DECARBONISATION INITIATIVES APPLIED WITHIN THE GERMAN

LOGISTICS SECTOR

Jens Tackena, Vasco Sanchez Rodriguesa, Robert Masona

a
University of Plymouth Shipping and Logistics Unit
c
Cardiff University Logistics and Operations Management Unit

INTRODUCTION
Over the last two decades, environmental protection has gained increasing significance.
Companies are under pressure to reduce the environmental impacts of their logistics
operations (McKinnon, 2010). Green logistics ‘attempts to measure and minimize the
ecological impact of logistics activities’ (Rogers and Tibben-Lembke, 1998). It is
estimated that the energy consumed by road freight movement will outpace the energy
generated for cars and public transport by 2020s (World Business Council for Sustainable
Development, 2004).

McKinnon (2007) has developed a framework for guiding CO2e emissions reduction in
road freight transport at aggregated level. However, it has not been explored how road
freight transport operations reduce their carbon footprint at a micro level. The aim of the
paper is to qualitatively evaluate the application transport-related CO2e reduction
initiatives in the German logistics sector. ‘Green logistics encompasses all measures
applied to optimize of vehicle utilization, consolidate and optimize of tours to reduce
traffic and traffic-related emissions, reduce traffic-related and stationary environmental
impact of logistics’ (Lohre and Herschlein, 2010). This definition will be used to frame the
research.

DECARBONISATION INITIATIVES APPLIED TO ROAD FREIGHT

TRANSPORT
Decarbonisation initiatives for road freight transport are among others those of using
environmental friendly transport modes and consolidation of goods. In the literature, the
categorisation of these measures varies considerably. Wu and Dunn (1995) discuss
opportunities reduce carbon intensity in logistics operations. McKinnon (2007) developed
seven ratios for guiding CO2e emissions reduction in road freight transport. McKinnon
(2007) identifies seven key parameters and corresponding determinants to map the
relationships between logistics activities and related environmental costs.

The CO2e emissions reduction parameters proposed by McKinnon (2007) have been
linked with carbon reduction initiatives recommended in the literature. Twelve recent
articles, freight transportation and environment and/or GSCM with relation to
transportation, namely [1] Arbeitskreis Nachhaltigkeit des Logistik-Initiative Hamburg
e.V. (2010), [2] Eglese and Black (2010), [3] Shell Deutschland Oil GmbH (2010), [4]
Woodburn and Whiteing (2010), [5] McKinnon (2008), [6] Heriot-Watt University (2007),
[7] McKinnon (2007), [8] Preuss (2005), [9] Wee et al. (2005), [10] Hoogma et al.
(2002), [11] Boege (1995), [12] Wu and Dunn (1995), have been consulted to identify
potential measures and activities to reduce CO2e emissions of road freight transport.

Measures were identified early by Wu and Dunn (1995) and extended over the years by
e.g. Wee et al. (2005) and McKinnon (2008, 2007). Moreover, authors have specialised
their discussions on technical components to increase efficiency (Shell Deutschland Oil
GmbH, 2010), modal shift (Wee et al. 2005, Woodburn and Whiteing, 2010) or the
routing optimization (Eglese and Black, 2010). The identified initiatives to reduce CO2e
emissions in road freight transport are assigned to the parameters of the green logistics
framework (Table 7, next page) and matched against strategic (S), tactical (T) or
operational (O) decision levels (Simchi-Levi et al., 2008).
Parameter Initiative Authors Decision-making level
Modal split Modal shift [1], [4], [5], [7], [9], [11], [12] Tactical/Operational
Average handling factor Network optimisation [5], [6], [7], [11], [12] Strategic
Network optimisation [5], [6], [7], [11], [12] Strategic
Average length of haul Vehicle routing [1], [2], [5], [6], [7], [8], [9],
Operational
optimisation [10], [12]
Vehicle utilisation Consolidation [1], [5], [6], [7], [8], [9], [12] Operational
(Average load on Increase backhaulage [1], [2], [5], [6], [8], [9], [12] Operational
ladden trips and
average empty Increase vehicle
[1], [5], [6], [7], [12] Strategic
runnings) dimensions
Driver training [1], [3], [5], [6], [7], [9] Tactical/Operational
Driver incentive
[1], [5], [6], [7] Tactical
schemes
Fuel efficient vehicle
[1], [5], [7], [8], [9], [11] Strategic/Tactical
engines
Reduce power rating [7] Tactical/Operational
Reduce vehicle tare
[3], [5], [6], [7], [9] Strategic/Tactical
weight
Vehicle fuel efficiency
Aerodynamics profiling
[1], [3], [5], [6], [7], [9] Strategic/Tactical
of trailer and tractor
Improve tyre
[1], [3], [5], [6], [9] Strategic/Tactical
performance
Effective vehicle
[1], [5], [7], [9], [12] Tactical/Operational
maintenance
Fleet management
[1], [2], [3], [5], [7], [8], [9], [12] Operational
(scheduling)
Alternative and less
Carbon intensity of fuel [1], [3], [4], [5], [6], [7], [9],
carbon intensive Strategic/Tactical
used [10], [11], [12]
energy sources

