The Role of Logistics Service Providers in the Development of Sustainability-Related Innovation

The Role of Logistics Service Providers in the Development of Sustainability-Related Innovation

Maria Huge-Brodin (Linköping University, Sweden)
DOI: 10.4018/978-1-60960-585-8.ch014
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Abstract

Logistics service providers (LSPs) are important actors in the supply chain, and due to the transport intensive activities they manage, they can make a large contribution to the development of sustainable supply chains. They are often considered as reactive and quite passive in their role vis-à-vis their customers though many possess the critical logistics capabilities required to make distribution operations less damaging to the environment. Developing green logistics service offerings can be one way of greening the whole supply chain, though today there appears to be little demand for these services. In the longer term, however LSPs are likely to benefit from being an environmentally innovative and to apply their environmental knowledge more effectively inside their organisations. This will strengthen their competitive position in a future logistics market in which environmental capabilities become major selection criteria. Many of the innovative systems and practices may not be motivated primarily by a desire to preserve the environment but will, nevertheless, contribute to sustainable development. To make a major commitment to greening client’s supply chain, an LSP will often require a longer-term contract that supports investment in more environmentally friendly technology and business processes.
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It is now vital for LSPs to include environmental considerations in their overall business offering, and more specific business models targeted on particular market segments (Maack and Huge-Brodin, 2009). How are LSPs responding to the market demands for sustainable services today? An investigation among Swedish LSPs shows, in line with the findings of Wolf and Seuring (2010), that the LSPs are actually offering more environmental services than the market – the customers – demand (Martinsen and Björklund, 2010). As logistics is really their core business, LSPs’ sustainability innovations are closely related to the logistics innovations. Flint et al. (2005) distinguish two types of logistical innovations: technological innovations and process innovations, and relate them to what can be included in a sustainable service offering from an LSP (Martinsen and Huge-Brodin, 2010).

Green service offerings from LSPs were described on the basis of literature reviews, a homepage scan, and a survey study among Swedish LSPs and logistics customers. They included choices relating to technology, emission- and energy reports as well as more complex issues like transport planning and environment-related network (Martinsen and Huge-Brodin, 2010). The investigation showed that the LSPs offerings exceed both the actual demand and the expectations from their customers, specifically in the areas of energy reports, mode choice, transport planning and network design (Martinsen and Björklund, 2010). On the other hand, the different groups’ offerings and demands were more closely matched in their assessments of environmentally classified vehicles and fuels (Figure 1).

Figure 1.

The LSPs’ green service offerings and the customers’ demand, described per green item. The respondents were asked to rank each item according to which extent they included the item in their offering or demand (5 fully agree – 1 don’t agree at all) (Martinsen and Björklund, 2010).

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