Incorporating Sustainability as a Parameter in the Ocean Carrier Selection Process A Study Conducted at a Case Company

Abstract

The study has been conducted at a case company in the biomaterials and paper business that delivers products worldwide. Procuring transportation services is critical due to its significant share of logistics costs and impact on business performance. The case company transports a large share of their products through maritime transport, hence, selecting ocean carriers that can meet their needs is critical. Maritime transport is considered environmentally friendly as it carries large volumes over long distances. However, it still faces significant sustainability challenges, including rising GHG emissions and air pollution. Sustainability is a key component of the case company’s corporate strategy and governance, and they want it to influence all aspects of their operations, including logistics. Therefore, the purpose of the thesis is to develop a framework for successful incorporation of sustainability as a parameter in companies’ LSP selection process for maritime transport. To fulfill this purpose, the current procurement process for maritime transport at the case company had to be identified. Secondly, through a literature review and empirical findings, suitable sustainability criteria for the container segment within maritime transport were identified. After this, a method that integrates sustainability as a parameter in selecting ocean carriers was developed. It regards the construction of a sustainability performance index which facilitates the assessment of ocean carriers’ sustainability performance by weighting and aggregating criteria scores. To obtain scores, a questionnaire based on identified sustainability criteria was created. The AHP method is recommended for weighting and an additive aggregation method for compiling weighted scores into sub-indices within each dimension which together form the sustainability performance index. Lastly, a framework was developed for how sustainability can be integrated as a parameter in the selection process. It is recommended to consider sustainability throughout the selection process to guarantee that ocean carriers’ performance is taken into account. In conclusion, implementation of the developed framework will improve the case company’s’ selection process, enabling better evaluation and comparison of ocean carriers’ sustainability performances.