CONSOLIDATION IMPACT ON TRANSPORTATION COSTS AND CO2 EMISSIONS IN GLOBAL SUPPLY CHAIN

Global supply chains are becoming more complex with an increased number of challenges that logistics executives must deal with, such as distance, delivery time, numerous parties involved with a single international shipment, language and culture barriers. Numerous studies have found that consolidation can improve customer services. Not only that consolidation can improve customer services, but it can also improve market penetration, flow of product return and delivery time, vehicle utilization, flexibility, while reducing fuel consumption, transportation cost and negative environmental impacts. However, the earlier studies have not explored consolidation in terms of transportation costs and the amount of CO2 emissions per unit. Therefore, the major objective of this paper was to investigate the effect of consolidation on transportation costs and CO2 emissions per unit, in order to find out benefits for both customers and logistics providers. The results indicate that an effective consolidation strategy can decrease transportation costs and CO2 emissions per unit, also achieve significant savings for customers and higher profit for logistics provider.