Henrik Pålsson Docent, Packaging Logistics Lund University

Henrik Pålsson Docent, Packaging Logistics Lund University

The purpose of this report is to explore current practices of sustainable freight transport initiatives in Swedish companies. The practices that affect transportation are carried out by shippers and transport providers. Four research questions that address the perspectives of both are posted: 1. What are the motives and drivers for shippers to reduce transportation emissions? 2. What transport practices have shippers and transport providers implemented to reduce the environmental impact? 3. How do Swedish shippers and transport providers: a. Integrate transport into their environmental initiatives? b. Prioritise environmental transport practices compared to other environmental practices? c. Utilise the transport capacity (have a high fill rate)? 4. Which policy instruments have been effective in terms of reducing transport emissions from a company perspective? The report is based on data from five sources: two literature reviews, interviews with the environmental managers and the transportation managers of seven large companies covering different industries, a survey of 172 shippers and transport providers in the eight most transport-intensive industries in Sweden, and an analysis of company reporting on environmental practices. The results show that the main motives to implement environmental transport practices were to be seen as an environmental employer and to show social responsibility. This implies that consumers have the power to affect companies environmental transport practices. From a governmental perspective, it would be effectual to support information campaigns directed at the general public or to facilitate consumers in making informed environmental choices. The second most important motives were to obtain long-term competitiveness and provide a marketing potential from environmental transport practices. Short-term profits were considered less important. Still, increasing the vehicle fill rate seem to be primarily motivated by economic factors. To further support these motives, there could be governmental support for communication, arranging workshops, and research grants in this area. The least important drivers for environmental transport practices are different types of requirements from customers, authorities and company owners. The legal requirements are necessary and important to obtain a certain level of reduced environmental impact, but by addressing the company-internal motives related to economic benefits and improved image, companies are likely to green their transportation even more. Governmental support for company-internal motives can be effectuated by supporting initiatives that increase understanding of how economic advantages from green transportation can be obtained by supporting research, environmental education in companies, and environmental and cost calculation tools. Both shippers and transport providers actively reduce the environmental impact of transportation. Large companies are more likely to implement green transport practices than small companies, and the overall company strategy seems to affect whether a company greens their transportation. The most common practices in Swedish companies seems to be related to short-term operational environmental initiatives and technical solutions. However, practices related to more long-term strategic changes, which require organisational or structural changes, are less implemented. This means a limited implementation of green issues in the sourcing and supplier selection processes of shippers and in the design of production and distribution structures. These types of organisational changes are of a strategic nature, but transportation does not seem to be prioritised in green strategies. To include transportation in the strategic decisions, the mindset of managers needs to be changed and models for combining economic and environmental measures need to be developed. From a policy perspective, this means that policy makers can support research for developing environmental i

performance measurement where economic and environmental factors are linked. The Swedish shippers and transport providers seem likely to continue to reduce the environmental impact of transportation in the coming years through operational decisions, but it appears that the strategic and commercial decisions are likely to continue to work in the opposite direction. Practices that require collaboration between shippers and transport providers do not seem to be particularly implemented. The data sharing for transportation is of an operational character, while strategic data sharing is lacking. There are a number of reasons for the limited implementation of collaboration: transport providers do not experience much interest or requirements from shippers; collaboration is of a strategic nature; all the practical problems involved in collaborating with huge numbers of suppliers and customers; and when shippers outsource transportation, they tend to emphasise other areas. Transportation does not appear to be highly prioritised in the environmental efforts of Swedish companies. When it comes to strategic decisions, vehicle fill rate has a low priority, but the transport providers seem to work a lot with factors that have a direct impact on the fill rate, such as number of pallets in the vehicle. However, factors that have an indirect impact on the fill rate, such as packaging design and ordering patterns, are less considered. The indirect factors often require interorganisational collaboration and strategic decisions. The research interest in vehicle fill rate has increased in recent years and the transport providers seem to put considerable efforts into having as high a vehicle fill rate as possible. They work efficiently with operational practices, but the shippers demands are considered as fixed. This means that there is little communication between transport providers and shippers about aligning the transport demands of shippers with the transport providers transport flows to improve the vehicle fill rate. To obtain further improvements, more collaboration is needed. Joint loading, for instance, is often needed to make intermodal road-rail transport solutions profitable. There is also a need for information transparency within companies to align and highlight constraints in the order and delivery process, and in packaging management on the vehicle fill rate. Improved models for cost and benefit sharing are also necessary to increase the vehicle fill rate. A survey of Swedish companies revealed that among three types of policy instruments for reducing the environmental impact of transportation, they perceived investment-based policy instruments to be the most efficient. About 75% of the companies consider that these policy instruments have been efficient to very efficient for reducing CO 2 emissions. Companies seem to have great confidence in new technological solutions, which are supported by investment-based policy instruments. When it came to regulatory policy instruments, companies favoured those that lead to free and dynamic adjustments to new legislation instead of more directed legislation. However, even though the kilometre tax was considered as being the least efficient for the whole sample, 35% of the companies considered it to be efficient to very efficient for reducing CO 2 emissions. The third type of policy instrument, voluntary engagement, obtained a low ranking regarding efficiency. To further reduce the environmental impact of transport, policy makers should provide clear and long-term policies. This report describes such policies to support organisational and strategic change. It also highlights the effectiveness of educational and communicational support in terms of best practice guides, environmental performance measurement, facilitation of workshops and seminars, education of consumers, and research grants. All this can facilitate knowledge sharing and increase the low interest among shippers for the environmental performance of transportation. A benchmarking tool can help both companies to improve their performance and policy makers to identify the causes of high costs and physical bottlenecks, thus supporting infrastructure investment decisions. A benchmarking tool can also improve the low level of collaboration with customers and suppliers. Currently, shippers or transport providers may set standards or use audits for the other actors to obtain a minimum environmental level, but they rarely seem to integrate their physical flows or information systems to reduce the environmental impact. This type of education and communication support can also affect packaging management practices that increase the volume and weight efficiency, which seem to be lacking. ii

Syftet med denna rapport är att utforska befintliga initiativ för gröna godstransporter i svenska företag. De initiativ som påverkar godstransporter utförs av både varuägare och transportörer. Fyra forskningsfrågor, som adresseras från båda aktörers perspektiv, har väglett rapporten: 1. Vilka motiv och drivkrafter har varuägare och transportörer att minska transportutsläpp? 2. Vilka typer av transportinitiativ har varuägare och transportörer implementerat för att minska sin miljöpåverkan? 3. Hur gör svenska varuägare och transportörer för att: a. Integrera transporter i miljöarbetet? b. Prioritera miljöinitiativ kopplat godstransporter jämfört med andra miljöinitiativ? c. Utnyttja transportkapaciteten (ha en hög fyllnadsgrad)? 4. Vilka styrmedel har varit effektiva från ett företagsperspektiv för att minska transportutsläppen? Rapporten är baserad på data från fem källor: två litteraturstudier, intervjuer med miljöansvarig och transportansvarig på sju stora företag inom olika branscher, en undersökning av 172 varuägare och transportörer i de åtta mest transportintensiva branscherna i Sverige och en analys av företags miljörapporter. De viktigaste motiven för att implementera initiativ som minskar transporternas miljöbelastning var att ses som en miljö arbetsgivare och att visa socialt ansvar. Detta indikerar att konsumenter kan påverka företagens miljöarbete för transporter. Ur styrmedelsperspektiv kan det vara verkningsfull att stödja informationskampanjer riktade till allmänheten eller på andra sätt underlätta för konsumenter att göra miljöbaserade val. De näst viktigaste motiven var att erhålla långsiktig konkurrenskraft och få en marknadsföringspotential, medan kortsiktiga vinster ansågs vara mindre viktigt. Att öka fordonens fyllningsgrad verkar dock primärt drivas av ekonomiska faktorer. För att stödja dessa motiv ytterligare kan det finnas statligt stöd för kommunikation, seminarier och forskningsbidrag inom området. De minst viktiga drivkrafterna var krav från kunder, myndigheter och företagsägare. Lagkrav och regler är nödvändiga och viktiga för att uppnå en viss nivå av minskad miljöpåverkan, men genom att adressera företagsinterna motiv kopplade till ekonomiska fördelar och förbättrad image är det troligt att företag jobbar proaktivt med att göra transporterna grönare. Statligt stöd för företagsinterna motiv kan effektueras genom att stödja initiativ som leder till ökad förståelse för hur ekonomiska fördelar från gröna transporter kan erhållas, t ex genom forskningsfinansiering, miljöutbildningar i företag och utveckling av miljö- och kostnadsberäkningsverktyg. Både varuägare och transportörer arbetar aktivt med att reducera transporternas miljöpåverkan. Stora företag är mer benägna att genomföra gröna transportinitiativ än små företag. Vidare påverkar företagens övergripande strategi i vilken omfattning företag jobbar med gröna transporter. De vanligaste miljöinitiativen för transporter i svenska företag verkar vara operationella initiativ med ekonomiska incitament på kort sikt samt tekniska lösningar. Initiativ som innebär långsiktiga strategiska förändringar och därmed kräver organisatoriska eller strukturella förändringar implementeras betydligt mindre. Detta inkluderar en begränsad implementering av gröna frågor i varuägares inköps- och leverantörsurvalsprocesser och i utformningen av produktions- och distributionsstrukturer. Dessa typer av organisatoriska förändringar är av strategisk karaktär, men transporter verkar inte prioriteras i gröna strategier. För att inkludera transporter i de strategiska besluten behöver ledares mindset förändras och modeller för att kombinera ekonomiska och miljömässiga åtgärder behöver utvecklas. Ur ett styrmedelsperspektiv betyder det att beslutsfattare kan stödja forskning för att utveckla mätning av miljöarbete med hänsyn till både ekonomiska och miljömässiga faktorer. Svenska varuägare och transportörer verkar fortsätta att reducera miljöpåverkan från transporter de kommande åren genom operativa åtgärder, men det verkar som strategiska och affärsmässiga beslut kommer att fortsätta att gå i motsatt riktning. iii

