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Modelling interrelationships between logistics and transportation operations

– A system dynamics approach

Article in Management Research Review · May 2015

DOI: 10.1108/MRR-11-2013-0271

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Modelling interrelationships Logistics and

transportation
between logistics and operations
transportation operations – a
system dynamics approach 505
Gerald Aschauer Received 25 November 2013
Revised 25 April 2014
Department of Transport Logistics, Accepted 11 May 2014
University of Applied Sciences Upper Austria, Steyr, Austria
Manfred Gronalt
Institute of Production Economics and Logistics,
University of Natural Resources and Life Sciences, Vienna, Austria, and
Christoph Mandl
Mandl, Luethi & Partner, Vienna, Austria

Abstract
Purpose – This paper aims to present a system dynamics model for the interdependencies between
logistics strategies and freight transport. As efficient freight transport operations are a crucial part
within securing the competitiveness of a company, the “right” logistics strategy plays a key role within
realization of efficient transportation movements lowering environmental impacts.
Design/methodology/approach – Freight transport is affected by different parameters determined
within a logistics strategy. This research approach models interdependencies between logistics
strategies and transportation movements through a systemic point of view.
Findings – The paper starts with an overview of challenges in freight transport and highlights the
parameters of a logistics strategy. Afterwards, the qualitative and quantitative model is presented.
Numerical experimentation further illustrates the applicability while providing additional intuitively
insights.
Originality/value – The authors present a system dynamics model for the interdependencies
between logistics strategies and freight transport. The developed model allows the comprehensive
description and analysis of the system operations (parameters of logistics strategy) and taking also
transport relevant factors (toll, CO2 internalization, infrastructure capacity) into account. The model
should serve as a basis for the realization of sustainable transport operations. Thus, it may prove as
useful to loaders/industry, logistics service providers as well as policy stakeholders regarding the
realization of efficient, sustainable transport movements in future.
Keywords System dynamics, Logistics strategy, Transport operations
Paper type Research paper

Introduction
Globalization, European integration and the liberalization of transport markets have Management Research Review
created conditions of production and distribution which have led firms to profoundly Vol. 38 No. 5, 2015
pp. 505-539
change their logistics concepts. This has major repercussions on demand behavior in © Emerald Group Publishing Limited
2040-8269
freight transport (Bolis and Maggi, 2003). Transport is a second-order activity which is DOI 10.1108/MRR-11-2013-0271
MRR generated by other economic activities. As such, the demand for transport depends
38,5 heavily on economic activities and consumption and changes both of these. When the
economy is growing, both production and consumption will grow, hence leading to an
increase in the demand for transport and vice versa (Ruijgrok, 2001). The impact of
transport on the environment comes primarily from three sources:
(1) construction of transport networks;
506
(2) operation of transport vehicles; and
(3) disposal of transportation vehicles and parts.

Transport is a prime consumer of fossil fuels such as oil and natural gas, and vehicles
generate noise and emit many toxic chemicals. Transport requires an infrastructure of
roads, airports, harbors, rail right of ways and fills up and often pollutes landfills with
dismantled vehicles, parts and toxic substances. Efficient use of transport can help
alleviate these problems and protect the environment (Wu and Dunn, 1995). In most
industrialized countries, there has been a strong positive relationship between economic
growth and transport growth. Nevertheless, in some countries, like the UK, empirical
evidence has shown an increase in gross domestic product, while the volume of road
freight traffic has remained stable or even decreased. This can be explained by the
transformation of such economies from transport-intensive sectors toward more service
industry-oriented sectors (Alises et al., 2014). The restructuring of logistical systems
(production and distribution systems) has influenced freight transport much more than
changes in the physical mass of goods in the economy or in the allocation of freight
between transport modes (McKinnon, 1998). The reduction of road freight transport
intensity is the result of an interaction of factors which include manufacturing
processes, the structure of the supply chain, logistical and technological improvements
and the management of transport resources primarily designed to improve overall
efficiency in the movement of goods (Alises et al., 2014).
This research is motivated by the need for the development of methodological tools
that would assist to analyze the impacts of logistic strategies on freight transport
operations. A logistics strategy must take into account a variety of parameters including
order size, frequency, transport flexibility, global or local sourcing, etc. After the
definition of the logistical parameters, transport key performance indicators like
utilization, transport mode have to be resolved under two main competing objectives:
(1) ow transport costs; and
(2) maximum of sustainability within the transport operation.

The objective of this work is to study the behavior of the interrelationships between
logistics strategies and transport operations. The primary modeling and analysis tool
used in this research is system dynamics (SD) methodology. SD is an approach to
understand the behavior of complex systems over time periods. This model consists of
internal and external factors that influence directly or indirectly transport costs,
utilization of trucks and transport mode. Such parameters include within a logistics
point of view order amount, order frequency, transport flexibility, transport distance,
etc. and external factors like taxes, infrastructure capacity or shifting potential. The
proposed strategies lead to decisions that confirm the feasibility of optimize transport
operations regarding sustainability (high utilization, shift to rail) and low transport Logistics and
costs per ton. transportation
In the current paper, we examine the interrelationships between parameters of operations
logistics strategies and key performance indicators of freight transport operations. The
proposed model concentrates more on operative parameters but it is kept as generic as
possible to facilitate its implementation on a wide spectrum of real-world cases. The
next section defines the problem and outlines the study. The necessary elements for the 507
developed SD methodology including model variables, the causal loop diagram and
the mathematical formulation are presented in Chapter 3. Followed by the validation of
the model, an extended numerical investigation is presented afterwards. Finally, we
wrap up with managerial implications and further research.

