Dare to care: Shipment consolidation reduces not only costs, but also environmental damage

Companies interested in greening their supply chains quickly realize that carbon and energy waste represents an expense, and thus minimizing this expense not only brings in truckloads of money, but also helps save the environment. This paper demonstrates that shipment consolidation, a powerful logistics strategy that combines two or more small shipments into an aggregate load to be dispatched on the same vehicle, can help mitigate carbon and energy waste. Specifically, a Discrete-Time Based Shipment ConsoLidation (DTB-SCL) policy and a new method to calculate CO2 emissions associated with the dispatch of a vehicle are introduced. In addition, an optimization model with the objective of maximizing combined economic and environmental savings is developed in this study. It is shown that, among other benefits, the higher use of transportation capacity decreases environmental damage, one goal of the DTB-SCL policy. The mechanics of the mathematical models are illustrated by numerical examples, and sensitivity analyses are conducted to provide managerial insights that might help companies come to better decisions that are environmentally responsible.