Sustainability has emerged as central theme in logistics during the last decades. This is further pushed by legislation and stakeholder demand. The COVID-19 pandemic and related preventive measures have had enormous impacts on all logistics and transportation. The purpose of this research is to study value of sustainability as well as impacts of the ongoing pandemic, from perspective of logistics service providers representing different parts of intermodal transportation networks. The chosen approach is qualitative case study, comprising of interviews targeting 12 Finnish logistics companies. In addition, data from a survey on logistics companies' confidence during the pandemic is used to elaborate results in macro-level further. All transportation modes excluding aviation are covered in this study. The results show that value of sustainability (especially environmental) is increasing in intermodal transportation networks. On top of this, the COVID-19 pandemic has hit the sector heavily, but the examined companies seem to have survived the worst and are in the process of recovering.
TopIntroduction
Value from sustainability has become increasingly important source of competitiveness for logistics service providers (Arvis et al., 2018). While regulative and societal actions targeting sustainability of all business sectors act as drivers for transformation towards sustainability, some companies have identified competitive advantages in sustainability and therefore possess proactive orientation towards it. Indeed, top-down approaches promoting sustainability come in form of global (e.g., Paris agreement; UNFCCC, 2021), regional (e.g., EU decarbonization targets; European Commission, 2021) and national regulation (Haas and Sander, 2020). However, from the competitiveness point of view, stakeholder pressure towards companies to improve sustainability of their operations (i.e., bottom-up approach) is becoming increasingly important (Seuring and Müller, 2008). In addition, Covid-19 has had dramatic impact on logistics sustainability in terms of transportation modal shift and on mobility of both passengers and goods.
Clearly, sustainability can provide value to logistics service providers. However, it is extremely difficult to measure in quantifiable terms (e.g., short-term profits), making it harder for companies to justify investments towards improving sustainability (Hristov et al., 2019). Some measurements are used currently, such as CO2 emissions amounts, which via carbon trading platforms can be assigned with a price tag. As a response for external stakeholders’ pressure towards sustainability, companies also increasingly involve these stakeholders in designing and developing their operations (e.g., Söderholm & Bergquist, 2012). The role of logistics is vital for any modern society, and as the movement of people and goods is tied to energy use, the role is also central in improving environmental sustainability of societies.
Rather than sustainability, functionality and price are still the most commonly used measures in logistics (Arvis et al., 2018). Functional logistics is dependent on utilization of different transport modes. These modes (i.e., rail, road, sea, inland waterways, aviation, and pipelines) differ in characteristics, one of those being their environmental sustainability. For example, electrified railways can be seen as more environmentally friendly option over road transportation or aviation. However, this is not always obvious, and for example railway operators seem to not notice or in some cases overlook the natural competitive advantage their transportation mode possesses. As the pressure towards environmental sustainability of transportation is increasing for logistics service providers, competitive advantages can be reaped by those actors with proactive orientation towards environmental sustainability (Wu & Pagell, 2011). Especially in passenger transportation, where consumer is in direct and close interaction with the service provider.
Logistics service providers act as intermediary entities and thus participate value creation within network (Wang et al., 2016). As sustainability is established as a factor for value creation, the organizational orientation, culture, and strategy towards sustainability emerge in importance (Wang, 2019). While societal awareness towards environmental challenges has been increasing, using environmental sustainability as competitive advantage seems to be still lacking in logistics sector. Currently, environmental sustainability in logistics is tied to processes and isolated actions. Similarly, research on logistics environmental sustainability can still be seen as lacking (Björklund et al., 2016). Sustainability is not something that one actor alone can resolve, rather it requires collaboration and network wide strategies not to manifest as exercise in futility (Chen et al., 2017; Pakdeechocho & Sukhotu, 2018). It seems that the network collaboration is one of the dimensions that is currently lacking in pursuit towards sustainability in logistics industries. In addition, the recent Covid-19 pandemic has brought its own challenges, and the clientele in “new reality” expect resilience of service provision to be part of sustainability.