37th Bled eConference Resilience Through Digital Innovation: Enabling the Twin Transition June 9 – 12, 2024, Bled, Slovenia Conference Proceedings Editors Andreja Pucihar Mirjana Kljajić Borštnar Staša Blatnik Roger W. H. Bons Koen Smit Marikka Heikkilä May 2024 Title Naslov 37th Bled eConference – Resilience Through Digital Innovation: Enabling the Twin Transition Subtitle Podnaslov June 9 – 12, 2024, Bled, Slovenia, Conference Proceedings Editors Uredniki Andreja Pucihar (University of Maribor, Faculty of Organizational Sciences, Slovenia) Mirjana Kljajić Borštnar (University of Maribor, Faculty of Organizational Sciences, Slovenia) Staša Blatnik (University of Maribor, Faculty of Organizational Sciences, Slovenia) Roger W. H. Bons (Open University; Heerlen; Netherland) Koen Smit (HU University of Applied Sciences Utrecht, Utrecth, Netherland) Marikka Heikkilä (University of Turku, Turku, Finland) Review Recenzija Sasan Adibi (La Trobe University), Tashfeen Ahmad (The University of the West Indies), Satu Aksovaara (Jamk University of Applied Sciences), Art Alishani (Tartu University), Joschka Andreas Hüllmann (University of Twente), Alenka Baggia (University of Maribor), Matthias Baldauf (Eastern Switzerland University of Applied Sciences, Campus St. Gallen), David Baxter (University of Southampton), Staša Blatnik (University of Maribor), Morten Boesen (KEA - Copenhagen School of Design and Technology), Roger Bons (Open University of the Netherlands), Christer Carlsson (Institute for Advanced Management Systems Research and Åbo Akademi University), César Casiano Flores (University of Twente), Helen Cripps (Edith Cowan University), Lukas Daniel Klausner (St. Pölten University of Applied Sciences), Mitja Dečman (University of Ljubljana), Stefan Dedovic (Tartu University), Aidan Duane (South East Technological University), Kristel Edelman (University of Turku), Taina Eriksson (University of Turku), Riikka Franzén (University of Turku), Leonid Freidovich (Umeå University), Christian Geiger (Bern University of Applied Sciences), Matt Glowatz (University College Dublin), Torsten Gollhardt (University of Muenster), Linda Grogorick (Technische Universität Braunschweig), Thu Ha Dang (Swinburne University of Technology), Nerko Hadziarapovic (HU University of Applied Sciences Utrecht), Raija Halonen (University of Oulu), Nathalie Haug (Universität Konstanz), Marikka Heikkilä (University of Turku), Andreas Hermann (University of Muenster), Ralf Höchenberger (Universität Ulm), Matilda Holkkola (University of Jyväskylä), Irene Jonkers (HU University of Applied Sciences Utrecht), Tina Jukić (University of Ljubljana), Fuad Khan (University of Turku), Mirjana Kljajic Borstnar (University of Maribor), Eva Krhač Andrašec (University of Maribor), Pavlina Kröckel (Friedrich-Alexander Universität Erlangen-Nürnberg), Paul Kruse (University of Muenster), Rob Kusters (Open University of the Netherlands), Sam Leewis (HU University of Applied Sciences Utrecht), Gregor Lenart (University of Maribor), Yin Leng Tan (University of Reading), Xander Lub (Hogeschool Utrecht), Pasi Luukka (LUT University), Mahinda Mailagaha Kumbure (LUT University), Melanie Mandl (BANDAS Center University of Graz), Venkata Marella (Open University of the Netherlands), Marjeta Marolt (University of Maribor), Tilen Medved (University of Maribor), Thomas Mejtoft (Umeå University), Axel Minten (German Coworking Association and FOM University of Applied Sciences), Ondrej Mitas (Breda University of Applied Sciences), Domen Mongus (University of Maribor), Rasim Mujalović (JadroAgent-Bar), Pradeep Murukannaiah (Delft University), Anastasija Nikiforova (Tartu University), Ayesha Nilashini (La Trobe University), Omid Noroozi (Wageningen University and Research), Guido Ongena (HU University of Applied Sciences Utrecht), Tiina Paananen (University of Jyväskylä), Zdravko Paladin (Administration for Maritime Safety and Port Management), Mrityunjoy Panday (Cognizant), Gabe Piccoli (Louisiana State University and University of Pavia), Marijn Plomp (Vrije Universiteit Amsterdam), Andriana Prentza (University of Piraeus), Andreja Pucihar (University of Maribor), Uroš Rajkovič (University of Maribor), Pascal Ravesteijn (HU University of Applied Sciences Utrecht), Christopher Reichstein (Duale Hochschule Baden-Württemberg), Joaquin Rodriguez (Grenoble Ecole de Management), Carsten Schmidt (Tartu University), Juergen Seitz (Baden-Wuerttemberg Cooperative State University), Anna Sell (Åbo Akademi University), Navin Sewberath Misser (HU University of Applied Sciences Utrecht), Anand Sheombar (HU University of Applied Sciences Utrecht), Muhammad Shuakat (Deakin University), Luuk Simons (Delft University), Erik Slingerland (HU University of Applied Sciences Utrecht), Koen Smit (HU University of Applied Sciences Utrecht), Ulrik Söderström (Umeå University), Ronald Spanjers (Roessingh Rehabilitation), Zachary Spicer (York University), Lucy Temple (University for Continuing Education Krems), Nevena Toporova (Technical University of Munich), Nalika Ulapane (La Trobe University), Annemae van de Hoef (HU University of Applied Sciences Utrecht), Esther van der Stappen (Avans University of Applied Sciences), John van Meerten (HU University of Applied Sciences Utrecht),mMathijs van Dijk (HU University of Applied Sciences Utrecht), Rogier Van de Wetering (Open University of the Netherlands), Stan van Ginkel (HU University of Applied Sciences Utrecht), Willemijn Van Haeften (HU University of Applied Sciences Utrecht), Johan Versendaal (HU University of Applied Sciences Utrecht and Open University of the Netherlands), Gabriela Viale Pereira (University for Continuing Education Krems), Doroteja Vidmar (RLS, Slovenia), Mirko Vintar (University of Ljubljana), Doug Vogel (Harbin Institute of Technology), Alex Wahlroos (Umeå University), Xiaolu Wang (Åbo Akademi University), Valtteri Wanne (Azets, Åbo Akademi University), Thorsten Weber (FOM Hochschule), Nilmini Wickramasinghe (Swinburne University of Technology & Epworth HealthCare), Gary Wills (University of Southampton), Varinia Wittholz (Technische Universität Braunschweig), Adrian Woick (AKAD University), Rio Yusri Maulana (Department of Government Science, Universitas Jambi), Zaid Zekiria Sako (La Trobe University), John Zelcer (La Trobe