BMO3418 Transport & Logistics Management | Logistics Industry of NSW

Introduction

The report focuses on understanding the potential problems faced by the logistics industry of New South Wales (NSW) in terms of generating special focus on an intermodal transport company. The report further would focus on reflecting on the sustainability issues affecting the logistics industry of NSW. It there would aim in generating effective solutions to the logistics issues in terms of gaining the assistance of the NSW Government. Different aspects like Just-n-Time and Carbon footprint would also be dealt regards to the logistics industry.

Overview of ACFS

ACFS or Australian Container Freight Services Pty. Ltd. Was established during December 2005 by two able entrepreneurs Terry Tzaneros and Arthur Tzaneros.  The company was formed by them with a vision of rendering effective services in the aspects of warehousing, transport and also freight logistics. From its very inception, ACFS contributed in servicing the needs of different blue chip importing and exporting firms based in Australia. On an annual basis, ACFS tends to transport around 1.2m TEU. The transport, warehousing and freight operations of the company are essentially carried out by a team of 1200+ staffs on a national basis(Australian Container Freight Services Pty Ltd., 2018). Potential knowledge and expertise gained by the company along warehousing, transportation and also freight services has helped it in meeting the strategic needs of its clientele. During 2015, ACFS gained the potential of expanding its operation base to Fremantle in addition to its existing branches based in Sydney, Brisbane and also Melbourne. The freight logistics services are made by ACFS from the ports directly to the doors of the customers(Australian Container Freight Services Pty Ltd., 2018).

Main problems with current logistics network in NSW

Different types of challenges are faced by the logistics operators based in New South Wales. The challenges can be effectively segregated under different heads like geographic factors, demographic factors, and environmental factors, legislative, technological and also other issues that affects its services.

Geographical Challenges

The growth of general traffic along the coastal regions of urban Australia like New South Wales owing to the growth of owned and private vehicles has created problem concerning the movement of intermodal transport in the regions. Developmental works carried out along the different highways for helping in the reduction of transportation hours and also enhancement of safety of pedestrians account for the road blockades and thereby contribute to growth of traffic congestion(Campos et al., 2014). Further, the large distances between the different regions with also the availability of few petrol pumps also affect the effective transportation of freight logistics. Moreover, the long distances between the different Australian regions also tend to generate greater risks associated with driver fatigue that may tend to fatal circumstances. Moreover, the movement of animals like kangaroos along the suburban roads also tends to create potential problems for the movement of logistics and other domestic transports(Faulin et al., 2018).

Demographic Challenges

A larger part of the ageing population in Australia is still not granted the retirement status as a strategy to evade the growing cost associated to superannuation benefits and pension. The ageing population is thereby required to continually work along the different sectors like logistics and transport for earning their living. The same affects the workplace productivity and also contributes to rise of fatal problems(Memon, 2017).

Environmental Challenges

The growing impact of logistics and transportation activities on the natural environment accounts for a greater concern. The same requires the logistics and transportation companies to work on reducing emission levels, reduction of emissions of greenhouses gases, minimisation of waste generation and also the use of recyclable materials and resources in their operations. Further, events like snowfall and also the emergence of storms during the winter season account for potential problems regarding movement of logistics(Sheffi, 2012). The hot summer months tends to affect the movement of logistics in terms of affecting the cooling systems, over exhaustion of the drivers and also affecting the quality of products being transported. Similarly, the emergence of natural disasters like floods and cyclones vehemently affect the transportation and logistics activities in the region(Diamond, 2013).

Legislative Challenges

The operations of the logistics industry can tend to get potentially affected owing to the potential disagreements between the central and state governments regarding the generation of needed funds regarding the development of roads, bridges and other railway based transportation systems. Logistics firm like ACFS dealing with imports and exports are required to gain effective permission from Australian Quarantine and Inspection Service (AQIS) for effectively importing and exporting different products across the Australian border. The same enhances the cost and time of the logistics firms for meeting needed ends(Decker, 2014).

Technological Challenges

Changes brought about in the technological paradigm with requiring the logistics companies to incorporate the new technological systems for carrying out their day-to-day operations tends to enhance the level of operational cost of the firms. Further, small supplier or vendor firms fail to use integrated systems like ERP software that creates a synchronisation problem for the logistics operators. Increased dependency on computerisation also amounts to greater risks associated to loss of potential data(Decker, 2014). The same requires the need for having effective backup which in turn increases the cost of the logistics firms. Similarly, problems like reduced speed of internet in some areas with also potential resistances of the staffs regarding incorporation of technological changes also affects the operational productivity of the logistics firms(Faulin et al., 2018).

