The Impact on Transportation Standards from regulations

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Throughout the past decades, the rapid global economic growth increased the level of the products consumption. Globalization provoked the expansion of the goods distribution streams worldwide, and the manufacturing, storage, and consumption of the goods induced the negative impacts on the natural environment.

Global warming caused by the extensive greenhouse gasses emissions is regarded as one of the most significant issues by the environmentalists and scientists. According to the recent statistics, since the end of the 20^th century, the emissions caused by the cross-national aviation has been increased to over 50%, and the further expansion of the international trade will provoke even more significant increases (Abe, Hattori, & Kawagoshi, 2014, p. 468).

Nowadays, governments and other official agencies recognize the importance of taking measures for the current problems resolving. The research of operations and activities involved in the logistics and transportation management helps to investigate their impacts on the environmental state and, at the same time, improve the organizational performances, refine policies, and reduce costs.

The given paper is devoted to the analysis of the relations between the environmental protection regulations and the transportation standards as well as the integration of the environmental regulations in the logistics and transportation management.

Through evaluation of the previous literature findings and claims related to the subject, the tendencies in the logistics and transportation management will be investigated as well as the environmental policies impacts on the structures of the supply chains transportation, their planning, and control.

Literature Review

According to Abe and his colleagues (2014), the current “total global emissions from international transportation are much larger than the sum of emissions from all sources in the UK and France” (p. 468). The complete liberalization of trade and the lack of the environmental controls will induce the greater negative effects on the environment.

Since transportation is considered as the primary source of the negative environmental impact, many researchers are concerned with the environmental sustainability considerations and the potential benefits of “greening” the organizational logistics and transportation systems (Pazirandeh & Jafari, 2016, p. 890).

The government attempt to undertake measures for the excessive emission control. For example, “policies to induce biofuel production in the US include technology (biofuel) mandates and performance-based standards for transportation fuel” (Chen, Huang, Khanna, & Onal, 2014, p. 242).

The Renewable Fuel Standard, the Low Carbon Fuel Standard, and a carbon price policy were also adopted by the government as the initiative for the environmental sustainability increase and promotion of the alternative fuels usage by the organizations. The initiatives introduced by the officials have both economic and ethical implications.

The Concept of Sustainability n Logistics and Transportation Management

Sustainability is commonly defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland, Khalid, Agnelli, Al-Athol, & Chidzero, 1987). Therefore, the process of the economic development must include social and environmental aspects to meet the sustainability standards.

The researchers continue to make attempts to apply the concept of sustainability to the context of logistics management (Pazirandeh & Jafari, 2016; Oberhofer & Dieplinger, 2014). Traditionally, logistics management can be regarded as the set of regulations meant to plan, implement, and control the efficiency and effectiveness of the goods storage and the activities that lead to the goods consumption and compliance with the customers’ demands.

And when speaking of “green logistics,” it involves the same regulations and activities and additionally attempts to minimize the negative impacts on the environment (Marchet, Melacini, & Perotti, 2014, p. 776).

“The environmental management practices commonly used in the logistics industry include disposing waste responsibly, purchasing ecological products, reducing energy consumption, reducing solid/water waste and emissions, using cleaner transportation methods, and using recyclable packaging/containers” (Ho & Lin, 2012, p. 231).

The sustainable transportation processes involve both technological advancement and the transformation of the management strategies. According to Marchet and his colleagues (2014), the reduction of pollutant emissions and greenhouse gas is one of the principle goals for the efficient and environment-oriented logistics management (p. 793).

For the development of the organizational capacity to integrate the concept of sustainability into management, it is suggested execute the transportation by cleaner vehicles or use the alternative fuels. According to Lieb and Lieb (2008), the usage of more environment-friendly transportation methods is now widely recognized because of the government environmental regulations, the rise of costs for fuels, fuel scarcity, and the organizational attempts to increase competitiveness and improve company’s image (p. 14).

Along with the shifts towards different modes of transportation and fuel efficiency, the researchers suggest the redesign of the transport and distribution strategies. For example, it is possible to relocate the production and manufacturing sites closer to the consumption areas to reduce distances and decrease traffic (Marchet, Melacini, & Perotti, 2014, p. 777).

The improvements in the vehicle utilization are regarded as the optimal way to integrate environmental performance into the economic growth of the organization. The consideration of transportation modes thus leads to the efficient utilization of resources (Pazirandeh & Jafari, 2016, p. 893). In this way, by improving the environmental performance, a company can attain a higher efficiency regarding the costs and profits.

According to Ho and Lin (2012), the effectiveness of the technical innovations, as well as a successful adoption of newly designed environment management strategies in logistics and transportation, highly depends on the quality of human resources (p. 228). Adopting the new activities and practices is a complicated process that requires the transformation in the personnel operability and functioning, and the human resources’ competence and professional capabilities facilitate the organizational transition to change.

Therefore, the elaboration of training programs, development of the necessary skills, and the increase of awareness of the issues related to environmental sustainability play one of the crucial roles in the environmental management (Del Brio & Junquera, 2003). Well-Planned coordination of employees increases their level of involvement and commitment. The qualified, knowledgeable, and competent human resources thus benefit the organization in the effective adoption of the logistics, transportation, and environment strategies change.

The Motivations to the Adoption of Environment-oriented Strategies

There may be various motivations for the elaboration of strategies that include the environmental sustainability initiatives. The motive forces maybe both of internal and external character.

