TLMT600Wk6

Additional Resources Week 6 Lecture Notes located in the Weekly Content section

References Muller, G. Intermodal Freight Transportation. Eno Transportation Foundation, Inc., 1999.

Rodrigue, Jean-Paul, Brian Slack, and Claude Comtois. "Transportation Modes: An Overview." Https://people.hofstra.edu/geotrans/eng/ch3en/conc3en/ch3c1en.html. N.p., n.d. Web. 7 Sept. 2015.

Rodrigue, Jean-Paul, and Brian Slack. "Intermodal Transportation and Containerization." Https://people.hofstra.edu/geotrans/eng/ch3en/conc3en/ch3c6en.html. N.p., n.d. Web. 7 Sept. 2015.

Hazen, K., & Lynch, C., The Role Transportation in Supply Chain, CFL Publishing, 2008.

Intermodal Transportation During week 6 we will be discussing intermodal transportation. Customers of global supply chains in the future will continue to demand faster supply chain delivery of their commodities and products. Speed—or total transit time through the supply chain—will continue to be a necessary factor for intermodal transport. Customers will demand better execution of the supply chains, represented by quality and reliability (Muller, 1999, n. p.).

According to the article “Transportation Modes: An Overview” (n. d.) “intermodal transportation is concerned with a variety of modes used in combination so that the respective advantages of each mode are better exploited. Although intermodal transportation applies for passenger movements, such as the usage of the different, but interconnected modes of a public transit system, it is over freight transportation that the most significant impacts have been observed. Containerization has been a powerful vector of intermodal integration, enabling maritime and land transportation modes to more effectively interconnect” (Rodrigue, Slack, and Comtois, n. d., n. p.).

According to the article “Intermodal Freight Transportation” (1999) intermodalism will be a significant and critical factor in the success of hyper-competition among supply chains of the future. Its more significant role in global supply chains will require an understanding of supply chain management, the needs and requirements of the marketplace, the capabilities and advances in information and communications technology, and the continuing challenges and constraints on transport infrastructure (Muller, 1999, n. p.). It might be argued that the future driver of the intermodal process and options in supply chains needs to come from the demand or supply chain side of the equation rather than the traditional supply or mode-carrier side. But from wherever the future impetus for intermodalism comes, additional insights need to be gained through measuring it in its broader definition and not just the historical containerized context (Muller, 1999, n. p.). An increased awareness of the scope and magnitude of broadly defined and measured intermodalism will heighten the need for intermodal education and training for those being asked to manage and execute both new intermodal technologies and information-communications systems and the increasingly constrained infrastructure of intermodalism (Muller, 1999, n. p.).

The emergence of intermodalism has been brought about in part by technology and requires management units for freight such as containers, swap bodies, pallets or semi- trailers. In the past, pallets were a common management unit, but their relatively small size and lack of protective frame made their intermodal handling labor intensive and prone to damage or theft. Better techniques and management units for transferring freight from one mode to another have facilitated intermodal transfers. Early examples include piggyback (TOFC: Trailers on Flat Cars), where truck trailers are placed on rail cars, and LASH (lighter aboard ship), where river barges are placed directly on board sea-going ships. A unique form of intermodal unit has been developed in the rail industry, particularly in the US where there is sufficient volume. Roadrailer is essentially a road trailer that can also roll on rail tracks. It is unlike the TOFC (piggyback) system that requires the trailer be lifted on to rail flat car. Here the rail bogies may be part of the trailer unit, or be attached in the railway yard. The road unit becomes a rail car, and vice- versa (Rodrigue and Slack, n. d., n. p.).

While handling technology has influenced the development of intermodalism, another important factor has been changes in public policy. Deregulation in the United States in the early 1980s liberated firms from government control. Companies were no longer prohibited from owning across modes, which developed a strong impetus towards intermodal cooperation. Shipping lines in particular began to offer integrated rail and road services to customers. The advantages of each mode could be exploited in a seamless system, which created multiplying effects. Customers could purchase the service to ship their products from door to door, without having to concern themselves of modal barriers. With one bill of lading clients can obtain one through rate, despite the transfer of goods from one mode to another (Rodrigue and Slack, n. d., n. p.).