Theory contribution
The evidence of the existence of logistics strategies was confirmed by a number of
empirical studies (Autray et al., 2008; McGinnis and Kohn, 2002; Closs and Clinton, 1997;
Bowersox and Daugherty, 1987). Additionally, the dependence of logistics on efficient
and well-organized transport infrastructure and technology is well documented. The
implications of logistics for transport are, however, much less researched (Homann and
Drewes, 2004). It is still difficult to determine the actual relationship between logistical
structures and transport, as it is seen on the one hand as an integrated part of the
logistical system and on the other hand as an activity embedded in its own systemic
logic in transport chains. The relationship between logistic organization and transport
is not straightforwardly established. Nevertheless, being able to link strategies of
logistical organization with changes in transport would be of importance, as it could
support industries development of more environmentally sustainable supply chains
(Drewes Nielsen et al., 2003). Lemoine and Skjoett-Larsen (2004) summarize the
following trends within Europe which do have effects on logistics and transport
operations:
• reduction of the supplier base;
• reconfiguration of European supply chains;
• consolidation of the carrier base; and
• changes in the demand for freight transport.

Freight transport is affected by a broad range of corporate decisions. These decisions

influence the transport operation in different ways. Logistical decisions affecting freight
transport operations are made at four levels (McKinnon and Woodburn, 1996): strategic,
commercial, operational and tactical decisions. The growth of freight traffic is the result
of a complex interaction between decisions made at different company levels. Generally,
the influence direction can be described as a top-down (from strategic level to the
operational level). Wanke and Zinn (2004) see, for example, that logistics managers are
involved in three strategic-level decisions:
(1) make to order vs make to stock;
(2) push vs pull inventory deployment logic; and
(3) inventory centralization vs decentralization.
MRR The reconfiguration from decentralized toward centralized production plants results
38,5 traditionally in costs savings within production. This is not always true for logistics and
transport costs. Decentralized production leads into decentralized logistics activities
which do have influence on transport operations (Abrahamsson and Brege, 1997).
The review on existing literature and approaches on relationships between logistics
and transport operations shows a dominant position of optimization and network
508 models developed within the field of operations research. The entire models or
approaches have in common that they seek for the minimization of transport or logistics
costs or the maximization of profits. Nevertheless, they only consider some logistical
and transport parameters. Therefore, they can also be described as “partial models”,
considering individual parts of complex logistics systems (D’Este, 2001; Crainic and
Laporte, 1997; de Jong et al., 2004).
Therefore, we present an SD model trying to answer the main research questions:
How do parameters of logistics strategies and freight transport operations interrelate?
The answer should contribute to get new insights for closing the gap within in the two
prepositions that the growth of freight traffic is the result of a complex interaction
between logistical decisions made at different company levels and more environment-
friendly transport operations can be realized through linking logistics strategies
decisions with freight transport operations.

Methodology
We apply an SD approach for modeling systems behavior. There are already few models
using SD for interrelationships between logistics and freight transport. A review of
studies that applied the SD methodology to different transport-related issues showed
that the methodology is well suited to catering to the needs of several analytical
problems in transportation. Nevertheless, the outputs of such models is often limited to
being good enough to show policy impacts, behavioral trends and levels of change
across time in a highly aggregate way. There is plenty of scope to extend SD modeling
toward micro-analytic models for various transport issues, as such models could
provide more specific answers as aggregate models do which tend to be rather simple,
general and abstract (Abbas and Bell, 1994). The advantages of SD models for freight
transport models are limited data requirements, possibility of usage of land use
interaction and the option of inclusion of external and policy effects variables.
Disadvantages are the lack of statistical tests on parameter values (de Jong et al., 2004).
As an example of freight models using SD, the ASTRA model (Assessment of Transport
Strategies) can be stated, which analyzes the changes in the transport quantities over
time and feedbacks to/from the economy, land use and the environment (Institut für
Wirtschaftspolitik und Wirtschaftsforschung, 2000).
An SD model developed by Schulz (2004) analyzed the behavior of road transport
market by changes within market conditions and the effects on the whole economy. The
model consists of endogenous (market entrance, capacity adjustment) and exogenous
(truck tolls, cost growth, etc.) parameters and is able to picture the interdependencies.
Disney et al. (2003) studied explicitly the transport function within generic supply chain
models, covering three scenarios: a traditional supply chain, a situation where batching
occurs within the order rule and a vendor-managed inventory supply chain via using an
SD modeling approach. The mentioned model approaches highlight the suitability of SD
for modeling transport operations and logistics interrelationships.
 The aim of this paper is to picture the interdependencies through a systemic point of Logistics and
view with the overall goal of more efficient transport operations. Efficiency is defined by transportation
a higher utilization of trucks and modal shift to rail if possible. In this research, we focus
mainly on operative parameters of a logistics strategy and transport key performance
operations
indicators. A major assumption is that strategic parameters (e.g. production plants,
warehouse location) have a long-term character as well as are not part of daily business
operations. This research tries to analyze interrelationships between operative 509
parameters and their impact on freight transport operations in a systemic way. We
extract the parameters of logistics strategy by a huge literature study which is explained
in detail by Aschauer and Gronalt (2011). Drewes Nielsen et al. (2003) developed four
transport indicators which are showing the impact of changes in logistics on transport.
In their research, they analyzed the impact of changes in logistical organization on these
parameters; nevertheless, these developed indicators are also functional describing the
impacts on transport when changes in operational parameters of logistics strategy
occur: transport mode, transport distance, transport efficiency and transport content.
These parameters will be explained in more detail in the following section.
Thus, it is evident that the modeling methodology that is employed needs to be able
to capture the transient effects of internal and external indicators and relates each other
in an overall system. SD has this capacity and moreover allows creating experiments
and scenarios within the developed system.

