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Transport and Telecommunication Vol. 14, no. 4, 2013
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Transport and Telecommunication, 2013, volume 14, no. 4, 292–299
Transport and Telecommunication Institute, Lomonosova 1, Riga, LV-1019, Latvia
DOI 10.2478/ttj-2013-0025
MANAGEMENT OF GREEN CORRIDOR PERFORMANCE
Kristina Hunke1, Gunnar Prause2
Tallinn School of Economics and Business Administration
Tallinn University of Technology, Estonia
1E-mail: Kristina.hunke@ttu.ee
2E-mail: gunnar.prause@ttu.ee
In the context of a harmonized transnational transport system the green corridor concept represents a cornerstone in the
development and implementation of integrated and sustainable transport solutions. Important properties of green corridors are their
transnational character and their high involvement of public and private stakeholders, including political level, requiring new
governance models for the management of green corridors.
Stakeholder governance models and instruments for green corridor governance are going to be developed and tested in
different regional development projects in order to safeguard a better alignment of transport policies at various administrative levels
and a strengthening of the business perspective. A crucial role in this context belongs to involvement of public and private
stakeholders in order to safeguard efficient corridor performance.
The paper presents recent research results about green supply chain management in the frame of network and stakeholder
model theory and its application to the stakeholders of green transport corridors.
Keywords: green supply chain management, green transport corridors, stakeholder governance
1. Introduction
Due to globalisation today’s industry is not dependent solely on location of resources and raw
materials but is present all around the globe and decision makers having chosen their locations more in
consideration of cost factors like labour costs, real estate prices and tax regulations but not on
geographically close location to the markets and low transportation costs. Therefore, one of the main
challenges connected to energy provision and use in a green logistics perspective is the energy
consumption during transportation of goods. In a supply chain, CO2 emissions related transportation
accounts for 14% of the total emissions according to [1].
When it comes to growth on the one hand and sustainable development on the other hand, the
responsibility lies mainly on the companies’ shoulders as the supply chains can be seen as the key factors
in creating a sustainable supply to the customers [2]. The growth rate of trade volumes is expected to
continue in the future increasing the demands in the performance of logistics networks. The current
estimations for Europe are predicting a 50% increase in passenger and freight transport within the next 20
years [3]. The emphasis of the European Union is laid on green transport corridors, i.e., European trans-
shipment routes with concentration of freight traffic between major hubs and by relatively long distances
of transport marked by reduced environmental and climate impact while increasing safety and efficiency
with application of sustainable logistics solutions, inter-modality, ICT infrastructure, common and open
legal regulations and strategically placed trans-shipment nodes [4].
2. Theoretical Background
A. Supply Chain Management
Green supply chain management is based on the principle of supply chain management with an
extra add-on on green impacts, meaning environmental friendly and efficient aspects. Supply chain
management aims at providing the logistic aspects of the production process in the company in the most
efficient way. That means that also suppliers, manufactures, customers and disposal companies are
involved in the supply chain activities. In the context of green supply chain management, there exists
interdependency between conventional supply chain management and eco-programs [5]. This includes the
approach on how ecological aspects can be considered in the whole business processes in the most
effectively way. The work [6] proposed that green supply chain management practices, which include
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green purchasing, green manufacturing, materials management, green distribution/marketing and reverse
logistics, refer to the involvement of environmental thinking into the supply chain management from the
extraction of raw materials to product design, manufacturing processes, delivery of the final products to
the consumers and end-of-life management [7]. Therefore, it can be assumed that the involvement of
green aspects in the supply chain of a company also involves changes in the supply chain itself. Of
course, this will then also have an impact on the cooperative alliances with suppliers, manufactures and
the customer at the end of the logistics chain.
However, there have been few studies exploring the issue of green supply chain management in
the network approach. The performance evaluation of the supply chain management is one aspect of
managing the transport corridor performance as an alliance and interdependence of stakeholders in the
transport corridor. Hence, applying green supply chain concepts is essential in order to reduce
environmental impacts, enhance market competition, and ensure regulation compliance.
The challenge within each supply chain is to choose the right mode of transportation, to use the
right equipment, and to use the right fuel [8]. Among the modes of transportation we find plane, ship,
truck, rail, barge and pipelines, all with different attributes when considering costs, lead time,
environmental performance and availability. However, the reality is that it rarely happens that all modes
of transportation are realistic options when shipping goods. The reason is that the goods might set
limitations on which modes that can be used. The customers will also be very influential when choosing
mode of transportation as they might be demanding a very high service level with quick delivery. When
shipping goods over long distances, the alternatives are normally transport by air or ship. However, when
distances are short, truck, airplane, train, or short sea ships are used [8].
