Write an essay on Qube.
Qube is Australia’s largest import and export logistics service provider. The company was founded in 2010. Qube logistics is a part of the company that deals with a number of services such as rail and road transport, warehousing, distribution, container parks, etc. These services are provided individually or failed to meet customer’s needs. The organization has expanded enough to become Australia’s biggest logistics service provider over past four years. Qube Logistics contribute 45% of the total earnings (Cai and Xiao, 2011). It has control over rail and road transportation of containers. Port and Bulk has a contribution of 50% that embarks on stevedoring. And the Strategic Assets chip in 5% of total earnings and its components are tactical land holdings in Sydney.
– Port Botany Freight Terminal
– Port Botany Empty Park
– Yennora Intermodal Terminal
– Macarthur Intermodal Terminal.
Qube logistics NSW is the largest import/export logistics service provider in the region. Qube has a strategy to integrate domestic logistics and small companies to consolidate and create one more effective and efficient company. In last few years, Qube has done some acquisitions and adds them to its network. It is highly competitive in the market (Cai and Xiao, 2011).
– The parent company Qube is operational nationwide.
– It operates in Freight Depots, Empty container parks, Warehousing, etc.
– It has the biggest rail terminals network in NSW.
– Rail fleet size is around 65 locos and 750 wagons
– Port Botany passes 320,000 TEU p.a. on rail
– It has the quality management team.
– It is having 17% revenue generation from retail goods import under supply chain management services
– Customer Value is generated by high-speed delivery and reliability.
Qube Logistics has achieved many successes in the recent past but the industry in which it is operational is highly unpredictable and competitive. The logistics industry gets affected by a number of factors within and outside an organization that challenges the proper functioning of the system. Current NSW Logistics Network is also facing some of these issues nowadays such as national policies and strategies, issues caused due to regulations, regional planning and development policies, state transport strategies, regional transport planning, and investment in the infrastructure. In fast few years, many such policies have been issued which directly or indirectly causes problems for the logistics supply chain (Farrell, 2012). There are some of the issues which are evident and need proper action.
Port Activities have been relocated from Port Jackson to Port Botany which has resulted in modification of modal split of containers that move to and from the port. Port Botany has such a design that transportation was done there by trucks. The containers that were carried by rail till Port Jackson were shifted to trucks to reach Port Botany (Xu, 2011). After this, the container trucks were oriented to move through Rockdale to the west as other routes were restricted to heavy traffic. The import/export companies had a conflict on the topic that container trucks should not violate any environmental rules and should not cause any environmental problems otherwise the alternatives will be closed for operations (Hull, 2015.). Local government council denied the use of newly constructed road network for freight transfers instead compelled to use rail networks. Later, state rail authority allowed transfer of 70% of containers to be transferred through rail network through specified routes. The changes in this rule were passed in 2011 and after that, 20% of containers started passing through Port Botany by rail.
There is 60-hectare unused area left in an industrial area which is connected by a rail line to Port Botany. The area is going to develop in coming year to convert it into an intermodal facility. (Huang and Zhao, 2012) When state government announced the development of this area, it attracted a conflict with the local government.
Limited container Storage and Less Terminal Space
Terminals are the intermodal boundary in a logistics network. The container handling plays an important part in reducing the costs and keeping a track of shipping records. It is a hub point for containers along with playing the part of temporary storage space. As the demand is increasing on daily basis, limited space will be a problem in upcoming time.
Port Botany is Australia’s second largest container port. The lease of the port is under NSW Ports Consortium. This privatization is an asset recycling initiative taken by the Australian government. This transaction advised the new constructions of the lines for better functioning (Huang and Zhao, 2012). One of these additional line constructions conflicts. The plan purposed a tunnel to be raised between Rozelle and St. Peters to release congestion on existing network. When the NSW state elections were over, the ruling government changed so resulted in the change in the plans. Lack of funding to complete the purposed plan became the hot topic of the elections. So, the plan divided the parties and the further outcome was the introduction of toll tax and the plan is still under process.
Qube is new to the market of commodity rail haulage. So, to pose an image in the market, its services have to be of high quality. Current downturn in the commodity market may adversely affect its operations (Kliment, Trebuňa and Straka, 2014). The demand for the coal and iron ore is weakening especially from emerging economies, so the contracts and earnings are not covering all the costs. Sustained low prices may hamper the growth of marginal mines. Qube has to consider junior mines to remain in the competition.
