Transport and Logistic Management: Crucial Transporters in Australian - Coursework Example

Transport and Logistic Management: Crucial Transporters Research Paper Name of Student Student Number Institution Course Code Name of Instructor Date Abstract Transport and Logistics Management is one venture The Crucial Transporters provides value to all clients in need of transportation and logistics cycle. With the requirement of 3PL or 4PL services, enhanced visibility, as well as operational efficiencies has posed extra importance in the enhancement of the company’s ability to collaborate with both customers and partners in the realisation of success in the transport and logistic industry. Crucial Transporters customer base constitutes various 3PL or 4PL organisations (Browning, 2003). With respect to the services offered, this research paper assesses the logistics and transport 3PL and 4PL issues in the Australian and abroad logistic industries. Crucial Transporters is a uniquely qualified company to address any arising 3PL or 4PL’s needs in the vicinity. Transportation has a key role in the Supply Chain Management. The respective roles and modes of transportation are critical for consideration to understand the importance of supply of goods and the eventual logistical proliferation. Logistic management can be termed as the science of balancing the storage (stock) and the movement (flow) of inputs and outputs to realise the demand and minimize the total cost while at the same time delivering enhanced efficiencies (DOTARS, 2002).Logistics and value added facilities along with enhanced intermodal transportation facilities can ensure increased trade and economic growth within a given region. With the contemporary world’s global information economy, one ought to look into the broader system to comprehend the changing of global structures and the new technologies impacts to the regions. The internet technology is enhancing the flow of goods and services via the supply chain, heightening the response to consumer and business demand, as well as delivering new products to market faster than ever before. Table of Contents Introduction With the advancement of logistics since the mid 20th century, there have been a number of researches aimed at evaluating and getting solutions to challenges attached with diverse applications (Carbonara et al, 2001). Owing to the trends that have been taken worldwide: nationalisation and globalisation in the past decades, the significance of logistics organizations have been on the increase in number of areas. The key element with regard to a logistic chain is the transportation system, which joins the diverse and separate activities (Chang, 1998). On critical analysis, we find that the transportation system takes one-third of the quantity in the costs of logistics and systems of transportation to enhance the performance of logistics system extensively. A clear example is the requirement of transport in the manufacturing industry. Transportation system is necessary and imperative in the entire production procedure (Lambert and Stock, 1999). Starting from manufacturing to delivery to the final consumer and returns, the transportation systems are highly crucial. In this regard, it only calls for good coordination among the components that would bring benefits to a maximum. This paper aims at assessing the logistics and transport (3PL/SPL) issues in Australian or overseas logistic industries. This will be achieved through the collection of relationship between transportation and logistics systems via collecting and analysing diverse application cases and practices in logistics from literatures. The paper starts with looking at the role of transportation in supply chain management then followed by the roles and mode of transportation. The management of flow of logistics has also been looked into clearly, as well as the mode and cost trade off. Further, the federal, economic and safety regulations will be evaluated followed by the export-import transportation issues. Finally, the customer delivery and service level will be evaluated, as well as the technology in transport management. This research has been undertaken with the aim of helping other logistic management teams, researchers and transport planners to define and understand the basic views of logistic and its diverse applications and relationships among logistics and transportation. One major study to learn from this research paper is the provision of an understanding of transportation’s role in the movement of products around the world via various modes like the rail, motor, air, and water. Objectives to the Study Measure the development and growth of the 3PL and 4PL industry in the Transport industry across Australia and diverse regions in the world. Ascertain how customers select and manage the 3PL/4PL providers. Identify the customer needs and how best the 3PL and 4PL providers are responding to the needs. Outline the topics regarding the transport and logistic management towards effective supply chain management. Provide strategic assessment of the future of transport and logistics industries with respect to 3PL and 4PL issues. Literature Review Goods once produced have to be transported from the industry through the wholesalers to retailers and eventually get to the end product user (consumer). Transportation services become imperative with special interest in the movement of goods, as well as the introduction of a supply chain ensues. According to Australian Transport Council (2009), the transport and logistic industry provide a foundation for all communities. The industry which incorporate the Logistic Management, Road Transport, Supply Chain, Warehousing, Ports Rail Sectors and Aviation. The industry in Australia supports the economy contributing to approximately 14.5% of the GDP1, while bringing employment to approximately 1.2 million people: this equivalent to 13.9%2 of the national workforce aggregate. The Role of Transportation in Supply Chain Management The role played by transportation in logistic system is more complicated than carrying goods for the proprietors. Looking at the operation of transportation, it is clear that it determines the efficiency of moving products. The advancement in techniques and management principles enhances the moving load, delivery speed, service quality, operation cost, energy saving and the usage of facilities (Meixell and Gargeya, 2005). Transportation takes critical part in the manipulation of logistic. Therefore, the review of the prevailing conditions, there is a greater need for a clear framework of logistic policies and proper transport implements and techniques to link the producing procedures. The systems of transport ensures that goods and products become movable and provide timely , as well as regional efficacy to promote value added under the least cost principle (Miller and Blair, 1985). Transport affects the outcomes of logistic system and cost of transport could be regarded as a restriction towards the realisation of objective market. As a manager, the choice of transportation mode is very critical for ascertaining and approving. This is with prior account for inventory costs when selecting a mode of transportation. In regards to costs, a mode with higher transportation costs could be justifiable if the resultants effects are significantly lower inventories. Roles and Mode of Transportation With regard to ten transportation modes, there exist six of them incorporating air, marine, rail, truck, pipeline, and finally space (Stephen, 2004). The logistical approach of transportation may incorporate the utilisation of virtually a number of these modes interchangeably to affect the transportation process. Whenever we have the freight and containers moving on the various modes and often switching among them; the process is termed as intermodalism (Van, 2001). The intermodal transportation system is shaped by at least three forces namely; the new emerging technologies, fast changing market and trading trends, and the deregulation and regulation processes. Other factors influencing the system are international boundaries and custom procedures, supporting infrastructure, as well as the efficiency and effectiveness of labour. For effectiveness in goods transportation and delivery; Logistics play a crucial role in the transport and storage of goods and materials. There are a number of transportation modes which are highly critical in the movement of goods and effective logistical measures (Wang and Chandra, 2007). The modes of transport include among others; trucks, rail, air, package carriers, water and pipeline. The trucks constitute of the Truck Load (TL) which are utilisable easily, possess consistent service and backhaul. Further, there is the Less Than Truckload (LTL) which is the average revenue per ton-mile. Their major issues constitute the location of consolidation facilities, utilisation, and vehicle routing, as well as overall customer service. The rail has its key issues as scheduling to the reduction of delays or the service improvement, off-track delays, yard operations and variability of delivery times. The mode of transportation is also critical in its way and has its key issues entrenched in the location or number of hubs and bases or crew bases, the schedule optimisation fleet assignment, crew scheduling and yield management. The package carriers incorporate companies that carry small packages ranging from letters to shipments of up to 150 pounds. This mode of transport is expensive, rapid and reliable delivery; possess small and time-sensitive shipment, as well as embracing preferred mode for electronic business. Further, the consolidation of shipment is particularly imperative for package carriers utilising the use of air as the primary method of transport. The water mode of transportation is limited to given geographical areas. This only happens where water bodies are present. Ocean, inland waterway system, coastal waters are critical in regard to utilisation of the same to achieve considerably and realise effective delivery of goods. This mode of transport is highly effective in the transportation of very large loads at very low costs though it is the slowest mode; it is the dominant in the global trade. The pipeline mode is primarily utilised in the transportation of crude petroleum, refined petroleum products and natural gas. This mode is characterised by high fixed costs but is highly crucial for large and predictable demand. Managing Flow of Logistics In the recent past, the management of logistics flow is becoming a crucial activity for competitiveness. According to Stephen (2004) globalisation is transforming the ways in which companies arrange their production and distribution activities with regard to the increased spatial complexity of supply chains. Without well-developed transport systems, the logistics would be a nightmare and realising its advantages into full play a mirage. Good transport systems in logistics activities could eventually provide