Model description
Based on the findings from literature (Aschauer and Gronalt, 2011), a model boundary
chart was developed for the classification of the observed parameters (Sterman, 2000). In
total, 25 parameters were identified which are relevant within the system of logistics
strategy and freight transport operations.
For the development of the causal diagram in the following step, these parameters
were classified into endogenous (influenced and influencing parameters), exogenous
(influencing endogenous parameters but not influenced by another parameter) and
excluded (not included in the SD model yet) parameters, as shown in Table I.
After the boundary clarification process, the causal diagram was developed. For the
formal logic of the diagram, the developed parameters and key performance indicators
have been concretized to some extent. For example, instead of transport efficiency, we
talk of utilization of trucks, or transport mode is changed into modal split.

Model variables & causal loop diagram

The causal loop diagram represents the major feedback mechanisms and serves as a
simplified representation of the model. The first step of our analysis is to capture the
relationships among the system operations in an SD manner and to construct the
appropriate causal loop diagram. Figure 1 depicts the causal loop diagram of the system.
The first loop, called logistics effect is a reinforcing loop. The three parameters are
shipment amount, transports and utilization of trucks. The shipment amount is
influenced by the operated logistics concept (e.g. Just in Time, Vendor Managed
Inventory, and Just in Sequence) which influences the order cycle frequency and amount
per order cycle which is determined also by the production amount of the company or
supply chain. The shipment amount is influenced by the amount per order cycle and
depends on the released orders within a certain time period. High numbers of order
MRR Endogenous Exogenous Excluded
38,5
Amount per order cycle order Logistics concept transport Product design outsourcing
cycle frequency shipment amount flexibility production centralized/decentralized
amount production
Utilization of trucks Infrastructure capacity Centralized/decentralized
510 distribution
Road kilometers traveled Transport distance
No. of transports Order cycle frequency
Pressure to consolidate Transport capacity truck
Road infrastructure utilization
rail kilometers
Modal shift congestion possibility
Table I. transport emissions fossil fuel
Model boundary consumption transport costs
chart transportation lead time

Figure 1.
Causal loop diagram

releases implicate a smaller shipment amount and vice versa. Small shipment amounts
mean a low utilization of trucks, whereas high shipment amounts have a positive impact
on the utilization of trucks (Kummer, 2006). This loop has two positive and one negative
link. The parameter utilization of trucks is also influenced by the external parameter of
truck load capacity. This factor can generally be fixed between 7.5 t and 44 t which
represent the mayor single truck load capacities within Europe. As there is also a debate Logistics and
within the European Union about the permission of gigaliners, experiments and transportation
scenarios with 60 t of capacity can also be realized. This described reinforcing loop is the operations
facilitated picture of what we have experienced in road freight transportation within the
past 20 years through the introduction of inventory reducing logistics concepts.
Nevertheless, transportation and industry face now several new challenges and this
reinforcing loop is influenced by the five other loops. 511
The first balancing loop is called the “fuel cost” loop and has the following
parameters and influences. The percentage of utilization influences the transport
distances traveled. This parameter is also influenced by the physical distance between
the company and the supplier or costumer. If we have a distance of, e.g. 100 km and a
utilization of 100 per cent, only 100 km are traveled. If utilization is reduced to 50 per
cent, 200 km have to be traveled, 10 per cent mean that 1,000 km have to be traveled in
sum and so on. The higher the amount of distance traveled, the more the fuel
consumption is. This raises the transportation costs (especially if fuel price rises
through crises or introduction of new taxes, etc.). If transportation costs increase, the
pressure to consolidate also rises. If this consolidation pressure increases, the shipment
amount will also be increased through, e.g. bundling. This bundling effect needs some
time within the system, as companies have to identify consolidation potentials and
bundle them. This consolidation potential could also be realized by, e.g. back loading
opportunities which also have positive effects against empty running and low
utilization (McKinnon and Ge, 2006). An additional aspect, which all of the loops
connected to “pressure to consolidate” have in common is, the positive relation between
transport flexibility and the pressure to consolidate. A growth in flexibility leads to a
growth of the pressure, as companies want to realize their transports efficient regarding
costs and utilization (Aronson and Brodin, 2006; Jackson, 1985, Kohn and Brodin, 2008;
Naim et al., 2006; Zhang et al., 2005).
A very similar effect is the second balancing loop “transport emissions”. As
described in the last loop, the higher the amount of traveled distances, the higher is the
fuel consumption and the higher are the emissions of the trucks, depending on the
standard and age of the truck. Within this model, we assume that a growth in emissions
results in a growth within transport costs. We can say that emissions are internalized. If
transportation costs rise, we can find the same effects as described above, the pressure
to consolidate will also rise and, therefore, measurements to increase shipment amount
should be implemented (Hausberger, 2012).
The fourth loop of the causal loop diagram is the balancing loop “transportation lead
time”. If the number of transports (truck on the road) is high, the risk of being affected by
congestion, accidents, etc. is evident. As road infrastructure has a certain amount of
capacity and influences the level of service (from free, undisturbed flow to congestion) of
the road within a day, this means a potential loss of time and planning uncertainty. Road
congestion represents the biggest individual issue leading to uncertainty which is
identified as a main cause for delays and delivery constraints particularly impacting the
average load on laden trips and empty running. Loss of time also has a huge effect on
transportation costs. The bottlenecks and infrastructure constraints on road are an
important issue in the future and definitely have to be considered. Having a lot of low
utilized trucks running on road infrastructure will also increase the transportation costs
MRR and leads to an increase of pressure to consolidate and to increase shipment amounts
38,5 (McKinnon, 1998; Potter and Lalwani, 2008, Sanchez-Rodrigues et al., 2010).
The next two loops will be described together, as they are very similar. They are
named as “shifting and bundling possibility (with emissions)”. Through a growth
within pressure to consolidate, besides bundling and increasing truck utilization there
also is a possibility to shift from road to rail. The realization of such a shift needs a
512 certain amount of time and cannot be realized immediately. A shift reduces traveled
kilometers by truck and, as a consequence, fuel consumption and emissions are reduced.
This decreases transport costs and reduces the pressure to consolidate (Zäpfel and
Lengauer, 2004). Both are balancing loops.
Having also a lot in common, the last two loops are also described together. They are
named as “rail transport” and “rail transport with emission”. If the pressure to
consolidate is high enough, and some other restrictions are fulfilled, a shift is realized
after a certain period of time. This changes the modal split and increases transport
kilometers by rail, whereas transport kilometers by truck are reduced.
Rail also needs energy (underling in the model that rail needs fewer fuel energy and
produces less emissions than trucks do) and, thus, has an effect on transport costs and
emissions which also increases in a next step transport costs. This increases the
pressure to consolidate (McKinnon and Piecyk, 2010). The loops are reinforcing.
The described causal loop diagram was developed iteratively by a literature study
and expert interviews. Within the model, some assumptions have been taken to reduce
the complexity. The comprehensive diagram serves now as a basis for the
transformation into the quantitative stock and flow model.

