Logistics And Supply Chain Management For Transportation Systems

Important Features of an Intermodal

Discuss about the Logistics and supply Chain Management for Transportation Systems.
 

History, as well as rivalry between modes, has resulted to the production of segmented and un-integrated transportation systems. Every mode, particularly the carriers that used to operate them, has aimed at exploiting intermodal transportation relating to its cost, safety, service, as well as reliability. These carriers have sought to retain the business while maximizing their revenue through maximization of the haul-line under their control. All the modes consider the other modes to be rivals. Additionally, there is a certain level of mistrust as well as suspicion as a result of the different rivalry rules and regulatory regime. Public policy as well accentuated to the lack of integration between modes, thus preventing organizations from owning companies in other modes or has led to the placement of the modes under the state’s direct monopoly control. Modalism has been favored by the technical challenges that arise when transferring goods from a particular mode to the other, hence leading to incurring additional costs as well as delays, the primary reason being that there was a need to change the load unit that is necessary for bulk transportation. Initially, this started with the aim of enhancing the productivity of shipping goods and later evolved into an integrated supply chain management system across different modes. This has involved the use of more than one different mode in shipping through the use of an intermodal transport chain. This has permitted integration of many transportation networks. Thus intermodal aims at improving transport’s chain economic performance. This essay aims at addressing the Pakistan Intermodal Limited PIL, analyzing intermodal’s features, and identifying strategic management strategies. Also, crucial problems related to logistics network in Pakistan are identified, as well as how they can be solved. The sustainability of the various activities is based on the several qualitative studies conducted.

Pakistan Intermodal Limited is the latest Marine Group companies’ initiative located in Pakistan aimed at developing intermodal service within the nation through the use of freight train operations that meet international standards both at the local and regional level. The company avails road-rail connectivity, having ports trough inland ports with the primary goal of providing efficient logistics solutions as well as assist to develop a cost-effective transportation across both the local and the international corridors (Abbasi and Hassan, 2013, pp.61). According to the company, some of the benefits associated with intermodal transportation include: there are reduced costs in using intermodal transportation. Firms have the capability of reducing transportation costs by moving their freights in intermodal containers. For instance, the use of rail and trucks avails major saving on fuel. The trains consume less diesel compared to the trucks. For long-haul trucking, fuel can be considered to be a huge expense. However, trains assist in easing the impact (Assadipour, Ke and Verma, 2015, pp.53). Nonetheless, trains help in reducing a company’s carbon footprint. Shipping in containers also reduces costs since no individual handling is required. Second, with intermodal transportation, there is consistency in capacity. For instance, rail and truck provide reliable capacity. Less rivalry in securing freight in intermodal transport not only lowers costs but also offers capacity when it is needed. Nonetheless, intermodal transportation offers quality services. Compared to the other modes, intermodal is more resourceful (Bergqvist and Monios, 2014, pp.26). This is because it is safer and secure for cargo transportation. It is obvious that trains are on fixed a track hence they are less likely to be involved in an accident as they carry hazardous or very combustible freight. 

Logistic Management Strategies

Mohmand and Wang,(2013) elaborates on the primary features of an intermodal logistic system. The most essential feature of intermodal transportation is the drayage. Drayage refers to a containers’ movement on trucks between an intermodal station such as marine or road and the client’s warehouse. In intermodal transportation, drayage movements are specifically applicable from a freight modeling viewbecause they are supplementary truck cruisesthat require being constituted to correctly determine the total truck cruises on a given highway network(Bouchery and Fransoo, 2015, pp.391). Nonetheless, there is importance to have an understanding and developing a time-of-day drayage cruises’ distribution as well as the manner in which the two interact with auto traffic, which is established on the intermodal terminals’ activities (Bozorgi-Amiri, Jabalameli and Al-e-Hashem, 2013, pp.918). The second feature is the equipment’s type that is used, which has a great influence on the modal intermodal freight flows’ magnitude and distribution in a particular region. The equipment’s types that play a crucial part in goods’ movement using the intermodal transportation include containers, the intermodal terminal, transportation equipment such as track-tractors, and intermodal chassis. The freight flows are affected by the possession and the lease problems that relate to the intermodal equipment.