Qube is growing since past few years in the market and has emerged as the biggest logistics service provider. The credit may be given to the acquisitions. But the acquisitions did on higher multiples and some based on difficult integrations have caused unfavorable effects on it (Kliment, Trebuňa and Straka, 2014). The planning to mine more synergies has resulted in weakening transactions specifically in the short term which may not give the favourable outcome in the defined period.
One of the strong factors that affect the logistics activities is adverse weather conditions. Although transportation and logistics system is designed to withstand all kinds of weather and unpleasant climate conditions, but the harsh situations like heat waves, snowfall, high temperature may slow down the transportation process. High temperature may cause flattening of tires or expand of rail tracks that increase the risk of accidents. Shipping lanes also experience sea level rise or fall. Coastal infrastructure and harbor facilities also get affected by these extreme conditions.
The main objective of Logistics Management is to make a plan to coordinate all the necessary steps to get the best service level at least possible cost. The logistics include the complete transportation process starting from picking up the product from origin point till the drop at the destination point (Mackenzie, 2010). As the supply chains keep on evolving and changing, there is a strong need to design logistics management strategies based on different customers, different locations, and different product lines. It is mandatory to plan that is flexible enough to cope up with the changing market demands. As Qube is facing a number of issues currently, there are few strategies their management has designed to overcome the issues and some other recommendations are also given in this paper regarding same (Multaharju and Hallikas, 2015). This will help the company to identify and analyze the problem and thus make necessary changes to avoid the reduction in customer service or profitability.
The strategies are designed keeping in mind the three fundamental elements:
Structural: The logistics strategy should be designed after doing the structural analysis of the organization such as the number of warehouses, area available, distribution center and channel.
Functional: Any strategy can be designed keeping the functional excellence of each function in consideration.
Implementation: The major job in the strategy designing is the way it is implemented across the whole organization (Simpson and Erenguc, 2005). The implementation plan includes changes in earlier plans, the configuration of the system, and the introduction of new procedures and policies.
Logistics Collaboration
While deciding about the operational strategies, the companies of same and linked industry should be together and a cooperative decision should be taken. If a company decides onto a dominant decision, it may adversely affect the functioning of other companies (Baker, 2004). This kind of approach is not good for business. A logistics alliance should be formed to fight with any issue.
Rolling Horizon Approach
To solve the issue of less container space, rolling horizon approach can be applied when the place has to handle a huge number of containers with inbound, outbound and transit containers altogether (Sokolov et al., 2014). For this, leaving time of container should be noted down and should be allocated space balancing the workload. The first horizon is chosen and a period is decided after which same plan should be repeated.
Reverse Logistics
Reverse logistics is a method to deal with products that are not useable or users don’t require that anymore. This process is operated to reuse the material or moving the products from the destination point to capture value. There are four rudiments of reverse logistics:
– reduction
– substitution
– reuse
– recycle
As per quantitative model, reverse logistics is divided into three fields:
– Distribution planning
– Inventory control
– Production planning
A nonlinear model can also be designed to consider both forward and return networks.
Limited Capacity
When there are not sufficient machines, trucks, drivers or warehouse space, limited capacity phenomenon should be used (Cai and Xiao, 2011). Under this strategy, backhauls should allow the empty vehicles to make use while coming back. Thus, return trips can be used efficiently and cost can be saved.
Intermodal Transportation
Transportation using different modes is a common and beneficial process which Qube is already using. This method allows fast delivery of freight with very fewer chances of damage or loss (Xu, 2011). However, it can be used in regional or remote areas too to make transportation convenient and fruitful.
Just-In-Time (JIT)
JIT deliveries are used generally at the time of small or frequent shipments. Sometimes there is a need of emergency shipments on right time at right place. The proper management of regular shipments and emergency shipments is the complex job but results in higher customer satisfaction and profitability (Sokolov et al., 2014). Quality, on time delivery and cost, are three main factors that need to be considered while deciding upon JIT model.
Transhipments
Transhipments may happen in one-to-many distribution system when the vehicle which has brought freight from origin point can not reach destination point. It has two main functions:
– Consolidation
– Break-bulk
Consolidate shipments join many smaller shipments and make a bigger one.
Breakbulk shipments split up larger load into smaller shipments (Cai and Xiao, 2011).
By this method, the larger area can be covered with the usage of less number of vehicles (Whiteing, 2003). Different sized vehicles should be used under this model at different stages to get economies of scale.
