Greenhouse gas reduction in transport: analyzing the carbon dioxide performance of different freight forwarder networks

There are growing concerns in the food industry about how supply chains can be managed in a more sustainable way. When distribution activities are outsourced to a logistics service provider (LSP), shippers need to evaluate the LSPs they may (potentially) engage in order to ensure that supply chain sustainability goals are met. In this paper, we present a methodology for LSP evaluation and focus on the ecological dimension of sustainability. We examine how the network carbon footprint of a real-world distribution system is affected by the LSP network that is chosen to forward goods from production facilities to customers. To do this, we analyze the shipment data of an existing Fast Moving Consumer Goods (FMCG) manufacturer. A quantitative distribution network model is set up to study the network carbon footprint of 125 scenarios. Real-world shipments are forwarded via five generic, idealized types of LSP networks. In total, 625 network carbon footprints, specified by three distribution logistics variables and the structure of the LSP network, have been calculated. The results show that LSP structures practicing a geographically decentralized consolidation of shipments are most efficient in reducing of greenhouse gas (GHG) emissions. Furthermore, the effects of changing the manufacturer's and the LSP's strategies for deciding on the tonnage to be forwarded via the LSP network or moved by direct transports are quantified. Finally, we estimate the GHG effect of improving the capacity utilization of the vehicles that move the products.