Another important factor that has great impact on the environmental performance is the type of
fuel that is used. Today the main categories of fuel are gasoline, biofuels, and electricity. Modern gasoline
is much cleaner than it used to be. Biofuel can be mixed with regular gasoline, but if biofuel is used
extensively, then the engine will have to go through some costly adoptions. Biofuel is fuel based on
organic waste, and in that sense it is environmental friendly, but the problem is that it takes a lot of
gasoline to make biofuel, which makes the total environmental performance of biofuel quite pure.
However, if the technology and methods that are used for making biofuel are improved in the future, the
environmental performance might raise significantly. Electric vehicles are clearly environmental friendly
as they have very low levels of emissions, and the production of electricity can be controlled in order to
calculate the emissions. The most important restriction for electrical vehicles is their range, which is too
limited in order to be fully competitive with the combustion engine. This limitation might be eliminated
in the future if the technology on battery capacity moves forward [8].
Finally, there is also a possibility for a development and use of other types of equipment. This
might for instance be to use Giga-liners (long trucks), to use extra-long trains, and larger vessels at sea.
These are all improvements that could decrease the emissions per kilo transported. However, if then the
load factor drops, then the environmental performance might get lower than it originally was. Another
method that already is used extensively is to lower the speed; this is for instance used in the shipping
industry when the rates are low. A bi-effect is that the environmental performance rises.
Additionally, [8] proposed that Operations Research (OR) leads to a more efficient use of
resources, which is not only cost attractive, but also tends to create less emissions of greenhouse gases.
Therefore, with new methodologies in OR these savings and reduction of emissions can be considered as
one solution to the challenge of high energy consumption in the transport and logistics sector.
Furthermore, OR helps to identify transport solutions, especially with multi-criteria decision analysis,
when it comes to multi-modal choice and alternative route optimisations. One key aspect of new solutions
is the exploration of new and innovative transport connections by using multi-modal transport chains. The
method of multimodal transports allows cargo to be transported faster with lower environmental impact.
One attempt, mainly in the European aspect, is to consider transport chains as transport clusters along
certain routes, the so-called transport corridors.
B. Network approach
In order to understand what a transport corridor means by theoretical backgrounds it can be helpful
to see the corridor as a conglomeration of different stakeholders which act along a defined geographical
area in order to achieve different goals but with the same objective not only to minimize the
environmental impact but also to reduce costs, increase efficiency, and create sustainable logistics
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solutions. Realization of the increasing complexity of the interactions among actors along their supply
chains suggests that a network perspective may better explain the emergence of collaborative practices
and integrative behaviours in logistics in general and supply chain management from organization’s point
of view [9]. Researchers have begun to suggest the need for a network-based view of supply chains,
recognizing that the interactions between organizations in a supply chain are rarely as sequential as a
chain structure would suggest [10]. As a whole, studies acknowledge the importance of a network
structure for the effective diffusion of supply chain-related practices [11], as well as for efficiency and
flexibility of the responses of the supply chain to customer expectations [12].
As the stakeholders act in a coherent sense and are located in a certain geographical area such a
transport corridor can be described as a tubular cluster performance. Due to natural reasons transport and
logistics activities have often close relations to strategic alliances, cooperation and collaboration
agreements which can result in cluster activities. Arising from the social network theory a transport
corridor can be seen as a scale free network. It started from dyadic relationships between two stakeholders
and grew to a broader network. Specific characteristics of scale-free networks vary with the theories and
analytical tools used to create them, however, in general, scale-free networks have some common
characteristics. One notable characteristic is the relative high number of nodes with relations to other nodes
which greatly exceeds the average. The nodes with most of the relations are often called "hubs", and may
serve specific purposes in their networks. It turns out that the major hubs are closely followed by smaller
ones. These ones, in turn, are followed by other nodes with an even smaller number of degrees and so on.
This hierarchy allows for a fault tolerant behaviour. If failures occur at random, which, in the case of
transport corridors, means the drop out of a stakeholder and the vast majority of nodes are those with small
degree, the likelihood that a hub would be affected is almost negligible. Even if a hub-failure occurs, the
network will generally not lose its connectedness, due to the remaining hubs. On the other hand, if a few
major hubs are taken out of the network, the network is turned into a set of rather isolated graphs.