Table 1: CO2e emissions reduction initiatives for road freight transport (adapted from
McKinnon, 2007)

THE GERMAN LOGISTICS SECTOR

There are 1,251 active companies undertaking business in logistics-related areas in
Germany (Bundesamt für Güterverkehr, 2010). The sector turnover records euro 190
billion in 2007 and has a steady yearly average grown of 5%, being the fastest growing
sectors in Germany (Deutsche Bank Research, 2008). The logistics market is dominated
by small and medium-sized enterprises (SMEs) (Bundesamt für Güterverkehr, 2010);
however, large national and international acting logistics companies are increasing
(Deutsche Bank Research, 2008).

Although the sector has suffered under the economic crisis (Bundesamt für Güterverkehr,
2010), it is worthwhile mentioning that environment is still on its agenda of the sector
(AMMPL and Wittenbrink, 2009). Road freight transport is the most important modality in
(Deutsche Bank Research, 2008) and keeps its primary role in comparison to the other
modes (Eurostat, 2010; European Environment Agency, 2009). It accounts for 78% of
the total emissions from freight transport in Germany; nevertheless, it decreased its
CO2e emissions by 5% from 1990 till 2007 (International Transport Forum, 2010).

METHOD
The research follows a deductive-to-inductive approach using deduction as foundation
and induction to identify new insights. ‘Induction and deduction are dialectical rather
than mutually exclusive’ (Miles and Huberman, 1994). The researcher decided to apply a
multiple case-study approach with ten small cases based on interviews to address the
research aim. Case study research has recently been discussed within logistics (Aastrup
 and Halldorsson, 2008; Seuring, 2008). This approach provides flexibility in the data
collection and triangulation can be also be applied to increase the research quality
(Saunders et al., 2009; Locke et al., 2000).

As recommended by Maylor and Blackmon, 2005, a non-probabilistic purposive sampling

strategy was applied to select the case studies. Hair et al. (2007) point out that
convenience, speed and low cost are the main advantages of purposive sampling. The
approach of heterogeneous sampling was also applied to select the case studies, as
suggested by Saunders et al. (2009), considering two main company characteristics:
number of employees and sectors served. Different sources were used to identify the
companies: the German Logistics Association (BVL), transport markets (e.g.
www.logismarket.de) and and homepages of logistics magazines (e.g.
www.verkehrsrundschau.de). An invitation together with the study proposal was sent to
30 companies. Five of these companies responded positively to the invitation.
Subsequently, 20 other companies were contacted and five additional companies
accepted to participate. During the follow-up process, the Frohlich’s (2002)
recommendations to increase the response rate were applied: ‘pre-notice’, ‘appeals’,
‘results’ and ‘steady pressure’.

As Table 2 shows, the sample studied presents diverse characteristic in terms of

company size (number of employees). The companies offer a wide range of logistics
services in several sectors and have international logistics coverage. Nevertheless,
company E offer full logistics services nationally and internationally but specialised on the
chemical sector. All the interviewees, with the exception of the one from company I,
influence on the decision making of national as well as international transport flows.

During the case studies, managers from the logistics providers investigated were
interviewed. The interviews last between 60 and 90 minutes and were semi-structured in
nature. In semi-structured interviews, the researcher should prepare an interview-
guideline (Saunders et al., 2007). The first part of the interviews was introductory (topic,
course of action, recording permission and confidentiality) and contains general questions
regarding the interviewee and company. Part two, the core part, was focused on the aim
of the study. The third part, the closing part, rounds the interview off.

