Sustainability-related risk management in buying logistics services

Abstract

Purpose Sustainability-related risk management of logistics service providers (LSPs) is an essential part of sustainability performance of focal companies, as logistics services touch the entire supply chain (SC) – from raw material sources to end-customers. The purpose of this paper, draws on resource-based view and stakeholder theory in exploring how companies can manage environmental and social sustainability-related risks from logistics service suppliers. This kind of capability is essential in order to maintain reputation in the eyes of stakeholders, and to maintain long-term financial performance. Design/methodology/approach The data of this multiple-case study were collected from semi-structured interviews in eight case-companies in Finland. Five of the cases are primary logistics buyers, and three represent LSP companies. Findings The cross-case analysis showed that primary buyers of logistics services use their sustainability criteria as a prerequisite for LSP candidates, and when the level is adequate and equal, other factors, e.g. price and capacity, are decisive. Based on the analysis, large LSPs are preparing for the future competition, and act in a more sustainable manner than their customers (buyers) expect at the moment, while small LSPs strictly comply with the regulation. However, buyers’ requirements for sustainable logistics services are increasing as the stakeholder expectations for comprehensively sustainable SCs are growing. Originality/value Only little research has been conducted on sustainable logistics from the buyer company’s risk management perspective. This paper adds the knowledge of sustainability-related risk management in purchasing of logistics services and in the logistics industry.

Open Innovation and CSR, Determinants in Logistics and Performance in Commercial SMES

“…Another significant result and with similar strength to the previous hypothesis was the H6, which represents the effect that Logistics has on the Performance of the SME. These findings inform us that these types of companies are obtaining some financial results, but not enough, this may be caused by good practices based on sustainable logistics processes, results that align with the theory of sustainability and empirical studies focused on sustainable and / or green businesses (Hannes, Christian, Christoph, & Michael, 2014;Kalmykova, Sadagopan, & Rosado, 2018;Multaharju et al, 2017). However, we do not find empirical support for H3 and H5, this leads us to infer that open innovation and Environmental CSR directly are not having a significant effect on Performance.…”

“…Responsible practices focused on the sustainability of the processes in which logistics intervene under the ecological practices of business have achieved a great amount of organizational and financial benefits. Some authors in their recent research have concluded that environmental social responsibility in conjunction with sustainable logistics has allowed to improve products, improve the quality of the service that the client receives, has reduced waste in the processes and has managed to take care of its resources such as electricity and water, thereby reducing its costs and increasing its economic profitability Jayanti & Rajeev Gowda, 2014;Multaharju et al, 2017). From the theoretical and empirical review, we emit the following hypothesis: H4.…”

“…In addition, innovative businesses are incorporating lean methodologies and processes from other organizations in order to improve some logistics activities, among the main actions are the selection of suppliers with ecological practices and reasonable purchases of materials and supplies for lean processes, with this the delivery in time of the products demanded by the clients is achieved (Diouf & Kwak, 2018;Gupta & Barua, 2017). These actions are changing companies in businesses with green and / or ecological logistics systems, allowing their interest groups (partners, customers and suppliers) to be satisfied more convincingly, but also turning businesses into an environmentally responsible conscience (Melander, 2017;Multaharju, Lintukangas, Hallikas, & Kä hkönen, 2017). From the theoretical and empirical review the following hypothesis has been developed: H2.…”

Roles and Perspectives When Estimating Energy and Environmental Potentials of Urban Consolidation

“…An ongoing trend within sustainability logistics is to widen the scope from a traditional company internal focus to include upstream and/or downstream actors (see e.g., [51][52][53]). In line with this, the scope in measuring has also broaden [54,55].…”

CSR and the Supply Chain: Effects on the Results of the SME

“…Teuscher, Grüninger, and Ferdinand [136] and Walker [95] affirmed that proactivity in sustainable supply chain management may help manage reputational risk in a company. Multaharju, Lintukangas, Hallikas, and Kähkönen [137] and Kopnina and Blewitt [34] explored how companies can manage sustainability-related risks from the supply chain, an essential process for maintaining their reputation. They argue that suppliers' non-sustainable actions and neglect of sustainability along the supply chain can cause reputational damage and broad financial losses for a focal company.…”