Journal of Cleaner Production 283 (2021) 125400

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

The environmental impact of fast shipping ecommerce in inbound

logistics operations: A case study in Mexico

s Mun
Andre ~ oz-Villamizar a, b, *, Josue

C. Vela

zquez-Martínez a, Perla Haro a, Ana Ferrer a,
~o a
Roger Marin
a
Center for Transportation & Logistics, Massachusetts Institute of Technology, Cambridge, MA, USA
b
School of Economic and Administrative Sciences, Universidad de La Sabana, Chia, Colombia

a r t i c l e i n f o a b s t r a c t

Article history: Consumer demand for short delivery windows has driven companies to compete for faster shipping to
Received 21 May 2020 clients. Recently, Amazon and Walmart along with other major companies have started offering same-
Received in revised form day delivery. That translates into not using full truckload capacities, requiring more frequent dispatch,
27 November 2020
and in turn, increases transportation cost. However, inefficient routes are not only more expensive for the
Accepted 2 December 2020
Available online 4 December 2020
shipper but they are also more carbon-intensive. In this context, and from an operative level, we analyze
the environmental impact of inbound logistics caused by fast shipping. We create a discrete-event
Handling editor: M.T. Moreira simulation model to understand and compare the effect that certain parameters (i.e., delivery win-
dows, inventory management policies, truck type) have on sustainability inbound logistics. We validate
Keywords: this model with the largest retailer in Mexico in order to analyze how sustainable fast shipping actually is
Fast shipping and how to reduce its environmental impact. Results from the simulation model show that fast shipping
Sustainability produces significantly higher CO2 emissions since it imposes a challenge for cargo consolidation. We
Inbound logistics found that fast-shipping increases both total CO2 emissions and costs up to 15% and 68%, respectively.
Environmental impact
© 2020 Elsevier Ltd. All rights reserved.
Simulation
CO2 emissions

1. Introduction
When the World Wide Web was created in the 1990s, it not only
revolutionized technology but also changed the world of logistics
forever. The Internet enabled e-commerce to grow aggressively,
causing a frenzy among retailers competing for e-commerce mar-
ket share (Heuser and Ashraf, 2019). The uninterrupted access to
offers allowed customers to purchase 24-h a day and with no need
of being physically present in stores, transforming shoppers’ buying
habits (Je˛ drzejczak-Gas et al., 2019). Reaching 14.1% of all retail
sales worldwide in 2019, it is safe to say that e-commerce has
secured its place as a major sales channel (Statista, 2019).
From the supplier’s perspective, e-commerce also provides a
number of benefits. Online shopping mitigates the importance of
physical stores and, thus, allows companies to reduce costs asso-
ciated with them (Je˛ drzejczak-Gas et al., 2019) and lower the
environmental impact of shopping under specific circumstances
* Corresponding author. Center for Transportation & Logistics, Massachusetts
Institute of Technology, Cambridge, MA, USA.
~ oz-Villamizar).
E-mail address: andresmunvi@unisabana.edu.co (A. Mun
(van Loon et al., 2015). This also enabled the birth of ‘pure-play e-
commerce’ business models such as Amazon.com and Overstock.
com, with 100% online marketplaces (Bell et al., 2014). Further-
more, the use of online channels facilitates data gathering, which
can be used to map customer behavior and establish a direct
communication channel with shoppers, proving to be a valuable
strategic asset (Je˛ drzejczak-Gas et al., 2019).
As we experience the rise of e-commerce, market share is
shifting from B2B (Business to Business) to B2C (Business to Con-
sumer) (Pålsson et al., 2017). Hence, retailing is also experiencing
significant change led by consumers’ behavior. This is leading re-
tailers, large e-commerce business and startups to focus on differ-
entiating by offering the best customer experience possible.
According to an analysis by McKinsey & Company, 23% of con-
sumers are willing to pay an extra fee to have same-day delivery
and 2% would pay significantly more for instant delivery (Joerss
et al., 2016). These numbers are predicted to increase given the
role of younger consumers, which tend to choose fast delivery (FD)
instead of regular delivery (Joerss et al., 2016). Regular delivery is a
low-cost option for those who do not have any need to receive their
parcel right away. Companies ship the parcel order in the most
economical way, reduce transportation costs and use consolidating

https://doi.org/10.1016/j.jclepro.2020.125400
0959-6526/© 2020 Elsevier Ltd. All rights reserved.
A. Mun
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shipments, by giving the customers a window of time during which
to expect the parcel to arrive (for example, 3e5 days) (Dror, 2007).
Fast delivery, on the other hand, refers to expedited shipping in
which provisions are made to make sure orders are delivered be-
tween 1 and 3 days. For this expedited option, companies ship the
parcel order as soon as possible. That translates into not using full
truck load capacities, requiring more frequent dispatch and in turn
increases transportation cost (Lin et al., 2018).
While e-commerce is essential in an omni-channel approach
and there is no doubt that fast-shipping is a source of competitive
advantage (Jalili Marand et al., 2020), these new distribution stra-
tegies also cause significant impact to the environment (Ignat and
Chankov, 2020). The high number of deliveries in densely-
populated urban areas contributes to traffic and pollution
(Scho €der et al., 2016). Moreover, e-commerce also enables con-
sumers to have access to offers from all over the world, increasing
overseas shipping which has superior environmental impacts than
local delivery (Scho€ der et al., 2016).
Greenhouse gas emissions from the transport sector are ex-
pected to double by the year 2050 and the growing demand for
faster shipping is contributing to this scenario, with transportation
being one of the main contributors of greenhouse gas emissions
(OECD, 2012). Consumers, however, are becoming increasingly
aware of environmental issues and demanding initiatives from
companies. An MIT research study, for example, concluded that
consumers are willing to wait four days on average if environ-
mental impact of same-day delivery information is provided (Fu
and Saito, 2019). This gives retailers an opportunity to better un-
derstand the drivers of consumers’ behavior and find a balance
between fast-shipping, low costs, and reducing environmental
impact while striving to succeed in a dynamic market.
It is common to focus on outbound logistics when addressing
FD; nevertheless fast-shipping also affects the inbound logistics
part of the supply chain. Inbound logistics is the part of supply
chain that concerns the flow of materials from suppliers to distri-
bution centers (DCs). Unlike last-mile logistics that focus solely on
the distribution of goods (in this case from DCs to their final
destination), inbound logistics have the added complexity of
overseeing inventory management at the DCs as well (Knoll et al.,
2016).
Shorter delivery times create a huge supply chain challenge for
inbound logistics. Inventory management and policies that have to
be changed, higher costs for expedited shipping and not using
trucks to their maximum capacity are just some of the challenges
companies face while reducing delivery times. All these challenges
come with a cost and environmental impact attached to them that
has yet to be quantified. To the best of our knowledge, no previous
work discusses the environmental impact of inbound logistics
caused by fast-shipping. Having this in mind, we propose the
following research question:

How new e-commerce fast-shipping strategies increase the CO2
emissions produced by inbound transportation?
In order to solve this question, a discrete-event simulation
model is proposed as a tool to evaluate the inbound logistics
environmental impact through amount of CO2 emissions. The
discrete-event model covers the processes and the network aspects
of supply chain management (SCM) with a focus on inbound lo-
gistics and can be implemented in any industry (or company). We
validate the model using data from a DC of the largest retailer in
Mexico, which is currently joining the e-commerce revolution.
Therefore, the three key contributions of this paper are as follows:
(1) we identify a gap for measuring the environmental impact of
fast shipping in inbound logistic; (2) using a discrete-event
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Journal of Cleaner Production 283 (2021) 125400
simulation methodology, a simulation tool is proposed to evaluate
the inbound logistics environmental impact through amount of
CO2; and (3) numerical results, obtained after implementing the
approach in a case study, are presented in order to offer insights
into the tradeoffs of different demand behavior and fleet configu-
rations regarding its environmental impact and their total cost.
This paper is organized as follows. The state-of-the-art research
and basic statistics on e-commerce, same-day delivery and inbound
logistics are described in Section 2. The methodology employed to
develop the simulation model and its numerical setting are detailed
in Section 3 and Section 4, respectively. Sensitivity analysis and
discussion are presented in Section 5. Finally, we conclude the
paper by discussing results and suggesting areas for future research
in Section 6.
2. Literature review
2.1. The e-commerce revolution
E-commerce is defined as “the sale of goods and services through
the use of technology and telecommunications infrastructure”
(Je˛ drzejczak-Gas et al., 2019). The term e-commerce, short for
electronic commerce, was first introduced in 1997 by IBM
(Je˛ drzejczak-Gas et al., 2019); but it actually began 2 years earlier, in
1995, and has been growing astronomically ever since (Laudon and
Traver, 2016). Nowadays, it is the type of commerce that grows the
most in the world, a fact which can be attributed to the consoli-
dation of the internet (Laudon and Traver, 2016).
To represent this growth in numbers, we base the following
statistics on the US Quarterly Retail E-Commerce Sales report. The
second quarter 2019 total annual retail sales in the United States
have grown 3.2% (þ-0.5) compared to the second quarter of 2018.
Similarly, e-commerce estimate grew 13.3% (þ-1.6) on the same
period (Census Bureau of the Department of Commerce, 2019).
Compared to the previous quarter, total retail sales increased by
1.8% (þ-0.2) and e-commerce increased by 4.2% (þ-0.9). Overall, e-
commerce represents 10.7% of total retail sales in the second
quarter 2019 (Census Bureau of the Department of Commerce,
2019).
Online retail grew 13% globally in 2017, reaching 29 trillion
dollars (UNCTAD, 2019). E-commerce is currently responsible for
14.1% of all retail sales globally, and is expected to reach 22% by
2023 (Statista, 2019). In Latin America, it is still in its early stages
and, therefore, is expected to grow by 21.3% in 2019, hitting 71.34
billion dollars (Ceurvels, 2019). Brazil is the regional market leader,
with 34.0% of all e-commerce sales in 2019, followed by Mexico
with 28.9% and Argentina with 6.3% (Ceurvels, 2019). Mexico is
predicted to have the greatest retail e-commerce growth in the
region at 35.9% (Ceurvels, 2019).
E-commerce has not only been growing exponentially, but also
changing the way that firms do business and consumers behave.
For one thing, e-commerce has transformed the way companies do
marketing and advertising (Laudon and Traver, 2016). The online
environment builds a continuous communication channel with the
consumer as well as permits data collection on customer behavior
(Je˛ drzejczak-Gas et al., 2019). A classic e-commerce anecdote, for
example, recounts how Target started sending a teenage girl-baby
promotions before her father even knew she was pregnant (Hill,
2012).
E-commerce is also transforming the way clients are being
exposed to offers. In traditional retail, clients have to be physically
present to buy; shopping is restricted to stores’ working hours and
customers can buy in locations as far as where they are willing to
travel to. With e-commerce, all of these things are unlimited:
shoppers can buy at any place and any time and the market is global
A. Mun
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(Je˛ drzejczak-Gas et al., 2019; Laudon and Traver, 2016; Scho € der
et al., 2016). There is also a gain in transparency, since consumers
can compare products and prices from multiple retailers (Laudon
and Traver, 2016).
This new retail channel also comes with its downfalls, however.
Information delivery may be a barrier for some types of products
where customers like to touch and feel before buying, such as
clothes (Bell et al., 2014). Delivery speed is also a challenge for re-
tailers. Many shoppers like to have their products as soon as they
purchase and are impatient in waiting for their items to be deliv-
ered. Logistics strategies such as same-day delivery and “buy on-
line, pickup in store”, however, are becoming more and more
common as a means to counter this issue (Bell et al., 2014).
In order to survive in the fast-changing online environment,
businesses must adapt and constantly reinvent themselves. As
businesses started integrating online and physical channels in or-
der to maintain their competitiveness on both ends, the concept of
omnichannel was developed (Lazaris and Vrechopoulos, 2014).
Omnichannel is the term used to describe the integration of both
online and offline channels (Lazaris and Vrechopoulos, 2014). As
more and more businesses adopt this approach, however, cus-
tomers are beginning to see it as the norm rather than a competi-
tive advantage; and, thus, “the question for sellers is no longer
whether to operate an omnichannel strategy, but how to imple-
ment it most effectively” (Bell et al., 2014).
2.2. The delivery race and its consequences
Acknowledging the newfound relevance of e-commerce in
contemporary businesses and its growing adoption, it becomes
fundamental to understand the consequences of e-commerce in
order to ensure sustainable development. Although e-commerce
brings a number of benefits to companies, its negative impacts
should not be neglected. The impacts of e-commerce can be
described in three different levels: first, second and third-order
(Berkhout and Hertin, 2001). First-order effects are mainly envi-
ronmental and concern the production and manufacturing of
electronic hardware such as computers and mobile phones (Fichter,
2002). Energy used in manufacturing, production of harmful sub-
stances, radiation emission and electronic waste production all
significantly impact the environment (Fichter, 2002).
Second-order effects concern the impacts of e-commerce in the
industry. Changes in the market and economy and changes in
production, logistics, transportation and land use are all conse-
quences of the use of e-commerce (Fichter, 2002). Additionally, e-
commerce may lead to changes in carbon emissions and energy
consumption, which can be positive or negative depending on the
context in which it is applied (Fichter, 2002). Finally, third-order
effects concern the impacts of e-commerce in society. Changes in
consumers’ lifestyle and behavior may lead to changes in the
economy and in the environment due to an increased flow of goods
(Fichter, 2002).
As e-commerce grows, online customer satisfaction becomes a
factor of utter importance in guaranteeing success. As a result,
shipping speed and delivery efficiency prove to be major compet-
itive advantages and, thus, the race for faster and faster shipping is
established (Joerss et al., 2016). Companies with dominant online
presence such as Amazon, Walmart, Target and Alibaba already
offer same-day delivery in major cities, delivering products within
hours of the customer placing an order.
A study conducted by McKinsey & Company (Joerss et al., 2016)
with 4700 respondents showed that roughly a quarter of con-
sumers are willing to pay extra for same-day delivery. They predict
that this form of delivery is likely to grow over the next few years,
considering younger interviewees were more prone to pick same-
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Journal of Cleaner Production 283 (2021) 125400
day delivery. This scenario, however, is alarming when consid-
ering the sustainable aspect. Same-day delivery is known to raise
the number of trucks in delivery areas, causing an increase in car-
bon emissions (Schoo € der et al., 2016). The global market enabled by
e-commerce also incentivizes overseas shipping, which may reach
drastic proportions sustainability-wise; especially when comparing