Åtgärder som kräver samarbete mellan varuägare och transportörer verkar inte vara implementerade i någon nämnvärd omfattning. Informationsdelning för transporter verkar vara av operationell karaktär, medan strategiska informationsdelning är mycket begränsad. Den begränsade omfattningen på samarbete beror på att transportörer inte upplever mycket intresse eller krav från varuägare, att samarbete är av strategisk karaktär, att det finns praktiska problem med att samarbeta med en stor mängd leverantörer och kunder, och att när varuägare outsourcar sina transporter tenderar de att fokusera på andra områden. Transporter prioriteras inte särskilt högt i varuägares miljöarbete. Fyllningsgraden har inte heller hög prioritet i strategiska beslut. Däremot verkar transportörer arbeta mycket med faktorer som har en direkt påverkan på fyllnadsgraden, såsom antalet pallar i fordonet, medan faktorer som har en indirekt påverkan, såsom förpackningsdesign och beställning mönster, beaktas mindre. Indirekta faktorer kräver ofta interorganisatoriska samarbeten och strategiska beslut. Forskningsintresset för fyllnadsgrad har ökat de senaste åren och transportörerna verkar jobba en hel del med de indirekta faktorerna för att nå så hög fyllnadsgrad som möjligt. De arbetar effektivt med operativa åtgärder, men varuägarnas krav betraktas som fasta. Det finns endast begränsad kommunikation mellan transportörer och varuägare om att anpassa varuägarnas transportbehov till transportörernas transportflöden för att öka fyllnadsgraden. För att uppnå ytterligare förbättringar behövs mer samarbete. Exempelvis är samordning av transporterna ofta nödvändigt för att intermodala väg- och järnvägstransporter ska bli lönsamma. Det finns också ett behov av informationstransparens inom företagen för att anpassa och belysa påverkan från order-och-leveransprocessen och förpackningsutformningsprocessen på fordonens fyllnadsgrad samt förbättrade modeller för kostnads- och vinstdelning av ökad fyllnadsgrad. Den upplevda effektiviteten av tre typer av styrmedel för att minska transporters miljöpåverkan visade att svenska företag uppfattar investeringsbaserade styrmedel som de mest effektiva. Ungefär 75 % av företagen uppfattar att denna typ av styrmedel har varit effektiva till mycket effektivt för att reducera koldioxidutsläppen. Företagen verkar således ha ett stort förtroende för nya tekniska lösningar. Bland de reglerande styrmedlen verkar företag föredra de som leder till obunden och dynamisk anpassning till ny lagstiftning snarare än mer riktad lagstiftning. Dock kunde det noteras att även om kilometerskatt ansågs vara den minst effektiva för hela gruppen uppfattade 35 % av företagen att det är effektivt till mycket effektivt för att minska koldioxidutsläppen. Den tredje typen är styrmedel för uppmaning till frivilliga åtgärder, vilket erhöll en låg ranking avseende effektivitet. För att stödja minskad miljöpåverkan från transporter ytterligare bör beslutsfattare ge tydliga och långsiktiga policies. Denna rapport beskriver sådana policies för att stödja organisatoriska och strategiska förändringar. Den belyser också effektiviteten i utbildnings- och kommunikationsstöd i form av best practice-guider, mätning av miljöprestanda, workshops och seminarier, utbildning av konsumenter och forskningsbidrag. Detta kan underlätta kunskapsutbyte och öka varuägares låga intresse för transporters roll i miljöarbetet. Ett benchmarking-verktyg kan hjälpa båda företag att förbättra sina resultat och beslutsfattare att identifiera orsaker till höga transportkostnader och fysiska flaskhalsar, vilket därmed kan stödja investeringsbeslut i infrastruktur. Det kan också bidra till ett ökat samarbete med kunder och leverantörer. För närvarande sätter varuägare eller transportörer normer eller använder revisioner för andra aktörer ska uppfylla vissa miljökrav, men det är sällsynt att de integrerar sina fysiska flöden eller informationssystem för att minska transporternas miljöpåverkan. Denna typ av utbildnings- och kommunikationsstöd kan också bidra till spridning av kunskap om initiativ kopplat till förpackningsdesign och dess påverkan på volym- och vikteffektivitet i transporter saknas. iv

Summary... i Sammanfattning... iii 1 Introduction... 1 1.1 Purpose... 1 2 Method... 3 2.1 Literature reviews... 3 2.2 Interview and survey studies... 3 2.3 Environmental reporting... 4 3 Frame of reference... 6 3.1 System studied... 6 3.2 Environmental practices... 8 3.3 Factors affecting the vehicle fill rate... 9 4 Environmental transport practices...11 4.1 Insights from literature...11 4.2 Insights from the interview study...16 4.3 Insights from the environmental reports...19 4.4 Insights from the survey study...22 5 Discussion and conclusions...24 5.1 Motives and drivers to implement environmental transport practices...24 5.2 Implemented environmental transport practices...25 5.3 Resource utilisation...26 5.4 Effective policy instruments...27 6 Concluding remarks...29 7 References...30

Greenhouse gas emissions from domestic freight road transport have increased considerably in recent decades, and represent approximately 11% of the total greenhouse gas emissions in Sweden. The projections of the Swedish Transport Administration show a continued increase. The transportation is carried out in many industries and using various cargo types. It can be seen from a commodity flow survey carried out in 2009 that the outgoing consignments from Sweden were about 190 million tonnes and incomming consignments about 40 million tonnes (Trafikanalys, 2010). The products in the outgoing consignments came from manufacturing industries (117 million tonnes), forestry and logging (43), wholesale trade (22) and agriculture (8). The products in the incomming consignments came from manufacturing industries (35) and wholesale trade (4). The most common mode of transport for outgoing consignments in Sweden was road transport with 70% of the weight, while rail and sea represented most of the remaining weight. For all transportation, combining incomming and outgoing consignments, palletised, packaging and unpacked components represented 47% of the transported weight. Most of the other 53% consited of solid and liquid bulk goods, and freight containers. Sweden has long-term governmental targets for 2030 and 2050 to reduce transportation emissions, and there are ongoing initiatives, such as KNEG (kneg.org), where member companies volountarily reduce transportation emissions. However, we lack a comprehensive picture of emissions reduction practices and the role of transporation and in the companies environmental work. This report examines how corporate environmental and sustainability work addresses transportation. What, for instance, are the motives and drivers for reducing transportation emissions, and how do they affect the intentions to do so? A central question deals with how companies integrate transport into their environmental and sustainability initiatives, for example, how and for what reasons environmental measures related to freight transport are prioritised in relation to other environmental measures. Another question considers resource utilisation of freight transport, such as how company practices address issues related to utilisation of freight transport capacity. The purpose is to explore current practices of sustainable freight transport initiatives in Swedish companies. Four research questions (RQs) have been developed to guide the report. The practices that affect transportation are carried out by both shippers and transport providers. Thus, the RQs address both perspectives. The resource utilisation of transport capacity based on the fill rate is given particular attention in the different questions. The following RQs are posted: 1. What are the motives and drivers for shippers to reduce transportation emissions? 2. What transport practices have shippers and transport providers implemented to reduce the environmental impact? 3. How do Swedish shippers and transport providers: a. Integrate transport in their environmental initiatives? b. Prioritise environmental transport practices compared to other environmental practices? c. Utilise the transport capacity (have a high fill rate)? 4. Which policy instruments have been effective in terms of reducing transport emissions from a company perspective? The overall research approach in the report is to first review the literature, and then to complement the most essential gaps with empirical data from transport companies and shippers. This should further deepen the understanding, particularly in the Swedish context. 1

This report was written by Dr Henrik Pålsson, Associate Professor in Packaging Logistics at Lund University. The empirical data were collected together with two colleagues. John Karlsson, MSc in Industrial Economy, carried out the interview study and Amanda Persson, MSc in Chemical Engineering, conducted the empirical data collection from the environmental reports. Eva Jernbäcker at the Swedish Environmental Protection Agency provided useful comments on the report. 2

This report is based on data from five sources: two literature reviews, interviews with the environmental managers and the transportation managers of seven large companies covering different industries, a survey of 172 shippers and transport providers in the eight most transport-intensive industries in Sweden, and an analysis of company reporting on environmental practices. To explore current practices of sustainable freight transport initiatives in Swedish companies, scientific literature was reviewed to identify both current and potential practices available internationally. The applications of these practices in Swedish firms were then explored in an interview study and a review of environmental reporting. Essentially, two separate literature reviews were conducted. One focused on environmental freight transport practices and the other on resource utilisation. A rigourous literature search, and reading of 67 articles resulted in 35 useful articles. To gain a Swedish perspective on the environmental freight transport practices, a Swedish report was reviewed on a study of how a number of companies in nine industries consider their environmental work, the essential drivers, and what role national environmental targets plays in their efforts (Norén and Strömdahl, 2007). The resource utilisation of freight transport is highly related to the load factor of the vehicle. To explore what companies can do to improve their resource utilisation, literature on the determinants for the load factor was reviewed. The literature review was based on Santén och Rogersson (2014) who identified 29 scientific journal articles. To further explore the insights from the literature review, with a focus on companies in Sweden, an interview study of five shippers and two transport providers in Sweden was conducted. In order to obtain statistically generalisable results, a survey study of 172 companies (shippers and transport providers) was also carried out. Both studies covered a broad spectra of transport issues, logistical requirements, and industry practices related to sustainable transport. The studies aimed to reflect companies with a high impact on freight transport work in Sweden. To cover these dimensions, the following selection criteria were applied. First, the companies should represent the most transport-intensive industries in Sweden (SIKA, 2006). Second, the companies should have a substantial amount of business in Sweden. Transport providers carry out a great share of the transport work, but shippers also organise their own transportation in Sweden. According to Lammgård (2007), 95% of the manufacturing companies outsource transportation to transport providers, but 36% also organise their own transportation. Third, companies in the interview study should have a sustainability report in order to complement and validate the interview data. Finally, for the interview study only large companies with more than 500 employees (OECD, 1997) were selected, as they tend to adopt green initiatives to a greater extent than smaller companies (Vachon and Klassen, 2006). To ensure diversity, as well as gain knowledge of the impact of smaller companies, they were included in the survey study. The survey instrument and the data collection are described in Pålsson and Kovács (2014). Based on the literature review, a semi-structured interview guide was developed. This was structured around two topics: environmental freight transport practices and resource utilisation. Questions related to the first topic were based on emerging topics in the first literature review, particularly Norén and Strömdahl (2007) which focus on Sweden, and drivers in Pålsson and Kovács (2014). Questions related to the second topic were based on 3

resource utilisation factors identified in Santén och Rogersson (2014). In addition to the topic-related questions, background information and information about the transport characteristics of the company were collected. The questionnaire was adjusted with one version for shippers and another for transport providers. For the interview study, two respondents were selected at each company. As the aim was to explore the role of transportation in environvironmental practices, we interviewed the transport manager and the environmental manager. In so doing, we gained insights on transportation from an environmental perspective and on the environmental practices from a transport perspective. The companies included in the study are shown in Table 1. Table 1. Companies interviewed in the study Company Industry Turnover (msek) Employees Chemical company Chemical 2 200 4 500 Food company Food and drinks 4 800 1 500 Ore and metal company Ore/metal 6 700 1 700 Pulp and paper company Paper/forestry 20 000 4 300 Wholesaler company Wholesale trade 6 500 4 300 Transport provider 1 Transport provider 40 000 39 000 Transport provider 2 Transport provider 26 000 20 000 The data were collected between October 2014 and December 2014. In total, 14 semi-structured interviews were conducted. They interviews were carried out over the telephone. Each interview took 45-60 minutes. They were recorded and transcribed. Prior to the interviews, a short summary of the questionnaire was sent to the respondent to facilitate preparation. The interviews were guided by the interview guide. 1. Read all interviews separately. 2. Based on the purpose and the literature review, a number of areas were determined. 3. Each interview was colour coded and carefully read. All sections that related to the areas in point 2 were marked according to area. 4. Sections of text related to the different areas from the different interviews where put together, keeping the colour coding to trace the source. 5. Each section was analysed and synthesised for shippers and transport providers. 6. For the discussion chapter, the synthesised text were combined with the other sources of information. To validate and complement the interviews and the survey data, we analysed company environmental reports. From these reports we identified the most common environmental transport practices and compared these to other reported environmental practices. 4

