Sustainability of transport and logistics companies: an empirical evidence from a developing country

Abstract

Purpose

Transport and logistics companies (TLCs) are vital to the world's economies but they account for one-third of the world's CO₂ emissions which damage the environment, economy and society. For managers and policymakers to help improve the environmental performance of TLCs, using dynamic capability (DC) theory as the lens, a theoretical model was developed to show how environmental performance affects the TLCs' support requirements and economic and social outcomes. This paper aims to discuss the aforementioned theoretical model.

Design/methodology/approach

All registered TLCs operating in the Philippines were sent an invitation and survey questionnaire, and 218 responded with complete and useable answers. From the collected data, exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) served to evaluate the study's scale and model accuracies. Comprehensive CFA marker technique helped detect and correct for common method bias (CMB). Covariance-based structural equation modeling using AMOS 26 was implemented to test the model and hypotheses.

Findings

Using data from 218 participating TLCs operating in the Philippines, this study found that good environmental performance advances TLCs' economic and social performances, as well as their support infrastructure requirements. However, further financial support assistance from the government and non-government development organizations that can help save the environment are not required by eco performing firms.

Research limitations/implications

This research has provided some theoretical contributions to the knowledge on the greening TLCs. It uses the DC theory as the lens to understand how environmental performance relates to economic and social performance of TLCs and how it affects their demand for eco-enabling mechanisms and support infrastructure if they are to remain competitive, socially responsible and eco-friendly. By providing an epistemology on environmental performance and how it affects the support requirements, and economic and social outcomes of TLCs, it offers the literature and industry a tool/framework to better understand the dynamics of eco-performing TLCs operating in a developing country.

Practical implications

The results of this study, together with the extant operations management principles, can be used by TLC managers, policymakers and other stakeholders in crafting strategies, mechanisms and support systems that can help TLCs maintain sustainability for future generations.

Social implications

The environmentally sound practices of TLCs such as waste and emission reductions improve the health and welfare of people in and around where they operate. Health is wealth for the populace because healthy people are more productive, have more time and energy to work and are less likely to pay hefty medical expenses. Hence, realization of environmental performance by TLCs does not only do justice to the environment but also the quality of life of people.

Originality/value

Research on the sustainability of TLCs in developing countries especially in Southeast Asia is sparse. The literature has shown how various support systems affect the “greening” of firms, but what is not yet explored, is understanding how environmental performance affects the support requirements of TLCs so that their eco-endeavors are sustained and meaningful. As well, knowledge on how the environmental performance of TLCs affects their economic and social outcomes are under-investigated. This paper aims to fill these gaps in research by examining the sustainability of TLCs operating in the Philippines.

Citation

Layaoen, H.D.Z., Abareshi, A., Abdulrahman, M.D.-A. and Abbasi, B. (2023), "Sustainability of transport and logistics companies: an empirical evidence from a developing country", International Journal of Operations & Production Management, Vol. 43 No. 7, pp. 1040-1067. https://doi.org/10.1108/IJOPM-12-2021-0799