Chapter 37: Logistics and the Environment

Many companies now plan and manage their freight transport operations as part of a broader logistical strategy. This allows them to coordinate transport more effectively with related activities such as inventory management, production scheduling, warehousing, order processing, and materials handling. In assessing the environmental impact of freight movement, it is therefore important to take account of logistical trends and the trade-offs that companies make between transport and other elements in the logistical system.

Over the past decade, companies have come under mounting pressure to “green” their logistics. Much of this pressure has come from tightening government regulation. There have also been numerous campaigns by trade bodies (e.g. International Road Transport Union, 2000), environmental groups (Holman, 1996), and governments (e.g. UK Department of the Environment, Transport and the Regions, 1999a) to encourage companies, voluntarily, to adopt environmental best practice in their logistical operations. Benchmarking of freight transport operations has revealed wide variations in efficiency and energy intensity, suggesting that wider adoption of best practice measures would yield significant economic and environmental benefits. These so-called “green–gold” measures, which are largely if not entirely self-financing, now command wide support. They include backloading initiatives, the application of computerized vehicle routing and shared-user distribution. Much less popular are environmental measures that carry a logistical cost penalty. A small minority of companies are prepared to implement these measures to portray themselves as “green” logistics operators. In some sectors, this can bring rewards in higher sales and greater customer loyalty. It can also minimize the risk of a company’s reputation being tarnished by the “counter-marketing” campaigns of environmental pressure groups (McKinnon, 1995).