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CHAPTER 1
INTRODUCTION
1.0 Introduction
Freight transportation and logistics trends are the worlds largest industries. They play
a substantial role in modern world. Freight transportation is the movement of people
and goods from one location to another. Modes of transport include air, rail, road, water andpipeline. Transport and logistics trends are important since it enables trade between peoples
and goods, which in turn establishes civilizations. They are closely connected to
the economics of country. When economic activity is buoyant, demand for transport and
logistics services is equally strong. The research will cover at central region such as
Selangor, Kuala Lumpur and Negeri Sembilan. It will involve with port authority, shipping
companies and government agency. This research will provide because in Malaysia have not
efficient technology compare with worldwide. So, to implement it must have the role ofperformance management and technology solution. It will be carried to ensure the solution
from these problems. The field can be divided into infrastructure, vehicles, and operations.
1.1 Background
Logistics is the management of the flow of materials and services between the point
of origin and the point of use in order to meet the requirements of customers or corporations.
Logistics involves the integration of information, transportation inventory, warehousing,
material handling, and packaging, and often security. Logistics is a channel of the supply
chain which adds the value of time and place utility. They are high due date reliability, short
delivery times, low inventory level and high capacity utilization.
http://en.wikipedia.org/wiki/Cargohttp://en.wikipedia.org/wiki/Modes_of_transporthttp://en.wikipedia.org/wiki/Aviationhttp://en.wikipedia.org/wiki/Rail_transporthttp://en.wikipedia.org/wiki/Road_transporthttp://en.wikipedia.org/wiki/Ship_transporthttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Vehiclehttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Materials_managementhttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/Materials_managementhttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Vehiclehttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Ship_transporthttp://en.wikipedia.org/wiki/Road_transporthttp://en.wikipedia.org/wiki/Rail_transporthttp://en.wikipedia.org/wiki/Aviationhttp://en.wikipedia.org/wiki/Modes_of_transporthttp://en.wikipedia.org/wiki/Cargo -
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The trend towards globalisation and logistics is in the process of reshaping transport
activities. New strategic uses of logistics will continually alter the nature and culture of
operations in industry, governments will have to match these changes. The strategic
advantage of logistics is likely to be most pronounced in terms of improvements in
coordination and planning resulting in transport efficiency gains. However, it is important for
governments to fully understand concepts of logistics and to stimulate economic
competitiveness to achieve positive economic development. At the same time, governments
need to reduce any negative impacts, so as to achieve a more balanced approach to economic
growth, including sustainable development.
One of the most obvious manifestations of logistics activities is the growth in freight
transport due to the worldwide expansion of trade. In particular, the globalisation of industry,
including planning, sourcing, manufacturing and marketing activities has resulted in more
complex trading and much more developed transport networks.
Developments in vehicle and handling technology also offer the potential to change
the operating costs of different modes of freight transport and bring about a change in the
pattern of traffic flows. The rapid development of logistics has influenced not only supply
chain performance but has also changed industry structures and produced new services.
1.2 Statement of Problems
1. The research is to determine that the competitive in moving freight as compared atwater, air, and road in central region.
2. This research also identifies that whether the operation in the central region logisticstrends to provide competition in other states.
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1.3 Research Objective
1. To identify the relationship between logistics hub and freight transports in the centralregion.
2. To analyse the logistics trends for development of economy in the central region.3. To identify the currently of the development in the technology that having impact of
the movement freight transport and logistics trends with the different mode and the
strength of the mode transport in the Peninsular Malaysia Central Region.
1.4 Research Question
1. What are the relationships in the freight transport to the logistics hub transportation?2. What are the differences between mode and the strengths of freights transportation in
the central region?
3. How the logistics trends can effect economic growth in the state?
1.5 Significant of Study
The logistics trend and freight transportation of study is widespread field especially an
industry, and they not fully utilize. This study can assists the problems of freight
transportation and logistics trends in Malaysia. Therefore, within have an analysis about this
study can help to identify the time, cost, and strength of movement from origin to destination
by each available of modes and route in the region. It also can improve understanding of the
opportunities for improving freight logistics and transport in central region.
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1.6 Limitation of Study
The problems that facing when doing this research such as time consuming process is limited
and resources information is not sufficient to process the data and time is constrains.
1.7 Definition of Term
1) Logistics:The management of materials flow through an organization, from raw materials
through to finished goods.
2) Trends:The general direction followed by a road, river, coastline, or the like.
3) Logistics transport:Primary modes of transportation such as truck, rail, air, water, pipeline,
intermodal transportation
4) Integrated:Involved in use multimodal transport, intermodal transport and combined transport.
