Sustainability assessment of retail logistics solutions using external costs analysis: a case-study for the city of Antwerp

Abstract

Purpose: Policy implementation in the logistics sector might drive unexpected side-effects which sometimes undermine the performance of key economic activities of logistics operators, especially in areas such as transport service, sustainability of operations, etc. Especially for the latter, there is a lack of understanding how the sustainability performance if retail logistics solutions is impacted on by policy implementation and, in turn, by operators’ responsive measures. This paper conducts a sustainability analysis of concrete innovative and already tested retail logistics solutions addressing the research question “what are the effects of retail logistics solutions on total costs and sustainability performance?” Methods: The analysis relies on the development and application of an indicator-based framework based on the key sustainability components (economy, environment, society) and enriched by the addition of the transport component. The framework assesses three different scenarios together with a business-as-is one: Urban Consolidation Centre, Tethering and Shared Bus accompanied with a Strengths-Weaknesses analysis. Data are provided by an international food retailer operating within the city of Antwerp, Belgium, but conclusions can be generalized due to wider applicability of measures and solutions examined. Results: External costs analysis shows that higher degree of internalization is achieved in the line-haul transport. Within an urban context, the measures that do not require significant initial investment and broad interventions are assessed as the most sustainable in our analysis. Tethering is the solution that indicates the highest sustainability score. Conclusions: The impact of innovative and already tested solutions relies on a variety of factors: organizational, urban context, type of goods transported, engagement of stakeholders, etc. In any case, innovation is crucial for urban retail logistics impacting on transport service, society, economy and environment. Any new retail business model should be designed with respect to cost efficiency and through a socially acceptable transition path.