Critically Analyse the Evolving Role of Ports as Logistics Hubs in International Supply Chains - Essay Example

Download file to see previous pages Case Example - Role of Rotterdam Port as a Logistic Hub in International Supply Chain 10
Conclusion 13
References 14


Introduction

Ports are often viewed as the geographical mediums which contribute to the business in any country. Ports facilitate to entice numerous trading activities within different nations. Ports not only act as a transport system, but also act as a medium of financial activity. Ports are logistic hubs which play a vital part in international business network (Lugt & Nijdam, 2005). Due to the continuous changes in global market context, the international business has changed significantly. Globalisation has eliminated numerous trade restrictions formerly imposed by the government of different countries which in turn has amplified the seaborne trade. The unprecedented growth of seaborne trade has generated huge impact on the logistics and global supply chain. The international supply chain has become quite multifaceted and this trend is stimulated by the demand of people all over the world. In line with the increasing change of demand, the logistics chains are changing continually with the improvement of ports. The paper is concerned with analysing the importance of port in global supply chain. The objective of the paper is to assess the various activities of port and how it has evolved to become one of the significant parts of logistics.
Literature Research
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America, Africa and Middle East have demonstrated significant growths in import. The trade growth is higher than the global Gross Domestic Product (GDP) growth rate. The progresses in global GDP and merchandise business have essentially impacted on the seaborne business and the demand for transportation services. In the year 2007, the cargos transported through ports were forecasted to be around 8.02 billion tonnes which is similar to the yearly growth rate of 4.8%. In transportation, tanker represented almost one third of international cargo transportation. In seaborne trade, Asia was in the leading position with 40% share subsequently America which accounted for 23% share in seaborne trade in 2007. The shares of Europe, Africa and Oceania were 18%, 10% and 9% respectively. These three regions represented almost 80% of total freights (Buck Consultants International, 2009). According to an estimation of UNCTAD, the global seaborne trade will grow by 44% by 2020 and 88% by 2030 encompassing almost 11.5 billion tonnes and 16.04 billion tonnes correspondingly (Buck Consultants International, 2009). Dynamics of International Logistics Logistics is an activity which is liable for flow of materials. Usually, international logistics has been viewed as an integral part of commercial strategic planning. Logistics is considered as an unavoidable expense and appears within the boundaries of business. Organisations search for raw materials internationally in order to maintain low expenses. The expenses of logistics represent higher portion of sales. In present days, for several large multinational organisations, logistics expenses encompass more than 10% of sales revenue. These expenses are determined by internal as well as external aspects. Internally, ...Download file to see next pagesRead More