Logistics management is the part of the supply chain that is entrusted with the planning implementing and controlling the flow of goods and services from the point of origin to the point of consumption in order to meet the needs of the customers (Clausen, 2015, p102). Logistics management must ensure that the flow of the goods, services and the related information take place in an efficient and effective way that serves to improve the productivity of organizations. Also, logistics is entrusted with ensuring that both forward and reverse flow and the storage of goods, services and related information serve to improve service delivery in organizations to improve the welfare of the society and for the betterment of humanity (Awasthi, 2012, p573). Despite the various functions of logistics management, the functions of logistics can be divided into two which are the physical distribution, which is the derived transport segment, and the materials management, which is the induced transport segment.
Logistics management simply means the transfer of goods, services and information from the point of manufacture to the point of use in any part of the world (Nuzzolo, 2014, p240). This ensures that factories identify the needs of the customers and identify the various ways through which they can deliver the goods, services and information according to the needs of the manufacturers. Logistics management has undergone evolution in the recent past, and the technological development has simplified operations in the logistics to improve efficiency and effectiveness of logistics companies. In 1960, logistics management involved some functions among them being demand forecasting, purchasing, requirements planning, production planning, manufacturing inventory, packaging, inventory among others. The various duties of the logistics management were then simplified the more by technological development, and this resulted to materials management and physical distribution in the 1980s (Ozdamar, 2012, p592).
In the 1990s, logistics management further evolved into logistics with other sub-duties such as information technology, marketing and strategic planning. The evolution of strategic management helps in simplifying the duties of the transportation of goods, services and information form the suppliers to the consumers and this helps in meeting the needs of the consumers (Pienaar, 2012, p280). Finally, logistics management has led to the development of the various sectors of the freight in the society and the modern day logistics management involves the supply chain management and this helps to improve the efficiency and effectiveness of the transportation of goods and services in the society. Although there are two major functions of the logistics management, the two major functions of freight logistics include the physical distribution (PD) and materials management. Physical distribution involves the range of activities that serve to ensure that the goods, services and the related information are transferred from the points of production to the points of sale or consumption (Lindholm, 2012, p134). On the other hand, materials management involves all the activities involved in the production and manufacturing of goods and services in the society.
With the major changes in the patterns of global trade, there is need for the change in the logistics in the society and this call for the countries to change their freight modes in order to conform to the global trade. The global trade in the society influences the success of freight agencies, and this leads to the success of various countries in the world (Fahimnia, 2013, p79). The two major components that affect the supply chains of the goods and services in the society are production and consumption. This is because production and consumption are the two main factors that affect the supply and demand relationships of various industries in the world. Besides, production and consumption affect the logistics management that in turn affects trade patterns in the society.
The economic theories also have their effects to the logistics management because they influence the production and the consumption of goods and services in the society. In this light, freight management should be adapted to ensure that it meets the production and consumption patterns of the society (Lindholm, 2012, p129). This would ensure that there is no deficit in the customers need and at the same time there is no surplus of goods and services in the goods and services in the market. Lack of equilibrium in the production of goods and services in the market is considered as a market failure making it the onus of the market to ensure that demand and supply have direct relationships. Before the consideration of the impacts of water transport, it is of essence appreciate the impacts of global trade and the benefits that it causes to the economies of various countries.
One of the benefits of global trade is that it leads to economic efficiency in various countries, and this leads to the improvement of social welfare. The economic developments in various countries are due to the global trade and which is greatly influenced by the water transport (Nourbakhsh, 2015, p12). Moreover, the distribution and fragmentation of production in various countries lead to the expansion of trade, and this majorly becomes successful due to the water transport. The division and fragmentation of production, therefore, leads to the lower manufacturing costs, and this leads to the growth of economies in the society. The poor transportation system would lead to poor trade between countries in the society, and this would require that every country produces what they require to satisfy their economic requirements. Such a system would lead to poor economic development since there would be overproduction at the same time lead to underproduction of some goods and services in the society (Speranza, 2012, p51). Such a system would lead to the lack of diversity in the production of goods and services leading to the poor development of knowledge and innovation.