University), Hans-Dieter Zimmermann (Eastern Switzerland University of Applied Sciences, Campus St. Gallen), Manuel Zwicker (RMIT University) Technical editors Tehnična urednika Aljaž Murko (University of Maribor, Faculty of Organizational Sciences) Jan Perša (University of Maribor, University Press) Cover designer Oblikovanje ovitka Jan Perša (University of Maribor, University Press) Graphics material Grafične priloge Sources are own unless otherwise noted. The authors and Pucihar, Borštnar Kljajić, Blatnik, Bons, Smit, Heikkila (editors), 2024 Conference Konferenca 37th Bled eConference – Resilience Through Digital Innovation: Enabling the Twin Transition Location and date Kraj in datum Bled, Slovenia, June 9 – 12, 2024 Programme committee Programski odbor Art Alishani (Tartu University), Matthias Baldauf (Eastern Switzerland University of Applied Sciences, Campus St. Gallen), Roger Bons (Open University of the Netherlands), Christer Carlsson (IAMSR/Abo Akademi University), Helen Cripps (Edith Cowan University), Matt Glowatz (University College Dublin), Nerko Hadziarapovic (HU University of Applied Sciences Utrecht), Marikka Heikkilä (University of Turku), Tina Jukić (University of Ljubljana), Mirjana Kljajić Borštnar (University of Maribor), Gregor Lenart (University of Maribor), Xander Lub (HU University of Applied Sciences Utrecht), Pasi Luukka (LUT School of Business and Management), Venkata Marella (Open University of the Netherlands), Marjeta Marolt (University of Maribor), Axel Minten (German Coworking Association and FOM University of Applied Sciences), Domen Mongus (University of Maribor), Guido Ongena (HU University of Applied Sciences Utrecht), Marijn Plomp (Vrije Universiteit Amsterdam), Andreja Pucihar (University of Maribor), Uroš Rajkovič (University of Maribor), Pascal Ravesteijn (HU University of Applied Sciences Utrecht), Juergen Seitz (Baden- Wuerttemberg Cooperative State University), Anand Sheombar (HU University of Applied Sciences Utrecht), Koen Smit (HU University of Applied Sciences Utrecht), Stan van Ginkel (HU University of Applied Sciences Utrecht), Esther van der Stappen (Avans University of Applied Sciences), Johan Versendaal (HU University of Applied Sciences Utrecht), Doroteja Vidmar (RLS, Slovenia), Doug Vogel (Harbin Institute of Technology), Nilmini Wickramasinghe (La Trobe University), Hans-Dieter Zimmermann (Eastern Switzerland University of Applied Sciences, Campus St. Gallen) Organizing committee Organiazacijski odbor Staša Blatnik (University of Maribor, Faculty of Organizational Sciences), Petra Gorjanc (University of Maribor, Faculty of Organizational Sciences), Mirjana Kljajić Borštnar (University of Maribor, Faculty of Organizational Sciences), Klara Knific (University of Maribor, Faculty of Organizational Sciences), Maruša Luštrik (University of Maribor, Faculty of Organizational Sciences), Aljaž Murko (University of Maribor, Faculty of Organizational Sciences), Andreja Pucihar (University of Maribor, Faculty of Organizational Sciences) Published by Založnik University of Maribor University Press Slomškov trg 15, 2000 Maribor, Slovenia https://press.um.si, zalozba@um.si Co-published by Izdajatelj University of Maribor Faculty of Organizational Sciences Kidričeva cesta 55a, 4000 Kranj, Slovenia http://www.fov.um.si, dekanat.fov@um.si Edition Izdaja 1 ST Publication type Vrsta publikacija E-book Available at Dostopno na https://press.um.si/index.php/ump/catalog/book/860 Published Izdano Maribor, May 2024 © University of Maribor, University Press /Univerza v Mariboru, Univerzitetna založba Text / Besedilo © The authors & Pucihar, Borštnar Kljajić, Blatnik, Bons, Smit, Heikkila (editors), 2024 This book is published under a Creative Commons 4.0 International licence (CC BY 4.0). 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[et al.]. - 1st ed. - E-publikacija. - Maribor : University of Maribor, University Press, 2024 Način dostopa (URL): https://press.um.si/index.php/ump/catalog/book/860 ISBN 978-961-286-871-0 (PDF) doi: 10.18690/um.fov.4.2024 COBISS.SI-ID 196387075 ISBN 978-961-286-871-0 (pdf) DOI https://doi.org/10.18690/um.fov.4.2024 Price Cena Free copy For publisher Odgovorna oseba založnika Prof. Dr. Zdravko Kačič, Rector of University of Maribor Attribution Citiranje Pucihar, A., Borštnar Kljajić, M., Blatnik, S., Bons, R. W. H., Smit, K., Heikkilä, M.. (eds.) (2024). 37th Bled eConference Resilience Through Digital Innovation: Enabling the Twin Transition: June 9 – 12, 2024, Bled, Slovenia, Conference Proceedings. University of Maribor, University Press. doi: 1 0.18690/um.fov.4.2024 DOI https://doi.org/10.18690/um.fov.4.2024.36 ISBN 978-961-286-871-0 EXPLORING SUSTAINABLE VALUE PROPOSITIONS IN LOGISTICS SERVICES – HOW DIGITALIZATION AND DATA SUPPORT GREENER SERVICES? Keywords: sustainability, logistics, value proposition, digitalization, green service FUAD KHAN, TAINA ERIKSSON, MARIKKA HEIKKILÄ, TITIANA ERTIÖ University of Turku, Turku School of Economics, Turku, Finland fuad.khan@utu.fi, taina.eriksson@utu.fi, marikka.heikkila@utu.fi, titiana.ertio@utu.fi Employing a multiple-case study method, this study examines the value propositions in sustainable logistics services. We explored publicly accessible data on the financial, functional, and emotional aspects of the value propositions offered by four companies. We first discovered that digitalization plays a crucial role in value proposition creation supporting low emission logistics ecosystems. Specifically, digital solutions promise cost reduction opportunities across the entire value chain as financial value proposition; route optimization and regulatory compliance as functional value propositions; and transparency, trust, and credibility as emotional value propositions. Second, the reduction of fossil fuels as a functional value proposition is identified as a target for all companies. Third, functional value propositions prelude emotional value propositions, i.e. through sustainability certificates, service providers establish transparency, ensure value chain compliance, and ultimately build trust among customers. By highlighting the differences and similarities in value propositions, this study explores sustainable business model innovation and offers critical perspectives for organizations aiming to shift towards sustainable logistic service provision. 