To be able to make cross comparisons between the interview study, the survey study and the environmental reports, we started with the list including the companies in these studies. To assemble a useful number of reports for analysis, we first identified the reports written by half of the companies by: 1. Visiting the homepage of the company 2. Using a search engine 3. Calling the switchboard of each company 4. Filling out a matrix regarding type of report This resulted in 8 corporate social responsibility (CSR) reports and 23 sustainability reports. Data were collected from the environmental reports. Each report were read and the areas related to transport were identified. To structure and assess the level of implementation of the environmental transportation initiatives described in the reports, we used a framework developed by Colicchia et al. (2013). This framework distinguishes between intra- and interorganisational environmental practices using eight areas (Table 4 in chapter 2). The framework was extended to include additional company data: Employees Pages discussing transport and pages where transport is mentioned Total number of pages The analysis of the reports was conducted by describing patterns in the eight areas and summarising the number of times each practice was described. 5

This chapter first describes the system studied. Then it goes on to present potential practices to reduce transportation emissions and the barriers to their implementation. Finally, it identifies factors that affect vehicle fill rate. The actors studied in this report include shippers and transport providers as illustrated in Figure 1. The environmental impact of transportation, such as emissions, depends on logistical decision-making (e.g. order quantities and delivery times) and production/distribution structures and sourcing strategies (e.g. localisation of plants, warehouses and suppliers) of shippers. It also depends on the efficiency of transport providers to organise the physical transport by consolidating goods from various shippers, use energy-efficient modes of transport and vehicles that are as clean as possible. Shipper Transport provider Transportation emissions Figure 1. Actors involved in decisions affecting transportation emissions (Pålsson and Johansson, 2015) The branches of the shippers for incoming and outgoing consignments in Sweden in 2009 are presented in Table 2. The manufacturing industries dominate followed by forestry and logging, and wholesale trade. The survey covers all branches and the table shows that the branches with the biggest consignment flows were also represented in the interview study. In addition, the two transport providers in the interview study transport goods from all of the different branches. Table 3 presents the cargo types used for the consignments. It shows that about 47% of the goods by weight in 2009 were palletised, packaging and unpacked components, while 24% were liquid bulk goods, and 18% were solid bulk goods. The characteristics of the goods have some impact on the type of actions that can be implemented to reduce transportation emissions, which is commented on next. 6

Table 2. Outgoing and incoming consignments from and to Sweden in 2009 by weight in different branches Branch Outgoing consignments weight (1 000 tonnes) Incoming consignments weight (1 000 tonnes) Total consignments (1 000 tonnes) Interview study Manufacturing industries 117 416 35 270 152 686 Manufacture of food products, beverages and tobacco products 9 730 Food company Manufacture of wood products, pulp, paper and paper products 28 566 Pulp and paper company Manufacture of chemical products and manufacture of products 28 914 Chemical company in printing and publishing Basic metal industries and manufacture of fabricated products, 11 593 Ore and metal company machinery and equipment Mining and quarrying and other manufacturing industries 38 612 Forestry and logging 42 501 42 501 Pulp and paper company Wholesale trade 22 414 4 240 26 654 Wholesaler trade company Agriculture 7 858 7 858 Total 190 189 39 511 229 700 Table 3. Outgoing and incoming consignments from and to Sweden in 2009 by weight for different cargo types Cargo type Outgoing consignments (1 000 tonnes) Incoming consignments (1 000 tonnes) Total (1 000 tonnes) Other cargo types (e.g. packaging and unpacked components) 58 230 3 681 61 911 Solid bulk goods 39 152 2 276 41 428 Liquid bulk goods 28 801 25 961 54 762 Palletised goods 42 075 5 037 47 112 Freight containers 11 236 1 565 12 801 Mobile units 7 773 805 8 578 Unknown 2 921 186 3 107 Total 190 189 39 511 229 700 To reduce the environmental impact of transportation, both shippers and transport providers can adopt various practices (actions) (Pålsson et al., 2014). These practices can be sorted according to type. Transport providers can adopt (please note that shippers act as transport providers for their own goods when they organise their own transport): Cleaner vehicle technologies Non-fossil fuels Ecodriving Transport planning (e.g. route planning and consolidation) Increased loading capacity in vehicles Changing mode of transport from road to other, or from air to other Traffic control technologies Shippers can adopt: Using closer suppliers Relocating production plants and warehouses Packaging design (only relevant for packed goods) Load carrier design (only relevant for palletized goods) In addition to these individual practices, the shippers and the transport providers can also collaborate to reduce the environmental impact of transportation. Examples of this are modifying operations and logistical requirements in the production plant (e.g. ordering patterns, delivery times and delivery frequency) so that the transport provider can increase the vehicle fill rate. 7

One of the research questions in this report investigates the role of transportation in the overall environmental work of Swedish companies. Consequently, the description of environmental transport practices needs to be combined with other possible environmental practices. Table 4 combines transportation practices with six other areas of practices. Four of these other areas have an indirect impact on transportation efficiency (packaging management, internal management, collaboration with customers, and external collaboration), while the other two areas (reverse logistics and warehousing and green building) only affect other environmental considerations in a company. Packaging management affects the vehicle fill rate in terms of volume and weight efficiency. Outside the transportation domain, it has an environmental impact related to packaging material, packaging waste and avoidance of damaged products. Internal management is about developing an organisational sensitivity to sustainability issues. For transportation it involves ecodriving, inclusion of environmental considerations in the company strategy, and promotion of environmental awareness among managers. Collaboration with customers is about aligning sustainability goals with customers to obtain collaborative efficiency. This includes aligning customer requirements on deliveries with transportation efficiency. External collaboration is about aligning sustainability goals with suppliers and shippers/transport providers to obtain collaborative efficiency. Examples of this are coordinated transportation, collaboration with suppliers and aligning production strategies and operations with transport operations. 8

Table 4. Environmental practices related to transport and other areas in a company (modified from Colicchia et al., 2013, p. 201) Area Explanation Example of practices (transportation-related practices in italic) Transport practices (logistics management and technical solutions) Management strategies and attention to distribution and sustainable transportation execution Non-fossil fuels Cleaner vehicles Transport planning Increased loading capacity in vehicles Changing mode of transport from road to other Changing mode of transport from air to other Traffic control technologies Using closer suppliers Relocating production plants and warehouses (logistics structures) Packaging management Internal management Appropriate weight and volume of packaging Development of organisational sensitivity to sustainability issues Volume and weight efficiency Packaging recycle or reuse Ecological packaging material Reduction of packaging waste Avoid damaged products Ecodriving Inclusion of environmental considerations in the company strategy Promote environmental awareness among managers Environmental compliance and auditing programmes Environmental performance measurement and monitoring Green IT (e.g. green software, optimisation of backup numbers) Promote industry cooperative efforts Environmental training of employees Establish expertise and sustainability-dedicated intercompany groups Incentives and benefits for green behaviour apractices Publish environmental accomplishments Collaboration with customers External collaboration Reverse logistics Warehousing and green building Align sustainability goals with customers to obtain collaborative efficiency Align sustainability goals with suppliers and shippers/transport providers to obtain collaborative efficiency Recapturing value or of energy-efficient disposal of supply chain waste Energy-efficient buildings Align customer requirements on deliveries with transportation efficiency Help customers to comply with certification programmes Support customers efforts to attain green goals Cooperation with customers on reverse logistics and recycling programmes Coordinated transportation Collaboration with suppliers Align production strategies and operations with transport operations Collaborative partnerships with other companies Membership in environmental programmes Waste reduction, transport and disposal Materials recycling and reuse Consumption reduction Eco-friendly building design (e.g. energy-efficient lighting, thermal insulation) Energy-efficient material handling equipment Alternative energy sources Water systems (e.g. minimise water waste) Efficient land use This report also emphasises the vehicle fill rate, which has a great influence on transportation efficiency. It can be seen as the amount of goods in a vehicle compared to the maximum possible amount. The maximum fill rate can be restricted by weight or volume. The maximum loading capacity in a vehicle is affected by the size and design of packaging and load carriers, thus affecting the vehicle fill rate. The vehicle fill rate is also affected by other factors. Based on a literature review, Santén and Rogersson (2014) identified a number of factors that affect the vehicle fill rate, either as enablers or constraints to increase it. They grouped the factors in six areas (Table 5). 9

