Marching towards maritime decarbonization: Could self-operated fleets hedge cost and consumer payment uncertainty risks?

Maritime transport is the major source of global carbon emissions. While logistics service providers have made substantial investments in decarbonization initiatives, their volatile shipping fees will significantly influence the demand volume, harming the consignor’s ability to jointly achieve profitability and environmental sustainability goals. Such risks can be further enhanced if consumers have reservations when they pay the bill for both goods and their green mindfulness. Therefore, in this study, we investigate whether the consignor’s self-operated fleets could mitigate the negative impacts of cost uncertainty and consumer green concern risks. Although it becomes the consignor who invests in carbon reduction, we reveal that the mitigated cost uncertainty and double marginalization effect help effectively hedge consumers’ payment hesitation when they have uncertain green mindfulness. We find that the consignor’s preference for building the self-operated fleet exhibits a non-monotonic pattern (shifting from self-operated fleet to logistics service providers and then back) as the initial carbon emission intensity increases. We identify an investment failure zone where aggressive carbon reduction via self-operated fleet suppresses sales quantity, thus reducing the consignor’s profitability. Regarding the system’s sustainability performance, we point out that more carbon reductions might boost demand, and hence, increase overall shipping volume and net emissions. These findings underscore the complexities in balancing logistics autonomy and environmental responsibility, offering useful insights for consignors’ developing overseas business.