Figure 1. Transport corridor in social network theory
Thus, hubs are both strength and weakness of scale-free networks. These properties have been
studied analytically using percolation theory by [13] and by [14].
In the work [15] such a social network perspective to the stakeholder theory of the firm has been
applied. Accordingly, research has started to address systems of dyadic interactions and stakeholder
multiplicity, which can be also of importance for the understanding of a transport corridor concept.
Opportunities for organizational resistance or adaptations to stakeholder expectations [16], [17] and [18]
can be investigated. In the work [19] the predictors for stakeholder networks for value chains have been
investigated. The identified two structural features of such stakeholder networks: Firstly, network density,
defined as the degree of completeness of the ties between the actors in a network, has been identified as a
likely determinant of corporate responsiveness in that it affects the ease of communication and efficiency
of information flow across actors in the network [20], [17], and [21]. The second predictor, the degree of
centrality in the network, that is, the extent to which an organization occupies a central position in the
network, has been suggested as a further influence on the attentiveness of companies to stakeholder
concerns and their willingness to accommodate their requests [15]. How different stakeholders with
different typologies can cooperate efficiently and how they might be managed can be described with the
stakeholder model theory.
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C. Stakeholder model theory
In contrary to the shareholder model theory which says that in an organization or a firm only the
shareholders have an interest in creating value for themselves and serving the interest of the other direct
shareholders, the stakeholder model theory assumes that the firm has to serve several stakeholders. These
can be not only direct involved interest groups but also the society, employees or suppliers of third party
organizations or public institutions or political stakeholders. The stakeholder approach was initiated by
[22] but was constantly developed during the last decades (see [23], [24], [25] and [26]) as in capitalistic
markets the importance of the decision-making by stakeholders is increasing. Decisions do not only have
an impact on the organization itself but also to society and a wider group of stakeholders, mainly when it
comes to environmental effects and public serving obligations like it can be assumed for the green
transport corridors.
When it comes to governance structure of an organization like a green transport corridor also the
question of property rights arises. Property rights theory has mainly been developed by [27], [28] and
[29]. The party that possesses the rights to an asset can decide the use of it and is entitled to receive the
income from it. Unfortunately, this is not obvious to distinguish in the case of transport corridor as the
rights of the available assets, i.e., roads, terminals, railways, land, infrastructure, etc. belongs to different
stakeholders. Mainly these assets belong to public institutions which by their nature have no interest in
earning income form their assets but serving the society and ensuring economic freedom. Next to the
question of the property rights there are also other opinions when it comes to assets of the organization.
[30], [31], [32] and [23] argue that the assets of the firm do not only consist of physical assets but also the
skills of its employees, the expectations of customers and suppliers, and its reputation in the community.
This is not only applicable to the transport corridor concept in general but to every participating company
on lower level as well.
One crucial aspect of governance of a transport corridor is still how the decision making process
can be solved with such a big group of different stakeholders. In the work [33] already have been stated
that “the more groups of stakeholders there are, the more complicated it will be to reach a decision,
especially as the stakeholders often have different goals”.
In order to analyse the possibilities of introducing the stakeholder model in governance of
transport corridors it is important to have a clear idea of what is meant by stakeholders respectively
owners. It can be assumed that stakeholders by nature are also owners of the corridor structure. Therefore
we further define stakeholders as these parties which have a stake on the corridor and are part of the
governance structure of the same, as [22] definition states that stakeholders are: ‘‘…any group or
individual, who can affect or is affected by the achievement of organisation’s objectives’’. The work [34]
defines stakeholders as ‘‘…persons or groups that have, or claim ownership, rights, or interests in a
corporation and its activities, past, present, or future.’’ He further differentiates between primary and
secondary stakeholders. The first group includes stakeholders, like shareholders, employees, customers,
suppliers, government and communities, without their participation the organization cannot exist. The
secondary stakeholders are ‘‘…those who influence or affect, or are influenced or affected by, the
organisation, but they are not engaged in transactions and are not essential for its existence.’’ Examples of
secondary stakeholders are the media and competing companies. Other researchers [25] differentiate
between “social” and “non-social” stakeholders. Furthermore there are direct and indirect stakeholders.