Table 5. Factors that affect the vehicle fill rate (modified from Santén and Rogersson, 2014) Area Transport practices transport planning Transport practices logistics structures Packaging management External collaboration align production strategies and operations with transport operations External collaboration information sharing Regulations Factors Consolidation, backhaul, route planning, vehicle selection, network design Warehouse size, warehouse centralisation, number of warehouses, location of warehouses, storage strategies. Load unit selection, packaging system Demand fluctuation, delivery frequency, time-window, order lead time, customer service agreement, application of JIT Load matching services, IT-based scheduling systems, computer-assisted loading Coordinated distribution, time-windows, vehicle restrictions, vehicle fill rate controls, limits on vehicle carrying capacity, regulations supporting consolidation Some of the factors in Table 5 are mainly related to the transport providers and some to the shippers. The factors in the area of transport planning are mainly considerations for the transport provider; those in the packaging management area are mainly related to practices by the shipper. Warehouses can be controlled by either one of the actors. Thus, factors in the area of logistics structures are either related to the transport provider or the shipper. The two areas involving external collaboration include both actors, but in the area of aligning production strategies and operations with transport operations it is mainly the shippers that need to adjust their operations. For instance, the shipper may align ordering patterns and delivery frequencies with the transport provider s demand so that the transport provider can facilitate consolidation of goods between different shippers. A prerequisite for doing this is that the shipper receives information from the transport provider. The other area involving external collaboration is information sharing to obtain, for instance, load matching. In this area, it is the transport provider that needs information from the shipper in order to take action. The final area, regulations, affects mainly the transport operations and thus the transport provider. 10

The data reported in this chapter are obtained from five sources: a literature review, an interview study, environmental reports, and a survey study. The literature review presents insights from international research, while the other three focus on shippers and transport providers in Sweden. The green transport issues discussed in the current literature are summarised in Table 6. The main insights from the literature review on green transportation are summarised as follows. Green transport issues related to: Performance. Performance of green practices is viewed from different perspectives. Abareshi and Molla (2013) found that transport providers need to develop their organisational ability to acquire, process, and share knowledge in order to become greener. Currently, they seem to focus on internal rather than external knowledge sharing. Internal information is most commonly obtained through participation in environmental training programmes, followed by leveraging the existing competencies of environmental considerations into strategic decisions; the least adopted procedure is acquiring green logistics information from legislation. An essential step in developing an organisation s knowledge sharing ability in order to become greener is to incorporate environmental considerations into the strategic decisions to improve their green performance. Azevedo et al. (2011) indicated that such incorporation improves efficiency and reduces costs. Their case study identifies the most essential green practices considered by managers in the automotive industry. The green practices most commonly applied and considered most critical in order to be seen as a green supply chain were related to reverse logistics, waste minimisation and being a certified user of ISO 14001. None of these focus on transportation issues. Another practical implication of performance is provided by McKinnon and Ge (2004). They conclude that applying the best practice of vehicle fill and empty running can improve the transport efficiency of lowperforming companies, thus reducing the environmental impact and distribution costs. This is based on results from a benchmarking study in the food supply chain in the UK revealing wide variations in vehicle utilisation, delivery reliability and energy intensity, which partly were explained by variations in the operating performance of transportation. Policy makers can facilitate such best practices by providing an information infrastructure for benchmarking purposes. Another practical implication is presented by Schniederjans and Starkey (2014). They recommend governmental support for marketing green transport solutions and for educating consumers and citizens about them, because they found a positive relationship between willingness to pay for green transport and consumer attitude and peer pressure. Put differently, if consumers and citizens are aware of and can identify a green transport solution, they also seem willing to pay for it. 11

Table 6. Green transport issues in current literature Topic Subtopic Green transport issues Author Performance Purchasing Economically beneficial to have a green purchasing Carter, Kale & Grimm (2000) approach for transportation Willingness to pay Consumer willingness to pay for green transportation Schniederjans & Starkey (2014) Green logistics strategies Adoption of green logistics Transport mode Policy Green logistics initiatives Green sourcing Decarbonisation Social impacts of transport Sustainable supply chains Performance vs. knowledge GL performance is affected by GL Knowledge Acquisition, GLK Assimilation, GLK Transformation, GLK Exploitation Green practices contribute to improved environmental and economic performances Abareshi & Molla (2013) Economic effects of Azevedo, Carvalho & Machado greening (2011) Slow steaming Slow steaming Notteboom & Cariou (2013) Effects of CSR The impact of environmental and social programmes on the Gimenez, Sierra & Rodon (2012) programmes triple bottom line Benefit sharing Benefit sharing of efficiency gains in road transport Arvidsson, Woxenius & Lammgård (2013) Synchronised vehicle auditing Transport efficiency through synchronised vehicle auditing McKinnon & Ge (2004) Strategy Green logistics strategies Murphy & Poist (2000) Drivers GSCM drivers Diabat & Govindan (2011) Effect of strategy Impact of logistics uncertainty on sustainable transport Sanchez-Rodrigues, Potter & operations Naim (2010) Drivers and motives Motives and drivers for reducing transportation emissions Pålsson & Kovács (2014) Production structure Local vs. global production Nieuwenhuis, Beresford & Choi (2012) Effect of strategy Logistics management effect on the environment Wu & Dunn (1995) Adoption level Implementation factors Green logistics practices taxonomy Adoption level of multinational transport providers green Colicchia et al. (2013) transport initiatives Electric vehicle implementation factors Sierzchula (2014) A taxonomy for 47 socially responsible logistics practices in five areas (purchasing, trp, packaging, warehousing, reverse logistics) The level to which green logistics initiatives identified in academic literature are applied in practice The role of company strategy for sustainable transport and green transportation implementation levels Ciliberti, Pontrandolfo & Scozzi (2008) Adoption level Tacken, Sanchez-Rodrigues & Mason (2014) Implementation Oberhofer & Fürst (2013) factors Implementation Implementation feasibility of non-fossil fuels Rogers et al. (2007) feasibility Modal shift Identify 4 common denominators for successful modal shift Eng-Larsson & Kohn (2012) Modal shift Intermodal transport Lammgård (2012) Modal choice Impact of CO2 on transport mode selection Hoen et al. (2012) Policy implications of Translation of transportation research findings into Himanen, Lee Gosselin & research improved public policy on sustainable development Perrels (2004) Implications of Effects of time-windows on greening transportation for Quak & Dekoster (2007) policy retailers Environmental Environmental implications of transport policy Trømborg et al. (2009) implications Packaging Mode of transport and innovative packaging for wine Reich-Weiser et al. (2010) Postponement Impact of postponement on transportation emissions Yang, Yang & Wijngaard (2005) Supplier selection Green supplier evaluation and selection Govindan et al. (2013) Supplier selection Online benchmarking tool for transport chains Islam, Zunder & Jorna (2013) Scenario Decarbonisation of freight transport until 2020 Piecyk & McKinnon (2010) Road freight emissions Trade-offs in CO2 reduction of road freight transport Rogers & Weber (2011) Social impacts of Social impacts of transport Geurs, Boon & Wee (2009) transport Company challenges Company challenges for sustainable supply chains Abbasi & Nilsson (2012) 12

Green logistics strategies. Murphy and Poist (2000) investigated which green logistics strategies were the most common in all western industrialised countries 15 years ago. They were not related to transportation, but to recycling and reusing materials, and to reducing internal consumption. Companies with a greater emphasis on environmental issues used more green practices than other companies. Nieuwenhuis et al. (2012) investigated sourcing strategies in the automotive industry and found that local sourcing using road transport was more CO 2 efficient than global sourcing, in this case from South Korea using sea transport to the US and Europe. This means that localisation of production should be carefully considered to minimise the environmental impact of transportation. Pålsson and Kovács (2014) examined the intention of shippers and transport providers in Sweden to reduce transportation emissions. Their results indicate that greening transportation needs to be included in the overall corporate strategy since some of the main motives (e.g. environmental employer, social responsibility and marketing advantage) were outside the logistics domain. These image motives along with economic motives, such as obtaining long-term competitive advantage, were equally important for companies intent to reduce transportation emissions. However, companies with both economic and images motives had the highest intent to reduce transportation emissions. It was also noticeable that external requirements, from authorities, owners, and customers, had the lowest effect on the intent to reduce transportation emissions. Thus, it was recommended that companies implement a strategy that goes beyond stakeholder requirements and identify image and economic potentials from greening transportation to position themselves as green leaders in transportation. Finally, Sanchez-Rodrigues et al. (2014) investigated the links between uncertainty in transport operations and the impact on economic and environmental sustainability. They found that uncertainty in terms of delays, variable demand, poor information, delivery constraints and insufficient supply chain integration resulted in less green transport operations. These uncertainties affected the vehicle fill rate negatively. To reduce the uncertainties, more collaboration and information sharing between shippers and transport providers are needed. Adoption of green logistics. The level of adoption of environmental transport practices was investigated in Germany by Tacken et al. (2014). They concluded that the German transport providers exhibit a good knowledge of green transportation and that they, in general, have adopted several operational environmental transport practices. However, no company had adopted all possible practices. To facilitate more implementation of green transport practices, it is recommended that the transport sector develop a best practice guide to support companies in CO 2 measurement and reduction practices. It is also recommended that the sector introduce environmental performance measurements capable of linking economic and environmental factors to further improve environmental management. Colicchia et al. (2013) analysed the adoption of environmental practices of ten transport providers (turnover from 0.5 billion to 51 billion Euros) in Italy. Some of these companies, such as DHL, DB Schenker and Kuehne Nagel, also do business in Sweden. The main findings (ibid., p. 206) were that transport providers appear to be highly involved in environmental practices involving physical logistics, but practices involving changes in internal management and organisation seem to be uncommon. The study also confirmed that the adoption level of practices involving collaboration with customers and suppliers for greening transportation is still low. The reasons for this, however, were not examined. They found that technical solutions and transport planning improvements for environmental transport practices were the most extensive ones. The explaination is that a change in these core competences of the transport providers can reduce the environmental impact and also improve profitability due to reduced costs in relation to an initial investment. Packaging management practices are quite limited, particularly those related to the volume and weight efficiency of packaging,. This could be because they are mainly implemented by the manufacturing companies. The authors also concluded that practices outside the transportation domain (i.e. warehousing and green building and reverse logistics) are quite common. Finally, Oberhofer and Fürst (2013) stated that the adoption of green logistics is somewhat lacking even though companies have a general awareness for the importance of sustainable development. To improve the adoption rate the authors suggest a combination of more legal restrictions that inhibit environmentally adverse behaviour and incentives, such as access to venture capital funds or tax relief, 13