Modeling via stock and flow & assumptions

The next step of the SD methodology includes the development of the mathematical
model presented as the stock and flow diagram that captures the model structure and
the interrelationships among the variables. The stock flow diagram is easily translated
to a system of differential equations, which is then solved via simulation. The stock flow
diagram of our model has been developed using Stella ithink, which is one of the main
SD software programs available for the development of SD simulation models and is
exhibited in Figure 2. The stock and flow diagram is a graphical representation of the
mathematical model. In the remaining of this section, we present selected formulations
related to important model assumptions. All model equations with their initial values for
stock variables are given in the Appendix.

Model validation
The main criterion for SD models validation is structure validity, which is the validity of
the set of relations used in the model, as compared with the real processes (Vlachos et al.,
2007). Sterman (2000) suggests for a structured validation of a model the following tests:
dimensional consistency, extreme conditions, parameter assessment, etc. For the
detection of structural flaws in the SD models, direct and indirect structure tests are
used. For the latter, especially extreme condition and behavioral sensitivity tests are the
most significant ones (Barlas, 1996). Within the dimensional consistency test, every
parameter and equation was checked on its consistency regarding its units. Extreme
condition tests involve assigning extreme values to selected model parameters and
comparing the model generated behavior to the “anticipated” behavior of the real
 Logistics and
transportation
operations

513

Figure 2.
Stock and flow
diagram

system under the same extreme condition. The test exploits the fact that we, human
beings, are weak in anticipating the dynamics of a complex dynamic system in arbitrary
operating conditions, but are much better in anticipating the behavior of the system in
extreme conditions. If the model has any hidden structural flaws or inconsistencies, they
would be revealed by such tests (Vlachos et al., 2007; Barlas, 1996). The model responded
coherent to the tests. Another step in validation was sensitivity analysis, where we
checked the response of the model to relay small changes within some parameters. If the
results were completely different, it would be an indication that there are some
structural flaws within the model. The tests did not show any noticeable results.
Behavior sensitivity test consists of determining those parameters to which the
model is highly sensitive and asking if these sensitivities would make sense in the real
system. If we discover certain parameters to which the model behavior is surprisingly
sensitive, it may indicate a flaw in the model equations. Alternatively, all model
equations may be valid, in which case this may lead to the discovery of an unknown,
MRR non-intuitive property of the system under study (Vlachos et al., 2007). We conducted
38,5 structural validation tests, which confirmed that the model structure yields meaningful
behavior to parameters order frequency, truck load capacity, transport flexibility,
consolidation coefficient (alpha), toll costs, fuel costs, CO2 internalization costs, road
infrastructure capacity and truck costs per hour. The behavior validation of the model
with respect to the real data is also important and desirable. Therefore, a validation,
514 based on real company data, was also realized to proof the models applicability. For this
validation tests, the data of two different companies from steel industry were used.
These two enterprises provided the necessary and suitable historical input data (order
frequency, order amount per year, truck load capacity, transport distance) which
enabled the authors to run the model and compare the results with the existing outcomes
on the relevant parameters of the two companies for 2009 (shipping amount, utilization,
amount per order, transport costs, fuel consumption, etc.). The comparison of the results
was satisfying. The model was able to picture the outcomes of the numbers of the two
companies for 2009. After theoretical and practical validation runs, the model proofed its
applicability. The models behavior is consistent with empirical and theoretical evidence
based on the findings from literature.