The third feature is the logistics and the intermodal terminals’ operations. Issues related to logistics and intermodal operations have an impact on a region’s intermodal freight traffic. An example of an operational issue that is related to intermodal terminals basically in a modeling view is the time-of-day terminals’ activities which impacts directly on the time-of-day drayage truck trips’ activities (García, et al, 2013, pp.222).  For instance, the rush-hour drayage trucking operations may correspond with the peak-hour auto traffic on the main freight corridors as well as the access routes, hence causing congestion and adverse environmental and safety issues. The last feature is the cargo handling at the intermediate facilities. In intermodal freight movements’ instance where cargo control, as well as storage, are involved between the modal exchanges, the location, as well as the intermediate cargo handling and storage facilities’ locations and operations, affect a region’s magnitude as well as the distribution of the freight flows (Ghias,Pervaiz, Thornley and Marshall, 2012, pp.249). The operations among the different intermediate facilities and their impacts include: one is the bulk transfer facilities which involve liquid or even bulk commodities’ trans-loading, for example, petroleum between transport modes such as rail and road. In a modeling perspective, the number of truck cruises made between a receiver’s warehouse and the bulk movementwarehouse should be considered. Second is the LTL cross-docking station. This involves the immediate truck-to-truck cargo’s transfer with minimal or no warehousing. In the case of the long-haul LTL shipment, typically, several short-haul transportation truck cruises necessary for pickup and the transportation between cross-docking terminals of an LTL and the LTL receiver. Last is the trans-loading docks located at the warehouses and the distribution centers (Giannikas and McFarlane, 2013, pp.63). A warehouse and a distribution center is an essential freight facility that contains important intermediate cargo handling as well as holding between modal interchange. A normal storage facility may have its trans-loading activities being affiliated to a truck-to-truck or truck-to-rail cargo exchange. 

Uddin,(2013) notes that when an organization creates a logistics strategy, the aim is to define the company’s service levels at which its logistics are at the most cost-effective. Due to the constant change in the supply chain, an organization can develop several logistic strategies based on specific products, customers, or country (Hussain, et al, 2014, pp.351). The primary goal of a logistic management strategy is to ensure delivery of customer’s needs as well as spending little money as possible. A logistic strategy is important to every company as it is to Pakistan Intermodal Limited to facilitate in adopting a supply chain’s flexibility. Faced with challenges such as global operations, expanding the market, as well as stricter regulations and quality standards, the company is getting overwhelmed by the amount of information that is coming from the suppliers and the clients in various geographic location (Kanafani, Wang and Griffin, 2012, pp.700). Thus, there is need to develop strategies that will facilitate proper management of the data. This is inclusive of data at every supply chain’s stage which includes pricing of both the direct and the indirect materials, tax documents, compliance certificate, labor agreements, as well as rental contracts among others. Adopting a data management and integration strategy is important in solving the operational issues relating to Pakistan Intermodal Limited. This can be achieved by connecting the company’s supply chain system with those of their partners and shippers (Kannan, et al, 2012, pp.77). The data management and integration strategy would give the company the necessary visibility as well as control over their logistics system. In addition, raw information that originates from the customers, partners, and the suppliers compose of both structured and unstructured data that makes it hard for enterprises to take in, analyze, as well as generate insights from the disjointed information’s pieces(Leppänen, 2012, pp.94). Having a proper management and integration strategy assists in transforming the raw information into formats that are compatible which are required by the various supply chain management systems to ensure a seamless flow.

According to Giannikas and McFarlane,(2013), a company needs to build an agile and adaptive supply chain that has rapid planning and an integrated execution. Better understanding and shaping demand and risk by the executives requires adaption of the company’ supply chain to the changing market opportunities (Masood, Farooq and Hussain, 2016, pp.269). Pakistan Intermodal Limited should deploy dynamic planning capabilities and fine-tune the operations on a continuous basis to make sure that there is responsive agility in meeting the varying demand. This means that the company has to continuously adjust its dynamic supply chain if it is to respond to changes in the market. This is beneficial since it eliminates shocks across the company’s supply chain. This may include enhancing visibility and enhancing collaboration along the value chain. 

