Assessment of Implementing Green Logistics Principles in Railway Transport: The Case of Lithuania
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4.1. Internal and External Factors of the Strategy of Lithuanian Railways in the Implementation of Green Logistics
There are internal and external factors in every company that indicates the appropriateness and effectiveness of the organisation’s strategy. These factors can also indicate whether green logistics are important for companies and whether they are effectively aiming to reduce their negative impact on the environment and use resources more efficiently. As environmental requirements become more stringent and consumer awareness of environmental sustainability increases, it becomes even more important for companies to implement green logistics principles in their operations.
One of the internal strengths of Lithuanian Railways is the fact that railway transport is one of the most environmentally friendly types of transport. It is a much less polluting alternative to road transport, as it uses up to 10 times less fuel for transporting goods and passengers (Figure 1). The continuous improvement and financial support of the European Union legislation facilitate the development and improvement of the railway transport business, especially in order to improve interactions with other modes of transport.
Figure 1 illustrates that rail transport accounted for a very low share of transport CO2 emissions compared to other transport modes in both 2009 and 2019. Also, according to the statistics presented, CO2 emissions were 4.2% in 2009 and 2.7% in 2019, which represents a decrease of 1.9%. These two aspects allow us to conclude that rail transport is one of the greenest modes of transport.
Another strength of Lithuanian Railways is that transport by electric train leaves less CO2 emissions per passenger seat than transport by bus or car. For example, according to the Lithuanian Statistics Department, trains accounted for a mere 2.7% of the total greenhouse gas emissions from transport in Lithuania in 2019, even though more than 67% of freight was transported by rail. Furthermore, when comparing CO2 emissions per passenger seat, an electric Vilnius–Kaunas train emits 0 kg of CO2 as it runs on electricity generated from renewable energy sources, while a bus has CO2 emissions of 1.57 kg, and a car has 3.49 kg of CO2 emissions. Thus, rail transport is one of the most efficient and least polluting modes of transport, especially for carrying freight.
Another strength of the company is its electrification activities, which help to reduce emissions and ensure climate change mitigation and energy efficiency. The use of electric energy in vehicles is less polluting than the use of fuel, resulting in increased energy efficiency and reduced emissions. According to the data from 2018, the length of railways in operation was 1910.7 km, of which 152.4 km were electrified [46]. In 2021, 3464.6 km of railways were in operation, and the length of electrified tracks is shown in the table below (Table 3) [45].
The statistics presented show that the length of electrified tracks was 317.5 km in 2021, which is 165.1 km more compared to 2018, indicating that emission reductions and other climate change mitigation measures are being implemented. The electrification project has been underway since 2018, lasting for 48 months, with a value of EUR 411.26 million, a maximum speed of 160 km/h on this section and a length of 731 km. Thus, the aim is to have the total length of electrified railway tracks account for 35% in Lithuania, which means that the share of electrified railways, which has been increasing so far, will continue to increase in the future [47].
A strong focus on the circular economy is yet another strength of the company. The circular economy aims to keep natural resources in use for as long as possible, to improve waste sorting and recycling, and to reduce waste and environmental pollution. The Lithuanian Railways Group is committed to preserving the environment and adopting a sustainable approach to its operations. Therefore, in order to reduce waste and increase recycling efficiency, the company uses sustainable practices, such as reusing wooden and reinforced concrete sleepers, road ballasts and sorting and collecting packaging, plastic and paper waste separately, which is then passed on to waste handlers for reuse or recycling. In addition, staff received training in 2021 to enable them to better understand the waste management process and to make a conscious contribution to the problem. The company is also working with various waste management specialists to find new ways to manage waste more efficiently. The Lithuanian Railways Group achieved excellent results in 2021, having increased the amount of recyclable, and energy-recoverable waste from 90% to 99% in the last two years [45].
Another major advantage is that the company’s documents are digital, signed by electronic signature only, without using paper. A digital document management system helps to reduce the bureaucracy and administrative burden, improves the efficiency of information use and reduces environmental pollution associated with paper production and consumption. Electronic signatures allow for the fast and reliable signing of documents and reduce the time and costs associated with printing, delivery and storage. The figure below (Figure 2) shows the quantity and type of documents in the organisation between 2018 and 2021.
Thus, the statistics reveal that digital document management has been evolving year after year, while paper documents have been declining, accounting for a mere 9.3% in 2021, which is a strength in the green logistics environment.
