Transport and Logistics And Its Importance For Economy Or Business

Transport and Logistics are the pillars on which the modern economy is built. The significance of these pillars grows manifold as one starts to realize the inter-linkages created by transport and Logistics service. It is the one thing that makes a nation economically strong or weak. It also forms the crux of international trade. A strong and efficient transport and Logistics system ensure a high level of competitiveness in the global market.

Transport Logistics is the world’s largest trade show for logistics, transportation, IT, and supply chain management, held every year in late spring, in the famous exhibition center in Munich. The organiser is Neue Messe Munster. The theme of this year’s event is “The Commercial Route to Innovation”. In this year’s edition, the theme is “What’s in it for Consumers”.

Transport and Logistics impact on the environment

Transport and Logistics have a huge impact on the environment, considering that most of the freight transported is a result of trucking. Regular trucking can produce hazardous emissions, particularly greenhouse gases. The main cause of this is the huge amount of fuel used for the transportation of finished goods by means of internal combustion engines.

Transport and Logistics

Logistics plays in the supply chain

As discussed earlier, the role of logistics and transport plays in the supply chain and the overall organization of an organization. With regards to the supply chain, logistics help in transporting raw materials from the mine to the plant, and finally to the final consumer. On the other hand, transport helps in transferring the finished goods from the factory to the customer. Therefore, it can be said that logistics companies play an important role in the entire supply chain process.

In the case of rail transport, the goods are normally trucked or driven. On the contrary, maritime transport involves the movement of goods by sea, air or land. Railways play an important role in freight transportation because of the huge traffic they accommodate. The most popular form of maritime transport is passenger ferrying. This is normally done between islands or between continents.

In freight forwarding

The role of the logistics industry is very vital. A logistics professional is require in order to ensure that the shipments reach their destinations on time. The most common service provided by the logistics professional is warehousing. The warehousing function ensures that the goods at the destination are ready to be consume. The other service provided is packaging, labeling, dispatching, and delivery.

With regard to the transportation methods, there are mainly two main forms: road transport and air transport. Both these methods of transportation involve sending the cargo via one route or another. However, with respect to the transport method, the term ‘apparel’ refers to products that are transport in clothes or equipment while ‘farms’ refers to livestock. The other categories of transportation include military transportation, emergency and disaster relief, freight and logistic operations and postal transport.

Logistics industry crucial component

The Logistics industry is a crucial component in any organization and in particular the manufacturing sector. With regards to the manufacturing process, it helps determine the quality, reliability, and timeliness of the manufactured product. In the business of logistics companies, there are five important factors that determine the durability of the supply chains. These factors are product life cycle, customer satisfaction, training & performance, resiliency and adaptation. If any one of these factors is missing, chances are that the supply chain will not last long enough to meet the expectations of the customers and that would result in a loss of revenue for the company.

Environmental impacts

One major challenge that the organizations faced in the past was related to the impact of transportation on the environment. The introduction of railways and other modes of transport has resulted in considerable changes in the way we used to live our lives. People who used to travel by horse-driven chariot now have access to railway lines, air and sea vessels for their traveling needs. As a result, along with the changes in transportation patterns came new challenges such as negative environmental impact resulting from transportation and storage of fuels, disruption of habitats due to natural disasters and the introduction of chemicals into our water systems which ultimately affected the aquatic system.

Transport and Logistics

International Logistics

International shipping, transportation and cross-docking services have contributed significantly to the growth of the global economy. Moreover, the World Trade Organization (WTO) has forced most of the developed countries to reform their internal processes and strengthen their flagging supply chains. For example, the reformulation of the agricultural marketing policies in the US and the UK has led to lessening the role of local trade in their respective agricultural markets. Moreover, the reformulation of the rules on container shipments originating from China has led to the emergence of new logistic companies all over the world. As a result, competition in the international logistics market has intensified.

Container Shipping

With the liberalization policies of the WTO, many third-party nations are offering container shipping services to developed countries. These services enable the developed countries to reduce their import costs and at the same time, enjoy a flexible freight solution. It is a win-win situation for both parties as the developed nations get to promote their products while the developing nations get a viable market opportunity to sell their goods. The benefits of container shipping services include reduced import costs; increased exportable goods; reduction of over-stuffing issues; ease of handling; safety; reduction in storage space requirements; and timely delivery. However, this option should only be consider when it meets the expectations of the organizations involved.

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