In addition, following Oppenheim’s (1992) recommendations regarding how to reduce

bias in the application of interviews, the researcher was open-minded in the opening,
asked questions in the same tone, using the same non-verbal signals, and so on. It is
important to keep the identities of companies confidential, to inform them about the
nature of the investigation and their role within the study (Locke et al., 2000). This was
clarified in the initial invitation.

The interviews were tape-recorded and typed in German and translated to English.
Subsequently, the interview scripts were synthesized by applying content-analysis, as
recommended by Saunders et al. (2007), into an Excel table. Keynotes were returned for
final adjustment and approval to the interviewee. The data was analyzed using cross-
case analysis as suggested by Maylor and Blackmon (2005).
Interviewee

Interviewee
Department
(Germany)
Employees

Domain of
Interview
Locations

Sector(s)

Decision-
Company

Logistics
Services

Making
Client
of

National and
Management Face-to- Various sectors of
A 400 Germany Full logistics services: international
Board face industry and trade
flows
 Transportation,
Quality & Chemical, National and
warehousing, contract
B 400 Europe Environmental Telephone consumer goods, international
logistics and special
Management metal, paper flows
services
Transportation,
warehousing, value Bulk / silo National and
Face-to-
C 500 Germany Controlling adding logistics, contract products: chemical international
face
logistics and special sector, food sector flows
services
Automotive, National and
Quality Face-to-
D 800 Europe Full logistics services chemical, international
Management face
electronics flows
Controlling / National and
E 1000 Germany Project Telephone Full logistics services Chemical sector international
Management flows

Transportation, value Automotive sector,

Project adding logistics, contract financial sector,
F 1500 Global Telephone n/a
Management logistics and special insurance sector,
services public sector

National and
Project Face-to- Various sectors of
G 1700 Europe Full logistics services international
Management face industry and trade
flows

Automotive,
Quality & National and
consumer goods,
H 3500 Global Environmental Telephone Full logistics services international
fashion, electronics,
Management flows
food
Environmental Automotive, food,
I 4000 Global Telephone Full logistics services National flows
Management clothing
Automotive,,
electronics, National and
Project
J 10000 Global Telephone Full logistics services chemical, international
Management
pharmaceutical, flows
metal

Table 2: Characteristics of the participating logistics providers

IMPLEMENTATION OF CO2e EMISSIONS REDUCTION INITIATIVES IN

GERMAN ROAD FREIGHT TRANSPORT
The CO2e emissions reduction initiatives shown in Table 1, developed from McKinnon’s
(2007) CO2e emission ratios, are used as a basis for the analysis. The initiatives
gathered in the interviews are shown in Table 3. Firstly, there is an agreement among
the participants about modal split. All companies attempt to transfer loads to the less
environmentally harmful modes (mainly rail, also barge); nevertheless they emphasised
that this depends mainly on their customers’ requirements. Critically, company D would
use those modes more frequently if adequate infrastructure is available.

Regarding the average handling factor, the application of network optimisation in hub
facilities seems to be reserved to larger firms (Companies G and J). However, in the case
of length of haul, vehicle routing improvement is widely used (Companies A, B, C, D, E,
F, G, H and I). According to the participants from companies A, B, E, F, G, H, and I, their
firms have ICT tools for solving vehicle routing and scheduling problems, and companies
C and D plan the implementation of them, as suggested by Eglese and Black (2010).

Initiatives A B C D E F G H I J
Modal shift to No Driven by Driven by Driven by Driven by Driven by 1 Driven by Driven by Driven by
rail possible customers customers customers customers customers customers customers customers

