A study of green logistics in the third party logistics industry in Hong Kong

Abstract

The logistics industry is an imperative component of trade and a major contributor to economic growth in many countries. However, the logistics activities come along with severe negative environmental impact, particularly in freight transport which is considered the most important source of environmental hazards in a logistics system. Even though 3PLs have a key role in the logistics industry, only a limited number of studies have been conducted to analyze the greenness of their activities. Therefore, this study is done with the aim to examine the greenness of 3PLs in Hong Kong and to understand the key barriers that they face during green logistics implementation.

This empirical research is conducted through case studies with eight 3PLs. An analytical framework which consists of eight green transport measures and nine influencing factors is developed to facilitate the research.

The findings suggest that green logistics is evolving in the 3PL industry Hong Kong but it is still at a preliminary stage. It also shows that the number of green transport measures adopted by 3PLs in Hong Kong is lower as compared to the analyzed 3PLs’ headquarters in other countries. The study further reveals that 3PLs in Hong Kong tend to adopt those measures which directly bring cost benefits to the companies, such as, eco-driving, load factor optimization, route optimization and fleet management. Nevertheless, measures which require financial investment or trade-off of profit margin/operational efficiency, for example, fleet modernization and modal shift are not commonly adopted. Moreover, some of the green measures, such as, green fuel or vehicle are not adopted by the case companies simply because they are unavailable in Hong Kong.

A number of practical barriers are derived from the case analyses. They are considered the main causes of slowing down green logistics development in the 3PL industry in Hong Kong. While different stakeholders play a role in overcoming the hurdles of the green logistics development, the Government is found to be the most influencing one as it can influence external as well as some of the internal barriers elicited by this study. Therefore, it should take a leading role in eliminating the barriers. At the same time, in order to comprehensively facilitate the progress of green logistics development, efforts and commitments from other stakeholders, i.e. 3PLs, industry associations and customers are required.