616 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION 1 Introduction Holistically, the EU aims to decrease its greenhouse gas emission through initiatives such as the European Green Deal and Fit for 55 legislative packages. Simultaneously, the twining of the green with digital transition (i.e., the transitions mutual reinforcement) provides ample opportunities to achieve EU’s climate neutrality goals by 2050. The logistics industry, recognized as a vital component of the global economy, generates a third of global carbon dioxide (CO2) emissions and has come under increasing pressure to minimize its environmental impact (Towards a Net- zero Logistics Sector, 2023). Notably, the European Commission has implemented a series of policies aimed at reducing the industry's carbon emissions (Completion of Key ‘Fit for 55’ Legislation, 2023). In the face of such pressure towards sustainability, logistics companies have started to rethink and innovate their business models, to both align with environmental goals but also carve out a competitive edge in the changing market/ industry. The exploration of innovative, sustainable business models is not merely an environmental necessity but a strategic choice to stay relevant and appeal to a consumer base which increasingly values sustainability (Bask et al., 2018; Martins et al., 2019). Sustainable business models cover both environmental and social dimensions of sustainability (Mignon & Bankel, (2022); Brenner, 2018). The present study focuses deeply on the environmental sustainability of business models, specifically on carbon dioxide emission reductions. Hence, the concept of sustainable business model is used in this study to refer to environmentally sustainable business model. Central to sustainable business models is the customer value proposition (De Giacomo & Bleischwitz, 2020). The value proposition reflects the company's commitment to delivering value that goes beyond the traditional economic metrics, encompassing environmental stewardship. However, defining what exactly constitutes a sustainable value proposition remains a challenge. Digital technologies hold immense potential to achieve climate neutrality as exemplified in the European Commission’s Twin Transition efforts. However, the extent to which digital technologies are integrated into sustainable value propositions is still under- explored. Hence, our central research question is: How does digitalisation support value propositions in environmentally sustainable business models in logistics services? Employing a comparative case study methodology, this paper examines sustainable value propositions of four logistics companies. Our F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 617 investigation first delves into the value companies propose, while later illustrating the role of digitalization in providing environmentally sustainable logistics services. The market for sustainable logistics services is still in its infancy, with cases analysed in this paper emerging among the first services offered. The drivers for these services stem from the interplay between market opportunities, increased regulatory demands to lower carbon dioxide emissions and company’s desire to contribute to environmental sustainability. Emission data provision contributes to transparency in operations. This study is organized as follows: Section 2 reviews relevant literature on sustainability in the logistics industry, digital technologies supporting the sustainability transition, and sustainable BMs including their value propositions. Section 3 describes the methodology behind our multiple-case study. Section 4 presents the findings of the cross-case analysis. Section 5 discusses the implications of our findings and concludes the paper, summarizing key insights and proposing directions for future research. 2 Literature review 2.1 Sustainability in the logistics industry The push towards sustainability is increasingly capturing the interest of international transport and logistics providers, driven by market demands. They view sustainability to gain a competitive edge (Bask et al., 2018; Martins et al., 2019). Incorporating sustainability into logistics requires re-evaluation of conventional operations to reduce environmental impact and improve efficiency. However, researchers found that due to inconsistent measurement method of sustainability indicators across the supply chain, logistics providers fail to share cost and benefits with partners and differentiate themselves from competitors (Bask et al., 2018; Martins et al., 2019). Like fuel cost, amount of emissions is an indicator of sustainability. Replacing fossil fuels with less emitting alternatives is the major mean to make logistics more environmentally sustainable. While Electrifying freight deliveries has significant prospect to diminish the CO2 emissions of the sector (Gillström, 2023), especially in land logistics, LNG, biofuels, methanol and ammonia are potential renewable 618 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION energy sources in sea logistics (Solakivi et al., 2022). Also speed and route optimization has received much attention in past research as it can both save fuel cost and achieve emission reduction. One strategy is to design new vessels with a lower maximum speed. A notable example is Maersk's recent initiative, where they decreased the top speed of their new vessels from the range of 20–26 knots down to 23 knots. This adjustment led to 20% reductions in both fuel consumption and carbon emission (Macguire, 2013). However, there are drawbacks to consider with new constructions, including the emissions generated during the shipbuilding process and the high initial investment required. The second alternative is to reduce the speed of the vessel; higher fuel prices or lower freight rates encourage slower sailing. Slow sailing impacts the cargo owners most, leading to higher freight costs and delayed deliveries. This may push them to choose faster and potentially more polluting transport modes like rail or air. Interestingly, higher-value cargo tends to sail faster and hence emits more. Port congestion also affects this dynamic; optimizing arrival times can reduce emissions, highlighted by initiatives like "virtual arrival" and financial incentives (Psaraftis and Kontovas, 2015; Bektaş et al., 2019). Adopting green practices in logistics involves navigating through various options, each presenting its unique set of benefits and compromises. For instance, opting for reusable materials can enhance resource efficiency and reduce expenses, but it may inadvertently increase carbon emissions during the return logistics phase. In this context, adopting renewable energy stands out as an effective approach to reduce emissions while also offering economic advantages (Bhattacharya et al., 2016; Khan & Dong, 2017; Trivellas et al., 2020). Selecting various modes of transport, the average frequency of mode changes, haul duration, incidence of empty runs, energy efficiency per transport mode, and emissions per unit of energy consumption are all critical elements for developing sustainable transport routes. (McKinnon, 2016; Trivellas et al., 2020). 