land and air delivery in fast shipping (Schoo € der et al., 2016).
Considering the triple bottom line of sustainability – environ-
mental, social and economic – one might argue same-day delivery
impacts all three pillars. The increased amount of trucks in delivery
areas contributes to traffic congestion, accidents and noise, gener-
ating significant impacts on society. Studies also show that this
form of shipping, when offered at no charge, is not profitable
(Heuser and Ashraf, 2019). For the present study, the focus will be
on the environmental aspect of sustainability. It is important to
evaluate the environmental impact of inbound logistics in order to
raise awareness for both supply chain managers and customers that
foster the e-commerce revolution.
Due to the novelty of the field, academic research on the envi-
ronmental impact of same-day delivery is still very limited. Studies
are already being made, however, on alternative delivery schemes
that might be useful to mitigate the consequences of fast shipping
to the environment. Campbell and Savelsbergh (2006), for example,
study dynamic pricing as a way to maximize profit. In addition to
the economic aspect, dynamic pricing could potentially be used to
favor truckload consolidation and avoid idle capacity in vehicles.
They also study the possibility of offering customers lower shipping
prices for slower delivery and find this alternative to be more
profitable and easier to implement. Moreover, a study conducted by
MIT shows that providing information on the environmental
impact of same-day delivery upon purchase incentivizes con-
sumers to willingly wait longer for deliveries (Fu and Saito, 2019).
2.3. Inbound logistics
There are many ways of defining supply chain management
(SCM). Simchi-Levi et al. (2003) define SCM as “a set of approaches
utilized to efficiently integrate suppliers, manufacturers, ware-
houses, and stores, so that merchandise is produced and distributed
at the right quantities, to the right locations, and at the right time,
in order to minimize system wide costs while satisfying service
level requirements”. The goal of SCM can be defined as meeting
customer service objectives while minimizing inventory and
related costs (Carter et al., 1995). In this definition, however, envi-
ronmental concerns are lacking.
In order to have a more reliable and efficient distribution
network while minimizing transport and storage costs, a proper
supply chain management combination between inbound and
outbound logistics is necessary (Marques et al., 2020). More
generally, inbound logistics involves the transportation, storage
and delivery of goods, material or products into the location of the
business. This implies dealing with the relationship between
companies and their suppliers (Benedict and Madoh, 2018). Unlike
last-mile logistics that focus solely on the distribution of goods (in
this case from DCs to their final destination), inbound logistics have
the added complexity of overseeing procurement policies at the
DCs as well (Knoll et al., 2016). Fig. 1 illustrates the scope of inbound
and outbound logistics in the supply chain.
Previous studies address inbound logistics’ importance
throughout supply chain management on specific processes and/or
sector. Literature is abundant in the automotive sector. For example,
Ramkumar et al. (2009) proposed a model for selection of third-
party logistics service providers (TLPs) network. Liu and Sun
(2012) designed a collaborative planning, forecasting and replen-
ishment of automotive manufacturers based on the environment of
A. Mun
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Fig. 1. - Difference between inbound and outbound transportation (source: own elaboration).
Internet of Things. Gong et al. (2013) proposed an Activity-Based
Costing (ABC) calculation model in auto parts. Falsafi et al. (2018)
proposed a strategy based in optimization models to manage the
disruptions in the supply chain. In this context, discrete-event
simulation has been highly used to solve SCM and logistics
related problems and as a tool for decision making (Smith and
Srinivas, 2019). For example, Guo et al. (2019) proposed a discrete
event simulation to evaluate the integration of crowdsourced de-
livery in last-mile delivery. Other works, have also proposed
simulation-based models to evaluate and improve inbound logis-
tics in other sectors like food (Mittal and Krejci, 2016; Patitad et al.,
2020) and manufacturing (Chan and Chan, 2007; Mukherjee et al.,
2012).
Given that the outbound side of logistics deals with delivering
products to the customer, it is understandable that it would be the
first aspect considered to improve when dealing with FD demands
(Benedict and Madoh, 2018). However, the relevance of inbound
logistics to FD should not be neglected. Shorter delivery times
create a huge supply chain challenge for inbound logistics (Ulmer,
2020). Inventory management and procurement policies that
have to be changed, higher costs for expedited shipping and not
using trucks to their maximum capacity are just some of the
challenges companies face while reducing delivery times. All these
challenges come with a cost and environmental impact attached to
them that has yet to be quantified.
To the best of our knowledge, this is the first work focused on
the environmental impact of inbound logistics caused by fast-
shipping. The objective of this study is, therefore, to explore the
effects of fast shipping on inbound transportation, and investigate
the increase of CO2 emissions produced by inbound transportation
as a consequence of fast shipping.
3. Methods and procedures
The methodology used to analyze the environmental impact of
inbound logistics caused by fast shipping is based on discrete event
simulation modeling. Simulation models help to understand the
behavior of the system under study by allowing the visualization of
all the components involved and the analysis of different scenarios.
This methodology also allows the application of multiple cases by
creating a model that can be adjusted depending on the supply
chain under study. By simulating the model, data management and
changing variables becomes easier than it would be in real life
experiments. Since the experiments are done in the digital world,
bigger amount of data, algorithms and equations can be used. It
allows experiments to be conducted on a real dynamic system that
would be hard or impractical to modify in the real world (Garcia
et al., 2013).
The type of model used in this study is discrete event simula-
tion, which is process oriented and focuses on the sequence of
operations performed by entities. Parameters and locations can be
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Journal of Cleaner Production 283 (2021) 125400
modified at will, which allows us to create different scenarios in
different places and analyze how each variable affects the model.
This provides the opportunity to analyze the model while running
and understand a process while interacting with it. It is safe to test
different scenarios without affecting the real system (Borshchev,
2013).
Another key benefit from simulation models is the time and
money savings (Liotta, 2012). It would be highly costly and
impractical to any distribution center to change its system and
calculate its CO2 emissions in the real world and on a daily basis to
conduct different experiments. By dealing with the model virtually,
real assets remain stable and there is no disruption of the day to day
operations.
3.1. Simulation methodology
Based on the simulation methodology described by Garcia et al.
(2013), the model was developed following the steps explained
below:
1. Problem formulation;
2. Model conceptualization;
3. Model translation and validation;
4. Model runs and data collection;
5. Data analysis
3.1.1. Problem formulation
The problem being addressed is formulated including parame-
ters, variables, assumptions and participants. Understanding of the
problem and the factors to consider is important to later concep-
tualize the model and its interactions, how every element behaves
and alters the issue under study.
3.1.2. Model conceptualization
To conceptualize the problem, it is necessary to establish the
system’s interactions and relationships between elements. This can
be done through mind maps, and conceptual models such as a
flowchart. The beginning and end of the process and the flow of the
product must be represented, likewise the most important decision
variables.
3.1.3. Model translation and validation
The model was coded using Python 3.8.5. An initial model will
be used as a base to further add variables and define the proper way
to represent the problem addressed. During the model translation,
the model is tested against the real system behavior to find errors
and make it as similar as possible to reality. If the model runs
smoothly and all the relationships are as desired the model is
validated.
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3.1.4. Model runs and data collection validate our model.