Modal shift to 1
water
Network 1 1 1 1 1
optimisation
Vehicle 1 1 1 1 1 1 1 1
routing
optimisation
IT vehicle 1 1 1 1 1 1 1 1
routing
Volume Difficult Difficult 1 1 1 1 1
consolidation
Increase 1 1 1 1
back haulage
Increase 1 1 1
vehicle
dimensions
Inter- Yes, with Yes, with Yes, with Yes, with
company customers customers other customers
collaboration carriers
Driver 1 1 1 1 1 1 1 1 Yes, including
training subcontractors'
drivers
Driver 1 1 1
incentive
schemes
On-board 1
computers to
measure fuel
consumption
Fuel efficient Euro 4 Euro 5, but Euro 5 Euro 5, Euro 4 Yes, but Euro 5 Euro 5 Euro 5
vehicles and 5 difficult in but Euro not and 6
subcontractors 6 not specified
approved
Reduce
power-rating
Reduce
vehicle tare
weight
Vehicle Only in
aerodynamics tractors
Improve tyre 1 1
performance
Vehicle 1 1
maintenance
Fleet 1 1 1
management
and
scheduling
Telematics 1 1 1 1 1 1 1
for
scheduling
Alternative No 1 Biodiesel No Biodiesel Biodiesel Biodiesel AdBlue is Second
fuels/energy not not not not used generation of
sources approved approved approved approved biodiesel
after after after after
tested tested tested tested

Table 3: CO2e emissions reduction initiatives

Vehicle utilisation was significantly supported by the interviewees. Consolidation of goods

is, with the exceptions of companies B and C, done by all logistics providers studied. This
is also the case of the application of backhaulage to reduce of empty running. However,
there was a fair degree of disagreement within the sample studied regarding the
measures of increasing vehicle dimension and inter-company collaboration. Extensions in
vehicle dimensions seem to be reserved to the larger companies, but the medium-sized
company A is an exception to this rule. Several participants mentioned he use double-
decker, jumbo and longer and heavier vehicles trailers (Companies A, F, H, I and J).
Inter-company collaboration is pursued in different ways by the companies, e.g. logistics
alliances (Companies D, G and I), within the own corporate groups (Companies I and J)
or focused collaboration with customers (Company H, I and J).

Wide evidences were found regarding improvements on vehicle fuel efficiency. All
interviewees supported driver training as a means of reducing vehicle fuel consumption.
Different approaches of driver training are available which range from an own driving
instructor in the medium-sized companies to large programmes for own and external
(subcontractors) drivers among the larger one. Driver incentives schemes were
mentioned by practitioners from companies C and H, and also company G plans to
implement them. The interviewee from company D said that they also instruct transport
planners. Strong evidence is also found among the participating companies regarding the
usage of fuel efficient engines. The companies’ fleets comply with Euro 4/5 emission
standards, and also subcontractors’ vehicles in the case of companies B, H, I and J.

Limited support among participants was given to other measures to improve vehicle fuel
efficiency, e.g. the reduction of power rating and vehicle tare weight, and improved
maintenance activities, only mentioned by the interviewee from company F. In contrast,
as recommended by Shell Deutschland Oil GmbH (2010), low-rolling-resistance tyres
(Companies A, D, H and J) and the application of acronymic features (e.g. side covering)
(Companies A, I and J. Furthermore, those aerodynamic measures seem to be vulnerable
to become unfeasible due to the continuous changes in tractors and trailers (Company I).
Regarding the ratio of ‘fuel carbon intensity’, many of the companies studied have tested
the usage of alternative energy sources. Biodiesel was piloted by companies C, D, F, H
and I with negative results, since damage in the vehicles engines was caused by
biodiesels. The ethical discussion about the topic of biodiesel induced companies to stop
using them (Company A, C, D, F, H, I and J). Companies H and J have also considered
second generation of bio-fuels as well as hybrid motorisation in company I and J. Also,
companies C and I use AdBlue, a 32.5% solution of high-purity urea, to fulfil the Euro 4
and 5 emission standards.

Finally, representatives from companies A, G and J said that not all measures can be
implemented. Feasibility studies required to be undertaken before implementing any
initiatives (Company C). However, application of cost-benefit analysis and noted that an
overnight change is difficult, since the effectiveness of any environmental solution needs
to be assess among all their life-span (Company A). Furthermore, all the tradeoffs
between key factors, e.g. CO2e emissions, costs and customer service, as benefits from
one initiative can have unwanted side-effects. This is especially relevant when measures
affect different decision-making levels. The companies investigated apply operational to
tactical decisions (e.g. routing optimisation or consolidation) whereas tactical to strategic
measures are infrequent. As McKinnon (2010) stated, unsuitable decisions taken at
higher levels could vaporise gains achieved at operational levels.

