Towards greener supply chains : Inclusion of environmental activities in relationships between logistics service providers and shippers

Abstract: It is well-recognised that companies are under pressure to take responsibility for the environmental impact of their operations. Logistics service providers (LSPs), who through their transport and logistics operations have a large negative impact on the environment, are one type of supply chain actor that is under such pressure. However, in order for LSPs to be able to lower their environmental impact sufficiently, their customers, the shippers, also need to take responsibility. This thesis takes its starting point in the relationships between LSPs and shippers and argues that in order for LSPs’ environmental activities to reach their full potential, the shippers must be included in the activities.The purpose of this thesis is to describe and explain how supply chain actors, with a specific focus on logistics service providers and shippers, can include environmental activities in their relationships with each other. This comprises identifying those environmental activities that are relevant for relationships between LSPs and shippers, as well as describing the extent to which environmental activities are included in such relationships. By means of the theoretical perspective of power between supply chain actors, the thesis also sets out to further understand how power balances between LSPs and shippers can influence the extent to which they include environmental activities in their relationships with each other. Finally, the use of the theoretical perspective of coordination aims, through the analysis of coordination mechanisms, to shed light on how environmental activities are included in LSP-shipper relationships.The research in this thesis has mainly descriptive and explanatory aims, although due to the novelty of research into LSPshipper relationships in an environmental context, the research process as such is mainly exploratory. Following an abductive approach, the insights from literature are combined with empirical data from two cases studies, a homepage scan, a survey and a study of city logistics projects. Most of the applied research methods take a dual perspective of relationships between supply chain actors and thus include both LSPs and shippers.One conclusion from the research conducted for this thesis comprises the identification of environmental activities as well as a suggestion for a classification based on the activities’ role in the business between LSPs and shippers. With a starting point in the identified activities, a comparison of a market perspective and a relationship perspective of environmental activities in LSP-shipper relationships indicates that LSPs are able to fulfil the requirements set by shippers and that shippers’ requirement thus are met. The research does, however, point to a passiveness among LSPs in their relationships with shippers, who in turn would like the LSPs to be more proactive.Further, based on an analysis of power balances in LSP-shipper relationships, it is suggested that in an LSP-shipper relationship in which the shipper has a power advantage, the shipper’s environmental ambitions for logistics sets the agenda for the environmental activities in that relationship.An analysis of coordination of environmental activities in LSP-shipper relationships indicates that the mechanisms of direct supervision, which is when one actor tells the other actor in the relationship what to do, and mutual adjustment can be chosen to be used in order to include environmental activities in LSP-shipper relationships. While direct supervision is suggested to be a coordination mechanism that is easy for shippers to apply, mutual adjustment appears to hold greater potential for the development of environmental activities.Finally, these findings in combination are suggested to have implications for the coordination of environmental activities in LSP-shipper relationships. More specifically, this thesis offers a categorisation of different types of LSP-shipper relationships and the involved actors’ environmental ambition. Depending on whether the environmental ambition of the LSP and shipper in a specific relationship is high or low appears to have implications for the possibility to work towards greener supply chains for each type of relationship.