5) Intermodal:The concept of transporting passengers and freight on two or more different modes
during a single journey
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6) Multimodal:Namely the use of a variety of different transport modes for the movement of unitized
freight from its place of origin to the final destination.
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CHAPTER 2
LITERATURE REVIEW
2.0 Trade and Development of Transportation.
According from the united nations conference on trade and developments article in
efficient transport and trade facilitation to improve participation by developing countries in
international trade (2003) mention that the advances in information and communication
technology have further impacted on trade and transportation processes. Development of
sophisticated management and operating systems has provided efficient cost control,
optimum use of equipment and a new quality in customer relations.
Developing countries need to put in place the necessary physical and legal
infrastructure to benefit from information and communication technology. Providers of
transport services also need to develop information systems to improve their competitiveness.
The existing legal infrastructure needs to be adapted to the requirements of electronic
transactions.
Transport is of increasing relevance to the development of nations. It is a crucial
determinant of production and trade patterns and consequently also of economic integration.
For some countries it may also contribute to the generation of income through the provision
of transport services. Participation in world trade depends increasingly on the type, quality
and costs of transport services.
At present, intra company trade and trade in intermediate products are growing faster
than trade in finished goods. This trend is closely linked to improvements in transport andlogistics services.
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In order to explain who trades what with whom, and by what mode of transport, it is
not enough to look only at transport costs. Other quantitative aspects such as connectivity,
safety, security, reliability, service speed, port facilities and inland connections also need to
be taken into account. Furthermore, it is not only the supply of transport services that
influences trade, but also vice versa: different volumes and types of trade encourage the
supply of different types of transport services. From being an external factor, transport has
become an integrated part of the global production and distribution system.
As in the relation between globalization and international transport, the relation
between regional integration and regional transport is twofold: less expensive and better
intraregional transport services lead to further regional integration, and at the same time
regional integration also affects the markets for transport services.
Within the European Union, maritime cabotage services are liberalized for European-
registered vessels, trucks from member countries are free to move national cargo in other
countries, and common standards help to create not only a common market for goods, but
also a common market for transport services. This is part of a virtuous cycle, where transport
and regional integration mutually benefit each other.
2.1 Trends in Intermodal Freight Transport
A well functioning transport system is essential to our national prosperity and
defense. Advances in freight transport and logistics in recent decades have been a major
source of productivity growth in the U.S economy. The pictorial representation of intermodal
system is given in the following figure.
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Figure 1 : Intermodal Freight Transport
Source: Dharnikota Ujwal Kiran. Portland State University. Department of Civil and
Environmental Engineering(16 march 2007)
From the figure above is about the concept of intermodal freight transportation that
has been use. Many of the advances in freight transportation have been in intermodal
transportation. Intermodal transportation is defined as The concept of transporting
passengers and freight on two or more different modes during a single journey in such a way
that all parts of the transportation process, including the exchange of information are
efficiently connected and coordinated.
However, the term intermodal is often used to identify the important overall advances
in freight transportation and logistics of recent years. Intermodal involves conducting
business within existing governmental policies and regulations, managing the transfers
between modes through the use of developing technologies, and the interactions between
many intermediaries to enable the seamless and real time tracking, scheduling documentation
and delivery of the intermodal shipment to the customer.
Intermodal freight transport is also defined as the transport of goods in containers that
can be moved on land by rail or truck and on water by ship or barge during a single journey
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Many changes have occurred in intermodal transportation over the past century and
some of the key historical developments in the United States have been:
i. Seatrain Intermodal serviceii. Truck-Rail Intermodality
iii. Land Bridgesiv. Pipelinesv. Cargo Containers
vi. Air-Surface Intermodality
From the article by Dharnikota Ujwal Kiran, (16 march 2007) he highlighted that
today intermodal is often associated with a variety of transportation activities and is often
used to refer many of the important overall advances in freight transportation and logistics of
recent years.
The government provides major infrastructure components like ports and harbours,
airports and airways, and inland waterways. The transportation industry is rapidly changing
due to technological advances and search for faster and cheaper ways to transport freight
across the globe.
Intermodal freight transport is a system for transporting goods, particularly over
longer distances and across international borders, which uses a combination of two or more
individual modes, such as road haulage and rail freight, or road haulage and inland waterway
barge, to achieve the most economic, efficient and environmentally-friendly delivery of loads
to their destination.
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2.1.1 Rail
Intermodal rail technology has changed rapidly especially in the areas of automation
and flat car equipment. Most advances have been incremental changes to existing
technologies. Articulated cars represent the type of technology. Articulated cars are light
weight, have lower purchase prices, are less expensive to maintain, and prevent cargo by
eliminating most slack action and roll dynamics between cars.
