Logistics Management in Ocean Shipping Essay Example | Topics and Well Written Essays - 3250 words

Logistics Management in Ocean Shipping - Essay Example The issues like climate change dominate the future and result in headlong rush of western economies to offshore manufacturing to lower cost countries in the east. Further financial cost of delivering goods across the world has always been a fundamental element of trading and decisions of logistician is largely influenced by high environmental costs (www.pmcontent.com)1. Magee et al (1985:1) mentioned that high quality and high efficiencies have become the characteristics of the production and physical distribution operations of many foreign competitors concerned the companies in United States challenging some of their basic tenets. According to Frazelle (2001:10) global logistics is the flow of material, information and money between countries connecting suppliers' supplier with customers' customer internationally. Global logistics flows have increased dramatically during the last several years due to globalization in the world economy expanding use o trading blocs and global access to Web sites for buying and selling merchandise. It is much more complex than domestic logistics due to multiplicity of handoffs, players, languages, documents, currencies, times zones and cultures that are inherent to international business. According to Singh et al (1998:1) logistics management is unique and represents and paradox as it is concerned with one of the oldest and newest activities of business and government. It is further stated that logistics system consists of facility location, forecasting and order management, transportation, inventory, warehousing and packaging which were all being practiced since the start of commercial and industrial activity. Brewer et al (2001:12) states that logistic systems utilize a wide range of resources and services within and external to individual companies which is likely to happen because of wide range of functions that logistics encompass in procurement and distribution. It is further stated that achieving high level of performance in logistics is important for the profitability of companies and for the efficiency of national economies as well as global economy. The interactive effects of the productivity of national and international logistics increase because international trade increases as a percentage of the national domestic activity. Logistics is that part of supply chain process that plans, implements and controls the effective forward and reverse flow and storage of goods, services related information between the point of origin and the point of consumption in order to meet the customers' requirements. Logistics management is important in relation is issues like transportation costs, large distribution costs, deregulation, changing strategies, technology and globalization (Kritika and Madhu, 2008)2. Cavanagh et al (2002:163) mentions that there has been a massive increase in ocean shipping, highway transport, air cargo transport, rail with a tremendous corresponding increase in infrastructural develo pment with export production as a central feature of free trade. Ocean shipping has expanded more than tenfold since 1950s mainly because of increased commodity export activity from economic globalization which accounts for more than 90% of commodity trade shipments with the