to support environmental practices. They particularly suggest that road freight transport should be included in emissions trading. They argue that this could lead to the optimal allocation and the most efficient use of resources, which would then be used where they have the greatest positive effect. Transport mode. Intermodal transport solutions can reduce the environmental impact. In a case study of a transport provider, Lammgård (2012) examined intermodal road-rail transport services in connection with the company s environmental strategy. Currently, the transport provider only uses the competitive advantage of intermodal road-rail transport related to environmental benefits to some extent, mainly for marketing purposes. However, the company does not experience much interest from shippers for the environmental performance of transportation. When it comes to using intermodal transport solutions, the case showed that the fill rate was critical. Therefore, the author concluded that to obtain profitability in the solution, a company should always invite other companies for joint loading if a dedicated train line is chartered. In another case study of six companies, Eng-Larsson and Kohn (2012) found that it was not the quality of the intermodal solutions that hindered the companies, but other factors, such as purchasing problems. Managers more accustomed to purchasing intermodal transport solutions seem to be more likely to increase their usage of such solutions than managers that have not tested them. This indicates an opportunity for policy makers to assist companies in developing the knowledge of intermodal transport solutions. This could be presented in terms of successful examples or different types of encouraging measures (e.g. grants or subsidies) for testing intermodal transport solutions. However, emission-related charges should only be used as a complement as evidenced by Hoen et al. s (2012) conclusion that such charges have a low impact on the selection of mode of transport. Policy. Many municipalities only allow delivery access during certain time-windows to improve safety for citizens, reduce noise and emissions and improve the visual attractiveness of cities outside the time-windows. Quak and Dekoster (2007) investigated the economic and environmental impact of time-window restrictions in 14 cases. They found that shorter time-windows increase the environmental impact and the distribution costs more than proportionally to the shortened time. Particularly, time-windows increase emissions both globally (CO 2) and locally (PM10, NOx, and CO). They also increase the distribution costs of retailers. A commonly discussed and applied approach is to have nightly deliveries, but this is not recommended due to increased delivery costs for most retailers (longer unloading times and higher hourly driver wages) without reducing the environmental impact. Since more and more cities consider implementing time-window restrictions, an interesting finding is that the negative consequences of time-windows increase when more stores are affected. A cut-off point is when more than 35% of the stores are affected. Then, the negative impacts increase considerably. To lower the negative impacts of time-windows, Quak and Dekoster (2007) suggest harmonisation of time-access windows between different municipalities. They also suggest that policy decision-makers at municipalities should try to relax their time-windows to reduce both the environmental impact and the delivery costs for retailers. Green logistics initiatives. Yang et al. (2005) investigated the impact of postponement initiatives on transportation emissions. They also analysed the impact on transportation emissions of a number of concepts aimed at minimising inventory levels, such as just-in-time deliveries and vendor-managed inventory. These concepts are widely used, often as a part of the shippers lean strategies with minimal pipeline inventory and safety stock. According to Yang et al. (2005), the overall effect of these concepts is an increase in the overall transportintensity of the economy, because of a decrease in the share of bundled freight flows. To change this trend, they propose a possible initiative that shippers apply postponement to fulfil customer requests later in the order-to-delivery process, thus enabling the shippers to utilise slower and more environmentally efficient transportation (e.g. using slower mode of transport and obtaining a higher fill rate). To facilitate such a shift, the authors claim that governments should provide strong economic or regulatory incentives within which companies can respond to their responsibilities without losing competitive advantage (ibid., p. 202). Green sourcing. Green sourcing is related to having environmentally considerate suppliers. Govindan et al. (2013) investigated the extent to which the supplier selection process of shippers included green issues. They 14

concluded that the implementation of green issues in the supplier selection process is limited, and that more research is needed to integrate it in this process. A study by Islam et al. (2013) was more concrete because they assessed the performance of an online benchmarking tool for comparing alternative transport solutions in Europe. The tool was developed for 27 EU countries and it can assist managers, primarily in small- and medium-sized companies, to plan intermodal transport solutions. The majority of the transport providers perceived the benchmarking tool as helpful in strategic decision making. The authors also provide implication for policy makers in the area of intermodal transport. The benchmarking tool can compare the competitiveness of an intermodal transport solution to a single mode transport solution in terms of economic and environmental performance. It also presents the reasons why a certain solution is better or worse. Examples of this are if the costs are too high or if the perceived reliability of an intermodal transport solution is weak. Having this information, policy makers can address the barriers, such as identifying causes for high costs or reducing physical bottlenecks. Decarbonisation. Practices leading to reducing CO 2 emissions in the supply chain have evolved over the last two decades. A study in the UK by Piecyk and McKinnon (2010) assessed the decarbonisation of freight transport until 2020 in three scenarios. Their results show that over 80% of the companies involved in road freight estimated that their transport activities will be modified to a significant or large extent by 2020 due to climate change concerns. Unfortunately, it is perceived that strategic and commercial decisions will continue to increase the environmental impact, for instance, in terms of globalisation and fast deliveries. Functional decisions, on the other hand, are perceived to reduce the environmental impact. This includes, for example, improved fill rate, cleaner vehicles and reduced empty running. In their three scenarios, the optimistic projection would lead to the road transport sector in the UK reaching the CO 2 reduction target for 2050, but in the other two less optimistic scenarios, the authors state that the government needs to focus more on decarbonising road transport. Rogers and Weber (2011) analysed trade-offs among fatalities, CO 2 emissions and the value generated by road transport. If CO 2 emissions were reduced by reducing the vehicle speed, increasing weight limits or the length of vehicles, the authors found that fatalities would increase and the value of road transport decrease. To develop policies that address the trade-offs between safety and emissions, Rogers and Weber (2011) suggest that governments help to develop shadow prices, which can assist companies in assessing how to allocate scarce resources to environmental and safety improvements. Shadow prices are calculated to indicate the change in value of transport in order to reduce either CO 2 emissions or fatalities by a certain amount. Social impacts of transport. Geures et al. (2008) focused on the social impacts of passenger and freight transport. The research is quite theoretical, and does not primarily investigate environmental practices. They conclude that there is still a long way to go before social impacts of transport projects are included in appraisals in a mature way (ibid., p. 86). Sustainable supply chains. Abbasi and Nilsson (2012) reviewed scientific literature regarding challenges to obtain environmentally sustainable supply chains. They particularly focused on logistics and freight transport. The literature review identified challenges related to five areas: costs, complexity of change, difficulty to operationalise sustainability, difficulty to change organisational mindset, and uncertainty of changes. They recommend that policy makers should provide clear and long-term policies that can guide and mitigate uncertainty. In that way, companies are supposed to adapt to the policies and be willing to invest more in environmental practices. In addition to the areas reviewed in Table 6, the literature review identified discriminant factors for greening transportation. First, large companies are more likely to implement green transport practices than small companies (Vachon and Klassen, 2006; Pålsson and Kovács, 2014). Second, the logistics structure (e.g. modal choice, routing, direct vs. terminal distribution) and whether a company has control over logistics operations (e.g. using in-house planning vs. outsourced planning) does not seem to affect whether a company implements green transport practices (Pålsson and Kovács, 2014). Third, the overall company strategy affects whether a 15

company green their transportation (Pålsson and Kovács, 2014). Finally, companies that have tested intermodal transportation seem to be more likely to implement more intermodal transport (Eng-Larsson and Kohn, 2012). We explored the current environmental transport practices in Swedish companies based on interviews with transport managers and environmental managers. Depending on the features of the goods, either the volume or the weight limits the transport capacity. The limitation varies among the interviewed companies (Table 7). Table 7. Volume or weight limitations for the transport Chemical company Food company Ore and metal company Pulp and paper company Wholesaler trade company Transport provider 1 Weight Mainly weight Weight Weight Volume Mainly volume/area (occasionally pallets are stacked and then the weight is limiting) Transport provider 2 Varies goods from heavy (e.g. industrial components) to light weight (e.g. e- commerce deliveries) The role of transport in the environmental work varies slightly, but in general transport seems to have some importance in the environmental work of shippers. However, the environmental focus seems to be on issues linked to the factories. This is despite the fact that transport can account for a significant proportion of CO 2 emissions for the company. For example, for the pulp and paper company, transportation represents 10-20% of the total CO 2 emissions. For the food company, transportation represents a small share of their life cycle assessments. The environmental focus is rather on minimising the environmental impact of the raw materials (food). For shippers the environmental work with transport seems to primarily occur by setting requirements on transport providers such as motor rating, or the exploitation of new technologies. The pulp and paper company works a lot with cleaner vehicles and new fuels, such as ethanol, biogas and biodiesel. For the transport providers, transportation is more essential in their environmental work as it is the core of their business. Transport provider 2, for example, aims to reduce the environmental impact of transportation by 30% despite the estimation that the volumes will increase between 2009 and 2015. All the companies in the study seem to have empty running due to unbalances in the flows. The shippers are aware that some of their flows generate empty running in the return shipment, either due to imbalances in the flows or to specially-designed vehicles, such as wood chip trailers. However, in general the shippers appear to have limited insight into the proportion of empty running. The responsibility for empty running is placed on the transport provider. For instance, the food company uses transport providers but has no insight into their empty running. Instead, the food company relies on marketing mechanisms and means that the transport price indicates if a transport is efficient or not, such as having an empty return transport. There are also examples of how the marketing mechanisms facilitate the reduction of empty transports. The pulp and paper company takes advantage of the fact that there are many empty vehicles in Trelleborg that have delivered goods from Europe, but lack a return load. Thus, it is possible to get low shipping costs. As for the transport providers, transport provider 2 states that the average vehicle utilisation is 65-70% of the vehicle volume. Shipments from terminal to terminal, which represent the majority of the transportation, have a higher fill rate (85-90%), but there are some empty transports due to imbalances. For example, transport provider 2 has a lot of assignments northwards in Sweden, but not as many southwards. They have been struggling to find solutions to these imbalances. A Norwegian example is salmon from northern Norway down to Italy, and fruit and empty roll containers on the return. However, there are still imbalances. For shipments 16

