ENERGY EFFICIENCY BY UTILISING OVER-CAPACITY IN THE LOGISTICS SYSTEM

Paper in proceeding, 2015

Purpose: Energy is both a cost and a key resource to time-based, flexible and reliant deliveries. Energy intensity of freight transport and its dependence upon use of fossil fuel as key energy source is in this paper addressed through interaction between three cornerstones: (1) Flow of goods, conditions of which are created by customers of logistics providers; (2) Capacity utilisation, where the key task for logistics provider is to manage capacity to meet the demand of the flow and to protect own margins; (3) Increased energy consumption is strongly influenced by growing demand for freight transport services and the shippers supply chain strategies, but is in contrast to EU targets set for 2050. New technologies and policies are not sufficient to address the energy-transport dilemma; at present time there is over-capacity available in the freight transport system that constitutes a challenge. This over-capacity has to be identified and utilised, and eventually it constitutes an energy resource itself. On the backdrop of this, the purpose of this paper is to identify where in the logistics system this excessive freight transport capacity is, and to explore pathways as regards utilization of this over-capacity in order to release the objectives of increased energy efficiency faced by logistics providers. Research approach: (1) Literature review on the energy-logistics domain (by journals, keywords and snowballing); (2) Presentation of a framework that allows for better understanding of the interplay between the requirements of the flow, capacity availability, and energy consumption; (3) Illustration of the applicability of the framework by secondary evidence from both logistics providers and their customers. Findings and Originality: The freight transport sector is associated with excessive use of fossil fuel. This study suggests that capturing and using over-capacity is a distinct contribution to ambitious EU targets on reducing emissions from freight transport. While much attention in the area of freight transportation has been paid on issues like energy efficiency through new technologies (e.g. engines, vehicle types) and fuel efficiency (e.g. eco-driving), opportunities that relate to the management and organization of the logistics system as source of energy efficiency are not well developed. In particular, to make over-capacity that exists in the freight transport system available, the ‘system boundaries’ – or scope of management – must be revisited. Based upon this, the paper presents scenarios that illustrate potential improvement. Research and practical impact: Overview of current body of knowledge within energy efficiency and freight transportation. This is synthesised through a framework that allows practitioners (logistics providers and buyers of logistics services) to understand potential for improvement in terms of over-capacity inside and outside the logistics system. The paper provides a complementary approach to policies and technology as source of energy efficiency in freight transport thorough better management and organisation across various levels of the logistics system.