Switching Transport Modes to Meet Voluntary Carbon Emission Targets

Kristel M. R. Hoen (), Tarkan Tan (), Jan C. Fransoo () and Geert-Jan van Houtum ()
Additional contact information
Kristel M. R. Hoen: Quintiq, 5201 AG’s-Hertogenbosch, The Netherlands
Tarkan Tan: School of Industrial Engineering, Eindhoven University of Technology, 5600 MB Eindhoven, The Netherlands
Jan C. Fransoo: School of Industrial Engineering, Eindhoven University of Technology, 5600 MB Eindhoven, The Netherlands
Geert-Jan van Houtum: School of Industrial Engineering, Eindhoven University of Technology, 5600 MB Eindhoven, The Netherlands

Transportation Science, 2014, vol. 48, issue 4, 592-608

Abstract: The transport sector is the second-largest carbon emissions contributor in Europe, and its emissions continue to increase. Many producers are committing themselves to reducing transport emissions voluntarily, possibly in anticipation of increasing transport prices. In this paper we study a producer that has outsourced transport and has decided to cap its carbon emissions from outbound logistics for a group of customers. Setting an emission constraint for a group of customers allows for taking advantage of the portfolio effect. We focus on reducing emissions by switching transport modes within an existing network, because this has a large impact on emissions. In addition, the company sets the sales prices, which influence demand. The problem is solved by decomposing the multiproduct problem into several single-product problems, which we then analyze separately. Using the single-product solutions, we create an efficient frontier that reflects the trade-off between total carbon emissions and the total profit. It is observed that a diminishing rate of return applies in reducing emissions by switching transport modes. In a case study, we apply our method to a producer of bulk liquids and find that emissions can be reduced by 10% at only a 0.7% increase in total logistics cost.

Keywords: carbon emissions; green supply chains; sustainability; transport mode selection; Lagrange relaxation; pricing (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://dx.doi.org/10.1287/trsc.2013.0481 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ortrsc:v:48:y:2014:i:4:p:592-608

Access Statistics for this article

More articles in Transportation Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().