2.2 Digital technologies as means to achieve logistics sustainability Digitalization, leveraging data, and improved computational capabilities, plays another important role in transforming industries by creating innovative services and business models, enhancing operational efficiency, and enabling cost savings for further digital investments (Tagliapietra et al. 2020; Agarwala et al., 2021; Broccardo F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 619 et al., 2023). It encompasses both information and operational technology tools to streamline processes and reduce transactional costs (Felser et al., 2019; Mas et al., 2020; Broccardo et al., 2023). Furthermore, empirical research in European cargo transportation context shows that information and communication technology can be utilised for sustainability promotion (De Andres Gonzalez et al., 2021). In logistics, technologies such as robotics, AI, and big data offer significant decarbonization potential (Brinken et al., 2023). Various digital solutions, from sensors to blockchain, aim to optimize operations and reduce emissions (Durkin, 2021; Plaza-Hernández, et al. 2021; Lind et al., 2020; Boison & Antwi-Boampong, 2020; Di Silvestre et al., 2018; N. Agarwala & Guduru, 2021; Agarwala et al., 2021). Sustainable business models highlight the role of digital platforms in facilitating resource sharing, co-creation, and operational efficiencies, suggesting that digital tools are instrumental but not sufficient without integrating green technologies for true decarbonization (De Andres Gonzalez et al. 2021; Hiteva & Foxon, 2021; Broccardo et al., 2023). 2.3 Value proposition in sustainable business model Business models outline how organizations generate, deliver, and capture value, as described by Teece (2010). The business model canvas presented by Osterwalder & Pigneur (2010) includes various elements like the value proposition, customer engagement and segmentation, distribution channels, essential activities and resources, partnerships, and the revenue strategy. Companies can adjust these elements to seize new opportunities for growth or adapt to shifts in the market (Saebi et al., 2017; Eriksson et al., 2022). Sustainable business models can integrate economic, environmental, and social dimensions. As highlighted by researchers such as Lüdeke-Freund (2019), Schaltegger et al. (2012) and Schneide and Spieth (2013), sustainable business model aims to create positive impact and/or reduce negative impact on environment and society, while providing value generation and capture opportunity for all parties involved (Bocken et al., 2014, p. 44; Chevrollier et al., 2023). Sustainable forerunner firms may employ long term partnerships with their stakeholders to share their resources and knowledge. Likewise, rethinking the key partners will include partners who support the creation of sustainable ecosystems (Broccardo et al., 2023). 620 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION There are substantial evidences from recent research that especially the value proposition is the most central component of both traditional and Sustainable Business Model (De Giacomo & Bleischwitz, 2020; Eyring et al., 2011; Geissdoerfer et al., 2018; Schaltegger, Hansen, & Lüdeke-Freund, 2016; Bähr & Fliaster, 2022; Baldassarre et al., 2017; Boons & Lu; deke-Freund, 2013; Kristensen and Remmen, 2019; Laukkanen & Tura, 2022). Using value propositions firms can solve environmental problems through their products and services (Awan, 2020; Baldassarre et al., 2017; Chevrollier et al., 2023). New entrants or the biggest players in the market can also disrupt the market's established value propositions and propose a new type of values using non-conventional ways, resources and by revamping processes (Brenner, 2018; Broccardo et al., 2023). Hence, service providers must understand clearly what customers perceive as valuable, because the mismanagement of the expected and realised value will have implications and impacts on stakeholders (Hlady-Rispal and Servantie, 2018; Chevrollier et al., 2023). Customers likely value something that solves their problems or meet their needs, which would help service providers to build a sustainable value proposition (Foss & Saebi, 2016; Schneider & Spieth, 2013; Chevrollier et al., 2023) through which customers gain certain benefits (Patala et al., 2016; Osterwelder & Pigneur, 2010; Laukkanen & Tura, 2022). 