Other Challenges

Other challenges associated with the rise in fuel cost, growth of security issues in terms of pilferage and burglary of merchandises-in-transit from the logistic systems and also the damage generated to materials and equipments potentially affect the operations of the logistic firms. Further, the transportation of oversized shipments like materials used for construction and other allied activities based on the use of intermodal network is affected by the country’s topography thereby causing delays and need for further plans(Memon, 2017).

Resolving of the Problem

Transport for NSW or TfNSW accounts for the governing body that focuses on undertaking potential strategies for resolving of the problems concerning logistics network as underlined above.

Infrastructural Developments

The inland rail program of the NSW government contributes in fostering effective linkages with the different ports. Further, the government also works with the private sector for development of freight hubs along the route facilitating intermodal transport. Further, the government also focuses on the generation of needed funds for the development of road infrastructures, railway networks and also for the incorporation of effective technology in enhancing the productivity of the system(Sheffi, 2012). The NSW Government also aims at taking active measures regarding the protection of corridors supporting fright movements along road and rail networks. Again, the NSW Government also works in an integrated fashion with private operators linked to the various ports and also other stakeholders involved along the supply chain for supporting the movement of merchandises linked with import and export transactions(Transport for NSW, 2017).

Incorporation of effective Technology

The NSW Government focuses on taking effective steps regarding the incorporation of effective technology that would help in increasing the level of productivity and efficiency of the intermodal networks while also in enhancing the safety parameters involved in the operations. Similarly, effective technology is required to be incorporated for enhancing the level of transparency associated to the movement of merchandises along different segments of the supply chain such that the same helps in adequate planning and increasing of productivity(Mulley & Nelson, 2016).

Development in Regulatory Mechanisms

The inclusion of new technology by the transport and logistics firms is required to be made according to the report generated by the National Transport Commission. It is also known as Land Transport Regulation of 1940. Different technology trends in the aspect of automation, data generation and sharing and also mobility. Further, the regulatory mechanism further spoke on the parameters of safety and enhancement of efficiency which required regulations regarding the movement of heavy vehicles(Rimmer, 2014). Again, opportunities were required to be created regarding the generation of lands around ports, railway stations and airports for docking of freight and thereby in supporting initiatives for reaching the freight to the final consumers(NSW Government , 2013).

The National Rail Vision

The National Rail Vision as envisaged by the NSW Government encourages the generation of reforms regarding increasing of safety and regulating the reporting of incidents, protection of the environment and also the different corridors, for development of funding and also investment related activities while also focusing on the development of a performance system for measuring the performance and efficiency of railway transport systems(Logistics Management , 2017).

Sustainability issues concerning logistics

The growth in the number of vehicles for carrying out the transportation and logistics functions accounts for the large scale depletion of natural resources like fuels and natural gases that are needed for powering the vehicular operations. Similarly, the growth in the use of large scale vehicles also leads to the increase in the level of greenhouse gas emissions that potentially affects the natural environment and also amounts to the depletion of the ozone layer. The emergence of the above sustainability issues require the undertaking of different sustainability plans associated to development of sustainable transport mechanisms and also the manner of reducing the impact of harmful and toxic materials generated from transportation vehicles on the natural environment(Singhry, 2015). Sustainable logistics thus focuses on generating greener fuel solutions such that the same would contribute in reducing the emission levels from the vehicles while also contribute in saving the fossil resources from large scale depletion. It would also help in generating an effective carbon footprint for the transport and logistics companies. Again, the aspect of sustainability planning in logistics also contributes in the reduction of considerable wear and tear of different materials associated to the transportation trucks and vehicles. Wastage is also controlled in terms of depletion of the road and rail infrastructure owing to increased transportation activities which in turn also reduces the cost associated in repairing and maintenance(Ingrao et al., 2017). Further, the undertaking of sustainability planning initiatives would also make the transportation and logistics firms for effectively abiding by the rules and regulations generated by the government for meeting of the sustainability objectives. Imposing of fines and penalties would enforce the participation of the logistics firms in the protection of the natural environment and resources from large scale annihilation. Sustainability initiatives can also be undertaken in terms of encouraging the use of social media for creating large scale awareness among consumers and general public associated to the purchasing of such products and services that have met the sustainability initiatives(Bouzon et al., 2015).