According the article "Intermodal Transportation and Containerization" (n. d.) “the most important feature of intermodalism is the provision of a service with one ticket (for passengers) or one bill of lading (for freight)” (n. p.). Rodrigue and Slack (n. d.) state “at the heart of modern intermodalism are data handling, processing and distribution systems that are essential to ensure the safe, reliable and cost effective control of freight and passenger movements being transported by several modes” (n. p.). In order to assist with the distribution systems, Electronic Data Interchange (EDI) had been an evolving technology that is helping companies and government agencies (customs documentation) cope with an increasingly complex global transport system (Rodrigue and Stack, n. d., n. p.). As we all know intermodal transportation is a transforming business that is a growing share of the medium and long-haul freight flows across the globe where large integrated transport carriers provide door to door services, such as the high degree of integration between maritime and rail transport in North America (Rodrigue and Stack, n. d.). As an example, the Europe rail intermodal services are becoming well-established between the major ports, such as Rotterdam, and southern Germany, and between Hamburg and Eastern Europe. Rail shuttles are also making their appearance in China, although their market share remains modest. While rail intermodal transport has been relatively slow to develop in Europe, there are extensive interconnections between barge services and ocean shipping, particularly on the Rhine. Barge shipping offers a low cost solution to inland distribution where navigable waterways penetrate to interior markets (Rodrigue and Stack, n. d., n. p.). Since this has assisted European transportation it is being tested in North America, although with limited success thus far, the limits of intermodality are impeded by such factors as space, time, form, pattern of the network, the number of nodes and linkages, and the type and characteristic of the vehicles and terminals (Rodrigue and Slack, n. d., n. p.).

Video - Intermodal Transportation

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Scaling up Sustainability – The Role of Voluntary

Standards

Businesses are increasingly embracing the sustain- ability agenda and have moved the discussion from philanthropy to competitiveness and value creation. However, while sustainability has matured as a con- cept, the goal that it seeks to promote – the long-term reconciliation of social, environmental, and economic demands – requires that more organizations (public and private) become more deeply engaged in relevant practices. In other words: we need scale, if we want to achieve the transformative change that is necessary to address some of the pressing problems surrounding us. More than one billion people lack access to elec- tricity, safe drinking water, and food; the gap between the rich and the poor is widening, both within and among countries; and some of the world’s ecosystems are in steady decline.

In this commentary I argue that voluntary standards (e.g., the Forest Stewardship Council and the Fair La- bor Association) provide an opportunity to ‘scale up sustainability’, particularly since transnational hard law for social and environmental issues remains lim- ited in various ways. By ‘scaling up’ I mean that more companies become more deeply engaged in sustain- able business practices. However, I also caution that, while standards may help us to achieve more scale, they are also facing numerous problems that poten- tially impede their impact.

!e Rise of Sustainability Standards I de!ne a standard in general as a rule for a common purpose and voluntary use, decided by several indi- viduals or organizations.1 In modern life, standards

- riety of ways and are designed for di"erent purposes, ranging from the size of paper to interface technolo- gies for telecommunication devices. With rising con- cerns about unsustainable business practices and the

By Professor Andreas Rasche, Center for Corporate Social Responsibility, Department of Intercultural Communication and Management

1For a more elaborate discussion of the role of standards in general, see Brunsson, N., Rasche, A, and Seidl, D. (2012). #e Dynam- ics of Standardization: #ree Perspectives on Standards in Organization Studies. Organization Studies 33: 613-632.

Andreas Rasche is Professor of Business in Society at the Centre for Corporate Social Re- sponsibility (cbsCSR) at Copenhagen Business School. He holds a PhD (Dr. rer. pol.) from Eu- ropean Business School, Germany and a Habil- itation (Dr. habil.) from Helmut-Schmidt-Uni- versity, Hamburg. His research focuses on corporate responsibility standards (particularly the UN Global Compact), the political role of corporations in transnational governance, and the governance of global supply networks. He regularly contributes to international journals in his !eld of study and has lectured on cor- porate social and environmental responsibility at di"erent institutions in Europe. He co-edited #e United Nations Global Compact: Achieve- ments, Trends and Challenges (Cambridge University Press). His latest book Building the Responsible Enterprise (with Sandra Waddock) was published in May 2012 by Stanford Univer- sity Press. Andreas collaborated with the UN Global Compact in the context of di"erent pro- jects and currently serves on the Global Com- pact LEAD Steering Committee. He joined Co- penhagen Business School from the University of Warwick in August 2012. More information is available at: http://www.arasche.com.

Researchers’ corner

Research

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inability of some governments to address social and environmental problems, a variety of sustainability standards have emerged in recent years. !ese stand- ards represent so" law implying that corporations commit to them voluntarily.2

I classify sustainability standards into four categories: -

tainable corporate conduct (e.g., the UN Global Com- pact), (2) standards that certify production facilities against prede#ned criteria (e.g., Social Accountability 8000), (3) standards that outline indicators for sus- tainability reporting (e.g., the Global Reporting Ini- tiative), and (4) standards that de#ne processes and key terms to enable the creation of management sys- tems around sustainability issues (e.g., ISO 26000). Of course, there is overlap between these categories (e.g., ISO 14001 de#nes management systems that can be certi#ed).