Figure 2: Intelligent Railroad System
Source: Dharnikota Ujwal Kiran. Portland State University. Department of Civil and
Environmental Engineering(16 march 2007)
The figure 2 is the intelligent railroad system that use in industry .The government
and rail industry are developing Intelligent railroad System that will incorporate evolving
information into train operations and maintenance. Some of them are client service systemand a train control and dispatching system.
Other developments are Nationwide Differential Global Positioning System
(NDGPS), Positive Train Control (PTC), electronically controlled pneumatic (ECP) brakes,
automatic equipment identification tags for all equipments, way side equipment sensors to
identify defects on passing trains, and intelligent grade crossings to reduce grade crossing
collisions.
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Technology based improvements such as real-time grade crossing supervision and
warning systems, supervisory control distributed networks; solid-state interlocking controls
will enhance railroad safety operational efficiency.
2.1.2 Motor Carriers
Most of the advances in this mode are in fuel efficient factors and lighter and stronger
trailers with increased cargo capacity. Also the commercial vehicle operations (CVO)
initiative, which is a part of the intelligent Transportation system, is expected to improve
administrative efficiency, highway data collection, safety and reduce operating costs to
commercial vehicles.
2.1.3 Aviation
Aviation continues to expand its role in intermodal freight transportation in shipment
of high value and time sensitive cargo. From his article, Dharnikota Ujwal Kiran, (16 march
2007) has been highlighted that large aircrafts like Boeing 747-400 freighter and MD-11 andnow Russias Antonov-124, can accommodate 20 and 40 foot international organization for
standardization (ISO) ocean containers. However until lighter and stronger sea air containers
are developed and used, the additional handling cost of transferring cargos between the
heavier ISO ocean containers and the ISO air containers will continue to be more costly than
all ocean service. To accommodate this growth and enhance safety the Federal Aviation
Administration (FAA) is engaged in a comprehensive program to modernize Air Traffic
(ATS) Control System. This includes replacing radar surveillance systems, modernizing
voice communication systems introducing enhanced automated navigation aids, data links,
and improved weather systems.
A common standard for containers would help ports to have standardized equipment
resulting in streamline of the transfer processes. It exploits technologies like tracking, control
and communication to form integrated carriers like FedEx.
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2.1.4 Water Ways
Todays containers vessels have 50 % more cargo capacity than those of 1975 and
some triple the size. He also mention that an 8000 twenty foot equivalent unit (TEU) ship
was developed in 1997 and 13000 TEU ship design is currently being studied. When these
ships were produced in 1970s, they required many waterways and ports to be deepened to
accommodate the increasing drafts of these vessels.
Along with the development of the transportation systems there is also a need for the
standardization and modularization of container design. Not only is the container sizes
increasing but also the design is evolving to make containers stackable, roll able and solid
able onto freight carriers like ships, trucks, and others. Recent innovations have included the
use of advanced materials for higher capacity, lower weight, better performance and life.
In many countries, governments are concerned with viability and survival of such
enterprises, and want to ensure this survival through providing awareness programs,
educational and resource-expansion export. Although freight transportation has benefited
from improvements in information and equipment technologies over the past years, the
progress linking the evolving information and transportation systems has been slowed by lack
of network infrastructure, and lack of expertise in some sectors that participate in the freight
transportation system.
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2.2 The Trends of Trade and Development
According the article Impact of Todays Trends (October 5, 2001), Most experts
talk about inventory and shipment visibility as the key to successful logistics execution. But,
when asked to define visibility, those same experts give a fancy response that in plain English
means knowing the status of in-transit shipments or inventory. Unfortunately, the reality is
that knowing the status of something once it is already in-transit adds no value to the supply
chain. What many companies fail to realize and understand is that there are four conditions
that are changing the way companies are thinking about visibility and the logistics operation
as they struggle to meet the ever increasing customer demands:
a) The Internet B2B Economy:A dramatic transformation in the use of the Internet for business transactions between
companies
b) Reverse Logistics:The management of returned products to distributors, manufacturers or retailers; a
fifth of all purchased items are returned annually
c) Real-time Logistics Event Management:The need for accurate and timely management of information in order to maintain on-
time deliveries, reduce inventory levels and ensure that the right product is in the right
place at the right time
d) Technology Solutions Provide Visibility:New logistics event management technologies to gain real-time visibility into
logistics operations; ensure a more accurate, efficient and effective flow of goods;
reduce costs and increase customer satisfaction
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The four conditions outlined above have significantly changed the role and
expectations of the logistician. Companies must radically adapt their logistics management
strategy in order to compete in todays tumultuous marketplace, marked with eve r-decreasing
turnaround times, increased competition and lower profit margins. This article focuses
primarily on how these conditions are affecting logistics today, with a particular emphasis on
the new technologies that are improving the flow of goods.