After the initial model is modified into a sturdier one, the new
version of the model is tested using different parameters in order to
get different scenarios. The scenarios must have clear differentia-
tions such as high, standard, and low values for important pa-
rameters to be able to deliver different and valuable results. The
results obtained so far are stored for further analysis.
3.1.5. Data analysis
The results from different scenarios must be compared and
analyzed to identify the factors and combinations that alter the
environmental impact of the supply chain. Specifically, the impact
of fast shipping due to changes on inbound logistics management.
Optimization is out of the scope of this research, rather an under-
standing of the amount of CO2 emissions different scenarios might
have for different supply chain requirements. Formulas used for
calculating CO2 emissions can be found in section 3.2.
3.2. CO2 emissions calculation
The shipping sector generates significant amounts of carbon
dioxide (CO2) emissions on annual basis (Schwartz et al., 2020).
According to EPA (2020), CO2 is the primary greenhouse gas
emitted as accounts up to 81.3% of all greenhouse gas emissions
from human activities. Consequently, the environmental impact is
measured according to CO2 emissions throughout the supply chain.
For inbound logistics we consider three ways of shipping from the
supplier to a distribution center; fast shipping (1 day), regular
shipping (3 days) and slow shipping (5 days). Each type of shipping
along with the different types of trucks used represent a different
amount of CO2 emissions. To do the calculations, the formulas (1
and 2) were integrated into the simulation model (NTM Road,
2019).
TE ¼ CE * D * ½FCempty þ ðFCfull  FCempty Þ (1)
TE ¼ Total emissions in grams of CO2
CE ¼ Constant emission factor (2621 g of CO2/L).
D ¼ Distance in km.
FCempty ¼ Fuel consumption of empty vehicle in L/km.
FCfull ¼ Fuel consumption of fully loaded vehicle L/km.
LF ¼ W w , where w ¼ Cargo weight and W ¼ Truck capacityW.
Equation (1) is then rewritten as Equation (2), differentiating a
fixed amount of emissions per shipment and a variable amount
with relation to the units shipped.
Data used to build the simulation model was provided by
Mexico’s largest online retailer. The following data from a DC was
provided for 59,061 orders: order number, date sold, date routed,
and product ID code. Data ranged from October 1st through
December 31st, 2018.
Orders were sorted by date, yielding an average of 649 orders
per day. Limits for removing outliers were defined as follows:
Lower limit: Average - 3 * (Interquartile range) ¼ 0 orders.
Upper limit: Average þ 3 * (Interquartile range) ¼ 1367 orders.
The dates from November 16th through 19th were identified as
outliers and removed, resulting in a new average of 537 orders per
day. Dates 16e19 of November 2018 correspond to the days of “El
Buen Fin” in Mexico, a national shopping event with sales and
discounts that takes place once a year.
The product with the most sales during the analysis period was
selected to build the model. The most sold product was a mattress
with 1900 x 1340  300 mm dimensions and weighing 31 kg. For
mattresses, volume was the limiting factor in terms of trucks’ ca-
pacity and it was estimated that 64 units could fit inside a 14-ton
inbound vehicle.Using Google Maps the mattresses supplier dis-
tance to this specific DC was retrieved with a total of 61.9 km. It was
assumed that inbound trucks do not mix cargo and, therefore, only
carry one type of product at a time.
438 double mattresses were sold in the analyzed period
(excluding “El Buen Fin” dates), with an average of 5.41 sales daily.
These orders were differentiated by delivery window resulting in 70%
with 1 day delivery, 20% with 2e3 days and 10% up to 5 days for de-
livery. The frequency distribution for orders per day can be observed
in Fig. 2. The histogram in Fig. 2 was fitted into a log-normal distri-
bution with the following expression: 0.5 þ Logn(4.97, 5.36), where
4.97 is the mean and 5.36 is the standard deviation.
4.2. CO2 emissions calculation
CO2 emission calculations were based on equations (1) and (2).
The fuel consumption (FC) values for certain types of trailers were
obtained from NTM Road (2019) and shown in Table 1.
Since these FC values were obtained for European trucks and
roads, it was necessary to tropicalize them in order to get a more
realistic CO2 emissions calculation for the Mexican retailer case.
Another previous work from MIT propose a set of accurate emis-
sions factors for a 1.2 ton truck, based on a field study in Mexico
(Gamez et al., 2020). These values were compared with the ones of

