Lecture 2

Reducing freight transport externalities

§ Much of the early research on the

environmental impact of logistics was
motivated by the growth of lorry traffic at a
time when lorries were much noisier and
more polluting than today.
§ Numerous studies were conducted in the
1970s to assess the nature and scale of these
effects, many of them in the UK.
§ Their focus was on the local environmental
impact of lorries.
 Reducing freight transport externalities

• Reports published by
environmental pressure groups
catalogued the environmental
damage they were causing
• and demanded government action
to contain the ‘lorry menace’.
• In the UK, the government
responded by setting up an inquiry
to examine the effects of lorries on
the environment
• and explore ways of minimizing
them .
• Advances in vehicle technology
and tightening regulations on
emission levels gradually reduced
transport externalities per vehicle-
km.
 Decoupling economic growth from road freight
traffic levels

§ Reducing the
transport intensity of
the economy (ratio of
road tonne-km to
GDP)
§ Altering the freight
modal split (to
displace freight on to
alternative modes)
§ Improving vehicle
utilization
§ MIC BMS hybrid and
IVMS
 City logistics
• The first major studies of the
distribution of freight in
urban areas were conducted
in the 1970s and early
1980s.
• Major cities such as London
and Chicago commissioned,
usually for the first time,
surveys of freight
movements.
• In Europe most of the
studies focused on the
adverse effects of goods
movement
 City Logistics

• In the US the focus was on transport

efficiency and economic development
• In Japan, researchers became very active
in logistics studies and included greening
as part of total quality management
• More recently a book was published
considering green supply chain
management as part of total quality
management
 City logistics
• Efficiency and environmental
concerns converged in one of CO2 Emissions
the most extensively Freight Transport Mode
researched urban freight Intensity (gCO2 /T*Km)
topics at the time, namely :
• The ‘small order problem’ Ship 10.1
(Jackson, 1985).
• The dispersal of freight in
small consignments by poorly Railway 22.7
loaded vehicles to a multitude
of locations was found to
impose high economic and Road 119.7
environmental costs.
• Numerous studies were then
done to find ways of Air 809.2
consolidating loads and,
thereby: Source: Llano et al. (2018)

• cut traffic levels, energy use,

emissions and costs.
City logistics
§ Other new strands in urban
freight research in the last
decade include the increase in
the diversity and extent of
service-related transport to
commercial and residential
locations.

§ Food delivery companies for

example gained significant
market share and became very
popular
 City logistics …KiwiBot
§ Reliable: faster and cheaper
§ Friendly : improve your life and
reduce the congestion caused
by delivery cars. Make cities
livable and friendly for those
who matter
§ Efficient : cutting-edge
behavioral neural network
enables Kiwibots to seamlessly
mesh into the fabric of urban
landscape
§ The technology used such as
Smart Brake and Street Crossing
Mode make it very convenience
and don’t harm families friends
or neighbors
 What is next ? Autonomous Vehicles

Faster and more accurate shipping reduces

lead times and transportation expenses, adds
elements of environmental friendly
operations, reduces labor costs, and — most
important of all — widens the gap between
competitors.

§ Waymo introduced taxi service through self driving cars

in 2018 and currently building driverless trucks for more
safety. Expected revenue by 2030 is $ 114 billion.
§ 25% of Dubai cars will be self-driving ones by 2030
§ Braking, lane changing, collision prevention, navigation
and mapping, are examples of systems controlled and
monitored by artificial intelligence which all help in
reducing accidents
§ Hyundai - Uber flying car will be rolled out in 3 years.
Cruising between 1000-2000 ft. above the ground at 180
miles per hour. It would accommodate 4 passengers and
take trips up to 60 miles. Impact on congestion !!
What is next ? Fuel Cells

Toyota Mirai
 What is next? SMART ROADS

§ Roads developed with solar panels and

LED lights to produce electricity for
colorful lights to pay drivers attention and
heat roads for non-slippery in winter and
consequently no delivery delays.
§ Integrated Roadways (US based company)
has created the Smart Pavement System
which can connect the cars on the road to
the Internet and as a result provide
drivers with real-life information about
traffic jams and accidents.
§ Moreover, the AI within the system can
”feel” the position of every vehicle and
provide drivers with detailed navigation.
 What is next ? Hyperloop

§ Hyperloop (the future model for mass

transport) is vacuum-tube system to
propel passengers and goods at speeds
more than 1,000 kilometres per hour.
§ The pods may travel free of air
resistance or friction conveying people
or objects at high speed while being
very efficient, thereby drastically
reducing travel times over medium-
range distances.
§ The pods would speed through extended
tubes connected between cities.
§ Think of it as super-speed bullet trains
moving through a tunnel
§ The company claims that these are 5-10
times “more energy efficient than a
commercial airliner
 Reverse logistics
• The return of waste product and
packaging for reuse, recycling and
disposal,
• an activity that is now regarded as a
key part of green logistics.
• Research interest in this topic
developed in the early 1990s
• when governments and businesses
began to reform the management of
waste, reducing the proportion of
waste material being dumped in
landfill sites or incinerated
• and increasing the proportion that
was recycled and reused.
• This fundamentally transformed the
logistics of waste management and
• Stimulated research interest in the
return flow of product back along the
supply chain.
 Corporate environmental strategies

• Prior to the 1980s,

companies’ environmental
initiatives , often
implemented in response to
government regulations or
public protest.
• New international standards,
such as ISO 14000, were
introduced to accredit
companies’ environmental
programmes and
• help customers ensure that
suppliers had the required
environmental credentials.
 Corporate environmental strategies

• More recent surveys

have revealed the
widening diffusion of
green logistics/supply
chain strategies across
the business world
and
• Suggested that
transport and
distribution activities
have a prominent role
in these strategies .
• Research by Rao and
Holt (2005) suggested
that :
• ‘if they green their
supply chains not only
would firms achieve
substantial cost
savings,
• but they would also
enhance sales,
market share, and
exploit new market
opportunities to lead
to greater profit
margins.’
Green Supply Chain Management and Corporate
Performance