better logistics efficiency, reduce operation cost, and enhance the quality of service delivery. To achieved effective management of flow of logistics; this calls for the improvement of transportation systems, which calls for the effort of both the public and private sectors. With an efficient and effective logistic system, this could see the realisation of increased competitiveness and of the government and enterprises. Further, firms have been faced with the reality of redesigning their supply chains for survival in the current global changes, both at the local and international level (Meixell and Gargeya, 2005; Carbora et al., 2001). This is critical for purposes of sustaining competitiveness and dealing with the new orientation of customers and suppliers. On the same note, the growing attention towards the environmental sustainability has made the organisations to manage their logistics activities evaluating the environmental effects (Wang and Chandra, 2007). There are two main perspectives according to Albino et al (2008), used in the analysis of logistic flows. These include the spatial and operational strategies that pursue different goals. In specific terms, the production methods belonging to a supply chain, as well as their inputs and outputs; spatial oriented analyses can be performed so as to tackle the issues relating to traffic congestion, pollutant emissions, transportation infrastructures, and the availability of work. Therefore, based on the analysis of policies geared towards the improvement of transportation sustainability, as well as the reduction of arising negative impacts to the environment which are identifiable. The adopted approaches are critical in the evaluation of 3PL or 4PL of the economic and environmental performance of their activities. Conversely, the modelling of transportation as a basic input can be used to investigate the impacts therein with respect to supply chains. Mode and Cost Trade Off Transport system is the most essential economic action amid the apparatus of business logistic systems. Close to one third to two thirds of the expenses of any enterprises’ logistic costs are used on transportation. According to the National Council of Physical Distribution Management (NCPDM) of 1982 as cited in Chang (1988), the transportation cost accounted for an average of 6.5% of market revenue and 44% of logistic costs. With respect to BTRE (2001), it stated that Australian gross value added of transport, as well as the storage sector was $34, 496 million in 1999-2000 which accounted for 5.6% of the GDP. With respect to transportation costs, it incorporates the means of transportation, corridors, pallets, containers, labours, terminals, and time. The enhancement of item of higher operation cost can get better results. Thus, logistics mangers must comprehend transport system operation in details. Further, with regard to this sub-topic, it is critical to assess the temporal aggregation; which is the process of combining orders across time. This reduces the transportation costs owing to its results in larger shipments and brings down the variation in shipment sizes. Nevertheless, temporal aggregation reduces customer responsiveness. Transport Planning, Control and Strategy Comprehending the global perspective to a region’s trade and transportation system offers challenges, as well as opportunities to develop facilities of tactical significance in the flow of goods, supplies and people both at the local and international level. It calls for strategic measures to enhance the better understanding of the processes involved in the creation of such facilities. This calls for the utilisation of system approach. 3PL and 4PL 3PL and 4PL are critical in transportation. They are asset based and will always remain as asset based. Their internal incentives are focussed on selling transportation and warehousing services. Third-party logistics (3PL) is a firm that provides multiple logistic services for use by customers. The services incorporate transportation, cross-docking, warehousing, packaging, inventory management, and freight forwarding. The third party logistic providers include the freight forwarders, courier companies, other companies integrating and offering subcontracted logistic and transportation services. Third party logistics involves the use of external organisations to execute logistic activities having been performed in the organisation itself. It is critic al to note that 3PL incorporates any form of outsourcing of logistics activities that were initially being performed in-house. To expound on this, a clear example is when a company having its own warehousing facility decides to seek the services of an external transportation firm, this would b probably be an example of a 3PL (Baziotopolos, 2008). Looking at logistics critically, it can be termed as an emerging business area in the majority of countries. Four-party logistic providers (4PL) also called lead logistics provider were initially only consulting firms specialising in logistics, transportation and supply chain management. Though they are at times termed as a non-asset-owning service provider, their main role is to offer a wider range managing of the whole supply chain. Fourth party logistics with real dealing must present a way for customers to undertake control of their inbound supply chains. All firms have the mandate of providing every customer with the technology, the people and the procedure to manage purchase orders, suppliers and shipment to the relevant