Cooperative strategies of emission reduction in the 3PL-led supply chain

Abstract Accepted by: M. Zied Babai The third-party logistics (3PL) industry has grown rapidly over the past few years, and its emission reduction behaviour is gaining attention. This paper considers a supply chain system composed of a manufacturer, a retailer and a 3PL provider, in which both the manufacturer and the 3PL make the low-carbon investment. 3PL is a leader in the low-carbon supply chain. To promote emission reduction in logistics, the manufacturer and the retailer separately share the logistics emission reduction costs of the 3PL. Through comparing the no-sharing, manufacturer-sharing and retailer-sharing models, we discuss the cost-sharing strategy preference of each participant and analyze the impact on environmental benefit and social welfare. The results show that cost-sharing can effectively improve product demand, which also supports society in obtaining higher benefits. Moreover, the 3PL tends to be shared by the retailer when the low-carbon investment cost of logistics is high and the investment cost of production is low. Both the manufacturer and the retailer prefer the other party to share the cost, but sharing it together can effectively alleviate free-rider behaviour.