Examples of direct social stakeholders are customers, employees and investors and examples of indirect
non-social stakeholders are the natural environment and future generations which applies very much to
the concept of green transport corridors. As the concept for a transnational governance model, the
management of a green transport corridor, is new and not completely investigated it might be useful to
assume the group of stakeholders and try to define their expectations and intentions.
According to the network theory the stakeholders can be divided into smaller nodes and actors
which function as hubs along the corridor. What makes a transport corridor also specific and more
complex than a logistics network is the geographical and political scope? The transport corridor covers
several countries, regions and terrestrial and maritime areas as well as national, regional and transnational
political bodies. One could assume that the highest political institution is automatically considered as the
institution with the highest degree respectively highest decision making power in the network. However,
by looking deeper to the actual performance of a transport corridor and the role the individual
stakeholders play it becomes obvious that the hubs are rather represented by other institutions.
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1) Ports and logistic centres
Ports and also strategically planned logistic centres are considered as hubs due to their location.
Because of the connection to many transport modes (sea, inland waterway, road and railway) the cargo is
shifted or stored for a certain time period. When looking at the ideal transport chain along the corridor,
every cargo has to pass the main hubs at least twice during their entry and exit points. This simple fact
makes the ports or logistic centres to a very crucial part of the transport corridor. Owners of hubs and
logistics centres can be private but also public bodies. But anyhow they aim to cover their running costs
and earn additional income for their offered activities.
2) Logistic forwarders
Logistic forwarders, like rail companies, international courier services, and ferry lines, are not
dependent on one geographical location. Upon the company size they are rather considered as a hub due
to their close and manifold relations to other stakeholders in the corridor. They provide large portions of
equipment (containers, trucks, ferries, rail wagons) and also professional knowledge and skills of their
employees. Therefore they are a very crucial part of the performance of the corridor.
Logistic forwarders are almost 100% owned by private companies respectively represent a
stakeholder group which is very much interested in generating value and income for their own
shareholders. They will only act as stakeholders of a common transport corridor if the savings through
cooperation are higher than the losses.
3) Political institutions on several levels
Political institutions of all levels in all countries represent the national or regional governments.
Governments are not mainly interested in earning income for themselves from establishing a transport
corridor. However, they are obliged to represent the local market economy and ensure the best framework
condition so that private companies can perform well. This includes also equal access to all transport
corridor activities. From that point of view they have more like a representing function. Additionally as
the governments support the corridor activities with public funds the whole society is interested in the
investments. Therefore the political institutions act also agents for the general society.
3. Monitoring of Green Transport Corridors
When it comes to the issue of monitoring and controlling green transport corridors there are many
attempts from the individual companies and industry representatives but also from international
government level. The EU forces in the recent years the development of guidelines on criteria how to
monitor and assess the green logistics actions. The authors participated in the European funded project
East-West-Transport-Corridor under the Baltic Sea Region Programme 2007-2013, where for the first
time a “Green Corridor Manual” based on the green East-West-Transport-Corridor was developed trying
to give a holistic and consistent monitoring concept for multi-modal sustainable transport [35]. The green
corridor manual consists of a set of recommendations and guidelines on how to implement a green multi-
modal transport chain according to the EU freight agenda and as promoted by the EU Baltic Sea Strategy.
It also proposes a set of Key Performance Indicators (KPI) and incentives and regulations for more
efficient, high quality, safe, secure and environmental friendly transport facilities and services. Such a
manual can list indicators and measures with their potential impacts, together with a governance model
for the development of a stepwise deployment of a green transport corridor. It is also possible to look into
and elaborate on different options for the certification of green transports, which is of great economic
interest for the whole transport market.
There are different aspects, which will influence the performance of transport chains. One
approach is to separate them into enabling and operational criteria. Enabling criteria describe the settings
of the transport chain in regard to the hard infrastructure, meaning roads, railways, terminals, ports, etc.
The soft infrastructure includes the information and communication systems which supports the
transport logistics services offered in the defined transport route or set of factors. Other aspects of
enabling the performance of a transport chain are regional, national and international policies and
regulations which apply to all stakeholders. Operational aspects describe the geographical settings as
such, the transport and logistics solution by involving new and innovative business models. The
implementation of transport techniques will have also a direct impact on the performance of a transport
chain measured by given KPIs.
