International Logistics - Essay Example

International Logistics There has been a drastic change in the way seaports operate today. The era gone by Fordism 'Economies of scale' has been replaced by 'Economies of scope'. This post-Fordism change has seen a revolution in logistic movement. Subsequently, the port authorities who were hitherto the 'bosses', found themselves at the receiving end. Today, logistics talks of organisations cooperating through economic networks for mutual benefits. In other words, individualism has given way to collectiveness.

What brought about this transformation Consumers; that's right! Consumers today seek greater product variety at high quality and reliability. Availability is mandatory. Thus, huge containers are now cut to size to accommodate faster and efficient services. In order to attain such professionalism, global corporate houses have become centres of corporate structures, centred on the principles of co-operation and partnership; outsourcing of logistics functions.There are three basic forms of outsourcing with regard to supply chain Management: 1 The outsourcing of the production of components.

Global Corporate develop long-term relationships with a number of suppliers on the basis of mutual trust.2. Value-Added Logistics (VAL). VAL implies that production and distribution of a supply chain integrates into one.3. The outsourcing of transportation, warehousing and distribution. Third-partyTransportation, warehousing and distribution activities are fast growing outsourcing businesses. Globalization and outsourcing has opened new vistas for shipping lines, forwarders, terminal operators, road haulers, rail operators and barge operators.

Together they provide new value-added services as an integrated package. Danzas (since 1999 part of Deutsche Post), Schenker/BTL (the merger between Schenker Logistics and Scansped) and Ku hne und Nagel have evolved from basic forwarders to full logistics service providers. This has led to increased costs on operations. Improvements in terminal and landside operations are required to lower the cost on door-to-door servicing and savings at sea, one reason why shipping companies are expanding their scope to include terminal operations and hinterland transportation.

For this, they seek faster port clearances, and better loading/unloading facilities. Conclusion:How can port authorities manage such challenges Providing dedicated terminals to deal with increased port competitionIncreasing scale of operation to accommodate large port clients Secure investments to counter instability of port operationsDeal with possible drawbacks of load centring to induce a more stable port competition frameworkTo gain competitive advantage in the post-Fordian era port authorities need to initiate Inimitable and durable core competencies through cost leadership and differentiation.

Port authorities should constantly rethink and broaden their role as facilitators. They need to be inventive, co-operative and receptive to develop a proactive port management strategy.They need to develop an information system to enhance performance to meet their clients' needs. Participate in the planning and/or implementation of new (intermodal) transport services. Since maritime container battles will be won on land, port authorities must include the promotion of an efficient intermodal system to secure cargo under high competition.

Port networking is mandatory. The development of strategic relationships with other transport nodes is very important for port authorities to look into.Comments:The article has focused on the sensitive issues faced by port authorities in the face of extreme competition in logistic operations. The points highlight major policy options available to tackle the uncertain future for port operations, considering the strong outsourcing possibilities rested with ship liners. However, conclusion draws up most flaws that can be tackled and this will enhance the future of the port authorities.

References for Reading:3. KING, J., 1997, Globalisation of logistics management: present status and prospects.Maritime Policy and Management, 24, 381 3876. CHRISTOPHER M., 1992, Logistics and supply chain management: Strategies for reducing costs and improving services (London: Pitman Publishing).19. IAPH, 1996, The future role of ports in combined transport and distribution centres(Combined Transport and Distribution Committee, International Association of Ports and Harbours), Tokyo