Global Restructuring
As many of the ports have less space and containers other than poor landside road access, the government should take steps to reconstruct and expand the areas for better functioning. It will help Qube Logistics NSW to meet the upcoming demand of logistics services. Investment in infrastructure is required to sort out this issue. Government finances generally are not sufficient to meet the expenses required for this task (Baker, 2004). Private sector capital should be installed potentially to finance the need of public infrastructure up gradation.
Harmonising Regulations
The Road Safety Remuneration Act and Heavy Vehicle National Law etc have overlapping obligations and cost impacts. Instead, training programs, internal policies and safety systems should be updated. Action should be taken to stop regulatory bodies to stop have contradictory or overlapping orders.
Delivering efficient Infrastructure Projects
Politics is involved in all current infrastructure plans that lead to the wrong selection of projects. Thus, Infrastructure Australia Plan and Infrastructure NSW plan were designed keeping politics aside. For any specific problem, best solution should find out to reduce the applicable cost and ultimately burden on the taxpayers, users, and community (Taylor, Bajuk and Giffin, 2004). By choosing the correct solution, the maximum return can be generated on any investment. Whenever public money is decided to be spent on any projects, the public cost-benefit analysis should be done.
Improvement of Rail Network
It has been projected that Australia’s freight will be doubled by 2030, it is mandatory now to strengthen the rail network. This mode of transport can move a large amount of freight with low risk and investment (Cai and Xiao, 2011). Cost competitiveness improves with the increase in haulage distance. Short haul shuttles are also required to move between Port and Intermodal Terminals. However, the proper rail track system is lacking as of now which should be constructed to sort out the issue.
Later on, we have recommended some measures to solve the problems by applying some of the logistics management theories, however, few of these are already followed by management at Qube. At last, we have written about the steps that should be taken by Australia state government to unravel these prevailing issues.
To attain this long-term relationship within an industry, entire supply chain should be optimized cooperatively. The upper and middle management should be involved to achieve the objective.
Conclusion
In this report, we have discussed Qube, a biggest Logistics Service Provider Organization in Australia. Our target area was Qube Logistics New South Wales. First of all, we gave a brief description of the company and its features. Then, we discussed few problems that the organization is currently facing despite being a leader in the industry (Wang, 2011).
References
Baker, P. (2004). Aligning Distribution Center Operations to Supply Chain Strategy. Int Jrnl Logistics Management, 15(1), pp.111-123.
Cai, G. and Xiao, J. (2011). Optimization of E-commerce Logistics Distribution Center Location.Contemporary Logistics, pp.59-63.
Farrell, S. (2012). WITHDRAWN: Maritime Logistics: Contemporary Issues. System.
Huang, Z. and Zhao, Q. (2012). A Study on the Selection of Logistics Outsourcing Service Provider Based on Analytical Hierarchy Process. AMR, 479-481, pp.76-80.
Hull, D. (2015). A Freight Logistics Strategy for the State of NSW. SSRN Electronic Journal.
Kliment, M., Trebuňa, P. and Straka, M. (2014). Tecnomatix Plant Simulation, Its Features and Its Integration into Business Processes in Logistics Systems. AJME, 2(7), pp.286-289.
Mackenzie, L. (2010). An application of the model of human occupation to fieldwork supervision and fieldwork issues in NSW. Australian Occupational Therapy Journal, 44(2), pp.71-80.
Multaharju, S. and Hallikas, J. (2015). Logistics service capabilities of logistics service provider.International Journal of Logistics Systems and Management, 20(1), p.103.
Simpson, N. and Erenguc, S. (2005). Modeling multiple stage manufacturing systems with generalized costs and capacity issues. Naval Research Logistics, 52(6), pp.560-570.
Sokolov, A., Syunev, V., Sukhanov, Y. and Seliverstov, A. (2014). Features of functional logistics for wood harvesting. Resources and Technology, 1(11), pp.50-65.
Taylor, L., Bajuk, B. and Giffin, M. (2004). 4. Trends in New South Wales. NSW Public Health Bull., 15(5), p.17.
Wang, G. (2011). Supply Chain Integration Based on Commerce Flow and Logistics. Contemporary Logistics, pp.91-97.
Whiteing, T. (2003). Logistics management and strategy. International Journal of Logistics Research and Applications, 6(3), pp.185-187.
Xu, X. (2011). Quality Control and Management of Plum in Cold Chain Logistics. Contemporary Logistics, pp.28-31.
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