There are numerous companies in the marketplace that offer technology solutions
claiming real-time visibility into inventory levels and logistics unfortunately, what most offer
does not match up with what businesses really need to improve costs and customer
satisfaction.
2.2.1 The Internet B2B Economy
There has been explosive growth in business-to-business (B2B) transactions via the
Internet. According to Forrester Research,The Impact of Todays Trends (October 5, 2001),
the B2B e-Commerce segment of the economy will grow to $2.7 trillion by the year 2004.
AMR is even more optimistic, predicting that the market will reach $5.7 trillion during the
same time period. (The New Logistics Management Paradigm: The Impact of Toda ys
Trends October 5, 2001)
Forrester predicts that as much as 20 percent of all transportation transactions will
take place over the Internet by 2004. With this dramatic growth in Internet-based
transactions, e-logistics has created new categories of logistics management providers
including:
a) Fourth Party Logistics (4PL) firms:Organizations that manage the full scope of logistics services for companies by
aggregating and coordinating the services of multiple logistics service providers
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b) Logistics Exchanges (LX):Internet-based marketplaces for the buying and selling of logistics services,
management of logistics content, and the optimization of logistics activities
c) Logistics Visibility Providers (LVP):Internet-based service providers that capture data from logistics service providers;
cleanse, verify and analyze the data; and report on logistics activities to facilitate total
supply chain visibility. All of these providers rely on the Internet in some way to
provide a service to a business organization. However, it is difficult to determine who
participates in which category and who really delivers the functions they promise.
2.2.2 Reverse Logistics
At a recent National Association of Purchasing Management seminar, it was
presented that the top five reasons for electronically-generated orders not meeting customer
expectations are:
a) Late deliveryb) Wrong product/quantityc) Not shipped at alld) Technical problemse) Returns
If it is true that 90 percent of these issues could have been avoided in the first place,
then logisticians must focus on the root cause. In order to improve this process, companies
need real-time visibility into what is actually going to
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2.2.3 Real-time Logistics Event Management
From this article mention that, market today now have three to 100 times the
departmental interdependencies across organizations, international borders and myriad
systems. But, if even a small component of the process can be managed well, significant
improvements will be gained. Consider the fact that total supply chain management costs
typically account for eight to nine percent of sales, according to benchmarks from the
Performance Measurement Group, LLC. The largest single driver of this is logistics. Typical
benefits from integrating the supply chain range from 28 percent to 60 percent improvement
in delivery performance and inventory reduction, to 10 percent to 30 percent improvement in
capacity realization and fill rates.
Therefore, the potential money savings from real-time logistics visibility is
staggering. The combination of supply chain complexity and market conditions puts even
more pressure on manufacturers to provide the right amount of products, at the right time, for
the lowest possible price.
A few factors have made this increasingly difficult. There have been many recent
inventory debacles as a result of the inability of ERP systems to properly forecast demand
and prevent inventory build-up. In addition, the lead times for producing products has shrunk
dramatically. And finally, most organizations now outsource manufacturing of components to
third- party organizations. Our current connected economy has drastically changed the role
and operations of transportation.
As a result, the logistics management departments must try to perform transportation
miracles on a daily basis in order to meet these monumental goals. That is a significant
concern for companies. It becomes an even bigger concern if what was shipped was shipped
out incorrectly and has to be returned or routed differently. In this collaborative economy,
enterprises have to acknowledge the increased role of transportation management and how to
use technology to their best advantage. Figure 1 compares old school logistics with thelogistics of today.
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Figure 3: Compares old school logistics with the logistics of today.
(The New Logistics Management Paradigm: The Impact of Todays Trends
October 5, 2001)
From the figure 3, we can conclude that the improvement from the old logistics
become logistics today. Many of the improvement be made from these. So, automatically the
logistics trends have been improved.
The result is that the customer gets what they ordered, but at a significant cost to the
enterprise. There is technology that exists today to manage customer requirements before the
product is shipped. In logistics management, from the raw materials procurement to the
customer destination, value or cost is added along the way. To correct a deviation from the
original customer requirements as it approaches its destination is a very costly proposition;
not only in terms of money but in terms of time. There is a solution. It is real-time logistics
event management using some of the leading edge technology solutions available today.
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2.2.4 Technology Solutions Provide Visibility
Very few companies can compete on price alone. Speed, accuracy and completeness
with which orders are filled and delivered are the sustaining differentiators in todays fast -
paced economy. Effectively managing events is key. The solution is real-time logistics event
management. Logisticians must gain real-time pre shipment visibility and proactive event
management before shipment. But be warned some technology providers state they have
visibility to facilitate proactive tendering and management of all freight through to the final
destination. There are solutions available that provide visibility through a collection of real-
time, Web-based data and analytics.