TE ¼ TEfixed þ EFvar *w (2)

TEfixed ¼ CE*D*FCempty ¼ Fixed emissions due to the number of

shipments required.
EFvar ¼ CE*D
W *ðFCfull  FCempty Þ ¼ Marginal emission factor per
unit to be transported.

4. Numerical setting

4.1. The data

Mexico is the second largest country in Latin America with a

population of 126,190,788 (World Bank, 2018). Mexico’s GDP has
been growing steadily for the last few years. The rise in the GDP is
attached to the growth in production, exports and imports. In 2018
Mexico was the 2nd largest supplier of goods and the second
largest goods export market (Office of the United States Trade
Representative (2018)). All the transportation necessary to keep Fig. 2. Frequency distribution for orders per day for double mattresses (source: own
up with the growing demand makes Mexico an ideal country to elaboration).

5
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Table 1 4.3. The base model

Fuel consumption values from NTM Road (2019).

Type of trailer W (tons) Motorway Rural Urban A base simulation model was developed with the goal of having
FCempty FCfull FCempty FCfull FCempty FCfull
a moldable CO2 emissions calculator for inbound logistics given
different delivery windows from the customers’ orders. As
1 7.5 0.122 0.137 0.107 0.126 0.11 0.134
mentioned above, no optimization was sought, rather the dynamics
2 14 0.165 0.201 0.152 0.197 0.171 0.228
3 26 0.204 0.237 0.199 0.284 0.244 0.352 of a distribution center and its elements were represented.
4 28 0.201 0.294 0.205 0.318 0.255 0.402
5 40 0.226 0.36 0.23 0.396 0.288 0.504 4.3.1. Problem formulation
6 50 0.246 0.445 0.251 0.495 0.317 0.634
Given that the problem formulation has been addressed with
the research questions in the introduction section, a brief summary
is provided. The problem under study is based on a distribution
Table 2
center perspective and how different delivery windows affect in-
Fuel consumption values for Mexican trailers and roads (source: Gamez et al., 2020).
bound logistics CO2 emissions. For general purposes, the delivery
Type of trailer W (tons) Motorway Rural Urban windows are represented with types of shipping from a DC’s sup-
FCempty FCfull FCempty FCfull FCempty FCfull plier to the DC.
1 7.5 0.168 0.188 0.147 0.173 0.151 0.184
2 14 0.227 0.276 0.209 0.271 0.235 0.313 C Fast shipping: 1-day delivery
3 26 0.28 0.326 0.274 0.39 0.335 0.484 C Normal shipping: up to 3 days
4 28 0.276 0.404 0.282 0.437 0.351 0.553 C Slow shipping: up to 5 days delivery
5 40 0.311 0.495 0.316 0.544 0.396 0.693
6 50 0.338 0.612 0.345 0.681 0.436 0.872

4.3.2. Model conceptualization

To improve the problem understanding, its elements, and in-
teractions, the flowchart found in Fig. 3 was developed. It starts
NTM Road (2019) which resulted in a decrease of 37.5% in fuel
with the customer’s order being placed to the DC. The DC then
consumption efficiency for the Mexican trucks. Given this differ-
checks the inventory level which is followed by a decision that
ence new FC values were calculated, and shown in Table 2.
depends on the reorder point. If the inventory level is over the

Fig. 3. Flow chart for model conceptualization (source: own elaboration).

