Exploring Retailers' Sensitivity to Local Sustainability Policies

Abstract:     
Local governments in Western Europe increasingly use city time-access regulations to improve social sustainibility. These regulations significantly influence the distribution process of retail chain organizations. This paper studies the impact of governmental timewindow pressure on retailers’ logistical concept and consequential financial and environmental distribution performance. We determine which dimensions in the retailer’s logistical concept determine its cost and emission sensitivity to increasing time-window pressure. Our research is based on a multiple case study of fourteen Dutch retail cases in different sectors and with different store formulas. The retailers provided all organizational, flow and cost data of their secondary distribution (between distribution center and stores). We use these data to calculate the impacts of different time-window pressure scenarios, including the current situation, using vehicle routing software. It appears that cost increases are moderate, when few cities are affected. However, as more cities are affected, costs increase considerably, particularly if time-window lengths become shorter. Time-windows harmonized between cities, lead to less negative effects. We find various dimensions that contribute to reducing the retailer’s sensitivity to timewindow pressure. We formulate conclusions hypothesizing the links between timewindow pressure, its effects, and the dimensions that determine these effects.

Number of Pages in PDF File: 29

Keywords: sustainability, governmental regulation, city logistics / distribution, retail, case study

JEL Classification: M, L15, O32, M11, L81

working papers series