These solutions help to manage the logistics process between buyers and suppliers,
while eliminating costly discrepancies between purchase order, sales order and shipping
information. By eliminating these variances and inconsistencies in anything from quantities
and shipping locations to ship dates, part numbers and freight terms, logistics providers can:
a) Eliminate missed shipmentsb) Eliminate shipment discrepanciesc) Improve profit margins by inputting more accurate and timely data into optimization
tools Enable the reduction of inventory carrying costs for the customer
d) Support customers efforts to reduce inventory investmentse) Improve customer satisfaction through:f) Improved delivery reliabilityg) Improved efficiencies in your customers receiving operations
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Figure 4: Typical Logistics Workflow reposition
Figure 4 depicts the typical outsourced logistics workflow. This figure shows an enhanced
event managed visibility workflow solution. This solution extends into the supply chain and
integrates with the existing logistical systems. Visibility happens this way:
a) As the buyer processes the purchase order, the PO information is sent by line item to astandards based hosted platform. Reference Point 1.
b) As the shipment is picked, packed or staged at the Supplier, the data is sent to thesame platform. Reference Point 2.
c) Alerts on pre-defined information inconsistencies will be automatically sent toappropriate users for corrective action on a real-time basis before input into the TMS
or the product being shipped. Reference Point 3.
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More advanced technology will provide alerts on business rules and document
cardinality violations. For example, a shipping document cannot find reference to a sales
order number. Or a primary key field is missing that will impact analytic views later on. In
these two examples, alerts would be sent to the appropriate individuals for review and
resolution.
The ability for logistics managers to gain visibility into the buyers purchase order
and compare that data to the pre-shipment information from all suppliers through exception
or event management is of significant value to this market. It takes a truly proactive approach
to managing logistics. What comes out of this process is a significant improvement in the
flow of goods to the customer. In addition, this technology will arm the logistician with the
following capabilities:
a) Exception management enabling the logistics group to manage by exceptionb) Reduction of inventory carrying costs for the customer by improving shipment
reliability
c) Alignment with the customers effort to reduce inventory investments d) Provide one version of the truth for dispute resolutione) Improved customer service by enabling:
i. Improved scheduled delivery reliabilityii. Improved efficiencies in receiving operations
In todays volatile economic climate, logistics management is becoming more
important than ever before. Getting the right amount of goods to the right place at the right
time is critical, especially in an age when budgets are tight and customers demands are
unpredictable and unforgiving.
Logistics management is evolving in significant ways to address these problems.
Internet utilization, combined with the proliferation of reverse logistics and the impact of
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technology advancements in real time logistics event management and visibility, are
fundamentally changing the role of logistics management in organizations.
In order to succeed in todays global marketplace, companies must be ever cognizant
of these trends and develop a logistics management strategy that capitalizes on the best-of-
breed technology solutions available today, so that they can meet the demands of their
customers today and be well prepared for the future.
2.3 The Aim of Developing Logistics Performance Indicators
The aim of developing performance indicators for the logistics sector is to evaluate
the efficiency and sustainability of logistics systems, monitor the achievement of logistics
policies and explore possible improvements. Different players in the logistics chain have
different objectives, and achievement of each of these objectives needs to be evaluated.
The private sector aims to achieve optimisation of the supply chain, and hence, be
competitive in international markets. The public sector aims to fulfil its responsibility by
applying effective policies to address the trend towards increased globalisation of economies
and liberalisation of trade while achieving sustainability and social objectives.
The public sector has to be able to monitor freight transportation and the performance
of logistics systems to measure the effectiveness of its policies. Therefore, it is necessary to
assess the advancement of logistics not only from the viewpoint of industrial or national
competitiveness, but also from the viewpoint of global, social optimisation.
Performance indicators can be used to assess impacts of logistics by considering the
major players in the logistics system, i.e. consumers, shippers, logistic service providers andgovernments. Although a complete evaluation of logistics systems may be difficult, a relative
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evaluation is possible and useful by comparing the performances of logistics services in
different countries using performance indicators. They can be evaluated by considering best
practices as the standard evaluation criteria.
2.4 Central Region As A Logistics Hub ( Port Klang)
The Malaysian government is now actively encouraging the setting up of international
procurement centers to foster distribution activities especially at ports. This includes the offer
of suitable fiscal incentives to investors and the Customs designation of special free zones
areas where such activities could be carried out.
The National Economic Recovery Plan (1998) acknowledged the importance of the
value-adding activities as part of the efforts to foster greater competitiveness of the
Malaysian economy. The Plan emphasised the need to promote the usage of the various free
commercial zones in the country for value-adding and transhipment activities, especially for
industries licensed under manufacturing warehouse and free industrial zones.
