Comparison of the Physical Internet and the Traditional Distribution System with Carbon Footprint

Abstract

The Physical Internet (PI) is based on the technology and organizational structure of the Internet, abstracting the characteristics from the Internet and then applying them to logistics systems. The Physical Internet (PI) envisions a network of shipment centers called PI Hubs (π hubs), which distribute standardized modular containers (π containers) to streamline the movement of goods. The Physical Internet redefines supply chain configuration and value-creation patterns. By consolidating shipments, PI creates new opportunities for efficiency, reducing waste and costs. This innovative approach to supply chain management offers a more sustainable solution, not only from an economic perspective but also from an environmental one.

This thesis explores the effect of cost of carbon in PI by introducing a method for calculating CO2 emissions from heavy-duty truck dispatch. The costs associated with carbon emissions are formulated as fuel costs, emission taxes, and penalties. The thesis also demonstrates how sustainability considerations can be integrated into the mathematical model of the PI by incorporating costs and constraints related to carbon emissions.

Through a case study, it is shown that PI can be an economically viable solution and also one that reduces carbon costs under certain conditions.