A great deal of attention has been paid to the term “Green” in recent years. Green is the term used to describe actions taken that attempt to counter the damage humans have done to the environment, primarily through human use of fossil fuels as sources of energy. It has become a slogan, a buzzword, and even a sales pitch. Many companies announce that they are “going Green,” meaning they are conducting their business in a manner that considers the environmental impact of their business activities. In the field of Transportation Logistics, “Green” may be more than just a buzzword, it may be an imperative. This paper discusses some of the economic and geopolitical issues that have gotten us where we are today, and examines ways in which the links that form the supply chain may become the new “Green Logistics.”
To truly understand why we are where we are in terms of Climate Change and the damage we have wrought to the environment, it is necessary to look back at the decisions we made that actually got here. In hopes of forging a better future, we must not forget that past.
The word “Logistics” comes from the Greek word “logistikos,” which means “to think rationally.” In modern usage, the term “Logistics” may be somewhat ironic, considering what it has come to mean. Contemporarily, Logistics covers a broad set of activities, related to the packaging and shipping of raw materials to be turned into goods and products, and later, the packaging and shipping of those finished goods to retail outlets and other destinations. Finally, completing the cycle, Logistics also deals with the way goods that have reached the end of their serviceable lifespan are either discarded and taken to a landfill or other disposal destination, or enter the recycling chain where some or all of the product will be dismantled or otherwise broken down into its component materials and reused in various ways (Rodrigue, Comtois, Slack).
As applied to these activities, Logistics refers to the way in which these activities are planned for and carried out. That is where the ironic nature of the word “Logistics” being applied to these activities is concerned: by any objective standard, it appears that very little, if any, “rational thinking” was involved in the evolution of the field of Logistics. The majority of the standard operating procedures that comprise the field of Logistics are built upon methodologies put into place in the mid-20th Century, during the post-World War II boom in the Unites States.
In that era, oil and gas were plentiful, and, in fact, the U.S. derived the majority of its oil from domestic supplies. In those days, U.S. oil companies were simply drilling the “easy” oil (the oil found near the top of oil reservoirs, which was easy to get to) and when the “easy” oil was depleted, rather than drilling deeper (at a higher expenditure of time and money), the oil companies would simply move on to the next pool of easy oil (Gonzalez).
During this period of cheap and plentiful gasoline, Americans fell in love with the automobile. Beginning in the 1950s, the Federal government began building a system of Interstate highways, paid for primarily with a tax of a few pennies on every gallon of cheap gasoline. No one seemed to mind that, and soon these new highways connected virtually every city in America to every other city in America. Americans also fell in love with flying, as it became possible to traverse the entire country in a matter of hours (Gonzalez).
This love affair average citizens were having with transportation was a boon to business as well; with the new highways, trucks that delivered raw materials and finished goods were able to use these new, toll-free roads just like the drivers of cars were using them. Airlines, with their enormous fleets of brand new airplanes, quickly got in the business of shipping materials as well as people; after all, gas was cheap, and keeping those planes in the air meant more profit for the airlines, whether they were shipping people or the things that people needed (Gonzalez).
Yes, times were good. So good, in fact, that the basic concepts behind the methodologies that comprise contemporary Logistics are still built on the traditions and infrastructure that were established in those good times. The problem, of course, is that those good times didn’t last. The oil shocks of the early 1970s woke Americans up to some hard realities. Not only was gasoline suddenly not so cheap, it was never going to be cheap again. On top of the sudden spike in prices came an actual shortage of oil, as world production was not keeping up with demand (Gonzalez).
For decades, the U.S. had stabilized worldwide prices of oil in a simple way: when prices started to rise, the U.S. would increase domestic production, adding enough to the global supply to counteract the price hikes. Unfortunately for the U.S., by the time prices were rising and supplies were dwindling in the 1970s, they were no longer able to play that game. During World War II, the U.S. supplied nearly 90% of the crude oil used by the Allies through domestic production. By 1970, we had passed the point of peak production, and domestic U.S. supplies were no longer able to close the world price gap. The problem was exacerbated by the earlier pumping methods, where companies went after the “easy” oil and then moved on to the next well. The price of accessing a barrel of the “hard” oil, the oil that was lower in the ground and more difficult to bring up, was actually higher than the price of a barrel of oil on the world market. By the 1970s, the U.S. was for the first time dependent on foreign supplies for the majority of their oil needs, a condition that would only grow worse over the coming decades (Gonzalez).
So what did the U.S. do in response to this sudden change in the oil market? Did they immediately find ways to reduce consumption? Did they give serious consideration to the search for alternative energy sources? Did they demand that the brilliant automobile designers in Detroit come up with cars that burned less gasoline?
Unfortunately, the U.S. did none of these things. Instead, they simply expanded their reach. Deals were made with foreign suppliers. The heavy investment in the military during the decades-long Cold War was put to use as the U.S. began to establish a growing presence in the Middle East. There we built a rewarding friendship with Saddam Hussein, the kindly old gentleman who was the rightfully-elected leader of Iraq. In Iran, where things were a little more problematic, we simply installed a Shah of our choice to lead that nation, and proceeded to work together with both countries to acquire the oil we needed to maintain the lifestyle to which we had become accustomed (Gonzalez).