to local production units, the vehicle fill rate is generally lower. Another aspect is that transport providers do not always seem to have full control of their empty running. One reason is that many different hauliers are hired from point A to point B. After the assignment, the transport provider has no control over what the hauliers do. However, trailers and semi-trailers must be returned because they are owned by the transport provider, which also generates empty running. A general result seems to be that there is a lack of visibility in each interface between different actors. This is emphasised by the shipper s limited insights into empty running at the transport provider, and the transport provider s limited insights into what the hauliers do before or after their assignment with the transport provider. Consolidating goods with competitors can be an opportunity for shippers, but it appears to be uncommon. The shippers do not seem to consolidate goods with other shippers. The food company and the ore and metal company have carried out minor trials without success. In the case of the latter, the trial was about 15 years ago. The main reasons for not consolidating with other shippers were problems related to planning in terms of coordinating customer orders and the unloading times at different customers. The ore and metal company also does not want to risk delays or destroyed packages because when containers are co-loaded they must be opened before reaching the final customer to split up goods. The wholesaler trade company stated that even though they do not consolidate goods with other shippers themselves, the transport provider does for the distribution part of their transport. However, there is no adjustment of delivery times or other transport parameters. There is one exception though. The pulp and paper company is involved in a railway collaboration for finished goods with other pulp and paper companies. Together they own the Scanfiber Logistics Company. Half of owners annual production volume, 1.5 million tonnes, uses the company train, which runs to ports in Sweden and terminals in Europe. Scanfiber Logistics has also been successful in utilising the return train transports with fill rates between 60% and 100%. The collaboration between shippers and transport providers seems to be limited. The data sharing is of an operational character. For instance, it is quite common to have EDI solutions and to share detailed data regarding delivery address, weight, number of pallets, customer name and product data. However, it is unusual (non-existent in this sample) to share more strategic data, such as ordering patterns. Except for EDI solutions, none of the companies have reported that they have integrated IT solutions between shippers and transport providers. The core of the business models of transport providers is to consolidate goods. They typically receive orders from different shippers and try to match these as well as possible. They are constantly trying to make improvements. For instance, both transport providers have started to find synergies between different types of goods, such as letters, packages, light goods and pallets. These types were previously considered independently. Instead of having separate terminals, they now have combined goods and packaging terminals. A limitation for the transport providers is that the shippers do not want their goods stacked on the pallets, which limits the potential to increase the fill rate. The transport providers also have a more active dialogue with the shippers regarding minor operational modifications. Transport provider 2 in the study has established partnerships with a few packaging suppliers to help develop more volume-efficient packaging. Based on this knowledge, transport provider 2 has together started to advise other shippers on packaging selection. This transport provider s aim is to further develop collaborative setups, but feels that there is a culture of being static rather than innovative, which takes time to change. The vehicle fill rate appears to have a high priority among transport providers, but a rather low priority among many of the shippers. For both the shippers and transport providers, the vehicle fill rate is primarily regarded as being economically important, and secondarily as being environmentally important. Some examples follow. The chemical company tries to adjust the deliveries to obtain full vehicles according to weight. The food 17

company and the wholesaler trade company stand out as they are the only shippers that actively work with packaging to increase pallet utilisation. They try to reduce the packaging volume and standardise packaging to increase the stackability on pallets. Unfortunately, the food company has many circular-shaped packages that add space on pallets, and open boxes with bottles that are difficult to stack due to fragile necks. A common problem is that the pallets are not stackable because of the characteristics of the goods. Another issue that can affect pallet efficiency is customer requests for packaging, request that are fulfilled by the food company. The wholesaler trade company points out that the fill rate on pallets is highly dependent on the skills of the staff who fill the pallets in the distribution centres. The ore and metal company considers that they have done what is possible to optimise the vehicle fill rate, which is limited by weight. Further improvements require regulatory changes regarding the weight in vehicles. The wholesaler trade company also stands out because it considers vehicle fill rate in strategic planning and in purchasing due to the significant impact it has on the company s business. A high vehicle fill rate is key for the transport providers because it is the core of their business. The vehicle fill rate is considered by transport provider 2 when the company designs its distribution networks, but it is unclear whether provider 2 follows up on it. The vehicle fill rate is measured both in terms of weight and volume by the transport providers. However, the volume is measured in terms of floor area and number of pallet locations utilised, which means that the height is not considered. It should be noted that most of the respondents report that a major portion of their goods are transported in full truckloads (FTLs) and that only a small portion in less than truckloads (LTLs). However, there is room for improvement in FTL as well. As stated above the FTLs between terminals have a fill rate of 80-85%, but if the fill rate was 100% by weight, a mixed load of heavy and light goods could improve the volume fill rate. Such issues are more complex and more strategic in nature than many other actions to increase the vehicle fill rate in LTL shipments. Three general results to further increase vehicle fill rate were identified in the interviews: Actions to increase the vehicle fill rate are often of a strategic nature, but managers on the strategic level appear do not appear to be aware of such detailed issues as the fill rate. When companies outsource transportation (i.e. use transport providers), the shippers usually pass on the challenges related to vehicle fill rate, which means that few companies work to improve it with things likes order patterns, freight sizes, packaging, etc.. Factors that require interorganisational information sharing do not seem to be implemented due to a lack of visibility. In relation to the factors found in the literature review, the interviews revealed that: The factors related to transport operations are well applied by the transport providers, particularly factors of a technical character. A particular practice that improves the fill rate that the transport providers have started to apply is double stacking of pallets. Either the floor can be raised so that new pallets can be put underneath or bars are used to obtain the same function. This means that 0.6 metres extra height, which equals 23% of the loading volume, can be utilised in the vehicles. The extent to which this is implemented was not stated. The shippers do not seem to work with factors related to warehousing and order and delivery to increase the load factor, but some mention factors related to order and delivery as constraints, for example, timewindow and demand fluctuation. The transport providers use the factors related to information sharing and IT, but mainly within their own organisation. Packaging and loading are only considered to a limited extent. Regulations only seem to be regarded as limiting the fill rate to some extent. 18

The shippers try to get their customers to increase the vehicle fill rate to a minor extent, mainly by price mechanisms. Smaller consignments are charged at a higher price, but customer requests for deliveries are usually fulfilled. The food company also informs their customers when they have another delivery in the area. Regarding the transport providers, provider 1 discusses delivery issues, such as times of delivery and pick up, with those shippers that bring it up on their own. Transport provider 2 is more proactive. They have staff that with the shippers analyse the deliveries to achieve improvements. Provider 2 emphasises that the shippers should continuously work with the fill rate on pallets including volume-efficient stacking, avoiding pyramid stacking, stacking as high as possible within height restrictions and working environment restrictions, and not starting on a new pallet until the previous one is finished. The pallet fill rate is reflected in the shipping cost resulting in the shippers being rewarded if they do a good job of stacking. Two examples describes solutions that have reduced the need for transport: The food company: The plastic bottles for a product with a very high annual volume were previously manufactured at a company in England, distributed by sea and then by road to a production plant in Sweden. Thus, a lot of air were transported. A project led to investment in new equipment so that the bottles can now be inflated in the production plant. Instead of buying readymade bottles, a prefabricated bottle is purchased which has almost eliminated all packaging transportation. The food company is interested in rail, but this is problematic due to the short transport distances to customers. Many customers do not appreciate rail transport because of the lead time requirements. Previously, tomatoes from Spain and Portugal came by road, but now they go by sea. Two examples describe solutions that has improved the vehicle fill rate: The food company (raw material acquisition, packaging issue to improve the fill rate). It now purchases tomato paste in barrels or in a one tonne container instead of smaller quantities as before. The container alternative, which doubles the fill rate, has been applied in some plants. The barriers are the consumption of a raw material and the equipment to handle it. The chemical company has on several occasions adjusted the pallets and the packaging design in order to fill a container more efficiently and, for example, increase the weight by 20%. Regarding pallets, the bags/sacks have been adjusted so that the pallets can be utilised as much as possible. Transport provider 2 has an ambition to reduce its environmental impact by 30% between 2009 and 2015 even though the volumes are estimated to increase. The company will try to make both small and big changes, working with route planning and guiding customers to use more volume-efficient packaging. The analysis of environmental reports reveals that 27% of the pages in the reports from transport providers and 17% of the pages from shippers refer to transport (only a part of each page). In absolute terms, transportation issues are discussed to some extent on 6 pages (median) in the reports. If any, only short sections are dedicated to transport issues (the median value for the analysed reports is 0.5 pages and the median value for the total number of pages is 53). To identify environmental practices carried out by the Swedish shippers and transport providers, their reports were analysed using the framework presented in Table 4. An overview of the areas for the environmental practices discussed in the Swedish companies environmental reports are presented in Table 8. Internal 19

management and warehousing and green buildings receive the most attention, while the fewest environmental practices are conducted in the area of packaging management. Table 8. Overview of areas for environmental practices discussed in the environmental reports Area Count Internal management 129 Warehousing and green building 80 Transport practices 73 Reverse logistics 71 Collaboration with suppliers and competitors 61 Collaboration with customers 40 Packaging management 31 Table 9 presents the practices reported in the environmental reports. In the area of transportation practices, only a few refer to strategic issues, such as using local suppliers and strategic location of distribution. Rather, it is basic initiatives that are the most frequent practices. Another insight is that the practices in this area focus on technical solutions to a great extent. There are quite a few practices related to packaging management. Most of the practices focus on the packaging material in terms of material choice and reducing packaging waste. There is no practice reported related to the volume efficiency of packaging and only two related to weight efficiency. Environmental practices related to internal management seem to be quite common. The companies seem to develop internal policies and procedures, measure their internal environmental performance and educate staff by hiring environmental expertise. A rather frequent number of practices are related to collaboration with customers and collaboration with suppliers and competitors, but they mainly refer to surveys and audits. This means that the companies set requirements rather than establish collaboration to find new solutions together. Collaboration with competitors seems to be the least developed area. Reverse logistics emphasises efficiency gains by using fewer resources and thus reducing both costs and the environmental impact. Finally, the area of warehousing and green building focuses completely on technical solutions. 20

Table 9. Practices reported in the environmental reports Area Practice Count Transport practices Packaging management Internal management Collaboration with customers Collaboration with suppliers and competitors Reverse logistics Warehousing and green building Route planning Education of ecodriving Alternative fuels Fill rate optimisation Updating fleet (e.g. higher env. classification) Transportation modes Alternative vehicles (e.g. new features or non-fossil) Strategic location of distribution Increased loading capacity Emissions tracking Measurement of suppliers transport Local suppliers Lowered fuel consumption Sustainable packaging material choice Reduce packaging waste Reusable and returnable packaging Reduce product waste by packaging design Minimise packaging material Reduce packaging weight Enhance recyclability Guidelines, principles, policies Environmental expertise Staff training Internal groupwide networks Internal and external audits Life Cycle Assessment Performance measurement Certificates Management systems Internal reporting Stakeholder dialogue Set targets and goals Customer surveys and audits Customer dialogue Consumer contact channels Customer training Involve customers in innovation and development Information campaigns Social media Supplier code of conduct Audit/assesment/evaluation Guidance and support/educational programmes Competitors collaboration on global issues Dialogue and communication Competitor collaboration for industry development Supplier control Demands via contracts Supplier workshops Certification demand Collaboration with supplier organisations Supplier incentives Waste reduction Waste energy or biogas recovery Waste water treatment Supply chain efficiency Waste recycling Materials recovery Enhance product life Use recycled material Value adding to rest products Minimise material loss Green energy or electricity Increased energy efficiency Green building design Minimised water usage Efficient material handling Increased production efficiency Efficient land use 12 9 8 8 7 7 6 4 4 2 2 2 2 12 6 4 3 3 2 1 26 16 15 13 11 10 9 8 6 6 6 3 16 8 4 4 4 2 2 16 10 9 8 5 4 4 1 1 1 1 1 25 13 10 6 6 5 2 2 1 1 23 20 13 11 5 5 3 21