6
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~ oz-Villamizar, J.C. Vela Journal of Cleaner Production 283 (2021) 125400

Fig. 4. Simulation model pseudo code (source: own elaboration).

Table 3
Summary of the model.

Time Frame 81 days, from 01 October 2019 to 31 December 2019 (without “El Buen Fin” dates)
Replications 2000 runs

Demand Distribution 0.5 þ Logn (4.97, 5.36)

Vehicle fuel consumption Empty ¼ 0.227 L/km; Full ¼ 0.276 L/km
CO2 emissions factor 2.621 CO2 kg/L of fuel
Number of mattresses per shipment Slow ¼ 64 units (Full load truck), Normal ¼ Max. 35 units; Fast ¼ Max. 15 units
Shipment delivery time (days) Slow shipping ¼ 5 d; Normal shipping ¼ 3 d; Fast shipping ¼ 1d
Shipment cost Slow shipping ¼ USD 10; Normal shipping ¼ USD16; Fast shipping ¼ USD 27
Re-order point for slow shipment 10 units
Demand delivery-speed probability Up to 5 days ¼ 0.1; Up to 3 days ¼ 0.2; 1 day ¼ 0.7
Distance from mattresses supplier to DC 61.9 km

reorder point, then the product proceeds to the shipping dock
where a route is assigned and sent normally via trucks.
However, if the inventory level is not over the reorder point, the
DC needs to place an order to the supplier. Here a key decision is
made, this is based on the delivery window of the order. Depending
on how many days (or sometimes even hours) the customer is
willing to wait, the shipping type will be fast, normal or slow, and
each type of transportation has its own carbon footprint. For gen-
eral purposes, the delivery window is defined by a discrete prob-
ability of occurrence for each shipping type.
Once the product is at the DC it follows the same path as the
previous case and is sent to the customer. This whole flow ends
7
with the customer receiving the orders. From the different ways of
transportation, certain amount of CO2 emissions is released which
are added up to then include them on the inbound logistics’ envi-
ronmental impact evaluation.
4.3.3. Model translation and validation
Based on the previous flow chart, the model was coded using
Python 3.8.5. The pseudocode is presented in Fig. 4. However, in
order to replicate the experiments, the complete code is available at
http://bit.ly/inbound_logistics or upon request to the correspond-
ing author of this paper.
A. Mun
zquez-Martínez, P. Haro et al.
~ oz-Villamizar, J.C. Vela
Fig. 5. Partial Validation results from simulation model (source: own elaboration).
Table 4
Scenario set A summary.
Scenario Slow-speed Normal-speed Demand Fast-speed
Demand Demand
Baseline situation 10% 20% 70%
1 70% 20% 10%
2 20% 60% 20%
3 5% 5% 90%
4.3.3.1. Model translation. To begin with the simulation model, the
pseudocode structure was mimicked from the flowchart, although
some program counters were added to adapt it to the logic of the
simulation approach. In general terms, the customer orders are
generated according to a given distribution d. Using a discrete
probability, the demand is divided in three different delivery
windows (i.e. update pending orders). That is, fast orders (i.e., or-
ders to be delivered next day), normal orders (i.e., orders to be
delivered up to 3 days) and slow orders (i.e., orders to be delivered
up to 5 days later).
Then, the model updates the inventory level according to the
incoming orders. If there are products in stock, the maximum
number of pending orders are sent to the costumers, according to
the FIFO rule (First-in-Firs-Out), and the inventory level is updated
again. Next, if total inventory (i.e. inventory on hand plus phantom
inventory) is below the reorder point, a new inbound-shipping
order is allocated. According to the company, the DC’s inventory
is first replenished based on their inventory policy (slow inbound-
shipping). That is, once the inventory level match the reorder point,
a Full-Truck-Load order is placed. This order arrives 5 days later.
Then, the second replenishment option consists on define if the
total inventory (i.e., on-hand plus phantom inventory) is able to
fulfill all the pending the demand on-time. If there is going to be a
stock-out in 3 days, a normal order that fulfills the pending demand
is placed. This order arrives 3 days later. Finally, if there is going to
be a stock-out during next day, a fast order with the demand for
next day is placed. This order arrives next-day. The three type of
orders (i.e, slow, normal and fast) can be placed the same day in
order to fulfill pending demand of different periods.
Finally, the CO2 emissions formulas (1) and (2) were integrated
to the model. That is, using each type of incoming order placed,
total CO2 emissions were differentiated and updated. In addition,
8
Journal of Cleaner Production 283 (2021) 125400
Average CO2 Emissions (Kg) Average Shipping Cost (USD)
319.48 201.96
298.97 145.44
308.78 169.95
344.47 243.62
the total number of orders and costs from each type of shipping are
also computed. These metrics were especially used for validation
and comparison purposes.
4.3.3.2. Model validation. From the data described in section 4.1
and 4.2, Table 3 summarize the information of the case study
used to validate the behavior of the model:
After running the simulation with these parameters, the results
were obtained and compared to the calculations made in an
external Excel file. Partial results for the first 100 runs are shown in
Fig. 5. However, the total validation case (i.e. 2000 instances) has an
inbound logistics CO2 emissions average of 319.48 kg and an
average shipping cost of $201.96.
4.3.4. Model runs and data collection
After the model was validated, a series of scenarios were tested.
There are two sets of scenarios. One set is still based on the Mexican
retailer base scenario but with variations in the demand delivery
speeds probabilities. The second set changes factors such as truck
type, distance and road type to provide diverse case scenarios,
where the simulation model could be used. Further detail and re-
sults are presented in section 5.
4.3.5. Data analysis
As previously mentioned, the focus was not optimization ori-
ented but rather providing the total amount of CO2 emissions for
different settings and configurations. With this we can evaluate the
carbon footprint of different inbound logistics cases. This is also
further discussed in the following section.
A. Mun
zquez-Martínez, P. Haro et al.
~ oz-Villamizar, J.C. Vela
5. Results and discussion
After building and validating the simulation base model, two
different sets of scenarios were tested in order to assess the impact
of demand speed on inbound logistics CO2 emissions.
5.1. Scenario set A
On the first set, the percentages of slow, normal and fast speeds
demands vary while all other factors remain the same as the vali-
dation case previously presented (baseline situation). Table 4
shows a summary of the delivery speeds of each scenario and
Fig. 6. Boxplots with confidence interval per Scenario set A (source: own elaboration).
9
Journal of Cleaner Production 283 (2021) 125400
resulting inbound logistics CO2 emissions, while Fig. 6 shows the
boxplot of each Scenario with their corresponding confidence in-
terval (95%) and the p-value from the independent t-test.
As shown in Fig. 6, shipping speed has a considerable effect in
inbound CO2 emissions. Scenario 1 represents the contrary case of the
baseline scenario used for validation, since it presents what would be
the carbon footprint if the probabilities of slow and fast shipping were
inverted. Orders were divided into 70% slow shipping (up to 5 days),
20% normal shipping (up to 3 days) and 10% fast shipping (1 day),
resulting in 319.48 kg of CO2 emissions and $201.96. Scenario 2 is a
more neutral one where the majority of customers prefer a normal
delivery time and the extremes are in equilibrium. In this case orders
A. Mun
~ oz-Villamizar, J.C. Vela
Fig. 7. Proportion of inbound-shipment per Scenario (source: own elaboration).
Fig. 8. Total CO2 emissions per type of inbound-shipment and per Scenario (source:
own elaboration).
Fig. 9. Shipping cost per type of inbound-shipment and per Scenario (source: own
elaboration).
Table 8
Other truckloads scenarios.
Scenario Ton
Baseline situation 14
4 16
5 12