Bergqvist and Monios, (2014) notes that the performance of Pakistan compared to other Asian nations in almost all logistical indictors comprising of the trade’s quality as well as the transport infrastructure is poor. The current transport system fails to avail the necessary desirable services which are an indicator of the current logistics which include the intermodal transportation which combines strengths of various transport modes into an integrated transportation system (Mohmand and Wang, 2013, pp.341). Current Pakistan’s logistic system is faced with several problems as discussed:

Bouchery and Fransoo,(2015) argue that lack of planning and corruption in the public and private sector is a problem facing the logistic system. Corruption combined with inadequate planning are among the factors that are responsible for the development of an efficient logistics system in Pakistan. Private sector’s role, negligence in developing a high-capacity logistic system, as well as failure to make use of the existing land patterns in developing reliable and efficient logistics system are identified as the main factors that are required to develop an efficient logistic system in the country (Notteboom, 2012, pp.243). Second, is faced with the challenge of lack of infrastructure. The country has insufficient intermodal connections between other modes such as railroads, maritime ports, as well as the inland distribution centers. Nonetheless, the ports lack the necessary infrastructure to effectively connect with the rail and the truck transportation system (Ranjan, 2015, pp.325). Despite that the transport sector is functional, it experiences challenges to do with low quality, poor reliability as well as prolonged traveling times, specifically the rail transport.

Leppänen, (2012) argues that increased motorization and poor planning have contributed to the high levels of pollution as well as traffic congestion particularly in the urban areas. This has led to the decline in exports competitiveness, increased the costs of conducting business, and limits the capability of the country to integrate into the global supply chain. Regardless that geography endows Pakistan to have the potential of reaping economic gains as a result of becoming a hub for regional trade in Central Asia, Iran, China, and India, the government policies are critical in determining whether Pakistan will capitalize on this opportunity (Sahin, et al, 2014, pp.612). In the country, there has been a controversy among the policymakers and the professionals regarding the intermodal logistic system. The various types of modes, their role, and suitability form the basis for the national transport system. Hauls railway in Pakistan is considered uneconomical and inefficient (Samad and Ahmed, 2014, pp.157). Due to the political pressures, railways in the past have been forced to maintain some uneconomical rail station while opening new ones. Thus, maintenance of this transport systems has become an issue. Pakistan also faces a challenge in its logistic system whereby there is lack of consistency in customs inspections. Thus, this has resulted in the average time the containers stay at the ports is double that of the international average. This has been observed to be the result of pot-customs delays and deficit in the rail services as well as the logistical facilities that facilitate the transportation of these containers outside the port. 

According to Kanafani,Wang and Griffin, (2012), an efficient and cost-effective logistics network is essential for any organization to be competitive. Additionally, a good logistics network has a direct on a country’ growth in its economy. To attain this vision, there is need to develop Pakistan’s infrastructure. Improving the country’s basic infrastructure means that supply chain and logistics will be efficient and cost-effective. Essentially, the main reason why companies exist is to serve its customers by ensuring that products are delivered at the right time. With developed infrastructure, logistics improves thus resulting to increase in the country’s competitiveness and its ability to attract investors.  Improving Pakistan’s infrastructure and the logistics network will help in reshaping the nation’s physical and economic configuration (Shaikh and Fan, 2016, pp.253). As a result, the country would grow to become a hub for regional trade, where goods and people move and trade effectively and swiftly.

According to Abbasi and Hassan, (2013),the current interest rates in Pakistan has resulted in inefficient financing facilities has become a problem in developing logistics networks as well as the freight forwarding industry. Additionally, there is a challenge in growing the working capital requirements (Uddin, 2013, pp.75). As a result, the government can be helpful in coming up with a mechanism of lowering the interest rates as well as looking for finances to develop the country’s logistics network. Nonetheless, there is a need for the government to develop a comprehensive future transportation policy that is based on actualable short and long-run plans. The government can do this by integrating mode approach and modern technology as well as engaging private investors both local and external.

Conclusion

Pakistan’s large population of over 160 million generates a lot of opportunities for intermodal companies such as Pakistan Intermodal Limited to meet the demand and the supply in local markets. However, the underserved logistics infrastructure is the primary problem which hinders investment opportunities as well as enhancing the capabilities of capitalizing the existing gaps. For Pakistan’s port to become a regional hub, the government should declare and provide the necessary infrastructure. Additionally, the required logistics regulations should be well-developed to ensure that problems associated with Pakistan’s logistic network are addressed. It is clear that the logistics network is a vital necessity for any country’s development among all its aspects which is facilitated through economic linkages. It makes sure that safety is assured, there is timely travel and delivery of product to the market as well as cutting down on the transportation costs, while at the same time giving the producers the possibility to access the markets for their goods.

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