Could shipment consolidation jointly improve the economic and environmental sustainability of a maritime service supply chain?

ABSTRACT

Shipment consolidation is an effective way to reduce carbon emissions, because it can better utilise the ship-borne space and lower the shipment frequency. However, there also exists the dark side of shipment consolidation, i.e. the increasing pricing power of the common shipping company, and the ‘green dilemma’ because of green demand resluted by the shipping company’s emission reduction efforts. This paper studies the shipment consolidation decision of a retailer giant who resells two substitutable products, where either a common shipment company or two exclusive shipping companies can be contracted. The main findings include: (1) shipment consolidation induces the common shipping company to invest more in emission reduction, but strengthens the green dilemma, worsening environmental performance. (2) Pareto improvement of economic and environmental sustainability can be achieved with shipment consolidation. (3) Shipment consolidation can be even beneficial for upstream suppliers, so an ‘all-win’ situation is possibly observed.

KEYWORDS:

• Green maritime shipping
• shipment consolidation
• logistics coalition
• service supply chain
• game analysis

Acknowledgements

The authors are grateful to the editor and reviewers for their helpful comments. This work was supported by NSFC (No. 72293564, 72125006, 72293560) and the Joint Supervision Scheme of the Hong Kong Polytechnic University, China (Project ID P0039536). Baozhuang Niu is the corresponding author and Jian Dong is the co-first author.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data supporting this study’s findings are available from the corresponding author upon reasonable request.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [grant numbers 72293564, 72125006, 72293560] and the Joint Supervision Scheme of the Hong Kong Polytechnic University, China [Project ID P0039536].