Numerical investigation
In this section, the application of the developed model is demonstrated using a number
of different experiments and discusses few interesting insights that are obtained. The
input variables that have to be determined at the beginning of each scenario are order
amount, order frequency, truck load capacity and average transport distances. The basic
numerical numbers have a close relation to real company data provided for validation.
Within the basic scenario, we can find the following data, as shown in Table II.
These numerical numbers serve as input data in the SD model. Based on the
pre-defined constants and equations (see Appendix), a scenario over 10 years is
simulated. Caused by the cost increase per year (toll and truck 4 per cent, fuel 7 per cent),
a growth within total transport costs is visible. This development can be damped by
consolidation activities. In the fifth period, due to a high pressure to consolidate, a shift
from road to rail is realized which decreases total transport costs significantly.
Nevertheless, as costs still rise per year, also total transport costs rise, measures like
consolidation and shift are realized. Caused by the modal shift, also CO2 und fuel
emissions could be diminished (Table III).
To sum up, within the basic scenario, a lot of unused potential can be realized.
Therefore, different experiments have been created and simulated in the following
section, giving an overview of the behavior of the system.
Only one leverage point is changed, whereas the others are fixed (like in the basic
scenario).

Input data Numerical no.

Table II. Order amount per year 300 t

Input data for Order frequency 15/year
numerical Truck load capacity in tons 24 t
investigation Average transport distances 1000 km
 Results
Order CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
Period amount (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Beginning 20 11,055 4,200 1,500 50.2 83.3 0

End 22 9,044 3,413 1,000 60.1 90.8 1.07
Average 21 10,050 3,807 1,351 55.4 88.7 0.8

results
515

Basical example
Table III.
operations
transportation
Logistics and
MRR The first experimentation is presented through changing the order frequency
38,5 from 15 to 60, 120, 240 and 480. The change shows a high impact on costs and
utilization. The higher the frequency, the lower is utilization and the higher are
transport costs. The pressure to consolidate does not change significantly, as the
company tries to consolidate and shift. The high transport costs can be explained by
the higher traveled road kilometers due to the higher order frequencies (Figure 3;
516 Table IV).
The investigation of increasing or decreasing (500, 250 and 50 km) the average
transport distance shows that also transport costs per ton as well as emissions change in
the same way. Regional or local procurement and distribution locations have therefore a
huge potential. Nevertheless, within a globalized world, this is a challenge (Figure 4;
Table V).
The increase of the cost parameters toll, costs per truck hour (4, 16, 32 and 64 per
cent) and fuel (7, 28, 56 and 112 per cent) highlight a huge effect within the system.
A moderate increase tends to have the same development as in the basic scenario,
whereas the significant increase tends to strengthen the company on its effort for
bundling and shifting and, therefore, brings better results to light. The only
exception is transport costs per ton which do nevertheless increase by cost increases
(Figure 5; Table VI).
The realization of CO2 emission tax through internalization (€60, €120, €240, €480)
only has low impact on efficiency increasing within the system. Only the transport costs
per ton do increase, whereas lower fuel consumption or consolidation effects are not
realized (Figure 6; Table VII).
Experiments regarding the change of road infrastructure capacity (form Level of
service 1 to 2 and 3) show that especially transport costs increase due to a loss of
time (⫽ money). However, the losses within the system are in total too low to increase
considerably consolidation and shifting measurements (Figure 7; Table VIII).
Investigations regarding changes within shifting potential (0, 25, 50 and 90 per cent)
can be summarized by the following. Excluding the 0 per cent example, all other
experiments show a reduction of transport costs per ton as well as emissions. Only the
first one shows the opposite. Another interesting finding is that also no negative effects
on utilization of trucks can be found even if 90 per cent of the volume is shifted. Although
these results demonstrated the efficiency of shifts, a realization is still difficult in reality
(Figure 8; Table IX).
Changing the load capacity of truck from 24 t to 44 t and 60 t provides the following
information. The higher the load capacity, the lower are transport costs per ton. This
results in less pressure to consolidate and leads into less utilized trucks. As the pressure
is not high, also shifts are not realized. The limitation within this model is that the fuel
consumption and emission values are treated the same for each type of truck, which can
in reality vary (Figure 9; Table X).
The last experiments, executed with transport flexibility and consolidation factor
(Alpha) (10/10 per cent and 90/90 per cent) demonstrate that a growth or a decrease does
not result in the same outcomes. A decrease results in the highest transport costs per ton
and no shift to rail. Also, the increase results in higher costs per ton compared to the
basic scenario and do not emphasize higher consolidation measures. A shift within this
scenario is realized very late, exactly in Period 9 (Figure 10; Table XI).
 Logistics and
transportation
operations

517

Figure 3.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within order
frequency
 38,5

518
MRR

frequency
Table IV.
Results order
Parameter Results
No. of Changed parameter CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments (order frequency) Order amount (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis 15 20 103 39 136 56 88.7 0.73

E1 60 5 442 168 589 143 44 0.66
E2 120 2.5 884 336 1,178 215 36.8 0.69
E3 240 1.25 1,769 672 2,355 339 33.2 0.7
E4 480 0.625 3,538 1,344 4,710 574 31.4 0.71
 Logistics and
transportation
operations

519

Figure 4.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within transport
distance
 38,5

520
MRR

distance
Table V.
Results transport
Parameter Results
No. of Changed parameter CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments (average transport distance) (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis 1,000 103 39 136 56 88.7 0.73

E1 500 51 19 68 27.9 88.7 0.8
E2 250 28 10.5 37.5 15.3 88.7 1.1
E3 50 2 5.8 7.5 3 88.7 1.1
 Logistics and
transportation
operations

521

Figure 5.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within cost
parameters
 38,5