The Sustainable Travel Club, where passengers can accumulate club membership points and redeem them for discounts on train trips to reduce CO2, is yet another great initiative. Trains are one of the most efficient means of passenger transport in the EU as they emit only a fraction of greenhouse gases per kilometre travelled compared to other modes of transport [48] (Figure 3). It promotes sustainable travel practices and reduces the environmental impact of travelling while supporting people who have chosen a sustainable alternative. This could encourage more people to choose sustainable travel alternatives and increase the use of public transport [49].
Thus, these data highlight that rail transport is a reliable and efficient mode of passenger transport in the EU, with significantly lower greenhouse gas (GHG) emissions per kilometre than other modes. Passenger trains emit 79% less CO2 than passenger planes and 77% less CO2 than passenger cars, which means that rail is not only the most economical but also the most environmentally friendly mode of transport. In 2014–2018, the efficiency of rail passenger transport increased by 13%, which was achieved as a result of the electrification of the rail network and the reduction in the intensity of and use of electricity in the EU [48].
One of the weaknesses of the Lithuanian Railways is that freight and passenger transport is mainly diesel-powered, emitting GHG and causing environmental pollution. Diesel trains are a major source of pollution, and pollution is a major problem not only from the environment but also from a health point of view. Therefore, electric transport, which is significantly cleaner and more efficient and reduces emissions and climate change, has a major role to play in the development of sustainable transport systems. According to data from 2018, there were 17 electric trains and 28 diesel trains, while in 2021, there were 14 electric trains and 28 diesel trains. In 2018, there were 56 electric rolling stock and 92 diesel units, and in 2021, there were 42 electric rolling stock and 92 diesel units [50]. Thus, the number of electric trains and rolling stock has decreased over the past 3 years, while the number of diesel trains and rolling stock has remained the same, which is a weakness for green logistics.
Another weakness is competition, as there is a lot of competition in the green logistics sector, which means that other providers of these services may have more experience, more efficient technology and more extensive resources. Green logistics services are provided by various Lithuanian companies, which may be competitors of Lithuanian Railways.
Also, a higher price of travel on electric trains and green logistics services compared to traditional logistics is unappealing to customers. Green logistics services are more expensive due to investments in new technologies, vehicles, special and environmentally friendly equipment and infrastructure. For example, a trip from Klaipėda to Vilnius in a second-class diesel train costs EUR 18.5, and a second-class electric train costs EUR 22.5. Due to this price difference, some customers may find the aspect of green logistics services less important than the price, which may reduce the demand. This means that selling green logistics services is more difficult, which is another weakness of the company.
Another weakness is the shortening or cancellation of train services on various routes due to ongoing electrification works, which causes inconvenience to passengers. For example, in 2023, a large number of trains on the Vilnius–Klaipėda–Vilnius routes were cancelled due to ongoing electrification works, and on some weekdays, only one journey time was left, or trains did not run on the Vilnius–Klaipėda route altogether. This may cause inconvenience for users, leading to lower passenger interest in this mode of transport.
Having analysed the company’s strengths and weaknesses, the next step is to look at external factors.
As mentioned above, the appropriateness of a company’s strategy is determined by internal and external factors. These factors can also indicate whether the application of green logistics methods, a reduction in negative environmental impacts and other environmental measures are important to the company’s activities.
The success of companies applying green logistics principles is affected not only by internal but also by external factors such as more stringent environmental requirements, changing consumer demands and other circumstances.
The first option is to reduce net CO2 emissions to zero. Green logistics operations can reduce emissions and help companies to achieve their sustainability goals. The Lithuanian Railway Group (LTG) is contributing to the implementation of the European Green Deal and the Paris Agreement by committing to reduce net CO2 emissions to zero by 2050 [45]. The plan is to progressively reduce CO2 and particulate matter emissions in rail transport, with the target set for reducing total CO2 emissions by 30% and specific CO2 emissions by 50% for freight and passenger transport by 2030 compared to 2005. In addition, in line with its strategic objectives and its priority of sustainability management, the LTG aims to actively contribute to the implementation of the Sustainable Development Goals set by the United Nations. One of the objectives is Goal 13: Mitigation of climate change, which is linked to the above-mentioned Paris Agreement, as these goals both include the mitigation of climate change through a reduction in greenhouse gas emissions.
