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Árni Halldórsson, Caroline Sundgren and Jessica Wehner

This chapter focuses on sustainable development of supply chains through energy efficiency, with a particular focus on logistics. It is argued that energy efficiency allows managers to unite economic and environmental reasoning in their decision-making and actions. First, consideration of different system levels such as activities, technology, actors and design of supply chain opens up a broad range of improvement options. Managers must identify system levels in which improvements should take place. Second, managers must understand how principles of supply chains such as flexibility, cost-efficiency and responsiveness set the conditions for energy consumption of logistics activities. To illustrate how improvement efforts can be addressed, the chapter presents examples of four different system levels: freight capacity, last-mile fulfilment options (downstream), sourcing and supply management (upstream), and reverse logistics and closed-loop supply chains.