Issues & Challenges in Logistics Industries

Logistics:
Logistics is the management of the flow of goods 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. Today the complexity of production logistics can be modeled, analyzed, visualized and optimized by plant simulation software, but is constantly changing. This can involve anything from consumer goods such as food, to IT materials, to aerospace and defense equipment.

Logistics management:
Logistics is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer and legal requirements. A professional working in the field of logistics management is called a logistician. Logistics management is known by many names, the most common are as follows:

Materials Management Channel Management Distribution (or Physical Distribution) Business or Logistics Management or Supply Chain Management

Reference: http://www.wikipedia.org/

There is an issue facing logistics performance not only in one country but in a global scale. This is because people have observed that the costs of logistics are not getting lower but higher, and the levels of service are also getting lower. These, then, are nothing less than blocks to the progress of global trade. Majority of economic development is stunted because of custom laws, bad border trading management, transport regulations, and global transport infrastructure. Logistics performance is a measurement of how effective logistics management is. Simply defined, logistics is what is called as the "physical Internet." The goal here is to bring goods and services from point A to point B in the fastest, most reliable, and cheapest way possible to help reduce hunger and poverty. Technology has always helped bridge the gap between effective logistics management and the issues it faces. As our technology advances, more and more opportunities are seen between countries to advance global marketing strategies. What affects logistics performance? The first thing to consider in logistics, as always, is cost. Any businessman worth his salt knows that he will be in the losing end if the tries to reach for a global market yet incur high overhead expenses. It will not be a wise move to ship items to another location if the actual costs of the activities are not going to be retrieved by the expected profit. Another thing to consider is the time that it will take for the goods and services to be delivered to their destination. In many instances, perishable goods do not reach the destination in the same fresh condition. This poses a risk to any businessman since the products will not be sold anymore. Sometimes, the products do reach the destination, albeit late. The downside here is that they would have just a few shelf days remaining. In a very short span of time, the products will perish and will no longer be fit for consumption. Ironically, this scenario means that it would take more days to transport the goods than the days they would

be displayed on market shelves. As such, business owners simply refuse to ship items since they lose money instead of earning it. In relation to this, geography also plays a crucial role in logistics management. If a target global market is too remote, there is almost no practical way of reaching out to that geography. What needs to be identified is the source of the product and then a study is made regarding the feasibility of transport to that specifically remote location. With today's airplanes, this does not really post much of a challenge. However, you still have to consider the associated costs with effective transport of goods. Lastly, one should take note of a country's over-regulation. There are many countries that have customer practices that are detrimental to their own economic development. Goods are stocked for so long in the customs bureau and they just get released after months of waiting. This kind of bad practice seriously impairs the goal of logistics. In reality, the poor performance of any logistical approach does not always have something to do with the company, but with other external factors as well. It is therefore necessary that poor logistics performance should not always be blamed on the source of goods.

Reference: http://EzineArticles.com/?expert=Sam_Miller

Issues & Challenges Faced By Logistics Industries are:

1. The precarious health of the LTL industry. Weak volumes and cutthroat pricing have taken their toll on the LTL sector, which continues to struggle with inadequate earnings. YRC is the best-known example, but there are others as well. Con-way, for instance, lost $110 million in 2009*. This will not change without a significant improvement in the economy.

2. The price of diesel fuel. After a temporary dip, fuel prices are once again on the rise. According to Department of Energy projections, the average retail price for diesel this year will be $3.00 per gallon. Although that's way down from a few years back, it's still high enough to be a major factor in the cost of moving goods. And we still have $80-a-barrel oil.

3. Rail regulation. A bill currently in Congress would eliminate antitrust law exemptions for railroads and change the way the industry is regulated. While captive shippers certainly deserve protections, I believe this bill, if passed, could be a dangerous first step toward more regulation.

4. The nation's deteriorating infrastructure. In spite of stimulus spending, we are making very little progress toward building the infrastructure needed to keep up with our growing rail and highway traffic. We need to think gray as well as green. If we don't, we'll pay the price in congestion and delays. It's been

projected that at current construction levels, highway capacity will have expanded by 9 percent by 2043. Traffic, however, will have surged by 135 percent. This is not exactly a recipe for an efficient national infrastructure.