market place. The firms can structure the relationship and the process sin a way that best meets the requirements of the customer, rather than the customer having to accept what the outsourcing provider has to offer. One critical observation regarding the undertakings calls for the diverse relationships absolutely require electronic interface so as to bring everything in place. This is with respect to embracing the emerging technology and keeping in pace with the growing market dimensions. The concept of 4PL provider can be termed as an integrator assembling available resources, capabilities and technology of the mother organisation in cooperating with other organisations to design, build, and run comprehensive supply chain solutions. Fourth-party logistics is an elite outsourcing capability shared by a majority of common 3PL. Close to 75% of all 3PL provide lead logistics and 4PL capabilities with regard to Inbound Logistics’ 2010 3PL Perspective market research report that was composed after a survey of more than 300 service providers (O’Reilly, 2011). Comparing the 3PL and 4PL, we find that, the former targets a function whereas the latter targets the management of the entire process. 4PL has been described as an overall contractor managing other 3PLs, truckers, forwarders, custom house agents among others with specific responsibility of a complete process for the customer. Federal, Economic and Safety Regulations Effective transportation and logistical finds its sanity and relevance with respect to the regulation placed to safeguard the same. The evolution and transportation economic regulation has also been characterised by jurisdictional conflict among the federal and national regulatory agencies. A good example is the American transportation economic regulation which has brought perplexing. The conflicts between federal and state economic regulation encompassed two jurisdictional issues; 1) what constitutes the interstate commerce and2) when is the regulation of interstate transportation impair interstate commerce? With respect to this, significant constitutional questions do arise pertaining regulatory conflicts that remain unresolved. A clear example is the ideological conflicts arising in the air transport. All these bring about the idea of government intervention in the regulation of transport and logistics from various centres within its jurisdictions. Export-Import Transportation Issues International business cannot be realised without the utilisation of transportation and logistic services to enhance effective goods delivery. The importation and export of goods in regard to transportation has its share of issues that impact to the effective service delivery. Customer Delivery and Service Level The last two decades has seen considerable changes with regard to Business Management and in specific the logistics industry. There has been remarkable Total Quality Management or what can be termed as the progressive elimination of unwanted deviations in products and processes. There has been utilisation of proper and effective concepts regarding the optimisation towards the delivery of full performance with regards to the customer at hand. For the customer to keep coming back for the same services and not looking for other providers there is a need to ensure the client gets full satisfaction. It is evident that the high proportion of customers taking their businesses elsewhere was initially not satisfied with the services prior offered to them. It is highly critical to note that value managed relationship is imperative in every business venture. It is advisable to retain an old customer as it is more profitable than getting a new one. Increased profitability entrenched in high customer service levels arise owing to amortising the cost of customer acquisition, declining account maintenance costs, reduced price sensitivity, promotion via word of mouth to others, rising barrier to competition and their purchase of ancillary products. Logistic managers have the mandate of knowing that the only way to come up with loyal customers who give them repeat business is the delivery of goods on time and in full. This is a critical strategic goal that calls for balancing always against the cost of the necessary delivery services. To enhance the level of service delivery and reliability; this can be achieved through utilisation of expensive forms of transport, as well as hiring more people to enhance customer support. Technology in Transport Management The changes in the transportation infrastructure have always given shape to the commercial location and regional development. With respect to the five waves of technological evolution related to transportation which has taken place in the past quarter of a century. According to Kasarda (2002), the first were the seaports, followed by rivers and canal based developments. The third wave was the railroads followed by highways and the last were the airports. The freight transportation centres have eventually developed for the sake of incorporating numerous modes of transportation with the overall goal of enhancing logistical efficiency in the trade and movement of goods. The technological advancement has also seen the full integration of warehouse management system. The transport information available from the web portal and can accessed via the order numbers, customer name, date, carrier and many more. These have been made effective via the utilisation of technology. The presentation of the freight with clear and accurate