Based on the survey of 172 Swedish shippers and transport providers, Pålsson et al. (2014) determined, on average, the rate of the companies intention to reduce transportation emissions until 2020 as presented in Table 10. Table 10. Share of companies with moderate to very high intention to implement the different actions (Pålsson et al., 2014) Action Moderate-Very high intention (% of companies) Main barriers and their scope Transport planning 77% Moderate: Flexibility, delivery time Cleaner vehicle technologies 61% Ecodriving 59% Only weak barriers Increased loading capacity in vehicles 52% Moderate: Infrastructure Non-fossil fuels 46% Changing mode of transport from road to other 46% Traffic control technologies 45% Moderate: Lack of IT Using closer suppliers 36% Packaging design 39% Moderate: Costs Load carrier design 36% Moderate: Costs Relocating production plants and warehouses 34% Moderate: Costs, lack of commercial solutions, lack of technical know-how Strong: Lack of commercial solutions Moderate: Costs, lack of technical know-how Strong: Flexibility, delivery time, infrastructure Moderate: Costs Moderate: Costs, Flexibility, lack of competence, quality Strong: Costs Moderate: Flexibility, delivery time Changing mode of transport from air to other 28% Strong: Flexibility, delivery time Table 10 shows that improved transport planning seems to be the action where companies in general intend to do the most to green their transportation. Many companies also intend to implement cleaner vehicle technologies and use ecodriving. A general pattern for the actions is that technological solutions and efficiency improvements receive the highest intention rates, while actions where organisational change (e.g. supplier localisation and plant localisation) is needed are less likely to be implemented. Another patterns is that the barriers in general seem to be surmountable since few of the actions have strong barriers. This indicates that it may be possible to increase the level of reduction, perhaps by helping companies to understand that a reduction potential exists and to realise the potential, for example, by providing benchmarking tools, education and research. Table 11. The companies perception of the efficiency of policy measures Policy measure Mean Std. Dev. Technology grant 4.0.895 76% Subsidise transition to more environmentally friendly technology 4.0.812 80% Infrastructure investment in rail and terminals 4.0.982 73% Carbon restrictions 3.3 1.034 49% Carbon tax 3.3 1.012 52% Emissions trading 3.0.926 32% Promote voluntary engagement 2.9.971 36% Kilometre tax 2.8 1.133 35% Efficient to Very efficient Table 11 shows how efficient the companies perceive eight different policy measures to be. The three perceived as most efficient are technology grants for development, subsidise transition to more environmentally friendly 22

technology, and infrastructure investment. A common denominator for these measures is that they consider governmental spending. These three policy measures are perceived as efficient to very efficient by 73-80% of the companies. Carbon restrictions and carbon tax are perceived as less effiecient on average. About 50% of the companies consider these policy measures as being efficient to very efficient. Emissions trading, promoting voluntary engagement, and kilometre tax have the lowest efficiency ratings among the companies, but still approximately one third regard them to be efficient to very efficient. 23

This discussion is based on information from the literature reviews, the interviews, the survey, and the environmental reports. There were only 14 interviews, but the shippers and the transport providers represent large companies in transport-intensive industries. The transport providers represent a great part of the transportation flows in Sweden. In the process of conducting more interviews, common patterns emerged, indicating that a saturation level had been achieved in terms of new information in the interviews. The survey of 172 shippers and transport providers in Sweden showed that the two main motives for companies in Sweden to implement environmental transport practices were to be seen as an environmental employer and to show social responsibility (Pålsson, 2011). Both of these motives address consumers and imply that consumers have the power to affect the environmental transport practices of companies. In addition, the literature review revealed that consumers that can identify a green transport solution also seem willing to pay for it. From a governmental perspective, it can be effectual to support information campaigns directed at the general public or to facilitate consumers in making environmental choices. One example is carbon labelling. The second most important motives in the survey were that implementation of environmental transport practices would result in long-term competitiveness and provide a marketing potential, while short-term profit were considered less important. The interviews confirmed that motives for implementing environmental transport practices seem to be primarily related to long-term cost reductions, closely followed by marketing the company as environmentally conscious. However, the examples given in the interviews for increasing the vehicle fill rate were all chiefly motivated by economic factors. In Sweden, the motives related to long-term competitiveness and a marketing potential are put into practice in different types of initiatives and networks, such as KNEG (http://kneg.org) and Hagainitiativet (http://hagainitiativet.se) where companies collaborate on a voluntary basis to reduce the environmental impact. Positive aspects of these motives are that they are proactive and internally motivated in the companies, which would increase the likelihood for implementation. The risks are that the marketing motive could lead to green washing, but the results of the current initiatives do not point in that direction. To further support these motives, there could be governmental support for communication, arranging workshops, and research grants in this area. The least important drivers for environmental transport practices are different types of requirements from customers, authorities and company owners. These are necessary to secure the implementation of environmental transport practices to a certain extent, but they do not seem to affect the attitudes of companies and motivate them to go beyond the requirement. From a governmental perspective, it should be noted that the legal requirements are necessary and important to obtain a certain level of reduced environmental impact, but by addressing the company-internal motives related to economic benefits and improved image as discussed in Pålsson and Kovács (2014), companies are likely to green their transportation even more. Governmental support for company-internal motives could be accomplished by supporting initiatives to increase understanding of how economic advantages from green transportation can be achieved. Examples are by supporting environmental education in companies or utilising environmental and cost calculation tools, such as the online benchmarking tool discussed in chapter 4.1. The government could also support research leading to increased attention and communication of green transport solutions internally in companies or in an industry. One current example is the strategic vehicle research and innovation programme funded by Vinnova where research results in new environmental practices are being implemented and disseminated in the industry. A concrete example, from a research project lead by the author of this report, is a model for evaluating and selecting packaging solutions for component supply at AB Volvo and Volvo Cars. The model compares the 24

economic and environmental impact of different packaging solutions including the materials supply from the component manufacturer via transportation and distribution centres to the assembly line. Based on these comparisons, the companies are able to select the most cost efficient and environmentally sound packaging configuration for each component. They also receive information about the environmental impact of sourcing and production strategies, which can contribute to better-informed decisions. Both shippers and transport providers actively reduce the environmental impact of transportation. Large companies are more likely to implement green transport practices than small ones (Vachon and Klassen, 2006), and the overall company strategy seems to affect whether a company greens their transportation (Pålsson and Kovács, 2014). However, the production and distribution structures of a company do not seem to affect the green transport practices (Pålsson and Kovács, 2014). The most common practices in Swedish companies seem to be related to short-term operational environmental initiatives and technical solutions. The operational initiatives include route optimisation, using cleaner vehicles, and intermodal transport solutions. The technical solutions are represented by cleaner vehicles and utilisation of alternative non-fossil fuels. However, practices related to more long-term strategic changes, which require organisational or structural changes are less implemented. Neither the interviews nor the environmental reports revealed any substantial changes of such practices, such as relocating production plants and warehouses or sourcing more locally to reduce the environmental impact of transportation. There seems to be a dilemma between the environmental impact of transportation and the trend of reducing pipeline inventory, safety stocks and inventory costs. From a competitive perspective, companies may not consider trading time for the environmental impact of transportation. Yang et al. (2005) argue that governments should provide strong economic or regulatory incentives within which companies can respond to their responsibilities without losing competitive advantage. All these patterns focusing on practices related to technical solutions and operational initiatives, and lacking practices related to organisational/structural change are confirmed by studies in Germany and in the UK. This may be explained by the fact that environmental transport practices are not integrated in the company strategy yet. Thus, decisions regarding sourcing and logistics structures are mainly based on economic motives. Based on that the patterns so far are quite similar and that many of the companies compete globally and are present in Sweden as well as in Germany and in the UK, the near future trends of environmental transport practices in these countries should have some relevance for Sweden too. Both the studies in Germany and in the UK, as well as the empirical data in this report imply that the Swedish shippers and transport providers will continue to reduce the environmental impact of transportation in the coming years though operational decisions regarding improved fill rate, cleaner vehicles and reduced empty running, but it seems that the strategic and commercial decisions are likely to continuously work in the opposite direction. The environmental transport practices that require organisational change appear to be implemented to quite a low extent in Swedish companies. This involves a limited implementation of green issues in the sourcing and supplier selection processes of shippers. Inclusion of green issues can, for instance, affect the localisation of suppliers to minimise transportation work. Green transportation issues also involve the production and distribution structures. These types of changes are of a strategic nature, but both the interviews and the literature review show that transportation is rarely included in green strategies. Instead, greening transportation is used for marketing purposes (as was the case for intermodal road-rail transport by Lammgård [2012]) or other image motives. The lack of green transportation issues in decisions to change production and distribution structures can be explained by the fact that these are currently often based on market presence, long-term competitiveness and economic factors. Transportation issues are not considered as it is already difficult to foresee the impact of changes in the production and distribution structures. Many decision factors are already included, such as the quality and volume capability of suppliers, costs, delivery times. Including transportation in the strategic 25