The move to encourage the development of international procurement centers and
distribution activities forms an integral part of the government's policy to stem the outflow of
foreign exchange payments. It is also seen that the role of the ports in the national economy
would be further strengthened through the linkages created by the generation of cargo.
The international procurement centers (IPCs) are allowed to be set up at designated
free zones only. The free zones offer an environment free from Customs documentation and
duties. A wide range of value-adding services are provided in addition to consolidation and
storage functions by the IPCs in the distriparks at the Westport Distripark and at the Port
Klang Distribution Park in Northport.
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In addition to the Westport Distripark at Westport, the Port Klang Distribution Park,
located in the free zone at Northport, also offers space to companies to carry out value-adding
services. The Port Klang Distripark, which is located strategically between two container
terminals in Northport at Port Klang, offers leased space to cargo consolidators to carry out a
broad range of value-adding services. PKDP and Westport Distribution Park are well link by
rail network.
The attraction of Port Klang for companies to set up the IPCs has also been fostered
by the recent increase in the mainline shipping services. It also offers considerable benefits
with prospects for saving in time and costs.
This inception literature assesses the general situation of freight transportation in
Malaysia and brings forward the potential of Intelligent Transportation Systems applications
and more specifically Commercial Vehicle Operations for providing a way of improving the
offered level of service. Malaysia s vision of attaining developed nation status by 2020 is
based on expansion towards a service and information economy, but this is only possible by
increasing the productivity of the industry.
A major parameter towards a competitive industry is the efficient transportation of
freight, since it is calculated that this sector comprises at least 10% of the value of products
that highlighted by Sgouris P. Sgouridis Freight transportation in Malaysia (Jun 30, 2003).
Domestic and international supply chains rely on the high utilization equipment andinfrastructure, as well as the coordination of a series of private and public administrative
procedures.
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The streamlining of administrative procedures and their electronic facilitation, the
consolidation of the very small carriers, the active support of private initiatives for
installation of freight tracking and fleet management systems, the support of intermodal
solutions and increase of the utilization of the rail and waterways for domestic and short
distance international trade, are some of the more important ones.
All these measures have as end goal to facilitate the creation of an efficient supply
chain. More specifically they can improve the traffic conditions and emissions in congested
areas like Kuala Lumpur, increase the security level so that it complies with the CSI
requirements and give the Malaysian shipping and port industry a competitive advantage,
promote road safety and reduce the impacts or prevent incidents that involve hazardous
materials.
Furthermore it can encourage the use of new technologies, which is convergent with
Malaysia stated goal of the promotion of knowledge-based economy, and give incentive to
local manufacturers to enter new technology markets of sensing, monitoring, sealing and
other electronic equipment.
Besides that, transportation plays an important role in logistics system and its
activities appear in various sections of logistics processes. Without the linking of
transportation, a powerful logistics strategy cannot bring its capacity into full play. The
review of logistics system in a broad sense might help to integrate the advantages from
different application cases to overcome their current disadvantage.
On the other hand, the review of transport systems provides a clearer notion on
transport applications in logistics activities. The development of logistics will be still
vigorous in the following decades and the logistics concepts might be applied in more fields.
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2.5 Impact Globalization on International Freight Transport Activity
The other article from the impacts of globalisation on international road and rail
freight transport activity (2008) have mention about the comparison international freight
transport can effect globalisation on activities of transportations in Europe to or from Asia.
In this article mention about the Travel distances between Europe and Asia are
generally far shorter by land than they are by sea. This is especially true if the origin and/or
destination are inland. Rail services from China to Europe via Central Asia could be provided
that take approximately 20 days, whereas this takes approximately 6 weeks by sea. It has
been estimated that travelling from Europe to Asia by road would take approximately two
weeks (ECMT, 2006).
At present the major trans-Asia land routes are rail routes, including the Trans-
Siberian, the TRACECA corridor, and the southern route via Turkey and Iran. Road routes
can be preferable to rail routes in Asia in terms of the denser coverage they provide to larger
towns. In addition, the physical terrain in the south of the continent is often better suited to
road than rail. China is currently developing a countrywide network of road and rail
infrastructure that will link up with connections to Kazakhstan, Mongolia and Russia.
Land transport between Europe and Asia is one of the oldest trade routes in the world
(The Silk Route). However, over time long-distance freight flows on this route were largely
replaced by maritime transport. The re-opening of the border between China and Kazakhstan
for commercial trade has resulted in the recommencing of long-distance freight flows by
(road and rail) land between the two continents.
However, volumes of intercontinental freight flows remain relatively small at present.
