Globalization is the act of physical, political, social and economic interaction of people across the world leading to an integrated system that is synchronized through common understanding (Scholte, 2000). The main area of concern is across border trade where business resources are shared beyond domestic markets to establish an interconnection with preferred foreign markets. There have been three forces that have continually increased the globalization phenomenon. They include transportation, technology and communication.
Transportation
Improvement in the transportation sector has been essential in enhancing globalization. Transportation modes move faster and have more capacity in storage volumes than previous decades. Improved
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The double stacking capabilities introduced incurred minimal extra costs of long distance shipment. The competitive capacity of rail transport was enhanced against the shipping industry. Road transport also embraced the advancement in containerization through new trailer or hauler trucks. Multiple containers could be latched onto one trailer and successfully delivered over long distances. Therefore, transfer of commodities was based on economies of scale with guaranteed minimum costs as compared to previous years. Due to standardized containerization, intermodal transportation emerged to effectively maneuver geographical constraints for timely deliveries. In this new system, integrated transport modes act in a specific sequence to ensure cargo is delivered door to door. Multiple networks of distribution centers linked to terminals were designed to penetrate a big portion of productive areas (Rodrigue, Comtois, & Slack, 2006). Customers no longer needed to have defined routes of cargo movement. Instead, they only needed to worry about the time of delivery and costs of shipment. The ability to enjoy faster transportation that was cheaper and covered longer distances as compared to previous decades, encouraged movement of people and goods through long distances. The ease and comfort in movement motivated the venture of investors and ordinary people into previously
Of the three forms of transportation, rail has the highest fixed costs, motor carriers the greatest variable costs, and air transport, the greatest variable costs of service and logistics optimization. Starting with rail, the cost structure has the highest fixed cost components, driven by infrastructure and terminal costs. Rail is therefore the most difficult to negotiate a lower transportation cost for, as the fixed costs form an inflexible pricing structure for retail service providers. The quality of rail service varies significantly across nations and regions as well, leading to greater variability in costs when a shipment moves across national and regional boundaries. Given the highly fixed cost structure of rail systems, there is significant room for improvement from an efficiency standpoint. The use of containerization is continually adding to greater efficiencies to this mode of transport (Jennings, Holcomb, 1996).
When the railway had not yet existed the majority of transportation took place by wagon. It is said that traveling by wagon actually costs approximately twenty times more than traveling by rail (Doc E). As stated in Document E, traveling by rail cost less than a tenth… than it would by wagon. Therefore, a more efficient transportation route was created; this meaning that the railway was less costly, much more agile, and also safer than the traditional, inconvenient
day. The Railroads created a cost efficient way to move people or supplies, even its earliest days
- Explain the structures of the road and rail cargo industries and the current issues facing the industries.
The difference in the share of railways in the USA and the EU is due to the geographical distances between cities in the USA and the EU. Railways cost less to operate and have fewer emissions when compared to trucking. Yet, the use of railways is limited for the following reasons: (i) building its infrastructure is very costly; (ii) the long lead time required for developing the infrastructure; (iii) consistent-high-volume of the freight traffic is needed for economic viability; and (iv) the need for trucks for the distribution to the final destinations. Trucks have many advantages over other modes of transportation, especially that they provide last mile delivery. Trucks, as compared to railways, ships, or planes have the most flexibility in reaching a destination, and the upfront
The use of railroads brought about a surge in economic and social development from the 1800’s to the present day. Railroads remain a major transportation service provider today for many commodities, as railroads remain the cheapest and most viable options for such commodities.
Less Cost - Road transport not only requires less initial capital investment, the cost of operation and maintenance is also comparatively lower. Even if the rate charged by road transport is a little higher than that by the railways, the actual effective cost of transporting goods by road is less. The actual cost is less due to road transport saving ion packing costs and the expenses of intermediate loading, unloading and handling charges.
Today’s world many options are available for transporting products from one point to another. A firm may select any one or more of five basic transportation modes—motor, rail, air, water, or pipeline.In addition, certain modal combinations are available, including rail-motor, motor-water, motor-air, and rail-water. Such intermodal combinations offer specialized services and sometimes lower costs not generally available from a single transport mode. Also other transportation options exist, including indirect, special carriers, or non-operating third parties, which offers a variety of services to shippers. These transporters include freight forwarders, shipper cooperatives, parcel post, UPS, FedEx, DHL, EGL, Star Track express, Toll priority and other specialty carriers.
utilization of other means of transportation network in order to support and bridge the increased
Liner Shipping developed new ways of packaging goods for transport; their growth has influenced the global trade. Even during economic crisis there has been tendency to move more and more goods through this means. Their growth influenced the efficiency of the whole supply chain. The progress of this trade has been faster than other sectors (Brooks 2000). Global environment of trading is constantly changing and Geographic concentrations of interlinked business and factories called clusters are making the trade pattern more difficult to predict. Like all other businesses the Liner shipping companies are thriving for competitive advantage over their rivals. And this has led to low freight rate and frequent services. But with
SCM can be divided into three main groups: purchase, manufacture, and transport (Thomas et al., 1996). The focus is on transportation. There are different modes of transportation. These modes of transportation fall under three basic types and they are: land (road, rail and pipelines), water (shipping) and air. Transportation plays a connective role among the several steps that result in the conversion of resources into useful goods for the ultimate consumer. It is the planning of all these functions and sub-functions into a system of goods movement in order to minimize cost and maximize service to the customers that constitutes the concept of business logistics. The system, once it’s put in place, must be effectively managed (Fair & Williams, 1981). What are the advantages and disadvantages of these modes of transportation in logistics?
The growth of the express transportation and logistic industry was brought about by three main trends
Globalization is the process by which people, cultures, ideas, and goods are spread across the world, stimulating the synergy and assimilation of world economies and governments. It references a global economy built on free trade and the use of foreign labor markets to capitalize on revenue, along with the movement of people, ideas, and knowledge from sea to shining sea. The study of history shows us that globalization is not a new phenomenon, rather it has been occurring for centuries. Whether one looks at trade routes such as the Silk Road, or the colonization of countries in the Middle East by European superpowers, they will see that these were all routes to spread economic and governing systems. With the increased availability to
The spread and growth of information technology and internet technologies has provided unequivocal advantages to logistics
Each business has its own particular transport needs. These depend on the nature of the business and the type of products or services it buys and sells.