We analyse the CO2 effects based on real travel and order data related to a German multi-channel clothing retailer. The retailer runs stores in several big cities in Germany and an online shop as well. The majority of parcels from the online shop are delivered by a European parcel service that provides data on the delivery processes of online orders. Consequently, two distribution channels of one retailer can be compared directly. The analysis starts at the retailer’s central warehouse, which is the initial point for the store supply and the delivery of online orders. The first part of the supply chain is the same for both channels and the central warehouse is “the point at which there is no difference between store and e-shopping”
(Mokhtarian, 2004, p. 278), making it the perfect starting point. Also Edwards, McKinnon, and Cullinane (2010, p. 116) suggest that emissions should be compared
“as far back as the point in which they diverge”. In doing so, we aim to combine customer travel paths and the freight transport.
Sivaraman et al. (2007) state that the advantageousness of the channels depends on the environmental problem considered in the analysis. We centre on CO2 emissions to keep the focus on the impact of transportation. In doing so, we exclude the energy use of running the stores and the customers’ shopping in the internet. We assume that the shopping locations, i.e. traditional stores and the internet shop, run anyway, aiming to evaluate the effects caused by the customers’ shopping behaviour only. In this way, we focus on the medium-term but not the long-term perspective. This would also include more complex decisions like changing the energy supply to a more environmentally-friendly supplier or closing down stores.
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5.2.1 Calculating CO2 emissions for the brick-and-mortar supply chain Starting from the central warehouse, the brick-and-mortar supply chain consists of two processes as depicted in Figure 11: transport from the central warehouse to the stores and the customers’ trips to the stores.
Figure 11: Supply Chain for Brick-and-Mortar Retail
The retailer provided information about store supply, such as distances, vehicles used and frequencies for two stores. Store 1 is located in the centre of a major city. Store 2 is situated in another city a little outside the centre, close to the retailer’s central warehouse. We chose differently located stores to compare various situations. The supply of store 1 entails a tour of 437.0 kilometres. In contrast, the supply of store 2 only requires a distance of 10.7 kilometres. Store 1 is served six times per week, store 2 five times. The average load per tour is 3,000 parcels for store 1 and 2,200 parcels for store 2. To calculate the CO2 emissions caused by transporting the goods to the stores, in a first step the fuel consumption of the vehicle used is calculated regarding its load factor (Kranke, 2009). In a second step, the value of the fuel consumption is multiplied with the CO2 factor of the fuel. For the combustion of diesel, this factor is 2.629 kilograms of CO2 per litre (Kranke, 2009).
Customer travels are analysed based on a customer survey conducted in the two stores of the retailer. Both stores can be reached by public transport, car and bike or on foot. The questionnaire surveyed the trip to the store, such as the transport mode used, trip chaining, the customer’s postal code and the products bought. The survey was conducted behind the cash desk of the two stores; consequently, only people
70 who bought something were interviewed. A sample size of 702 questionnaires could be used, of which 327 were collected in store 1 and 375 in store 2.
To calculate CO2 emissions for the shopping trip caused by the customers’ travelling, we used recent information on the CO2 emissions per passenger-kilometre of the different transport modes: 144 grams CO2 for cars, 73.5 grams CO2 for public transport and 139.5 grams CO2 for a motorbike (Statistisches Bundesamt, 2008;
Schächtele & Hertle, 2007). Besides, it had to be decided how to deal with customers walking or cycling to the stores. These trips do not generate any CO2 emissions but are real shopping trips. Therefore, these datasets were included in the analysis. To determine the CO2 emissions of each customer trip, the distance between the customer’s home (postal code) and the store was multiplied by the CO2 emissions of the transport mode used. The CO2 emissions of each purchase were then calculated by adding the emissions caused by the store supply and customer travel. Regarding shopping trips, there are many possibilities for customers to do their shopping.
Hence, it was necessary to make a major assumption to calculate the CO2 emissions caused by customers’ travels to simplify the analyses: only the datasets in which the customers stated that the shopping at the retailer was the main reason for the trip were taken into account. When shopping at the retailer was not the main reason for travelling, no CO2 emissions were assumed for the respective datasets.
5.2.2 Calculating CO2 emissions for the online supply chain
We calculated the CO2 emissions for the processes along the online channel based on information about the orders from the online shop, i.e. the parcels’ destinations and ordered articles (provided by the retailer). A dataset of 40,000 orders, delivered in a period of four weeks, was used. The parcel service provided detailed information about the parcel delivery process, such as distances, vehicles used and the load of the vehicles. The online supply chain consists of three processes (see Figure 12), also starting from the central warehouse. The parcels are transported to the outbound-depot, then allocated to the inbound-depots (line-haul) and, finally, delivered to the customers. Contrary to other studies (Weber et al., 2010; Matthews, Hendrickson,
& Soh, 2001), no airfreight is used along this supply chain due to the smaller distances in Germany.
71 Figure 12: Supply Chain for Online Retail
These three processes have different lengths. The outbound process is quite short, having a distance of 13.0 kilometres (doubled for the calculation because the distance is only driven for the parcel delivery). The line-haul has an average length of 388.8 kilometres. The shortest distance has the inbound-process in which an average distance of 1.3 kilometres is driven per parcel. This value is calculated by the overall distance of a delivery trip (200 kilometres) divided by the average number of parcels transported (150). To calculate CO2 emissions for all the processes along the online supply chain, we used the same proceeding as for the store supply in the brick-and-mortar retail (see 5.2.1).
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