MANAGERIAL IMPLICATIONS
The analysis of the green logistics initiatives shows strong evidence that the options
identified in theory are also valid for the German companies investigated. However, it
seems to be difficult to distinguish between ecological-related and economic-related
measures. High support among the companies was identified for modal shift, the
optimisation of vehicle routing and scheduling, increase of vehicle utilisation, driver
training and a fuel efficient fleet. Furthermore, according to the participants, alternative
fuels were tested in their companies, but only with little penetrating power. Certain
relevance also belongs to the application of collaboration which was identified. Most of
the participating companies apply operational options to reduce the environmental
impact, tactical and strategic actions seem to be taken individually.

Only occasional differences between medium-sized and large companies were found
mainly for strategic decisions which could be referred to the available network and the
financial capabilities. However, this would need further investigation and evidence.
Moreover, the green logistics framework by McKinnon (2008, 2007) seems to be fully
applicable for the sample studied. German third party logistics need to find an inter-
organisational agreement on the definition of green logistics, its range and standards to
allow benchmarking. With regard to decarbonisation initiatives, simulation of different
scenarios considering trade-offs at different decision levels are advised and attention
should be focused at establishing clear distinction between ecological- and economic-
related activities.

CONCLUDING REMARKS
The model developed by linking McKinnon’s decarbonisation framework and other
relevant literature works have been confirmed in the study. The companies studied apply
all the existent initiatives recommended for decarbonising road freight transport
networks. The strong agreement with the theory restricts the inductive elements to
enhance the theoretical basis on the present investigation. The investigated firms
understand that logistics and ecology do not contradict each other and both need to be
considered in their companies’ long-term planning. The findings show that measures
among the companies fit mainly together. The heterogeneous group of companies shows,
in reference to Hervani et al. (2005), that different evolutionary stages in environmental
management are available. Larger firms tend to be more developed; nevertheless, green
best practices can be found among medium-sized companies as well.

The research was limited in terms of funds. A bigger sample could have been
investigated as well as triangulating the findings from the case studies with a survey. The
findings of this study are the starting point for mainly three directions of further
research. The first one aims to investigate the present restrictions and selection criteria
on a wider research perspective taking into account more companies to allow
generalisation. The second one should use the same settings; however, transfer it to a
different logistics services or a different modality. The third one should be undertaken by
a slightly narrower focus on customer contractual arrangements and type of commodity
transported should be investigated in more detail.

