Transport Logistics

What is Logistics? “The process of managing all activities required to strategically move raw materials, parts and finished goods from vendors, between enterprise facilities, and to customers”. Council of Logistics Management Slide 2

Components of Globalisation Development of technology Increasing multinational investment Growth of international financial markets Expansion of international trade Global production Global labour market Increased dominance of international bodies Slide 3

The needs of global corporations  Globalised production  Global supply chain  Liberalisation of transport  Outsourcing logistics Transnational companies require transnational transport networks Slide 2

Integration of production “Around a third of world trade takes place within transnationals, between subsidiaries of the same corporation based in different countries.” Eliminating World Poverty: UK Government White Paper on International Development, December 2000 Slide 5

Complex global supply chains Stock, components and parts  in the right place  at the right time  anywhere in the world  door to door  at low cost  in the right condition “We need the right car at the right place at the right moment in perfect condition”. (Nissan vice- president, Distribution Service) Slide 6

Example: Toyota and it’s suppliers  Frequent deliveries  Hours (not days) lead time  Rapid response capability (not from stocks)  Delivery to assembly line at the right time in the right sequence without inspection  Reliability (quality and timing) Toyota moves more than 8 million parts and accessories every month! Slide 7

Deregulation of transport “Logistics applications never really took off until air transportation was deregulated in 1977 and motor and rail deregulation in 1980”. “The ESC considers the inclusion of cargo handling (in the EU ports directive) to be a significant success for shippers…This success has resulted from determined lobbying efforts”. European Shippers’ Council, 2002 Slide 8

markets are better at meeting needs than planning, and private companies are better at delivering goods and services than the public sector. World Bank IMF WTO GATS EU & trade blocks Slide 9

The players  Forwarders and trucking companies (Kuhne and Nagel; Transplace)  Shipping companies (Maersk, P&O Nedlloyd, CAC-CGM)  Integrators (UPS, FedEx)  Postal Services (Deutsche Poste, TNT, La Poste)  Rail operators (Schenker, ABX) Slide 10

Creating “seamless” global transport networks “The market in future will no longer be a question of competition among transport operators but rather among transport chains”. International Transport Journal, June 2002 Slide 11

“in contrast to other costs dock labour rates have climbed astronomically” CAC-CGM executive “ Distribution and logistics power our world economy and the trucking industry today…is providing tremendous value at low cost” Michael Belzer, Associate Director at the University of Michigan Trucking Industry Programme Slide 12

Logistics and developing countries  Mainly affects the industrialised countries  Rapid change in transition countries  External pressure for further liberalisation  Rapid expansion to the rest of the world  More exports of manufactured goods and more South-South and intra-regional trade  Not all developing countries are participating Slide 13

Trade Union Responses  International lobbying  Cross sectional approaches  Union links within global companies  Organisation of “new” workers  Strategic hubs Slide 14

“Transport workers now occupy a new strategic position in the global economy” BBC Newsnight August 2002 Slide 15