Costs and Benefits of Green Logistics

For the current 4flow study “Costs and Benefits of Green Logistics”, the supply chain experts at 4flow took a close look at opportunities for reducing greenhouse gas emissions. The focus was on whether logistics can contribute to a sustainable economy and whether cost efficiency and sustainability are compatible in actual practice. In this study various means for reducing greenhouse gas emissions were classified based on their financial and ecological impact. The ideal measures can both reduce emissions and save costs. The ecological measures reduce the CO2 emissions but lead to additional costs while the economical measures do just the opposite. Methodology Measures that are generally considered to be low in emissions were considered. The measures serve as concrete and representative examples of strategic, tactical, and operational logistics and were carried out based on realistic data. Designing networks differently - Eco-efficient network design - Merging networks Relocating production - Backshoring - Local production - Local sourcing of standard parts Rethinking trucks and boxes - Shifting from road transportation to intermodal transportation - Shifting from mega trailers to LCVs - Switching from returnable to disposable containers Considering routing and time restrictions - Reducing driving speed - Delivering less frequently - Extending delivery windows Results All in all, emissions were able to be reduced by 80 percent in all of the case studies. The ideal measures have both a positive ecological and a positive economic effect: - Merging networks - Shifting from mega trailers to LCVs - Extending delivery windows - Delivering less frequently In the other seven cases, the implementing these measures resulted in additional costs of €2,400 to €13,300 per reduced ton of CO2e annually. This price is well above the market price for one ton of CO2 in recent years.