These land routes are mostly used at present for the transport of commodities such as coal,
agricultural products, iron and oil, and bulk goods. Only very limited quantities ofcontainerized cargo is transported on these land routes.
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This reflects that maritime transport still dominates these container flows at present.
Rail transport (especially the Trans-Siberian Railway) was estimated to account for
approximately 3-4% of these containerized freight flows in 2005, and road freight was
estimated to represent less than 1% of these containerized flows (The Chamber of Commerce
of the United States, 2006).
2.6 Impact of Integrated Logistics on Global Business Practice
The progressive integration of logistics across supply chains has had profound effects onbusiness practices. These include the following trends, note by organisation for economic co-
operation and development (OECD):
a) Higher interdependency between firms interlinked within the business network,which has become the new reality of industry. Performance by an individual firm
affects the performance of all, and determines the ultimate performance of thenetwork as a whole.
b) A more globalise economy links the sourcing of material and product componentswith production and markets across national boundaries, invoking problems of time,
distance, cultures and diverse market preferences. It intensifies competition and
increases the complexity of supply by expanding product variety, searching for
higher efficiency while responding to diverse and rapidly changing markets.
c) Changing the concept of corporate enterprise. Organisations have shed peripheralactivities to concentrate on core competencies that offer the promise of unique value.
Greater external dependence therefore forces attention to inter-organisational
relationships for co-ordinating activities and processes. In some cases, the shift
towards core business has led to the creation of virtual organisations, where the
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majority of business operations have been outsourced to external parties, including
third and fourth party logistics.
d) Transformation of organisational structure of the corporation from a hierarchy, inwhich the manager dispenses knowledge and workers perform, to the point where
knowledge is widely diffused throughout the organisation and workers manage their
own activities. This places collaborative decisions closer to the point of action. In a
logistics framework, it places a premium on inter-organisational relationships through
formal and informal contact, as well as on data and information systems across
organisational boundaries.
e) Changing the government environment, creating both problems and opportunities.Much of the economic regulation of transport and telecommunications has been
liberated, leading to new market-based combinations of service providers who offer
transport combined with warehousing, telecommunications, product assembly and
related services. Other forms of regulations to cover consumer protection,
environment and safety are replacing the former economic restraints.
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CHAPTER 3
RESEARCH METHODOLOGY
3.0 Introduction
In conducting this research, they are several sequences of steps or stages have been
carried out to ensure the objective of the project could be achieved and the target to fulfil the
problem statement is completed. Objective for this methodology is to test the significance and
validity and reliability of the results. Furthermore, this research is directed to give a pithy
answer to the research question. The major purpose is to prove the hypothesis presented
before conducting the research.
3.1 Survey Method (Cluster Sampling)
In this research for freight transport and logistics trends use method of cluster
sampling. This cluster sampling technique to be use because cost effective and can be
administrated to a large number of people. Instead ofsampling an entire country when using
simple random sampling, the researcher can allocate his limited resources to the few
randomly selected clusters or areas when using cluster samples. We create the questionnaire
as an instrument for this research. The questionnaire will give to companies which have
relationship between freight transport and logistics trend in peninsular central region to get
respondent in survey.
http://www.experiment-resources.com/population-sampling.htmlhttp://www.experiment-resources.com/population-sampling.html -
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3.1.1 An Example of the Evaluation Form for Data Survey:
Dear Sir/Madam,
Please be informed that, this short survey is undertaken to clarify the freights
transports and logistics trends in particular central region. The objectives of the study are:
a) To measure the relationships between freights transport and logistics hub.
b) To evaluate for development the economy.
c) To determine the movement freights transport and logistics trends.
Participation in this survey is purely voluntary. All your answers will be kept
absolutely confidential and will be used for the purpose of this study only. This survey is part
of Final Year Project for final semester students in Programmed Bachelor Maritime
Operations (Hons).
If you have any queries about this questionnaire, please do not hesitate to contact the
undersigned for further clarification. A special taken of appreciation will be given for those
who participated in this survey.
Your cooperation is highly appreciated. Thank you.
Regards,
i. SHAIDATUL SHEEDA BINTI ABDUL RAHMANii. Email:[email protected]
iii. Tel: 019-4411202
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3.1.2 The Survey Questionnaire
The question use to contribute the overall validation in freight transport and logistics
trends in Malaysia. The survey was implemented by posting the questionnaire to a random
selection of companies in peninsular central region, requesting them to respond to the
questions given. The question is divided in following section:
a) Section A : General Informationb) Section B : Relationship between logistic hub and freight transportc) Section C: Development of economyd) Section D: Movement freight transport and logistics.
In section B, C, D the interviewees are asked to rate a series of question using a Y and N:
Y=Yes
N=No
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Below the examples of question will be asked:
Please take a few minutes to complete this survey. Your specific answers will becompletely anonymous, but your views, in combination with those of others, are
extremely important.
