firms as it is for manufacturing firms. This is likely because they are further down the supply chain and seen as “removed” from the manufacturing process.

Tips for Logistics Firms and Their Clients

Considerations for greening your logistics company – or working on green logistics with your providers – include:

• Logistics managers can support green practices adoption through management commitment and enhanced HR efforts, including staff training and awareness-raising programs.

• For firms in green logistics already, ensure partners understand the benefits of your services, e.g. reduced energy bills. Further, making certain that your technologies fit with industry practices (such as offering fuel-efficient vehicles with the same load space as other vehicles) is key.

• For clients, communicate clearly with logistics providers so they understand the importance of environmental performance to your firm.