decisions may be seen as making it even more complex as the economic motivation that is currently used would need to be complemented with environmental measures. To do this, the mindset of managers needs to change and models for combining economic and environmental measures need to be developed. From a policy perspective, this means that policy makers could follow the advice of Tacken et al. (2014) to support research for developing environmental performance measurements where economic and environmental factors are linked. It seems unlikely that the strategic decisions affecting transportation will turn the trend of an increasing environmental impact in the near future as developments, such as globalisation of businesses and fast deliveries are likely to continue. A general public awareness of environmental transport solutions, modified business models and the changed mindset of managers could alter this development. This may happen, but it takes time. To affect a change in the mindset of managers and to facilitate public awareness, at least in the long term, it is essential that environmental considerations are included in education at different levels. To facilitate modified business models, policy makers could support research on this topic as described above. Practices that requires collaboration between shippers and transport providers do not seem to be particularly implemented in Sweden. A certain area of collaboration that has the potential to contribute to a reduced environmental impact of transportation is information sharing. This potential seems to remain unused to a great extent. The interview study shows that data sharing for transportation is of an operational character, while strategic data sharing is lacking. However, it is the strategic information sharing that has the greatest potential to reduce the environmental impact of transport. There are several reasons for the limited implementation of collaboration. First, transport providers do not seem to have much interest or requirements from shippers. Second, a general insight from the interviews is that when shippers outsource transportation, they tend to emphasise other areas. Third, collaboration is of a strategic nature meaning that the problems discussed above are also valid for collaboration. Finally, transport providers cannot have close collaboration with all their customers as it requires great effort and information sharing; a large transport provider has thousands of customers. Transportation does not seem to be given a high priority in the environmental work of companies. Prioritising vehicle fill rate is even lower when it comes to strategic decisions. On the other hand, the vehicle fill rate is a key for transport providers to be profitable. Thus, they seem to work a lot with factors that have a direct impact on the fill rate, such as number of pallets in the vehicle, but factors that have an indirect impact on the fill rate, such as packaging design, ordering patterns and storage strategies, are less considered. Factors with an indirect impact are most important for goods that are sent as LTL, which, according to the interviews, is only a small share. Such factors are relevant for FTL as well, but to a lower extent. For LTL, the indirect factors can facilitate the utilisation of the total capacity of a vehicle. FTL vehicles are already considered full, but here, the indirect factors can increase the loading capacity by, for instance, improving the volume efficiency of packaging. These kinds of indirect factors often require interorganisational collaboration and strategic decisions. However, there seems to be limited collaboration and integration between shippers and transport providers regarding the fill rate and the factors that affect it. In addition, the people making strategic decisions appear to be unaware of such detailed issues as a low vehicle fill rate. The research interest in vehicle fill rate has increased in recent years. It is also a core consideration of transport providers business models. They seem to put considerable efforts into having as high a vehicle fill rate as possible, but they mainly consider the shippers demands as fixed. This means that there is little communication between transport providers and shippers about aligning transport shippers demands with the transport providers transport flows to improve the vehicle fill rate. 26

When shippers outsource transportation they also seem to outsource the vehicle fill rate challenges. Put differently, the shippers consider that the vehicle fill rate is mainly a challenge for the transport providers. It may be difficult to argue against such a standpoint, given the structures and business models of shippers and transport providers. In broad terms, the transport providers business models aim to consolidate shipments from different shippers, but not necessarily to minimise the volumes (or number of pallets) to be shipped by a shipper. Shippers, on the other hand, often outsource transportation to be able to focus on their core competence, such as developing and producing their products. More collaboration could also be an opportunity to even out some flow unbalances, but it should be noted that some unbalances are not possible to reduce due to uneven demand in different geographical areas. There are, however, some examples that collaboration is practiced among the companies in the interviews, but the overall potential to improve the vehicle fill rate through collaboration described in the literature has only been obtained to a limited extent. The shippers and the transport providers seem to lack insight into each other s businesses, which hinders improvements in vehicle fill rate from collaboration. The transport providers state that they carry out transportation in line with shippers demands. The transport providers have not reported that they try to affect the shippers ordering patterns, delivery frequencies, packaging, etc. The shippers, on the other hand, do not make changes in, for example, ordering patterns to increase the vehicle full rate because the transport providers do not inform them about the potential of such changes. Many potential practices are described in the literature, but few seem to be adopted in current practices. Postponement is such a practice that can improve the fill rate (discussed by Yang et al. [2005]). They suggest policy instruments that will facilitate companies to increase their usage of postponement strategies, but they do not discuss this in detail. Another potential practice is that shippers could consolidate goods with competitors to increase the fill rate. This is hardly done. Currently, transport providers work efficiently with operational practices to improve the vehicle fill rate. It is an essential part of their business model. One recent example that many companies mention is double stacking through technical solutions. To further improve the vehicle fill rate, more collaboration between shippers and transport providers is needed. In that way, strategic considerations can be considered. More collaboration between different transport providers is also needed. For instance, the literature review showed that joint loading is needed to make intermodal road-rail transport solutions profitable. There is also a need for information transparency within companies. Thus, it would be possible to align and highlight constraints in the order and delivery process and within packaging management on the vehicle fill rate. Finally, improved models for cost and benefit sharing are also needed to increase the vehicle fill rate. This can be linked to Arvidsson et al. (2013) who found that many practices need to be adopted by the hauliers with an increased cost, but most cost reductions have been fully passed onto the forwarder and much of that further to the shipper (ibid. p. 124). The perceived efficiency of three types of policy instruments for reducing the environmental impact of transportation revealed that Swedish companies perceive investment-based policy instruments (subvention of transition to ecofriendly technology, increased technology grants, expansion of railway network and freight terminals) to be the most efficient ones. About 75% of the companies consider that these policy instruments have been efficient to very efficient for reducing CO 2 emissions. Thus, companies seem to have great confidence in new technological solutions, which is in line with the current environmental transport practices. Among the regulatory policy instruments, two (CO 2 restrictions, CO 2 tax) were ranked as quite efficient, while the perceived efficiency of the other two (carbon offset, kilometre tax) were lower. These results indicate that companies seem to favour policy instruments leading to free and dynamic adjustments to new legislation instead of more directed legislation, such as kilometre taxes. However, even though the kilometre tax was considered 27

as being the least efficient for the whole sample, 35% of the companies considered it to be efficient to very efficient for reducing CO 2 emissions. The third type is voluntary policy instruments (request voluntary engagement), which obtained a low ranking regarding efficiency. This is likely to be perceived as being without sting. To further reduce the environmental impact of transport, the literature review suggests that policy makers should provide clear and long-term policies. A number of such policies have been identified in this report to particularly support organisational and strategic change, which seem to be lacking in the companies (environmental reports, literature) but called for in research. Several previous studies and the empirical studies in this report point at the effectiveness of educational and communication support in terms of best practice guides, environmental performance measurement, facilitation of workshops and seminars, education of consumers, and research grants. All this can facilitate knowledge sharing and increase the low interest among shippers for the environmental performance of transportation. A benchmarking tool can help both companies to improve their performance and policy makers to identify the causes of high costs and physical bottlenecks, thus supporting infrastructure investment decisions (prioritisation). It can also improve the low level of collaboration with customers and suppliers. Currently, shippers or transport providers may set standards or use audits for the other actors to obtain a minimum environmental level, but they rarely seem to integrate their physical flows or information systems to reduce the environmental impact. A benchmarking tool can also affect packaging management practices that reduce the volume and weight efficiency, which seem to be lacking. A special policy instrument which was discussed in the literature is time-windows. Policy makers were recommended to harmonise time-windows between cities and, if possible, relax them. Both of these changes would reduce the environmental impact of transportation. Another special policy instrument was to promote testing of transport practices. This was based on cases of intermodal transport solutions. The cases showed that companies that have used intermodal transport solutions seem to be more likely to implement more. 28

This report has analysed five sources of information to gain a broad perspective on environmental transport practices in Swedish companies. In chapter 3, we saw that transport providers can implement seven types of environmental transport practices, and that shippers can implement four. Two of these packaging design and load carrier design are only relevant for packaged and palletised goods, respectively. According to Trafikanalys (2010), this is almost 50% of the transported weight in Sweden. The other environmental transport practices should be relevant for all companies, but to various extents. Out of these environmental transport practices, companies appear to believe in the potential of and are implementing technical solutions, but the practices that require organisational change are less implemented. For transport providers, transportation is obviously at the top of the corporate environmental agenda, but for shippers, environmental issues related to transportation generally seem to have a low priority compared to other environmental issues. Transportation does not seem to be in focus in greening the supply chain. A consequence is that the vehicle fill rate is considered on an operational but not on a strategic basis. This means that operational practices that result in higher vehicle fill rates without delaying the delivery time or making it less flexible, such as double stacking in vehicles and consolidating goods, are being implemented, while shippers do not make changes in, for example, ordering patterns to increase the vehicle full rate. A key to taking the next step to reduce the environmental impact of transport in Sweden is collaboration, both between shippers and transport providers and between different shippers. Better information about other companies production plans and transportation needs can enable interorganisational adaptation through load matching and by aligning delivery times and frequencies. This is, however, a delicate matter considering company integrity and what might be considered as confidential information. In the empirical data, there were only minor differences in motives and intent to reduce transportation emissions of shippers in different industries. The motives and intent were slightly higher for transport providers, but the main differentiator was rather the extent to which environmental issues were considered in the company strategy. In combination with the fact that internal motives to implement environmental transport practices are stronger than external requirements, another key to taking the next step in reducing the environmental impact of transport is to get companies to integrate environmental issues related to transport into the corporate strategy. To take these next steps, a combination of regulatory, investment-based and educational policy instruments and governmental actions are needed as discussed in chapter 5.4. An overview of the governmental actions discussed in this report are summarised in the Appendix. A final remark is that a considerable amount of information has been analysed in this report. The ambition has been to highlight the big picture and provide an overview of the role of transport in companies environmental work and the environmental transport practices carried out by these companies. Future research can develop concrete policy measures by analysing each area in greater depth. Future research should also consider future transport challenges, such as city logistics and e-commerce, e-tools that can enable environmental transport practices, models for collaboration and the integration of transport issues in company strategy. The author would like to acknowledge all respondents in the survey study and in the interview study that shared in-depth information. 29

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Type Reason Governmental action Educational and communication support for companies Education of consumers Investment-based policy instruments Facilitate knowledge sharing and increase the internal motivation of companies to work with environmental transport practices Facilitate for consumers to make environmentally-informed choices regarding transportation Facilitate the utilisation and speed up the implementation of environmentally sound transport practices Best practice guides Benchmarking tools Environmental performance measurement Support for arranging workshops and seminars regarding environmental transport practices Support environmental education in companies Support or demand the utilisation of environmental and cost calculation tools in companies Support information campaigns directed at the general public Inclusion of environmental considerations in education at different levels Subvention of transition to ecofriendly technology Increased technology grants General regulation Reduce emissions in general Carbon restrictions Expansion of railway network and freight terminals Support green transportation initiatives Promote testing of transport practices with reduced environmental impact Carbon tax Directed regulation Reduce emissions in a predetermined way Carbon offset Research grants Development of greener business models for transportation and emphasise on the potential of environmental transport practices Kilometre tax Grants for environmental freight transport Grants for environmental performance measurements which link economic and environmental factors Grants for innovative business models for green transportation Grants for innovative environmental transport practices (e.g. packaging management) 33