522
MRR

Table VI.

parameters
Results cost
Parameter Results
No. of Changed parameter CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments (cost parameters) (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis 4%/7% 103 39 136 56 88.7 0.73

E1 16%/28% 100 38 133 123 88.9 0.75
E2 32%/56% 100 38 133 405 89.1 0.97
E3 64%/112% 98 37 130 3946 89.3 1.03
 Logistics and
transportation
operations

523

Figure 6.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within CO2 emission
tax
 tax
38,5

524
MRR

Table VII.
Results CO2 emission
Parameter Results
Changed
No. of parameter CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments (CO2 emission tax) (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis 15 103 39 136 56 88.7 0.73

E1 60 103 39 136 57.2 88.7 0.72
E2 120 103 39 136 59.2 88.7 0.73
E3 240 103 39 136 63 88.7 0.72
E4 480 103 39 136 70.7 88.7 0.71
 Logistics and
transportation
operations

525

Figure 7.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within infrastructure
capacity
 38,5

526
MRR

capacity
Results road
Table VIII.

infrastructure
Parameter Results
No. of Changed parameter (road CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments infrastructure capacity) (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis 1 103 39 136 56 88.7 0.73

E1 2 103 39 136 62 88.7 0.73
E2 3 103 39 136 67.5 88.7 0.73
 Logistics and
transportation
operations

527

Figure 8.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within shifting
potential
 38,5

528
MRR

potential
Table IX.
Results shifting
Parameter Results
No. of Changed parameter CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments (shifting potential) (%) (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis 25 103 39 136 56 88.7 0.73

E1 0 111 42 150 61.3 88.7 1.1
E2 50 95 36 122 50.4 88.7 0.73
E3 90 82 31 99 41.8 88.7 0,73
 Logistics and
transportation
operations

529

Figure 9.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within truck load
capacity
 38,5

530
MRR

capacity
Table X.
Results truck load
Parameter Results
No. of Changed parameter CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments (truck load capacity) (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis 24 103 39 136 56 88.7 0.73

E1 44 107 40 142 47 62 0.66
E2 60 107 40 142 41.5 53 0.67
 Logistics and
transportation
operations

531

Figure 10.
Development
transport costs per
ton, order amount,
truck utilization %
and CO2 emissions
per year for changes
within transport
flexibility
 38,5

532
MRR

flexibility
Table XI.
Results transport
Parameter Results
Changed parameter [transport
No. of flexibility/consolidation CO2 emissions Fuel consumption Road kilometers Transport costs/t Utilization Pressure to
experiments coefficient (Alpha)] (1,000/t) (1,000 l) (1,000 km) in € truck (%) consolidate

Basis LF 50%/Alpha 50% 103 39 136 56 88.7 0.73

E1 LF 10%/Alpha 10% 111 42 150 62.7 86.5 0.38
E2 LF 90%/Alpha 90% 111 42 147 62 87.4 0.51
Managerial implications & further research Logistics and
We presented an SD model for the interdependencies between logistics strategies and freight transportation
transport. The developed model allows the comprehensive description and analysis of the
system operations (parameters of logistics strategy) and taking also transport-relevant
operations
factors (toll, CO2 internalization, infrastructure capacity) into account. The model should
serve as a basis for the realization of sustainable transport operations.
We first validated the SD model employing, e.g. extreme condition and behavioral 533
sensitivity tests and then proceeded with the realization of numerical investigations or
scenarios. The latter provides insights about the influence of the different leverage
points within this dynamic system. Parameters of logistics strategies and transport
operations do have close interrelations. These interdependencies can occur in different
ways and do influence the whole system in direct and indirect ways. Especially the five
managerial logistics parameters transport flexibility, order frequency, truck load
capacity, cost parameters and modal shift do play an important role. Depending on the
framework, transport flexibility has a huge potential to reduce cost increases. Higher
truck load capacities do not exclude modal shift to rail. The reduction of order
frequencies does not always lead to higher utilization or better emission and fuel
consumption values. Less transport distances do not mean automatically less costs or
emissions. It could be demonstrated that the implementation of carbon dioxide taxes or
worse road capacities do have less influence on the system, in addition.
The following managerial implications can be derived. The SD model enables a
simplified analysis of the miscellaneous impacts within the system. This supports a more
sensible comprehension of the interrelationships. For the realization of efficient transport
operations, consolidation serves as a main tool to go against cost increases as well as
increasing utilization. Therefore, the internal pressure to consolidate has to be determined.
For that task, transport flexibility acts as an important variable. The significance of a high
flexibility for customers has to be clarified. The results demonstrate that already small
changes within this parameter (including its consolidation support factor alpha) can lead
into better utilization as well as a reduction of costs. When looking at the parameter order
frequencies, high efficiency potential could be found in addition. Therefore, an analysis of the
whole supply chain has to be conducted whether a reduction of order frequencies affects the
tradeoff between less transport costs and the possibility of higher storage costs. Within this
calculation, not only direct costs but also indirect savings through less CO2 emissions have
to be considered. A reduction of order frequencies as well as an increase of truck load
capacity also highlighted an efficiency potential too. In addition, these increased truck load
capacities offer new opportunities for bundling goods. As the results of the scenarios
demonstrate, it does not exclude modal shifts. Cost parameters which cannot be influenced
by the company itself can create difficult environments for them. Within the mentioned
parameters and an efficient usage, challenging situations can be handled in a better way.
The SD model contributes to an enhanced understanding of the interrelationships for
logistics and transport decision-makers within companies and supply chain networks.
Nevertheless, the following limitations should be considered. The model
concentrates mainly on operative parameters within a logistics strategy. The influence
through strategic parameters could be an extension of the model. Also, the classification
into operative and strategic parameters is an assumption based on findings in literature.
Therefore, this classification has to be treated carefully within more precise simulations
in future. Another critical assumption is that inventory costs have also been excluded in
MRR the model. Higher inventory costs resulting from less order frequencies could result in
38,5 another behavior within the model. This is also an aspect which has to be considered
within further developments of the model in future. The system logistics and freight
transport could also be influenced by other relevant business parameters like marketing
strategies for greening the company or financial aspects, etc. These business parts have
been excluded within this thesis and the model.
534 The model can be used to analyze various scenarios, thus identifying efficient
policies and further to answer questions about long-term behavior of the complex
interactions between logistics activities and transport movements in future. The model
could further be adopted by strategically logistics parameters. Thus, it may prove useful
to loaders/industry, logistics service providers as well as policy stakeholders regarding
the realization of efficient, sustainable transport movements in future.