Efficiency of Port Centric Logistics

Port-Centric Logistics is associated to the incorporation of both logistics and transportation services at the ports where the vessels arrive laden with merchandises and stocks. The incorporation of port centric logistics mechanism is considered efficient in that it helps in the reduction of freight miles for the consumer companies dealing with the merchandises arrived at the port. Freight miles are saved in terms of direct despatch of the stocks arrived at the port to the retail outlets and consumer points rather than requiring them to visit the warehouse facilities(Monios et al., 2017). In terms of reduction of freight miles the freight and consumer companies can also gain other efficiencies associated with the reduction of cost and in streamlining the different port, logistics and distribution operations. Further, in that the goods are directly transported from the ports to the retail and consumer outlets it contributes in the reduction of lead times while also helps in the reduction of carbon footprints associated to logistics and transportation activities(Guerrero, 2018).

In the case of ACFS, the port centric logistics activities are carried out based on the development of e-rail services that help the railway customers and others interested in containers meant for general purpose to directly collect the merchandises on site. The same contributes in reducing collection cost, operating in an informative and collaborative fashion and in enhancing the level of efficiency and productivity involved.

Pros and Cons of JIT Inventory Management

The application of Just-in-Time (JIT) in logistics signifies that the sourcing and transportation of goods demanded by the consumers in specific quantities aptly reduces the level of inventory and transportation cost associated with the same. ACFS in applying JIT in its operations can aptly contribute in the reduction of piling up of inventory and thus help in reducing the chances of wastage both across the routes and at the distribution centres. Further, the use of Electronic Data Interchange (EDI) systems also contributes in the enhancement of transparency associated with tracking the movement of merchandise from one end to the other. Effective flow of information between the manufacturers, logistics parties and the consumers thus enhances the level of trust involved. It enhances the level of customer satisfaction(Fabbe-Costes & Colin, 2017). Further, the use of JIT in logistics also enables the development of effective collaboration between the parties involved and thus promotes the growth of needed efficiency. Again, the application of JIT by ACFS would also contribute in reducing the level of transportation required for carrying the inventories to the warehouses and distribution centres in that it helps in the sourcing of ‘just’ quantity of inventories for meeting of consumer demands. The same contributes in meeting the objectives of environmental efficiency(Fabbe-Costes & Colin, 2017).

However, the focus on applying JIT in ACFS can also be rightly countered in that, JIT techniques denotes the movement of transportation of small lots of inventories in a repeated fashion and at greater frequencies over a period of time. The same is taken to be a potential wastage regards to time and also contributes in accruing the transportation cost for the logistics firm over a period. Moreover, the increased use of transportation and logistics operation account for increase in the emissions levels of greenhouse and other harmful gases. The same is thus observed to be detrimental in meeting the sustainability objectives regarding protecting the natural environment(Memari et al., 2017).

Carbon footprint of ACFS

ACFS can focus on estimating its carbon footprint in terms of evaluating the level of greenhouse gas emissions based on the use of different transportation modes like ships, railways and also by the use of air. It would thus contribute in both tracking and monitoring the level of harmful emissions along the different transport modes and thereby help the management in taking necessary action for reducing the emission levels(Omair & Sarkar, 2017). Further development of its carbon footprint program can be envisaged in terms of extending the estimation of the emission levels of greenhouse gases at the different transhipment centres. Effective reporting of carbon footprints contributes in the taking of managerial decisions concerning the choosing of shipping partners in order to reduce the level of carbon emissions by the logistics firm(Wang et al., 2018).  

Conclusions

The report contributed in understanding the potential problems that affect the logistics networks of New South Wales thereby affecting the productivity of the intermodal transport and logistics systems. Effective solutions to the problems faced by the logistics industry of NSW are pronounced in terms of collaborating with the government of the region. Further, the paper also focused on the sustainability issues concerning the logistics industry with also understanding the role of JIT (Just-in-Time) in logistics. Specific advantages and disadvantages associated with use of JIT in logistics are highlighted in the report. Further, the report also focuses on the aspect of carbon footprint with special focus on ACFS based in NSW.

References

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