2.4 Conceptual Framework To provide a value adding solution, firms must understand the utility customers gain from the value. Based on the utility gain, value proposition dimensions are categorised into financial (Borg et al., 2020), functional, emotional, and social (Sheth et al., 1991; Gilly et al., 1992; Sweeney & Soutar, 2001), epistemic i.e., utility of gathering new knowledge through products and service and conditional i.e., utility obtained in a particular situation (Sánchez-Fernández & Iniesta-Bonillo, 2007; Zeithaml et al., 2020; Laukkanen & Tura, 2022). We adapt the initial conceptual frameworks developed by Sheth and colleagues (1991), Gilly et al. (1992) for the logistics transportation industry. In this context, the epistemic and conditional dimensions have been excluded as they are linked to the customers, whereas here we focus on service providers’ perspectives only and their value proposition for achieving sustainability in logistics. Our working hypothesis is that businesses which provide products and services will prioritize financial, F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 621 functional, and emotional value propositions over epistemic and conditional value propositions. Epistemic value (i.e., value accrued through new knowledge) can be beneficial specifically to end consumers rather than service providers. Service providers are continuously pressured by environmental regulations and thus already familiar with sustainability added value than consumers. Similarly, understanding the conditional value of green logistic services would be challenging as such services are new to the market and would require in-depth understanding of the customer context in which logistics services are purchased. In summary, our framework for sustainable value propositions is broken down into three dimensions: 1. Financial (Borg et al., 2020): The financial aspect focuses on cost reduction and avoidance, specifically in the process of fuel consumption, regulatory charges, and material costs. This implies that sustainability efforts can lead to significant savings and more efficient resource utilization from a financial perspective. In addition, by taking sustainability initiatives and abiding by the regulations, firms can avoid regulatory penalties. 2. Functional (Sheth et al., 1991; Gilly et al., 1992; Sweeney & Soutar, 2001): Functionality is enhanced through improved performance efficiency, which includes speed, waste reduction, fuel consumption reduction (by decreasing fossil fuel dependency), and optimized routing to reduce idle time at ports. Additionally, the sharing of real-time data and information is highlighted, suggesting that timely and accurate information flow can greatly enhance operational efficiency. Moreover, replacing fossil fuel with renewables also indicates sustainable performance improvement. 3. Emotional (Sheth et al., 1991; Gilly et al., 1992; Sweeney & Soutar, 2001): On an emotional level, the goal is to elicit a positive reaction. This suggests that sustainability initiatives should also resonate with customers and other stakeholders on a level beyond mere financial or functional benefits, possibly enhancing the company's reputation. 4. Digital technologies: serve to achieve logistics sustainability, suggesting that leveraging technology is central to making these dimensions work together effectively in pursuit of sustainable operations. 622 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION A key objective of this framework is the reduction of carbon emissions, aligning business practices with environmental sustainability goals. Figure 1: Framework for sustainable value proposition dimensions Source: adapted from Sheth et al. (1991), Gilly et al. (1992), Sweeney & Soutar (2001) 3 Methodology This study’s aim is to examine sustainable value propositions of logistics services. With tightening emissions regulations and standards, the cases studied here exemplify companies that meet these challenges by providing innovative, environmentally sustainable services to their customers. The primary focus in each case was the value proposition; our secondary focus was to illustrate how digitalisation supports these value propositions. Case selection criteria: The cases were selected through convenience sampling, because there is a limited number of sustainable logistics services on the market with sufficient public data available to study. The selection aimed to contrast and compare services offered by both large and small businesses, covering global and regional scopes, as well as single and multi-modal transportation options. Consequently, this methodology resulted in the inclusion of four cases in the final analysis: two cases represent large, global, and multi-modal logistics services, two cases contrast as small, local, and single-modal transportation services. Data: The data analysed in this study is secondary data that was collected from public sources, such as companies’ web pages, corporate responsibility reports, press releases, articles, or news items. The data was collected through online searches with F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 623 the company and service name, Web of Science and Scopus databases for academic publications on sustainable logistics or publications containing the exact service name. Method and analysis: Following Yin (2012), we used the case study method to investigate each value proposition in each company’s service business model. The analysis of each case is descriptive in that it provides details on specific dimensions of the value proposition as illustrated in Figure 1. We conducted a multiple-case study and cross-case synthesis of the qualitative data (Yin, 2012). All four authors contributed to the analysis to ensure consistency and triangulation. Cross-case synthesis initiated with a review of key-information on individual case studies. Later, after the authors searched for patterns across the four cases, the interpretation of findings has been organized according to the sustainable value proposition dimensions in the multiple-case study (Figure 1 and Table 1). 4 Results 4.1 Small, local & single mode case descriptions Posti Green Freight (Posti, n.d.) is a fossil-free land transportation service offered to business customers. The service is operated based on Book & Claim model (Centre, n.d.), where the customer purchases a share of fossil-free transportation service. Based on the purchase the share of fossil-free transportation is earmarked to the customer. The customer pays a premium for the green transportation service. The Green Freight service is produced with fossil-free energy sources (electricity, biogas or green hydrogen). The customer receives an emissions report four times a year. External verification is in place to ensure the use of fossil-free energy and prevent double-counting. Viking Line green marine transportation service (Viking Line LNG, 2024) has been available for passengers since the summer of 2023, and it has recently been extended to include the B2B segment. The service is based on biofuel surcharge and available only on routes with appropriate vessels and infrastructure in place for using biofuels. Customers opt to pay the biofuel surcharge when booking the transportation service. Viking Line has calculated the energy it takes to realize the purchased service and orders the equivalent amount of biofuel. The calculation of 624 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION the energy required is based on annual averages to even out the impact of severe weather conditions. The logic of this green service is that customer demand defines how much the service provider is purchasing biofuels. 