The external factors include the governmental policies, legislation and laws, the change in the customers’ preferences and requirements, social expectations, the desire to meet the business partners’ demands, high level of competition in the market, attempts to create the competitive advantages and increase profitability, and improvement of the business performance (Lieb & Lieb, 2008; Del Brio & Junquera, 2003; Ho & Lin, 2012).

The internal factors creating the urge for the sustainability initiatives adoption are the improvement of the working environment, the increase of company’s efficiency, reduction of costs and expenses, the creation of the image as a corporate citizen and improvement of reputation (Ho & Lin, 2012; Lieb & Lieb, 2008).

The attempt to be a corporate citizen implies the recognition of the necessity for the responsible and ethical business conduction. According to Lieb and Lieb (2010), it is regarded as one of the most significant reasons for integration of the environmental sustainability programs into the corporate culture. In this way, companies can enhance their image and increase customers loyalty and attraction.

Potential Benefits of Organizational Compliance with the Sustainability Standards

Despite the recognized significance of the sustainability principles consideration in logistics and transportation management, there is still an insufficient number of research findings covering the benefits of the environmental sustainability management practices implementation.

The changes in the transportation and fuel modes, as well as the other environmental initiatives, are commonly regarded as the causal factors for the costs and expenses increase (Pazirandeh & Jafari, 2016, p. 890). However, many researchers attempt to find the relations between the competitiveness increase and the effective environmental performance of organizations, and it is shown that the environment-oriented practices may increase economic and financial performance (Ho & Lin, 2012; Marchet, Melacini, & Perotti, 2014).

According to Marchet and his colleagues (2014), the benefits that the company gains after the implementation of the sustainability initiatives can be “tangible,” such as effectiveness and efficiency increase, and “intangible,” such as improvement of the organizational image” (p. 800).

The tangible impacts thus are related to the economic or the environmental indications. From the economic viewpoint, there will be the reduction of material costs and low resources consumption.

According to Lieb and Lieb (2008), the optimization of the distribution centers locations and numbers, appropriate transportation policies, usage of efficient fuels and ecological vehicles may lead to the overall long-term costs decrease. From the perspective of the environmental benefits, there will be the reduction of emissions, industrial waste discharge, water waste, and reduction of toxic materials consumption (Marchet, Melacini, & Perotti, 2014, p. 800).

The intangible positive impacts of the environmental performance improvement involve the enhancement of the organizational image, a better quality of life, and motivation for the environmental problems resolving (Ho & Lin, 2012). According to Oberhofer and Dieplinger (2014), the environment-oriented behavior may increase the customers and suppliers’ attraction. The integration of the environment protection values into the organizational culture may increase the organizational attractiveness to the potential employees as well.

Summary

Despite the fact that the transport is regarded as the principal cause of the excessive air and water pollution, many organizations often underestimate the environmental practices’ impact on the business performance.

The government attempts to control the emissions legally by the adoption of standards and taxes increase, and many researchers contribute to the investigation of the benefits of environment-oriented practices adoption (Chen, Huang, Khanna, & Onal, 2014, p. 242). As the result, nowadays the environmental issues are of increased interest for the practitioners in the logistics and transportation management.

The conducted analysis of the literature helped to establish the reasons and motivations for the environmental initiatives adoption as well as the potential benefits provoked after their implementation and the issues of the environmental sustainability measuring regulated by the official institutions and agencies.

However, the research is exposed to a few limitations. First of all, the clear-cut evidence for the relations between the sustainable transportation strategies (environmental performance) and their relation to the financial performance of organizations is under-represented in the analyzed literature. The balance between environmental solutions and the business concerns in logistics and transportation is of significant importance.

While improvement of the environmental quality in an attempt to meet the external pressures and requirements increases costs, companies need to find ways to sustain the financial activity and avoid economic declines. Therefore, the further investigation of the balance between environmental performance and economic performance will contribute to more effective compliance with the environmental regulations.

References

Abe, K., Hattori, K., & Kawagoshi, Y. (2014). Trade liberalization and environmental regulation on international transportation. The Japanese Economic Review, 65(4), 468-482.

Brundtland, G.H., Khalid, M., Agnelli, S., Al-Athol, S.A. and Chidzero, B. (1987). Report of the world commission on environment and development: our common future. Retrieved from www.un-documents.net/our-common-future.pdf

Chen, X., Huang, H., Khanna, M., & Onal, H. (2014). Alternative transportation fuel standards: Welfare effects and climate benefits. Journal of Environmental Economics and Management, 67, 241–257.

Del Brio, J. A., & Junquera, B. (2003). A review of the literature on environmental innovation management in SMEs: implications for public policies. Technovation, 23(12), 939-948.

Ho, Y., & Lin, C. (2012). An empirical study on Taiwanese logistics companies’ attitudes toward environmental management practices. Advances in Management & Applied Economics, 2(4), 223-241.

Lieb, K., &Lieb, R. (2010). Environmental sustainability in the third-party logistics (3PL) industry. International Journal of Physical Distribution & Logistics Management, 40(7), 524-533.

Lieb, R., & Lieb, K. (2008). The North American third-party logistics industry in 2008: The provider CEO perspective. Transportation Journal, 49(2), 1-25.

Marchet, G., Melacini, M., & Perotti, S. (2014). Environmental sustainability in logistics and freight transportation. Journal of Manufacturing Technology Management, 25(6), 775-811.

Oberhofer, P., & Dieplinger, M. (2014). Sustainability in the transport and logistics sector: lacking environmental measures. Business Strategy and the Environment, 23, 236-253.

Pazirandeh, A., & Jafari, H. (2013). Making sense of green logistics. International Journal of Productivity and Performance Management, 62(8), 889 – 904.

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