REFERENCES
Aastrup, J., Halldorsson, A. (2008) Epistemological role of case studies in logistics: a
critical realist perspective. International Journal of Physical Distribution & Logistics
Management. 38 (10), 746-763.
AMMPL & WITTENBRINK, P. (2009) Green-Logistics – hohe Bedeutung auch in
Krisenzeiten [online]. Frankfurt/Loerrach: Association Materials Management Purchasing
and Logistics. Available from:
http://www.bme.de/fileadmin/bilder/PDF/AuswertungGreenLog.pdf [Accessed 10th
February 2010].
Arbeitskreis Nachhaltigkeit Des Logistik-Initiative Hamburg E.V. (2010) Leitfaden
Nachhaltigkeit in der Logistik: Anforderungen, Umsetzung in die Praxis, Beispiele.
Hamburg: Logistik-Initiative Hamburg Service GmbH.
Bundesamt Für Güterverkehr. (2010) Struktur der Unternehmen des gewerblichen
Güterkraftverkehrs und des Werkverkehrs. Köln: BAG.
Deutsche Bank Research. (2008) Logistik in Deutschland: Wachstumsbranche in
turbulenten Zeiten. Frankfurt am Main: Deutsche Bank Research.
Eglese, R. & Black, D. (2010) Optimizing the routing of vehicles. In: MCKINNON, A. C.,
European Environment Agency. (2009) Transport at a crossroads. TERM 2008: indicators
tracking transport and environment in the European Union. Luxembourg: Office for
Official Publications of the European Communities.
Frohlich, M. T. (2002) Techniques for improving response rates in OM survey research.
Journal of Operations Management. 20 (1), 53-62.
Heriot-Watt University (2007) Transport Management: A Literature Review [online].
Work Module 1 Green Logistics Project. Edinburgh.
Hervani, A. A., Helms, M. M. & Sarkis, J. (2005) Performance measurement for green
supply chain management. Benchmarking: An International Journal. 12 (4), 330-353.
Hoogma, R., Kemp, R., Schot, J. & Truffer, B. (2002) Experimenting for Sustainable
Transport: The approach of Strategic Niche Management. London, New York: Spon Press.
International Transport Forum (2010) Reducing Transport Greenhouse Gas Emissions:
Trends & Data 2010 [online]. Available from:
http://www.internationaltransportforum.org/Pub/pdf/10GHGTrends.pdf [Accessed 30th
June 2010].
Locke, L. F., Spirduso, W. W. & Silverman, S. J. (2000) Proposals that work: A Guide for
Planning Dissertations and Grant Proposals. 4th edn. Thousand Oaks: Sage Publications.
Lohre, D., Herschlein, S. (2010) Grüne Logistik - Studie zu Begriffsverständnis,
Bedeutung und Verbreitung „Grüner Logistik“ in der Speditions- und Logistikbranche.
Bonn: Deutscher Speditions- und Logistikverband e.V. (DSLV).
Maylor, H. & Blackmon, K. L. (2005) Researching Business and Management.
Basingstoke: Palgrave Macmillan.
Mckinnon, A. C. (2007) CO2 Emissions from Freight Transport in the UK [online].
Available from:
http://cfit.independent.gov.uk/docs/2007/climatechange/pdf/2007climatechange-
freight.pdf [Accessed 3rd March 2010].
Mckinnon, A. C. (2008) The Potential of Economic Incentives to Reduce CO2 Emissions
from Goods Transport. 1st International Transport Forum on 'Transport and Energy: the
Challenge of Climate Change', 28th-30th May 2008, Leipzig.
Mckinnon, A. C. (2010) Environmental sustainability: a new priority for logistics
managers. In: MCKINNON, A. C., CULLINANE, S., BROWNE, M. & WHITEING, A. (eds.)
Green Logistics - Improving the environmental sustainability of logistics. London: Kogan
Page.
Miles, M. B. & Huberman, A. M. (1994) Qualitative Data Analysis: An Expanded
Sourcebook. 2nd edn. London: Sage Publications.
Murphy, P. R. & Poist, R. F. (2003) Green perspectives and practices: a "comparative
logistics" study. Supply Chain Management: An International Journal. 8 (2), 122-131.
OPPENHEIM, A. N. (1992) Questionnaire Design, Interviewing and Attitude Measurement.
London, Washington: Pinter.
Preuss, L. (2005) The Green Multiplier: A Study of Environmental Protection and the
Supply Chain. Basingstoke: Palgrave Macmillan.
Rogers, D. S., Tibben-Lembke, R. S. (1998) Going Backwards: Reverse Logistics Trends
and Practices [online]. s.l.: Reverse Logistics Executive Council. Available from:
http://www.rlec.org/reverse.pdf [Accessed 29th November 2009].
Saunders, M., Lewis, P., Thornhill, A. (2009) Research Methods for Business Students.
5th ed. Harlow: Prentice Hall.
Seuring, S. (2008) Assessing the rigor of case study research in supply chain
management. Supply Chain Management: An International Journal. 13 (2), 128-137.
Shell Deutschland Oil GMBH. (2010) Shell Lkw-Studie: Fakten, Trends und Perspektiven
im Straßengüterverkehr bis 2030. Hamburg/Berlin: Shell Deutschland Oil GmbH.
Wolf, C., Seuring, S. (2010) Environmental impacts as buying criteria for third party
logistical services. International Journal of Physical Distribution & Logistics Management.
40 (1/2), 84-102.
Woodburn, A., Whiteing, A. (2010) Transferring freight to 'greener' transport modes. In:
MCKINNON, A. C., CULLINANE, S., BROWNE, M. & WHITEING, A. (eds.) Green Logistics -
Improving the environmental sustainability of logistics. London: Kogan Page.
World Business Council For Sustainable Development & World Resources Institute.
(2004) The Greenhouse Gas Protocol: A corporate accounting and reporting standard.
Geneva / Washington: World Business Council for Sustainable Development & World
Resources Institute.
Wu, H.-J., Dunn, S. C. (1995) Environmentally responsible logistics systems.
International Journal of Physical Distribution & Logistics Management. 25 (2), 20-38.