The transition from freight consolidation to logistics

The transition from freight consolidation to logistics

JournalofTransportGeography11(2003)

245–253

Thetransitionfromfreightconsolidationtologistics:

thecaseofHongKong

RaymondK.Cheung

a

a,*

,JudyH.Tong

b,1

,BrianSlack

c,2

DepartmentofIndustrialEngineeringandEngineeringManagement,HongKongUniversityofScienceandTechnology,

ClearwaterBay,HongKong

b

OrientOverseasContainerLineLtd.,31/F,HarbourCentre,25HarbourRoad,Wanchai,HongKong

c

DepartmentofGeography,ConcordiaUniversity,MontrealH3G1M8,Canada

Abstract

ThispaperexaminesthechallengesandopportunitiesconfrontingthetraditionalcontainerconsolidationindustryinHongKongasitstrivestomodernisebyadoptinglogisticsfunctions.Thestudyisbaseduponaseriesofdetailedsurveysoftheindustryun-dertakenduringaperiodofadjustment.Improvingvalue-addedservicesisseenasthekeytothesurvivalofHongKongasamajortransportationcentre;thisstudyindicatesthatmakingtheimprovementsrepresentsuniquechallengestothe rmsactuallyinvolved.Thebarriersandpotentialsforthese rmstotransformthemselvestothird-partylogisticsserviceprovidersareanalysed.Ó2003ElsevierLtd.Allrightsreserved.

1.Introduction

Thefreighttransportationindustrytraditionallyhasbeenmadeupofverydistinctsectors.Separatedbyfunctionandownership,alargenumberofspecialisedunitsgrewuptomanageandmanipulatecargo ows.Inthemaritimeindustry,oceancarriers,terminalopera-tors,shipssuppliers,warehousing,forwarders,customsbrokers,insuranceagents,truckers,railroadandbargecompaniesareamongtheseparatefunctionalactivitiesthatareimplicatedinthephysicalhandlingandorgan-isationalcontroloffreightasitmovesbetweenshipperandcustomer.Inmanycasesthisseparationwasman-datedbyregulation.IntheUS,forexample,legislationhadprohibitedmulti-modalownership(Muller,1996).Thefragmentedchainsarecomingtogether.Releasedfromregulatorycontrolandrespondingtotheprivati-sationofformerstate-ownedbusinesses,newstructuresareemerginginthetransportationindustry.Thetrans-formationisbeingshapedalsobyglobalisation(Dun-ning,1997).Theemergenceofglobalproductionsystems,inwhichmaterialsaresourcedaroundthe

Correspondingauthor.Tel.:+852-2358-7100;fax:+852-2358-0062.

E-mailaddress:rcheung@ust.hk(R.K.Cheung).1

Tel.:+852-2833-3471.2

Tel.:+1-514-848-2053.0966-6923/$-seefrontmatterÓ2003ElsevierLtd.Allrightsreserved.doi:10.1016/S0966-6923(03)00020-6

*

world,inwhichthemanufactureofcomponentstakesplaceatmulti-sitesonmanycontinentsandareassem-bledatdisparatesites,andwhoseproductsareshippedtoglobalmarkets,hasnecessitatedarestructuringofthetransportationindustry.Atthedawnofthe21stcen-tury,therefore,thetransportsectorisundergoingafundamentaltransformation.Attheheartofthechan-gesislogistics.Theneedtomanageandcontroltrans-portchainsandintegratethemseamlesslyinglobalproductionsystemsisthenewimperative(see,forexample,Cooper(1994)andMeersmanandvandeVoorde(2001)).

Asmuchasthelogisticsrevolutionisglobal,itistakingplaceatcountlesslocationsaroundtheworld,wheretraditionalstructuresarebeingre-formed,andindividualcompanieshavetoadjustorperish.Asthefastestgrowingeconomyintheworld,theAsia-Paci cregionisfacingnewchallengesandopportunitiesinthelogisticsrevolution(FengandChia,2000).BeingthecentreoftheAsia-Paci c,thegatewaytoChinaandastheworldÕsbusiestportintermsofbothoceancontainerthroughputandinternationalair-cargotonnage,HongKonghasemergedasoneofthecommandcentresoftheglobaleconomy(Rimmer,1999).Itisnotonlyanim-portant nancialcentre,butalsothelargestcontainerportintheworld.Seemingly,itisbene tingfromglobalisation.However,itstransport rmshavetoadjusttothenewlogisticsenvironment,justasare