The change from general cargo transport to container shipments resulted in historical change from craft production methods to industrial production by using containers, the general cargo transport gets attributes which are comparable to those of bulk cargo, making it possible to establish whole logistical chains from the shipper's ramp to the receiver's premises.
Due to the increasing importance of material handling costs now-a-days and transport costs the management function is more and more concerned with overall logistics.
Logistics comprise central planning and control of the movement of material and products to optimise their flow from procurement of materials through production and to the distribution to the customers. It may also be defined as the scientific planning, controlling and supervision of materials, persons, energy and information flows in systems. Surveying the logistical cost components, the inventory costs may amount up to 35% of total logistic costs.
It is important to understand that the isolated optimisation of individual functions will not result in an overall optimum solution. The objective is to achieve a high degree of overall efficiency and coordination. This is attained by optimising the interfaces between the various sections on the one hand, and suppliers, customers and providers of logistical services, on the other hand.
The isolated optimisation of single logistic components will not achieve the optimisation of the whole system. In order to reach synergy effects between the logistic components, various methods of system analysis are applied. Thus logistic is a cross section function which controls the entire flow of goods and materials. Taking these terms of reference as a starting point, attention must be paid to the application of system analysis in order to co-ordinate logistic procedures.
This external transport system starts with the interfaces of procurement at the beginning and distribution at the end of the production chain. Synergy and cost saving effects will be gained by reducing the level of inventory stocks and efficient, speedy and economic movement of materials through the system. Thus a determination of a co-ordinated procurement-orientated supply frequency will be the result.
For products which are largely identical in price and quantity, the speed and cost of delivery service are the dominant factor for their relative competitiveness.
THE DELIVERY SERVICE BASICALLY COMPRISES TWO COMPONENTS:
(1) AVAILABILITY: This is understood as the readiness of a product for delivery. A degree of availability of 100% means that the entire range of products will be immediately available: in the case of products to be made to customers specification, production and delivery can be realised within an insignificant time span.
(2) TIME OF DELIVERY: It is understood as the time span between the receipt of order and the delivery to the customers. A definite period is confirmed when accepting an order.
These two elements basically determine the level of delivery services. It should be the objective of logistics to produce the varying levels of delivery service to meet the expectations and requirements of the various markets, groups of customers or individual clients.
THE GENERAL OBJECTIVES OF LOGISTICS CAN BE SUMMARIZED AS FOLLOWS:
(1) Increase in productivity.
(2) Reduction of costs.
(3) Improvement of services.
Conventional liner shipping was dominated by the regulating factory of the shipping conference. The extent of liability along the transport chain was liner shipping company to the sea transport only. In accordance to this market organisation, improvements of transport sully were directed to the individual sections.
The signal sector thinking was encouraged by technological aspects. Heterogeneous cargo units were not suitable for a uniform transport, information and documentation system. The traditional conference system was denoted by a typical supply orientated thinking of all partners within the transport chain.
Containerisation can be split into three major phases. In the first phase cargo flows between the highly industrialised economies were containerised. During the second phase of development some ports on the routes between highly industrialised countries were included in the container transport system.
During the third traffic between highly industrialised countries and countries with rich natural resources (eg oil producing countries) were included in the containerisation process. The reason for including these trades into the containerisation was the congestion in the middle cast ports caused by the repaid growth in imports.
The container transport system was promoted from the very beginning by trucking companies, which were not bound to the routes and regulations or liner shipping. In contrast to the shipping companies their philosophy was to provide an uninterrupted house-to-house service. From the very beginning the cost aspect was one of the dominating factors within the land/sea container logistics.
In the first stage of containerisation the lack of coordination of intermodal transport has resulted in high additional costs for turnaround time of ships, inland carriers, and handling facilities in the seaports as well as in the hinterland.
THE MAJOR REASONS FOR THE INCREASING USE OF INTEGRATED INTERMODAL TRANSPORT SYSTEMS ARE:
(1) Shorter time of delivery from origin to destination.
(2) Lower costs along the whole transport chain.
(3) Greater control of costs, schedules, cargo safety and conditions.
THE ADVANTAGES AND POTENTIAL SAVINGS DEPEND TO A LARGE EXTENT ON THE FOLLOWING FOUR FACTORS:
(1) Efficiency of intermodal transport and turnaround of transfer points in terms of both costs as well as time.
(2) Efficiency of modal split of intermodal operations.
(3) Maximisation continuity of flow, particularly intermodal flow, or large scale direct transport transfer with a minimum of double handling and storage at intermodal interfaces: and
(4) Effectiveness of information and documentation control and transfer.
The most important issue of intermodal transport is effective integration of operation, control and management of the diverse modal links and facilities. This means that not every art of the transport chain can expect an optimisation of its individual operation. If the total intermodal chain of operations is to operate optimally, modal integration requires close coordination of operation, technology, information flow and control with capacities, frequencies of service, routings, and schedules well co-ordinated among interfacing modes of transport.
In other words, intermodal transport to be effective, must have a co-ordinated management or be managed as one co-ordinated transport system. The criteria which accounts for the efficiency of transport system can be derived from quantitative requirements. In this area the prime consideration is the capacity of transport system. A transport system consists of an optimal coordination of:
-- Carrier (sea and land)
-- Transport infrastructure (sea and land)
-- Terminals (handling facilities inland and at the seaports>)
Bottlenecks are bound to occur wherever the three elements-route, vehicle and handling points cannot be adjusted to each other through flexible planning and scheduling.
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