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Table 1. Performance indicators
Table 1 gives an overview about the KPIs, which were selected from the East-West-Transport-
Corridor project and were also tested during the project duration. Additionally to the table of performance
indicators often the enabling factors are described by a corridor dashboard aiming to connect the short-
term KPIs and the enabling KPIs by visualizing capacity, accessibility and performance. So the dashboard
stimulates improvements of the corridor infrastructure and facilitates the cooperation of all stakeholders
along the corridor in order to improve total performance [35].
Economic efficiency and service quality performance of a transport corridor can be demonstrated
by the total cargo volumes. Large cargo volumes increase the attractiveness of a transport corridor as it
might influence decisions from potential stakeholders whether to accept the transport corridor or not.
Furthermore, efficiency and service quality is reflected by the ability of the transport chain stakeholders
to provide on time delivery. It is measured by the arrival time in relation to transport timetables. A key
element with regard to on-time delivery is a uniform provider and shipper entity for measuring lead times
and its arrival time with relevant precision. The enabling performance under this area is the transport
chain capacity, which is set by the enabling criteria of hard and soft infrastructure and policies.
Total energy use aims at describing the general environmental efficiency. Indirectly it also
describes, to which extend the traffic flow is efficient, when, e.g., idle times, empty returns and long-
waiting times are reduced. In addition, operational performance in regard to the environmental efficiency
can be measured on fuel consumption, as it enables the calculation (if needed) of SO2, given the legal fuel
conditions or the actual quality used. In case renewable energy resources are used, the emitted
Greenhouse gases (carbon dioxide, methane and nitrous oxide) can describe the impact on climate
affecting emissions of the transport corridor. As an enabling indicator the availability of the
corresponding fuel stations must be measured by assessing the numbers of traditional fuel stations and
alternative fuel stations. The more alternative fuel stations are available the more environmental
efficiency can be assumed.
Engine standards (also includes after treatment devices), which are regulated for all stakeholders
of a certain transport corridor, can also be used as a performance indicator as they indirectly describe the
emissions related to impact on health and nature. Further indicators are related to dangerous goods, which
are already regulated quite strictly by international standards (e.g., ISO 9001 dangerous goods) and are,
therefore, quite known to measure the safety aspects of the transport corridor.
Social efficiency can be also measured by operational performance of the transport corridor.
Indicators and common standards are already precisely stated in the ISO norms for risk management (ISO
31 000 and ISO 39 000). In these norms the cargo security aspects are regulated as well as the traffic
safety aspects firstly meant for organizations but can be also transferred to the monitoring of a transport
corridor (e.g., road traffic accidents). Another indicator for social performance can be measured with the
sick leave rates of companies, fluctuation by employee turnover, the number of temporary employees and
workers and the average salary level and salary differences between the stakeholders of the transport
corridor. These indicators will give an indication on how the social performance is developed in the
corridor today but they do not reflect in the indicator in regard to sustainability of the corridor. First test
results from the East-West-Transport-Corridor project show that more detailed aspects must be
considered. These could be age, gender, level of education, and experiences of the employees. Indicators,
which enable social performance in regard to cargo security and safety, are the consistent usage of fenced
terminal areas with access controls and safe truck parking systems along the transport corridor [35].
4. Conclusions
Sustainable logistics solutions are high ranked on the political agenda and first results in the
implementation of green transport solutions have been generated paving the way to general sustainable
logistics. The results from green corridor projects on European level like the East-West-Transport-
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Corridor lead to holistic and consistent green monitoring concepts for multi-modal transport solutions,
which can be expressed in KPIs, in its turn, which are applicable for green supply chain management.
The performance of transport chains is influenced by enabling and operational factors, trying to
representing and connects the corridor’s hard and soft infrastructure as well as operational aspects. But
the first experiences of green corridors on European level are showing that beyond the development of
appropriate KPIs the success and performance of corridors heavily depend on the commitment and
cooperation of the involved stakeholders. So governance models and cultural aspects are representing
important success factors of green corridors.
Even due to the fact that companies are aware of environmental issues they are still lacking behind
the realization of the full potential of green supply chain management. Most businesses need additional
incentives to realize environmental investments, either by law or by economic motivations. First test
results of KPI application in the East-West-Transport-Corridor showed also that organizations and
corridor stakeholders were not willing to publish their performance indicators by fearing to lose their
competitive advantages despite the fact that green and sustainable supply chain management within
organizations could result in cost reductions and better business performance. Further research work has
to be realized in order to tackle these strategic bottlenecks of green corridors.
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