4.2 Large, global & multi-modal case descriptions Maersk Eco Delivery (Maersk ECO Delivery, n.d.) is a multimodal decarbonization solution to green ocean logistics by replacing fossil fuels with biofuels or methanol. Maersk’s Eco Delivery uses “mass balance chain of custody” model to reduce emission with sustainable fuels even in specific shipments across its global network. Customers are not required to invest long-term and have the flexibility to apply Eco Delivery to their specific location and product need. The payment model for this service is based on greenhouse gas emission reduction per trade. In practice, customers ask sales representatives to add Eco Delivery in their contract and Maersk provides yearly CO2 savings certificates to their customers. DHL Go Green solution (DGF_2017_GoGreen-Solutions_EN, n.d.) is a portfolio of multimodal services to reduce CO2 emissions in the logistics transportation chain. The Go Green solution portfolio consists of three offerings: carbon transparency, carbon footprint optimization, and carbon emission offsetting. Carbon transparency is a digital toolkit consisting of a carbon report, carbon dashboard, and DHL quick scan. Carbon footprint optimization is a service that helps customers plan their transports more efficiently and sustainably by utilising modal shifts or consolidation of shipments. These services either provide above-industry average carbon efficient freight services or completely replace heavy fuel with biofuel. Carbon emission offsetting allows customers to offset their carbon footprint with certified and verified climate protection projects. DHL Go Green solution customers receive annual reports and certified carbon reports. Customers need to pay a premium for the service. 4.3 Findings from the cross-case analysis of value propositions in logistics services The cases examined differ substantially in service offerings and regarding the availability of public data on their services. For the global cases - Maersk Eco Delivery and DHL Go Green services - there was detailed information available and F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 625 hence our analysis was able to capture their services wholistically. As for the local cases - Posti Green Freight and Viking Line Green Transportation Service - only a top-level value proposition was available from public resources. In practice, this means that even though these companies pursue carbon reduction for themselves and their customers, detailed value propositions in different dimensions (Figure 1) were not found at the time of the study. Posti Green Freight and Viking Line Green Transportation Service were only recently launched on the market, which may be one of the reasons for the scarcity of available information. Next, we turn to analyse the cases against the framework developed in Figure 1. 4.3.1 Financial value proposition Under the financial dimension, we observe that DHL and Maersk services, customers retain the power to govern their cost. For example, customers do not need to commit to the Maersk Eco Delivery service long-term, but they are able to obtain the service whenever needed. Moreover, customers always know the price they must pay and therefore they can circumvent price uncertainty and futureproof their logistics costs. Similarly, while DHL’s Go Green solution promises “cost optimization opportunities”, the means to secure that promise is different from Maersk. DHL provides a “carbon dashboard”, where customers can investigate cost improvement areas by themselves. Paired with their logistics consulting services, DHL offers “transport network optimization” expertise that will ensure cost reduction and profit maximization potential. For Posti and Viking Line, no information on financial value proposition could be found. 4.3.2 Functional value proposition In the functional dimension, we identified several technology-driven performance improvements, which are likely to increase logistics sustainability (Fig.1). Waste reduction is observed in Maersk’s and Viking Line’s operation. Maersk reuses waste and residues for fuel feedstock, which in turn decreases waste. Likewise, in Viking Line’s liquified biogas used in their ships is produced from waste and residues from households, agriculture, and food industries. In addition to sourcing food waste from industries, Viking Line recycle the ship’s food waste into biogas production. Route optimization is found in DHL’s Go Green solution value proposition under the carbon dashboard service. There, customers can model their 626 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION entire supply chain, simulate multiple transportation modes, and find the optimal route with the smallest carbon footprint. Information or data sharing is another feature in DHL’s carbon dashboard report service. DHL offers an “end to end” supply chain visibility which integrates reports from all service providers in the value chain. Next, DHL guarantees carbon efficient ships in the marine portfolio with the claim of “5% more carbon efficient than industry average”. This also fulfils the performance efficiency value proposition; however, the basis of such efficiency gain is not clear due to limited information. Posti and Viking Line replace fossil fuels with renewables and leverage data to define the amount of energy needed to produce the service bought by the customer. 