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Hartland.

Appendix 1. Model equations

consolidation_potential_stock(t) ⫽ consolidation_potential_stock(t - dt) ⫹

(consolidation__potential_flow - consolidation__potential_outflow) * dt
INIT consolidation_potential_stock ⫽ 0
INFLOWS:
consolidation__potential_flow ⫽ consolidation_potential
OUTFLOWS:
consolidation__potential_outflow ⫽ consolidation_potential_stock
truck costs_per_hour(t) ⫽ truck costs_per_hour(t - dt) ⫹ (truck_costs__development) * dt
INIT truck_costs_per_hour ⫽ 30
INFLOWS:
truck_costs__development ⫽ growthrate_truck_costs_per_hour*truck_costs_per_hour
deliveries_in_period(t) ⫽ deliveries_in_period(t - dt) ⫹ (deliveries - deliveries_outflow) * dt
INIT deliveries_in_period ⫽ IF (amount_per__order_cycle/truck_load_capacity) ⫽
INT(amount_per__order_cycle/truck_load_capacity) THEN
INT(amount_per__order_cycle/truck_load_capacity) ELSE
INT(amount_per__order_cycle/truck_load_capacity) ⫹ 1
INFLOWS:
deliveries ⫽ IF
ROUND((amount_per__order_cycle/truck_load__capacity_2)/change_in_utilization) ⬎
INT((amount_per__order_cycle/truck_load__capacity_2)/change_in_utilization) THEN
INT((amount_per__order_cycle/truck_load__capacity_2)/change_in_utilization)⫹1 ELSE
INT((amount_per__order_cycle/truck_load__capacity_2)/change_in_utilization)
OUTFLOWS:
deliveries_outflow ⫽ deliveries_in_period
fuel_price(t) ⫽ fuel_price(t - dt) ⫹ (fuel_price_development) * dt Logistics and
INIT fuel_price ⫽ 1.4
INFLOWS:
transportation
fuel_price_development ⫽ growth_rate_fuel_price*fuel_price operations
pressure_to__consolidate(t) ⫽ pressure_to__consolidate(t - dt) ⫹ (pressure_generation) *
dt
INIT pressure_to__consolidate ⫽ 0 537
INFLOWS:
pressure_generation ⫽ IF change_transport_costs ⬍ ⫽ 0 THEN change_transport_costs
ELSE
IF utilization_in_% ⬎ 97 AND average_transport_distance_2 ⬍ 300 THEN 0 ELSE IF
modal_split_share ⬎ 0 THEN 0 ELSE (alpha*change_transport_costs⫹(1-
alpha)*transport_flexibility)
shipment_amount(t) ⫽ shipment_amount(t - dt) ⫹ (average_shipment_amount) * dt
INIT shipment_amount ⫽ 0
INFLOWS:
average_shipment_amount ⫽ (amount_per__order_cycle/deliveries_in_period)
toll(t) ⫽ toll(t - dt) ⫹ (toll_proce_development) * dt
INIT toll ⫽ 0.3
INFLOWS:
toll_proce_development ⫽ toll*growth_rate__toll_price
total_amount_CO2_emissions(t) ⫽ total_amount_CO2_emissions(t - dt) ⫹
(CO2_emissions_per_year) * dt
INIT total_amount_CO2_emissions ⫽ 0
INFLOWS:
CO2_emissions_per_year ⫽
(CO2_emissions__truck_per_km*road_transport__kilometers)⫹CO2_emissions_rail
total_amount_consumed_fuel(t) ⫽ total_amount_consumed_fuel(t - dt) ⫹
(fuel_consumption__per_year) * dt
INIT total_amount_c_onsumed_fuel ⫽ 0
INFLOWS:
fuel_consumption__per_year ⫽
road_transport__kilometers*fuel_consumption__truck_per_kilometer
total_deliveries(t) ⫽ total_deliveries(t - dt) ⫹ (deliveries_outflow) * dt
INIT total_deliveries ⫽ 0
INFLOWS:
deliveries_outflow ⫽ deliveries_in_period
total_transport_costs(t) ⫽ total_transport_costs(t - dt) ⫹ (transport_costs__per_year) * dt
INIT total_transport_costs ⫽
transport_costs__per_year*average_shipment_amount*delivery__multiplier
INFLOWS:
transport_costs__per_year ⫽
(((CO2_costs⫹transport_lead_time_costs⫹fuel_costs⫹toll_costs)/average_shipment_amount)/
delivery__multiplier)⫹(rail_kilometers_transport_costs/average_shipment_amount/
delivery__
multiplier) utilization_of_trucks(t) ⫽ utilization_of_trucks(t - dt) ⫹ (change_in_utilization)
* dt
INIT utilization_of_trucks ⫽ 0
MRR INFLOWS:
change_in_utilization ⫽ average_shipment_amount/truck_load_capacity
38,5
Appendix 2. Constants and converters
alpha ⫽ 0.5
amount_per__order_cycle ⫽
538 order_amount/order_cycle__frequency ⫹ consolidation_potential_stock
average_road_infrastrcuture_capacity ⫽ 1
average_speed ⫽ IF average_road_infrastrcuture_capacity ⫽ 1 THEN 80 ELSE IF
average_road_infrastrcuture_capacity⫽2 THEN 60 ELSE IF
average_road_infrastrcuture_capacity ⫽ 3 THEN 50 ELSE 50
average_transport_distance ⫽ 1,000
average_transport_distance_2 ⫽ 1,000
change_transport_costs ⫽
(transport_costs__per_year/transport_costs_per_year_and_ton_previous_year)-1
CO2_costs ⫽ internalisation__CO2_tax*CO2_emissions_per_year
CO2_emissions_rail ⫽ rail_kilometers*0.022
CO2_emissions__truck_per_km ⫽ 0.737
consolidation_potential ⫽ IF less_than_truck_load ⫽ 0 OR (truck_load_capacity-
less_than_truck_load) ⬍ 1 THEN 0 ELSE (truck_load_capacity-
less_than_truck_load)*pressure_graphical
delivery__multiplier ⫽ deliveries_in_period*order_cycle__frequency
fuel_consumption__truck_per_kilometer ⫽ 28/100
fuel_costs ⫽ fuel_price*fuel_consumption__per_year
full_truck_load ⫽ INT(amount_per__order_cycle/truck_load_capacity)
growthrate_costs_per_hour ⫽ CGROWTH(4)
growth_rate_fuel_price ⫽ CGROWTH(7)
growth_rate__toll_price ⫽ CGROWTH(4)
internalisation__CO2_tax ⫽ 0.015
less_than_truck_load ⫽ IF amount_per__order_cycle ⬍ truck_load_capacity THEN
amount_per__order_cycle ELSE ((amount_per__order_cycle/full_truck_load)-
truck_load_capacity)*full_truck_load
modal_split_share ⫽ IF average_transport_distance ⬎ ⫽ 300 AND
pressure_to__consolidate ⬎
1 THEN 0.25 ELSE 0
order_amount ⫽ 300
order_cycle__frequency ⫽ 15
rail_kilometers ⫽ DELAY(modal_split_share,
1,0)*0.75*average_transport_distance*delivery__multiplier
rail_kilometers_transport_costs ⫽ rail_kilometers*0.11
road_transport__kilometers ⫽ (delivery__multiplier*average_transport_distance)-
rail_kilometers
share_of__road_toll ⫽ 0.75
toll_costs ⫽ toll*road_transport__kilometers*share_of__road_toll
total_deliveries_over__all_periods ⫽ delivery__multiplier*10
transport_costs_per_year_and_ton_previous_year ⫽
DELAY(transport_costs__per_year,1,INIT(transport_costs__per_year))
transport_flexibility ⫽ 0.5
transport_lead_time ⫽ road_transport__kilometers/average_speed
transport_lead_time_costs ⫽ costs_per_hour*transport_lead_time
truck_load_capacity ⫽ 24
truck_load__capacity_2 ⫽ 24
 utilization_in_% ⫽ change_in_utilization*100 Logistics and
pressure_graphical ⫽ GRAPH(pressure_to__consolidate)
(0.00, 0.00), (0.1, 0.00), (0.2, 0.1), (0.3, 0.2), (0.4, 0.3), (0.5, 0.4), (0.6, 0.5), (0.7, 0.6), transportation
(0.8, 0.7), (0.9, 0.75), (1, 0.8) operations
Appendix 3