zquez-Martínez, P. Haro et al.
Journal of Cleaner Production 283 (2021) 125400
were divided into 20% slow shipping, 60% normal shipping and 20%
fast shipping, yielding 298.97 kg of CO2 emissions and USD145.44.
Finally, the most extreme scenario is presented with a significant
difference in probability from slow and normal shipping to fast
shipping where the vast majority of orders are found. Hence, in Sce-
nario 3, orders were divided into 5% slow shipping, 5% normal ship-
ping and 90% fast shipping for the third scenario and presented
344.47 kg of CO2 emissions and USD 243.62. According to the statis-
tical results (i.e., p  0.0001), both CO2 emissions and shipping cost
increases as the shipping speed increases.
Figs. 7 and 8 present results for the different scenarios in greater
detail. Fig. 9 shows the proportion of demand fulfilled with the
three types of inbound-shipping. As the percentage of fast-speed
demand increases, so does the percentage of normal and fast
inbound-shipments that the company must take. For example, in
Scenario 1, on average, there are almost 4.1 normal and fast in-
bound shipments (i.e., 42% of total orders). However, in Scenario 3
this value is increased to 9.7 (i.e., 65%). Consequently, Figs. 8 and 9,
show that increased fast-speed demand also increases the total
emissions and costs up to 15% and 68%, respectively, due to the
utilization of normal and fast inbound-shipping.
5.2. Scenario set B
As shown in the previous section, fast shipping demand in-
creases the normal and fast inbound-shipment in the company.
These two types of shipment (fast and normal) have a bigger
environmental impact as they consider less-than-truckload
shipments and have higher CO2 emissions per ton-mile. In this
context, and for the second set of scenarios, we evaluate the
impact of having trucks with different truckloads. The idea is to
evaluate the impact of having smaller or bigger trucks for the
inbound operations. The probabilities of demand-speed were
fixed to the baseline scenario from set one meaning 10% slow
shipping, 20% normal shipping and 70% fast shipping probabili-
ties. As the truck type varies also varies its capacity as well as the
fuel consumption rate. Fuel consumption factors were estimated
using a bilinear interpolation of data in Table 2. This analysis has
the purpose of showing different inbound logistics configurations
depending on fleet size.
Table 8 and Fig. 10 shows the results of having trucks both 15%
bigger and 15% smaller. Surprisingly, the three Scenarios provide
the same Shipping costs (i.e., non-significant cost difference),
where bigger trucks have better environmental performance. This
is mainly because the slow shipping accounts for the highest pro-
portion of demand fulfillment and CO2 emissions. As the truck is
bigger, there will be less frequency of slow shipments and also less
amount of normal and fast orders.
6. Discussion
Previous works indicate that 10% of the manufacturing cost
could be attributed to the inbound logistic operations (Falsafi et al.,
2018). However, and according to our results, these inbound costs
Full Truck Capacity (Units) FCempty (L/km) FCempty (L/km) Average CO2 Emissions (Kg) Average Shipping Cost (USD)
64 0.227 0.276 319.48 201.96
73 0.236 0.284 288.31 201.66
54 0.209 0.249 329.84 201.24
10
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~ oz-Villamizar, J.C. Vela Journal of Cleaner Production 283 (2021) 125400

Fig. 10. eCO2 emissions and Shipping Cost per Scenario (source: own elaboration).