4.3.3 Emotional value proposition The cross-case analysis revealed several types of value propositions connected to emotional responses employed by the companies to deliver messages of their environmental solution. These are “creating good feeling and positive image”, “convenience and flexibility of the service”, “commitment to green transition”, “trust and credibility”, “taking responsibility and being transparent”, “customizable service” and “adaptable service per external changes”. The first 4 were mentioned more often than others. Creating a good feeling for customers and establishing positive brand image are communicated by two of the cases, Posti’s Green Freight and Viking Line’s Green Transportation services. Posti and Maersk propose convenience and flexibility of their service offering, Viking Line and DHL do not communicate such propositions. For example, to choose Posti’s Green Freight service, no separate agreement is needed; with Maersk, customers can choose the Eco Delivery service flexibly according to their location, product preference, and sustainability agenda. Commitment to the green transition is found to be another example of value proposition in the case of Maersk’s Eco Delivery and DHL’s Go Green solution. Maersk’s commitment is visible through its promise to go beyond the legislative boundary to reduce emissions. On the other hand, DHL’s commitment starts from the top-level discussions on climate impact, which is operationalised through their core businesses. In relation to ttransparency, Maersk, for example, wants to be credible by providing certification of traceable feedstock source and proof of sustainability with CO2 certificate. They point out that they partner with trusted certification bodies. Similarly, Viking Line wants to “conduct business in a transparent and proper manner” to gain customers’ trust. While there are no explicit F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 627 value propositions on transparency in Posti and DHL’s case, there is implicit transparency as value proposition in DHL’s carbon dashboard solutions. In general, all case companies provide reports, which indicates their attempt in being transparent about their carbon emission data. Finally, two other value propositions are observed, that stand on their own. First is customisation: as part of DHL’s Go Green solution, DHL logistics consulting offers customizable environmental performance improvement recommendations. Second, adaptability is communicated by DHL as well; they promise to adjust their services as per the regulations changes so that their customers can reach their own environmental targets. 4.3.4 Digital technologies supporting sustainable value propositions From the customer’s perspective, our cross-case analysis reveals that digitalization and data support logistics transportation service provision at key touchpoints: 1. Pre-service purchase, when customers evaluate among and choose transportation alternatives that best meet their needs. 2. Tracking during service delivery 3. Post-transport, by offering visibility into the emission data generated and validated by third parties as well as reporting for the customer. Based on the publicly available data, it is challenging to paint a complete picture of the role of data and digitalization in the service delivery process. Posti Green Freight uses data in allocating the share of fossil-free service to the customers that have paid for it. In a similar vein, Viking Line’s Green Transportation service uses yearly ship fuel consumption as a baseline to calculate the energy needed to transport the passenger or the cargo that purchased the green service and then, Viking Line purchases the equivalent amount of renewable fuel. Although Maersk offers an AI-driven platform called “StarConnect” pooling vessels’ big data to forecast and thus improve fuel consumption need, energy efficiency, and reduce carbon emissions (A.P. Møller - Mærsk A/S, 2023, p. 29, 45), the company does not disclose whether StarConnect is related to the solution under investigation in the Eco Delivery case. 628 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION Table 1: Summary of the value propositions in the four sustainable logistics service cases Studied Cases Value proposition dimensions Financial Functional Emotional Posti Green Freight n/a* Replace fossil fuels (with biogas and electric transportation); Aid in achieving sustainability targets & compliance; Verified emission report Good feeling & positive image; Convenience & flexibility Viking Line Green Marine Transportation Service n/a* Replace fossil fuels (with Bio-LNG); Waste reduction; Aid in achieving sustainability targets & compliance; Certified emission report/ Sustainability certificate Good feeling & positive image; Responsibility & transparency Maersk Eco Delivery Cost reduction Replace fossil fuels (with biofuel and methanol); Waste reduction; Aid in achieving sustainability targets & compliance; Certified emission report Convenience & flexibility; Commitment; Trust & credibility DHL Go Green Solution Cost reduction (through optimization); Profit maximization Replace fossil fuel (with biofuel); Carbon efficiency; Route optimization; Information sharing; Aid in achieving sustainability targets & compliance; Certified emission report Commitment; Customization; Adaptability Digital technologies: carbon dashboards, data analytics to calculate the share of fossil-free fuel provision, certified emission reporting, digital tools for route simulation and optimisation * Refers to the situation when a) when information could not be retrieved from public sources and/or b) at the time of writing, the value proposition does not include this dimension. There are notable differences between the cases in what kind of data is visible and reported to the customer. DHL is perhaps the most advanced in this respect, offering customers carbon reports, carbon dashboard, and DHL quick scan. customers can simulate and optimise routes with modal shifts or consolidation of shipments. The customers of Posti and Viking Line can opt for the green service when booking their journeys, typically online. Posti offers its Green Freight customers four times a year an emission report that shows the share of fossil-free transportation allocated to the company. Viking Line has been offering biofuel F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 629 surcharge to freight customers only recently and, as of now, is not communicating publicly how the emission reductions are reported to the freight customers. 