The transition from freight consolidation to logistics(2)

The transition from freight consolidation to logistics

246R.K.Cheungetal./JournalofTransportGeography11(2003)245–253

otherselsewhere,andthestakesarepotentiallyhigherbecausetherearemanythreatstothecontinuedsu-premacyofthecity.Ontheair-cargoside,theairportrelocationin1998triggeredastructuralchangeoftheairfreightforwardingindustry(Wanetal.,1998).Many rmshaverelocatedtheirwarehousesandtransformedthemselvesfromforwarderstothird-partylogisticsser-viceproviders.Ontheocean-cargoside,however,thetransitionisataslowerpace.Thispaperdescribesindetailthecharacteristicsandoperationsofatraditionalindustrythatisspecialisingincontainerfreightconsol-idation.Thisindustryisbothatraditionalactivity,andonethatinnewerformsisimportanttologisticsandsupplychainmanagement.Thepaperexaminesthechallengesconfrontingthisindustry,andthroughde-tailedsurveysassessestheresponsesof rmstothenewlogisticsenvironment.Althoughthisisacasestudy,andwhileits ndingsareofspeci crelevancetoHongKong,thepaperisintendedtocontributetoagrowingbodyofliteratureontheadaptationofmaritimefreightindus-triestologistics.

2.LogisticsandthechangingroleofwarehousingTheliteraturesuggeststhatglobalisationisimpactingonthetransportationindustrythroughseveralinterde-pendentdevelopments,ofwhichthedemandsofthemarket,competition,andtheneedtoenhancepro t-abilityareamongthemostimportant.Thereisawideacceptancethatchangesinthemarketandinthede-mandsofshippersareforcingthetransportindustrytoadoptlogisticsservices(BrowneandAllen,2001).Manymanufacturingcompanieshavereducedoreliminatedtheirtra cdepartments,inordertoconcentrateoncorefunctions.Theyarecontractingouttheirtransportbusinesstospecialisedserviceproviderswhocanarrangeforthephysicaltransportofgoodsaswellasprovideintermediateservicesthatcanvaryfromstorageandconsolidationthroughtoinventorycontrolandsupplychainmanagement.Many rms,nomatterwhethertheyareformerintermediariessuchasforwardersorcarriersthemselves,arere-organisingthemselvesasThirdPartyLogisticsproviders(3PL)(GardnerandJohnson,1994).Thisinturnisgeneratingalotofcompetitionbetween rmsthatintheoldorderoftransportationbusinesswereseparateandcomplementary.Forwarders,shippinglines,terminaloperators,warehousingcompaniesandothersthatusedtobeseparatelinksintransportchainsarenowcompetingwitheachotherastheyeachstrivetoo erarangeoflogisticsservices(NotteboomandWin-kelmans,2001).Theyareeachtrespassingontheformerterritoryoftheothersectorsandarebeingpropelledbycompetitionintowideningtheirservices.Yet,theyneedtocommandeverlongerandlargersegmentsofsupplychains.Thisinturnhasputdownwardpressureon

pro ts.Traditionaltransportactivitiesareseenasnotprovidingsu cientreturns,andopportunitiestoaddvaluetothesupplychainarebeingsoughtbymanycompanies(vanHoek,1996).

Intheacademicliterature,thereisaburgeoningcollectionofliteratureonthelogisticsdevelopmentsintransportation(Breweretal.,2001;Waters,1999).Ex-pansionisoccurringinoneormoreofthreeways.Firmsmaydecidetoextendtheservicestheyo er.Thelargeinternationalforwarders,suchasKuehneandNagle,Panalpina,andSchenker,areamongmanyexamplesof rmsaddingservicessuchasinventorycontrol,track-ing,paniesinthesamein-dustrycometogether,eitherthroughacquisitionorstrategicalliance,inordertoexpandthegeographicalscopeoftheiroperationsandtoreduceoperatingandtransactioncosts(Brooks,2000).Inmanycasesthemergersfacilitatetheupgradingofservicestoclientsandresultintheadditionofhigher-valueservices.Thecontainerterminaloperatingindustryisagoodexample,whereexpansionbyasmallnumberofcompanies,suchasHutchisonWhampoa,P&O,PortofSingaporeAu-thority,haveacquiredorleasedfacilitiesinalargenumberofportsaroundtheworld.Inmanycasesthisisresultingnotonlyingreatlyenhancedoperatinge -cienciesbutalsointheo erofawiderrangeofservices,suchaswarehousinganddeliverytocustomers.Verticalintegrationisthethirdstrategy,andtakesplacewhencompaniesextendtheiractivitiesinabroaderrangeofservices,eitherbyallyingwith,orbyacquiring,existing rmsinothersectors.Manyoceancarriersinvolvedincontainerlinershippingarebeingdrawninthisdirec-tion,purchasingtruckingorbargecompanies,o eringrailservices,anddevelopingthepotentialtoprovideacompletedoor-to-doorlogisticsservice(NotteboomandWinkelmans,2001).

Thewarehousingindustryisbeingbu etedbythesamewindsofchangeasothersectors.Thisindustryisfacingcompetitionfromtwomaindirections.Just-in-time,oneofthekeyelementsinsupplychainman-agement,isbaseduponthereductionofinventories.Speedingup owsthroughtransportchainsusingso-phisticatedmanagementcontrolsreducesthedemandforwarehousing.Atthesametime,other rmsthatarepositioningthemselvesas3PLprovidersareo eringenhancedwarehousingservices.Traditionalwarehous-ing,therefore,isfacingstrongcompetitivepressures(AckermannandBrewer,2001).

3.TheconsolidationindustryinHongKong

HongKongistheleadingcontainerportintheworld.Itsgrowthhasbeennothingshortofremarkable.From