Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Business

Program Name/Specialization

Operations and Supply Chain Management

Faculty/School

Lazaridis School of Business and Economics

First Advisor

Dr. Michael Haughton

Advisor Role

Professor and CN Fellow in Supply Chain Management

Second Advisor

Dr. D. Marc Kilgour

Advisor Role

Professor of Mathematics

Abstract

The ongoing debate about who, ultimately, should pay for greening the transportation industry has exposed a gap (i.e. misalignment) between logistics companies and their clients (shippers). This thesis examines this gap in detail.

Study 1 utilizes conceptual theory building to discuss the conditions under which closer environmental collaboration between logistics service provider (LSP) and shipper can be realized within the supply chain. Our theoretical framework discusses the misalignment of LSPs’ and shippers’ incentives regarding green initiatives. Our conceptual framework aims to address the general dependency of LSPs on shippers and to assess whether and when it can be converted to inter-dependency, thereby facilitating closer coordination on environmental sustainability. To this end, market pressures can moderate the parties’ negotiation deadlock over green initiatives. In addition, we shed light on mediating impact of agency problems and transaction costs on sustainability-related interactions. We summarize our findings by providing propositions about how practitioners and policy makers should approach green logistics issues.

Game-theoretic modeling makes it possible to understand the behavior of LSPs and shippers as economic agents. In Study 2, we assess to what extent the emissions reductions goals of LSPs and shippers are aligned or misaligned. In particular, we explain how factors such as consumer preferences and carbon tax policy determine the parties’ relative emissions preferences, and propose a modeling approach that simultaneously considers both the shipper's and the LSP's interests. Our notion of the environmental gap between the shipper's and LSP's environmental performance levels enables us to provide methodologically rigorous analytical explanations for existing empirical studies. Can LSPs and shippers fully agree on matters such as how to share the responsibility for environmental initiatives or who should be responsible for carbon tax?

In Study 3, we develop game-theoretic models to analyze whether and how LSPs and shippers can reach a mutually beneficial consensus on improved environmental performance. First, we develop a non-cooperative model in which the LSP is responsible for greening costs but the shipper determines environmental performance, taking monitoring costs and consumers' environmental preferences into account. Under the non-collaborative setting, we characterize the LSP's preferred environmental target to find conditions under which the LSP's environmental target exceeds the shipper's, i.e., the shipper's environmental target is suboptimal from the LSP's point of view. Then we study collaboration under two innovative contracts, Sharing Cost Savings and Sharing Monitoring Cost. We characterize the conditions under which collaboration between the two parties can result in a win-win-win outcome covering not only the parties’ profits, but also the green efficiency of product logistics.

Convocation Year

2020

Convocation Season

Fall

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