Why Sustainability Standards Can Provide Scale Why, then, can standards scale up sustainable busi- ness practices? First, standards help #rms to trans- late qualitative sustainability problems, which are o"en based on disparate interpretations, into quanti- #able indicators. Standards make sustainability issues measurable and hence allow #rms to set up relevant management systems. For instance, while water sus- tainability can cover numerous dimensions and mean di$erent things to di$erent #rms, the Global Report- ing Initiative o$ers indicators to measure water with- drawal, pollution, and recycling. !is translation of qualitative information into common metrics enables benchmarking and allows for performance measure- ment. In other words, it moves sustainability from concept to facts. Second, standards are swi"er to glo- balize than hard law regulations. !e emergence of hard law depends on the willingness of governments to move forward. While some governments have tak- en a proactive stance when it comes to regulating so- cial and environmental issues, others are lagging be- hind. Sustainability standards already a$ect regions where legal regulation is either weak and/or not exist- ing. For instance, the UN Global Compact has helped to globalize the sustainability agenda by creating local participant clusters in India and China. Of course, even the Global Compact has a long way to go in these economies, but given that both countries make up for almost 40% of the world’s population, there is certain- ly an opportunity for scale.

2 !e concept of so" law is much richer than to state that it is about non-binding obligations. For a detailed discussion, see Abbott, K. W. and Snidal, D. (2000). Hard and So" Law in International Governance. International Organization 54: 421-456.

Finally, some standards enjoy high degrees of legiti- macy, as they are based on multi-stakeholder govern- ance processes, balancing voices from various actors geographic domains. Initiatives that are perceived as legitimate are likely to grow their participant base, as the case of the Forest Stewardship Council shows. Hence, we should expect that legitimate standards are able to increase their impact on relevant problems over time. Of course, this is not to deny the superior regulatory authority and legitimacy of democratically elected governments. It is to say, however, that once a standard is perceived as legitimate by potential adop- ters and the wider public, it becomes attractive to a broader set of companies (largely because the latter are interested in positive legitimacy spillover e$ects).

!e Limits of Voluntary Standards While standards have proliferated, their potential to scale up sustainability is also limited in a variety of ways. One limit concerns the existence of too many unconnected, and partly competing, initiatives. For instance, there are multiple standards trying to en- roll #rms in supporting fairtrade co$ee production. !ere are also various initiatives for certifying fair la- bor conditions in global supply chains. It is unclear whether the market for sustainability will support this multiplicity in the long run, particularly since sup- pliers o"en have to obtain multiple certi#cations at the same time. Practitioners have also criticized the lack of interfaces between apparently complementary standards, such as the Global Reporting Initiative and the UN Global Compact.

Standards can also be challenged on the grounds that they are not yet capturing the interaction e$ects be- tween di$erent problem areas. While standards o$er a wealth of indicators, these indicators usually remain isolated and do not acknowledge interdependent ef- fects between social and environmental challenges. For instance, climate change has a profound e$ect on water availability in many countries, which in turn

- els. Making these links is not always easy, as causal- ity chains are long and e$ects between variables not yet well documented. However, ignoring these inter- dependencies is equally dangerous, as it can lead to a false security that problems are already adequately addressed.

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Another limitation relates to the lack of accountabil- ity mechanisms when looking at selected standards. Participants may select their level of compliance stra- tegically when not being held accountable for their actions, or, in some cases, may even completely de- couple talk from action. For instance, the UN Global Compact has been criticized for its weak accountabil- ity processes making it hard to determine to what ex- tent a participant adheres to its principles, while other standards such as SA 8000 do not make certi!cation reports publicly available and hence lack transparen- cy. Weak accountability mechanisms can impede the further uptake of standards, since commitment to these initiatives depends on them being seen as legiti- mate alternatives to other forms of regulating business conduct.

!e Bottom Line It may seem contestable to argue that voluntary stand- ards can help to scale up sustainable business practic- es. A"er all, voluntary solutions only reach a selected number of !rms and, as a result, have to remain limit- ed in terms of their overall impact. But we need to be careful when selecting our point of reference for judg-

social and environmental issues is unlikely to emerge in the near future making standards an attractive, albeit imperfect, tool to enhance corporate sustaina- bility. Especially when compared with other forms of self-regulation (e.g., !rm-speci!c codes of conduct), standards can level the playing !eld by encouraging !rms to live up to a common set of rules. However, the bottom line is that rules by themselves are not enough; rules need to be embedded into the strategy, structure, and culture of an organization in order to unfold their full impact.