Overview of the logistics systems of water transport
Water transport is the process of moving people and goods by the use of the boat, ship, sailboat over an ocean, sea, canal, lake or river. Water transport is very instrumental in the promotion of international trade in the society and the growth of economies (Franklin, 2012, p88). Ship transport is the largest freight carries in history and still serves as the largest freight carriers in the modern society. Although the impacts of ship carrier has decreased due to the inception and the recurrent development of the air transport, it still proves as the most effective forms of transport for short trips and pleasure cruises in the international arena. Moreover, ship transport proves to be more famous due to its cheaper prices in comparison to the air transport. Although water transport proves to be cheaper as compared to the air transport, there is fluctuation of the exchange rates (Najafi, 2013, p217). Also, the CAF charges affect the prices of that lead to the various effects on the prices of the water transport and that in turn affect the affordability and the usage of the form of transportation.
Water transport can be for products to be used for different purposes among them being for commerce use, recreational purposes and for the military. Any material can be transported by the use of water transport although it becomes inefficient to use water transport for the goods that require timely delivery. This is because the ship transportation proves to be relatively slower as compared to other the air transport. The water transport has undergone evolution and this majorly started in the 1970s when containerization was introduced in the society (Berger, 2014, p43). Water transport is considered as the oldest form of transport, and it uses the natural track that makes it a less expensive business venture. This is because it does not require the construction of and the maintenance of any infrastructure only in the cases involving canals. Also, the cost of operation in the water transport also proves to be relatively lower proving the fact business venture involving water transportation is very profitable.
There are various benefits that water transport has caused to the society and among them is that it carries bulky goods over very large distances in the world. In this light, the water transport helps in bringing societies closer making it indispensable to the foreign trade. There are two kinds of water transport that have been in existence since the inception of water transport; these are the inland water transport and the ocean transport. Inland water transport involves the use of rivers, lakes and canals in the transportation process (Du, 2012, p78). The river transport involves the use of boats and big barrages for the transportation of goods from one place to the other. River transport greatly helped the development of the modern means of large transport although their importance has declined due to the development of the railway transport system that proves to be a cheaper alternative for the transport of goods and people.
The use of the canal as a form of water transport involves the use of artificial airways that aid in the navigation purposes. This is a form of water transport that requires huge financial investment due to the high costs for the construction and the maintenance of the tracks. Additionally, the costs for the construction and maintenance of the canals also increase due to the high costs of providing water into the canals (Crainic, 2012, p48). This makes water transport using canals to be more expensive as compare to the water transport using rivers. One major challenge that the contactors get during the construction and maintenance of the canals is the problem of supplying water to the canals to aid the water transport. Finally, the water transport using the lakes can be either natural such as the case of rivers or artificial such as the canals.
Inland waterway plays a very big role in the transportation of goods in Europe and this is due to the fact that there are more than 37,000 kilometers of waterways that connect various cities and major industrial towns in the continent (Gonzalez-Feliu, 2014, p51). In this light, water transport plays a crucial role in promoting business activities in the European countries, and this leads to the development of economies of such countries. The water transport is very developed in Europe because the 21 of the 28 member states of the European Union have inland waterway that helps to develop the internal water transport and which aids in the development of business activities across the continent. Additionally, 13 of the member states have interconnected water ways that makes the flow of goods to easily flow from one country to another making it easy to move the goods from one country to the other (Rushton, 2014, p87). Water transport has a very promising future in Europe due to the huge potential for the development of the water transport as compared to other modes of transport in the continent.
Due to the capability of the water transport bulky goods and travel through long distances, water transport in Europe outshines the other forms of transport such as road and air transport since it helps in creating solutions to the problems such as congestion and issues relating to capacity. Inland water transport proves to be of high reliability and energy efficiency and the potential for expansion (Coimbra, 2013, p123). Besides, the European Union aims at increasing the expanding the water transport and strengthen the competitive position of the inland waterway transport system to improve cohesion and t...
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