labelling that complies with carriers requirements, enhances the carrier’s delivery, as well as tracking performance and thereby enhancing the likelihood of the customer acquiring their goods at the appointed or set time. In regard to technology, there is also need to look into the role of IT in the transportation. The complexity experienced with respect to transportation decisions demands for the utilisation of IT systems. The IT software is critical in the assistance of identifying optimal routes by reducing the costs that are subjective to delivery constraints. Further the optimal fleet utilisation is critical, as well as the GPS applications. Discussion The transport and logistic industry is the key to guaranteeing the competitiveness of companies in Australia and the global world. The sector has made considerable growth and development potential and principally acting as the drive power of private sector development and the economic growth for other sectors of the economy. In spite of the progressive improvements seen in the transport and logistic industry with the onset of technology, structural logistical problems persist bringing about barriers in the exportation and importation for goods. This leads to poor performance of local business dependent on the imports and the international export business which is critical for the host country. With effective notable differences among countries, generalisation of transport and logistical problems in the industry would have exceptions with major problems among the business persons being deficient of the logistic education and training, limited access to enhanced and better practices in the industry, as well as technologies and methodologies crucial in the improvement of supply chain management performance. Subsequently, the difficulty of accessing 3PL and 4PL logistic services, as well as lack of collaboration towards the achievement of sufficient capacity to compete internationally has posed a major challenge to the business world. There exists several factors that characterise the position 3PL and 4PL co-operators undertake in the implementation process to do away with deficiency of each other or even creating business among themselves. This makes 3PL and 4PL emerge as competitor entities in the logistics industry. Nevertheless, they work side by side in the management of conflicts making the relation an interesting business for every participant in the venture. With respect to competition queries, a key factor remains the information management via the information technology. On top of the highlighted obstacles, there exist structural problems that are exclusive for given nations. These comprise inadequate multimodal connectivity, inadequate availability of logistic centres to deliberate on performance and the inefficiencies of port operations. Further, there exist the difficulties associated with complexity of customs inspections, as well as their associated processes. On critical analysis of the situations discussed in this paper, there has been effective measures widely tested and available to address the issues arising and those implemented by some nations in global helm. Such measures incorporate the embrace of ICT and technological in the logistical service delivery to enhance operation and improve on the services rendered. The transportation and logistic industry is a growing sector and one that cannot be left with being enhanced for growth and development to ensure effectiveness and efficiency. Conclusion and Recommendations The trends undertaken towards globalisation and logistics are aimed at reshaping the transport activities. New strategic measures of logistical nature have continued to alter the nature and culture of operations in the companies, there crucial need for governments to match the observed changes. The strategic advantage with respect to the logistical measures undertaken is likely to be most pronounced in terms of improvements in coordination and planning as a result of transport efficiency results. The 3PLs and 4PLs capabilities shippers most valuable is whenever they are entering the market and are visible. With respect to competition a key factor is the embracing of technology, this is what represents a strong aspect for the business of the 4PL. On the same note, the divergences brought about among 3PL and 4PL can be managed without the loss of the contracted person and this reinforces the idea of the flexibility of the logistic providers. Nevertheless, there need for relevant authorities to fully take into consideration the concepts of logistics and eventually stimulate economic competitiveness towards the realisation of positive economic development. On the same note, governments ought to reduce the negative impacts; this is in the strategic move of achieving balanced approach to the economic growth including sustainable development. References Australian Logistics Council, 2008. Workforce Participation in Australian Transport and Logistics. Queensland Government: Apelbaum Consulting Group, PTY LTD. Australian Logistics Council, 2011. Submission on the Productivity Commissions Draft on the Economic Regulation. Baziotopoulos, P., 2008, An Investigation of Logistics Outsourcing Practices in the Greek Manufacturing Sector, PhD thesis. Browning, J., 2003. “Development of Logistics and Transportation Systems in Promoting Trade & Economic Growth: Comparing Incheon and Seattle Areas,” Korean Observer, Autumn. BTRE, 2001. 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