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Abstract
Environmental issues are some of the key factors considered in the development of freight and transportation systems across the globe. Transportation is a significant source of CO^sub 2^ emissions and other pollutants (NO^sub 2^, SO^sub 2^, and fine dust) that increase the greenhouse gas. In recent years, environmental issues gained more attention due to the cost and environmental impact on supply chain. The paper evaluates the impact of greenhouse emissions in supply chain route selection and transportation cost. The study also empirically verifies the supply selection mode based on the economy of scale. Companies often use large container freights in supply chain network to achieve economies of scale. This strategy is potential to reduce the shipping traffic, lower the GHG emission and consequently reduced costs. It is a fact that pollutants have a direct correlation to fuel efficiency. An ordinary linear model illustrates the relationship between the transport systems and the environmental costs. The study suggests the choice of transport mode could be based on the trade-offbetween costs and different emissions of transport units used for transport to or from facilities.
Key word: Supply chain; transport emissions; economies of scale
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1. Introduction
Companies across the world are considering going green in the production and distribution of their goods. Transportation is one of the most important logistics component and cost elements for most business operations. In the global market, the fluctuating demand has a direct effect on demand for transportation. Large freight such as heavy duty truck, block trains, water vessels, barges, and air cargo used in various supply chain operations. The use of Large container freights are employed to achieve economies of scale in most supply chain network to minimize the transportation costs. Currently transportation accounts for approximately 62.8% of every dollar spent on logistics in the United States, which is equivalent to 5.2% of US GDP [1].
In supply chain network design, industry practitioners traditionally deal with the problem of selecting the optimum transportation choice based on total network cost minimization aspects. However, the corporate businesses and policy makers increasingly consider environment aspects to reduce the negative environmental impact and the supply chain transport costs. The emission of CO2 is the most common environmental concern in the...