11
A. Mun
zquez-Martínez, P. Haro et al.
~ oz-Villamizar, J.C. Vela
could increase 68% due to the fast shipping. Moreover, the
increasing demand for faster shipping creates problem not only in
terms of costs but also one for the environment. As the increase in
faster shipping does not allow companies to consolidate shipments,
they are forced instead to have faster, and also more expensive and
polluting deliveries, with trucks that are not utilized to their
maximum capacity. From the results obtained in Scenario Set A, it
can be observed how CO2 emissions rise up to 15% when faster
shipping is being used more often. Consequently, companies must
find effective methods of communicating the impact of fast ship-
ping to their customers. This is mainly due the fact that customers
are willing to wait longer for their home deliveries when they know
and understand the resulting reduction in environmental impact
(CNN Business, 2019).
From the previous results, it can be expected that if fast shipping
was managed to be sent in full truckload shipments (i.e., using
smaller trucks), the impact would be similar to using the slow
shipping option and the overall results would improve significantly.
However, this does not mean that all the fleet should have less
capacity. Only the trucks used for normal and/or fast shipment
should be smaller. As shown in the Scenario Set B, having a full fleet
of smaller trucks (i.e. 12 tons) increases the total CO2 emission up to
14% while the costs remain the same. Our results show that there is,
non-significant cost difference of using a full fleet of vehicles with
different capacities. Moreover, as the company already owns the
fleet, a replacement policy for acquiring these new vehicles should
be defined first. It is also important to mention that only trucks
were considered as a means of transportation, in some cases fast
shipping could be considered as cargo planes and slow shipping as
rail transportation. For these two, another set of formulas and data
is required to calculate the CO2 emissions.
7. Conclusions and future research
Having in mind the exponential growth of e-commerce and
increasing demand for fast-shipping, this study explores the impact
this new scenario represents to the environmental sustainability of
inbound logistics. To the best of our knowledge, this is the first
work that measures the environmental impact (in terms of CO2
emissions) of inbound logistics caused by fast-shipping. A discrete-
event simulation model is developed and validated using data from
Mexico’s largest online retailer in order to analyze the effects of
different inbound logistics variables in CO2 emissions. Although
this project’s simulation model was validated using data from a
Mexican retailer, the model’s parameters can be easily adjusted to
provide the environmental impact of fast-shipping in other
businesses.
By testing scenarios with different percentages of fast (1 day),
normal (up to 3 days) and slow (up to 5 days) shipping, the simu-
lation model developed in this study shows that delivery speed
significantly impacts carbon emissions in inbound transportation.
Fast-speed demand increases the total emissions and costs up to
15% and 68%, respectively. This occurs due to the strong relation-
ship between fast-shipping and less than truckloads. After imple-
menting our approach, companies are able to measure the impact
of fast-shipping policies and effectively communicate this impact to
customers in order to slow down the increasing demand for these
types of services. Moreover, companies are also able to assess the
impact of different fleet configurations.
The case study and the proposed methodology also have their
limitations. The representation of a single supplier delivering only
one product in the model is one of this study’s limitations and,
therefore, adding complexity through multiple suppliers would be
an appropriate next step. Moreover, our model only examines
trucks as a means of transportation. Adding other means such as
12
Journal of Cleaner Production 283 (2021) 125400
water and air would likely generate further valuable insights as the
trade-off between cost and speed of delivery may affect the modal
choice. However, the faster modes, as airplanes, generally have
higher emissions per ton-mile than slow ones. In addition, in the
ground transportation sector, other types of vehicles could be
included such as smaller trucks, cars, motorcycles or cargocycles.
CO2 emissions formulas would be required to calculate each mode’s
carbon footprint considering their fuel consumption efficiencies.
Moreover, our approach does not consider orders backlog as the
company guarantees a 100% service level (i.e. no late deliveries).
Including other economics aspects such as inventory cost, ordering
cost, fuel cost, etc. could help to realize a comprehensive evaluation
of the impact of fast shipping in inbound logistics.
This study focuses on the environmental impacts of inbound
transportation, therefore, the authors suggest future research to
explore the environmental impacts of fast-shipping concerning
packaging and inventory in cases where special conditions, such as
refrigeration for grocery items, are needed. Finally, although
research on the environmental impacts of fast-shipping is still
scarce, some existing studies explore the environmental impacts of
outbound logistics and this research bridges the gap by covering
the inbound aspect. However, inbound and outbound logistics tend
to be treated separately. An understanding on how fast-shipping
order placement in outbound logistics affects procurement in in-
bound logistics and how long it takes until these effects are
perceived by the supply chain could provide valuable insights in
understanding the impacts of this new delivery behavior. There-
fore, next steps should include the use of new simulation-based
optimization approaches in order to evaluate and define the best
procurement (inbound) and delivery (outbound) policy in the fast-
shipping context.
Credit author statement
Andre
s Mun ~ oz-Villamizar: Methodology, Software, Visualiza-
tion, Data curation, Investigation, Validation, Writing- Reviewing
and Editing. Josue Velazquez-Martinez: Conceptualization,
Methodology, Supervision, Writing- Reviewing and Editing. Perla
Haro: Investigation, Methodology, Software, Visualization,
Writing- Original draft preparation. Ana Ferrer: Investigation,
Methodology, Data curation, Visualization, Writing- Original draft
preparation. Roger Marin ~ o: Investigation, Data curation, Writing-
Original draft preparation.
Declaration of competing interest
The authors declare that they have no known competing
financial interests or personal relationships that could have
appeared to influence the work reported in this paper.
Acknowledgements
Authors would like to acknowledge the support received from
Coppel, the MIT-SCALE Graduate Certificate in Logistics and Supply
Chain Management, AdP and the Special Patrimonial Fund at Uni-
versidad de La Sabana.
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