Another option is the purchase of more electric traction freight locomotives and passenger rolling stock. This would reduce emissions and contribute to sustainable transport. In addition, these vehicles tend to be more efficient, which results in energy savings and lower operating costs. As previously mentioned, LTG is committed to a net reduction in CO2 emissions to zero, which means that the implementation of clean energy transport solutions, such as the purchase of more electric locomotives, will be possible.
Obtaining 100% of electricity from renewable energy sources is another option for Lithuanian Railways. Electricity from renewable energy sources is clean and sustainable as it comes from nature and is dependent on natural phenomena, so using such energy could make rail transport even more sustainable. It would also lead to a reduction in emissions and represent a commitment to environmental protection. Thus, 100% renewable electricity remains an option for Lithuanian Railways, while other companies have already achieved this.
More noise barriers would be a sustainable way to reduce noise and improve quality of life. Noise from trains can be a major disruptive factor to those living and working close to the railway. Noise abatement can help to improve the quality of the environment and life in these areas. Walls can be built as a long-term investment in infrastructure as they can last for many years. This solution is also in line with the principles of sustainability, as it is less damaging to the environment than many other noise abatement methods and can be linked to renewable energy sources in order to reduce reliance on fossil fuels. In 2021, the length of these walls was only 2.7 km, so installing more of these noise barriers could be an excellent option to achieve an effective outcome and improve quality of life [45].
When it comes to threats, the first is an increase in energy costs due to the use of green transport infrastructure and innovative technologies. High energy consumption is mostly associated with the transport and logistics sector, and the costs of these sectors are often highly dependent on the price of energy used [51]. Supplying electricity to consumers is an expensive process, consisting of several different types of costs that are all collectively referred to as electric energy costs. Capital costs, load hours, fuel costs and lifetime are assessed, while most polluting plants, which use cheap but highly polluting fossil fuels, are at the forefront of this type of cost analysis. For example, rail transport is an efficient and environmentally friendly way to move large volumes of freight, but most trains are still diesel-powered. Electrification is one way to make rail transport more efficient and reduce emissions. It is a green logistics operation that requires new infrastructure elements directly linked to the railway infrastructure, such as power stations and energy supply networks, which can provide electricity to railway lines. The development and use of these elements can increase the cost of operations, as the introduction of new elements and technologies requires more energy, which means an increase in the total energy costs.
Another threat is the complexity of implementing new technologies. New technologies such as electric vehicles can lead to high implementation costs and the complexity of such a process. Sustainable transport requires appropriate green infrastructure, such as freight terminals with loading and unloading stations that can handle vehicles such as electric trains. Companies starting to implement green logistics in their business operations may face financial or technical difficulties due to a shortage of appropriate infrastructure, which may imply investments in new infrastructure. These investments may affect their competitiveness and ability to make a profit, implement new technologies and reduce environmental pollution.
A lack of funding for electrification is also a threat. Electrification is one of the main ways to reduce vehicle pollution. Unless a company is able to obtain the necessary financial support, it may face difficulties in modernising its fleet and adapting to green logistics requirements. Technological progress and the emergence of new alternative energy sources have a major impact on the energy sector. This may lead to changes in national priorities and project allocation. For example, the European Union’s strategic objective is to increase the use of renewable energies in order to reach an energy efficiency level of at least 32% by 2030. This means that more investment may be made in alternative energy sources and infrastructure than in the traditional energy generation sector, which may also affect investment in the modernisation of electric trains and railways.
Customers may be dissatisfied with the company if short-haul train journeys are cancelled. This may be due to electrification and other technical works and may affect the use of polluting road vehicles. For example, on the 6–28 February 2023 and on the 1–16 March 2023, trains were not running on the Vilnius–Šiauliai and Kaunas–Šiauliai routes from Monday to Saturday and on the 17–29 March 2023, trains were not in operation on the Radviliškis–Klaipėda route for all days of the week [52]. If a company cannot provide a stable and reliable service, customers may lose confidence and turn to other companies that offer traditional transport solutions and faster and more reliable services. Moreover, cancellations or delays in transport can have a negative impact on customers’ business and their costs.
Having reviewed the company’s external factors, a net reduction in CO2 emissions to zero, the acquisition of more electric locomotives, 100% renewable electricity and more noise barrier walls were identified as the main opportunities. An increase in energy costs, the complexity of implementing new technologies, a lack of funding for electrification and customer dissatisfaction were distinguished as the main threats.
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