5 Discussion, limitations, and conclusions While previous research has shown logistics providers’ failure to share cost and benefits with partners and differentiate themselves from competitors for sustainable logistics (Bask et al., 2018; Martins et al., 2019), our analysis suggests that digital solutions may help providers deliver both financial and functional value propositions and contribute to sharing costs and benefits of decreased emissions. Company size and scope (local vs global) also link to the value proposition capability: while the local cases do not offer financial value to their customers, the two global cases promise cost reductions through optimization to the customers., at least in the cases of global reach the global cases appear more mature compared to the local ones, also representing the transportation chain more comprehensively, even door-to-door, which means improved possibilities of multi-modal optimization. Digitalization was found to be a distinguishing factor among the cases: large global companies leverage more advanced digital technologies compared to smaller, recently established services. By examining how logistics service providers collate data on emissions, utilize and verify the data and deliver reports, the study expands our understanding of the role of data and digitalization in logistics sustainability. Digitalization and data are found to support or enable the green transportation services throughout the entire customer journey. This study also illustrate that digitally savvy firms can propose multiple value dimensions whereas the scope of new and cross dimensional value proposition for digitally young firms is limited. Digitalization facilitates the collection and calculation of emission data, which is a backend but central task for supporting sustainable logistics. For the local companies, providing emission reports to their B2B customers is functional value proposition, however, larger companies have moved further by incorporating digital elements (check table 1) in offerings and therefore both functional and financial value proposition are visible in collection and calculation of emission data. 630 37 TH BLED ECONFERENCE: RESILIENCE THROUGH DIGITAL INNOVATION: ENABLING THE TWIN TRANSITION Furthermore, we observed interconnected relationship between functional and emotional value propositions. All examined case companies communicated reduction of fossil fuel use as their core functional value proposition. In addition, all companies verified their carbon emissions reduction calculations through an independent third party. This independent certification process in turn not only adds credibility to the environmental claims of the services but also demonstrates their commitment to sustainability. By doing so, these companies establish trust and goodwill among consumers who prioritize environmental responsibility. Our findings are consistent with previous studies that businesses can address environmental issues through the value propositions in their products and services (Awan, 2020; Baldassarre et al., 2017; Chevrollier et al., 2023). In this study, we also uncovered various examples of emotional value propositions in the sustainable logistic services. The services analysed connect emotions with their offerings, demonstrating how sustainable logistics services assist customers in reaching their sustainability objectives. This communication builds trust in service providers as reliable partners. The number of emotional value propositions found in the case companies in comparison to their financial value proposition may indicate that companies are aware of the importance of communicating about their sustainability initiatives to their customers. On the other hand, the smaller service providers emphasize emotional value over functional or financial value, whereas the more mature service providers focus on functional and financial ones. Customers value services that solve their problems or meet their needs, which is an essential consideration for service providers in building a sustainable value proposition (Foss & Saebi, 2016; Schneider & Spieth, 2013; Chevrollier et al., 2023) as well as services through which customers gain certain benefits (Patala et al., 2016; Osterwalder & Pigneur, 2010; Laukkanen & Tura, 2022). In the case of green logistics services, customers increasingly demand reporting and transparency in service providers’ operations. Customers greatly benefit from obtaining verified emission data: first in ensuring compliance, second establishing a baseline, and third following up on their own progress in emission reductions. From our cross-case analysis, we observed that all companies provide reports that contain emission reduction data, which becomes a necessary requirement for green logistics services. Differentiation among service providers is based on additional aspects, such as the inclusion of digital elements in offerings as discussed earlier. F. Khan et al.: Exploring Sustainable Value Propositions in Logistics Services – How Digitalization and Data Support Greener Services? 631 This research has focused on exploring value propositions and the role of digital technologies in achieving sustainable transportation solutions from the viewpoint of service providers. This perspective, while valuable, presents certain limitations. First, our analysis is confined to the value propositions as presented by service providers, which does not encompass the customers' perspective, i.e., the value perception. Understanding how customers view and value these sustainable practices could significantly enrich the narrative around sustainable logistics and offer a more rounded perspective on the effectiveness of these services. Another limitation in our study is the reliance on publicly available data. Although we have opted for the service provider's perspective with an assumption that the quality of such data would suffice for customers to evaluate potential partners, this approach limits the scope of our analysis. Finally, our sample of four case companies inhibits the generalizability of our findings. As the relationship between sustainability and digitalization is expected to become more pronounced and complex, this twin transition provides a fertile ground for future research to delve into the role of digital technologies to help improve sustainability in logistics. 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