Environmental assessment of shipment release policies

Abstract

Purpose A program of shipment consolidation (SCL) is the purposeful intervention by management to regularly combine several small shipments so that a larger load may be dispatched on the same vehicle. SCL decisions traditionally have been based upon minimization of total logistics costs (inventory plus transportation). The paper aims to answer the following research question: given the environmental implications of vehicle emissions as a function of load weight, are the familiar SCL policies still optimal? Design/methodology/approach Nonlinear expressions relating carbon dioxide (CO 2 ) emissions to vehicle weight, and parameterized by trip length and average travel speed, were derived from published experimental data. Those expressions were included in a simulation model that assessed the environmental impact, in addition to the logistics cost, of the policies concerning when to release a consolidated load. Findings For short holding times, the quantity policy performs best in terms of both logistics cost and pollution reduction. In the case of low‐order arrival rates and long holding times, the time policy is best at reducing emissions and logistics costs. However, the best dispatch policy conflicts in terms of pollution reduction and logistics cost minimization for the following cases: moderate holding times and long holding times combined with high‐order arrival rates. In these cases, it is necessary to consider the speed of travel, trip length and unit cost of emissions when evaluating the policies. Research limitations/implications A carbon trading market appears to be on the horizon in several industries, which will establish a price per unit weight for CO 2 emissions and make it beneficial to minimize the total cost (including emissions) of the network. This research only considers CO 2 pollution, but future investigations could also consider other pollutants such as nitrogen oxides, carbon monoxide and volatile organic carbons. Practical implications SCL policies can include a “green logistics” component that is based on empirical data. Originality/value One undesirable consequence of transportation by truck is CO 2 emissions. However, the impact can be lessened, while still emphasizing total logistics cost per load, with our simulation‐based results for shipment release policies.