539
Stock Unit Initial value

Toll Euro €0.3

Fuel price Euro €1.4
Truck costs per hour Euro €30
Flow
Fuel price development Euro/time unit 0
Toll price development Euro/time unit 0
Truck costs development Euro/time unit 0
Converter (auxiliary variable)
Transport flexibility Percentage 50
Alpha Percentage 50
Internalization CO2 tax Euro/ton 15
Growth rate fuel price Percentage 7
Growth rate toll price Percentage 4
Growth rate truck costs per hour Percentage 4
Fuel consumption truck per kilometer Litre/100 kilometers 0.28
CO2 emissions truck per kilometer Kilogram/kilometers 0.737
Average road infrastructure capacity Level of service 1
Average speed Kilometer/hour 80
Pressure (to consolidate) graphical Percentage Graphical function
CO2 emissions rail Kilogram/ton kilometers 0.022
Proportional cost rate railway Euro/ton kilometers 0.11
Share of road toll Percentage 75 Table AI.
Modal split Percentage 25 Initial values

About the authors

Dr Gerald Aschauer is Senior Researcher at the Transport Institute of University of Applied
Sciences Upper Austria. Gerald Aschauer is the corresponding author and can be contacted at:
[email protected]
Prof Manfred Gronalt is Professor for Production and Logistics Management at University of
Natural Resources and Life Sciences Vienna.
Prof Christoph Mandl is Director of Mandl, Luethi & Partner, a consulting company focusing
on systems thinking.

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