Section A : GENERAL INFORMATION
Name of Company:
Address:
Name of Officer:
Designation:
Tel. No.:
Fax No.:
Hand phone No.:Email:
Website:
Table 1: General Information
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SECTION B: RELATIONSHIP BETWEEN FREIGHT TRANSPORTS AND
LOGISTICS HUBY = YES I = INADEQUATE N = NO N/A = NOT
APPLICABLEYES I = INADEQU
ATE N = NO N/A = NOT APPY=Yes N=No
LICABLE
1. Is development in Malaysia affects Transports freight and logistics trends?
Y N
2. Did the land transportation in more efficient compare with the rail transports?
Y N
3. Is the air, land, and water transports are under freight transport?Y N
4. Advances in transport and logistics industry trends freights are booming to Malaysia?
Y N
5. Did the logistics hub have a relationship with the freight transports?
Y N
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SECTION C: DEVELOPMENT OF ECONOMY
Y=Yes N=No
1. Is the impact of land transport to the establishment of national economy?
Y N
2. Is development in Malaysia affects the logistics hubs?
Y N
3. Is the economy give the long life of the freights transports?
Y N
4. Did the freights transports and logistics trends are the main pulse in the developmentof the economies in Malaysia?
Y N
5. Freights transport sector will give good profit to the company and especially to thecountry?
Y N
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SECTION D: MOVEMENT FREIGHT TRANSPORT AND LOGISTICS
Y=Yes N=No
1. Is the technology in logistics trends give impact to freights transports?
Y N
2. Did the government involve in the freights transport and logistics trends operation?
Y N
3. Is reliability are provided improvement at the state?
Y N
4. Is the safety and operational cost is give a major impact on transit?Y N
5. Is supply chain can provided adequate supply in long run term?
Y N
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3.2 Process Data
After get the result from evolutions from questionnaire, process data that can be use in
SPSS is Chi-square. From the collective data, the mathematical equation will be derived
depending on the scope of research. This Chi-square used to determine whether there is a
significant difference between the expected frequencies and the observed frequencies in one
or more categories. It because in this research have relationship between data and variables.
3.3 Flow of Project
3.3.1 Flow Chart of Project
Figure 5: Flow Chart of Project
This figure 5 show that the starting until the end of flow project.
STARTCONFORMATION
OF THE TITLE
FIND ARTICLE AND
JOURNAL
SUMMARIES THEARCTICLE AND
PROPOSE A NOTECARD
MAKE A MORE
RESEARCH FOR THE
PROPOSAL
PREPAIR A
PROPOSAL AND
PRESENTATION
END
NO
YES
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3.4 Conceptual of Framework
The sequences of the research are shown in the flow chart that is illustrated in the
following figure 6.
Figure 6: The flow chart shows the conceptual of framework
Relationship between logistic hub and
freight transport
Development of economy
Movement freight transports and
logistics.
Performances of management
Technology solution
Trends of
logistics and
freight
transport
Conceptual of framework
INDEPENDENT VARIABLES
DEPENDENT VARIABLES
MODERATION VARIABLES
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The flow chart shows the conceptual of framework in freight transport and logistics
trends in a simplified manner. This concept has related with each others. It can provide
improvement of understanding about the flow of freight transport and logistics trends. It has
three variables such as independent variables, dependent variables and moderation variables.
The moderation variables will be affected to the independent and dependent variables. When
role of performance of management and technology solution will be improve, thus the
independent and dependent variables become increase.
3.5 Planning of Budget
ITEMS EXPENSES
1) Documentation RM 302) Toll RM 80
3) Fuel RM 80
4) Accommodation RM 90
Total RM 280
Table 2: Planning of Budget
The table show the budget for the next final year project 2. The average that has been
calculated is about RM 280.00. So, this budget will use wisely when do it this research at the
central region.
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REFERENCES
1. Development, O. F.-O. (2002). Transport Logistics. Shared Solutions to CommonChallenges,Organisation For Economic Co-Operation and Development.
2. Kiran, D. U. (march 16, 2007). Trends in Intermodal Freight Transportation.Department of civil and environment egineering freight transport and logistics .
3. P.Sgouridis, S. (June 30,2003). Technological and Organisation issues from an ITSPerspective. Freight transportation in Malaysia .
4. Secretariat, U. (2003).Efficient transport and trade facilitation to improveparticipation by developing countries in international trade.
5. The Impact of Todays Trends. (October 5, 2001). The New Logistics ManagementParadigm , 1-7.
6. Yung-yu TSENG, M. A. (2005). Proceedings of the Eastern Asia Society forTransportation Studies.