5. The Mexican trucking dispute. We need to settle this once and for all. After dragging its heels for 17 years, it's time for the U.S. government to stop making excuses and give Mexican truckers what we promised under the 1993 North American Free Trade Agreementfull and free access to U.S. highways.

6. Transportation capacity. As freight volumes recover, shippers may find trucks harder and harder to come by. Many carriers sold off equipment during the slowdown. And given their weakened financial condition, it's unlikely they'll be able to rebuild capacity quickly as demand picks up. Operators may be in short supply as wellmany drivers lost their driving jobs during the recession and moved on to other occupations. The result could be capacity shortages more severe than we saw in 2005-2007.

7. The sustainability movement and industrial real estate. For all its benefits, the green movement has the potential to create serious headaches for at least one group: real estate investors. While most new construction is "green," many existing, vacant buildings are not. The owners of these buildings may be forced to invest in costly retrofits in order to compete with new, ecofriendly construction.

8. Quality. Unfortunately, quality has sometimes been a casualty of the economic decline. Many of us have cut corners to cut costs, but quality must be restored in the system. This will be a challenge for 2010.

9. The weakened logistics service provider (LSP) sector. Like many other service providers, LSPs have suffered during the past two years. While some have responded by coming up with new ideas and processes, not all have. Those who haven't, must. If they succeed, the result will be a system of improved, more creative providersa plus for the entire distribution system.

10. Vested outsourcing. I believe this conceptunder which clients pay LSPs for results, not processeswill establish a strong foothold during 2010. In fact, it could change the landscape dramatically.

Reference: DC Velocity (www.dcvelocity.com)

Logistic Challenges for India:

Freight cost forms 11% of the landed costs, as compared to the 6% in the developed countries.

Standard transit time from shop-floors in India to retail stands in EU/USA much higher compared to other countries.

Bottle necks: Delayed documentation processes, vast areas & complex locations to cover, delays due to lack of planning & connectivity in multi-modal logistics, very few service providers offer skilled expertise.

Lack of visibility in the entire chain

Every piece handled approximately 15 times from shipper to aircraft.

Complex and time consuming requirements of various government departments.

85% unorganized sector, very few national players.

Reference: www.aqualogistics.com

Challenges and solutions: The future of logistics

Gridlocked "megacities" and formidable environmental challenges: there's no better place to see the future up close than the epicentre of China's economic miracle, Shanghai. Beating urban breakdown and environmental decay, say logistics experts at the third Delphi Dialog, will take innovation, cooperation, and commitment to change.

Economics and environment experts discussed the challenges posed by megacities and climate change.1 An apt choice to host the 2010 World Expo, Shanghai's hi-tech but overcrowded cityscape offers competing visions of what is to come. By 2030, about 60 percent of urban dwellers will live in "megacities" like Shanghai with 10-million-plus people, with all the environmental and logistical implications. "Road of solutions" At the Expo, the Deutsche Post DHL-sponsored Urban Planet pavilion drove home the stark message that urban sprawl and global warming are realities that must be faced up to in the present rather than handed down to our children. But through sound, light, and vision someone who took a tour around the exhibit found himself walking not only the "road of crisis" but the "road of solutions" too. We can save the future, said the Expo, but we must start the struggle now. On October 14, 2010, logistics leaders and experts from various other professions convened from around the globe to discuss the challenges of megacity development and climate change during the Deutsche Post DHL Delphi Dialog. The debate coincided with the publication of Deutsche Post DHL's latest report: "Delivering Tomorrow: Towards Sustainable Logistics." Emissions efficiency: "A win-win situation" During the two-part debate at the Hyatt Hotel on Shanghai's historic riverfront "the Bund", the world's top experts presented their ideas on how to keep life going in the future's megacities and offered some blue-sky thinking on green logistics. As a former advisor to the Obama administration and now a Visiting Fellow at the Peterson Institute for International Economics in Washington, USA, Delphi speaker Trevor Houser knows the difficulties of brokering political agreement on climate change at first hand. Currently Director of Energy and Climate Practice at research consultancy the Rhodium Group, during his

keynote address Houser recalled the wrangling at Copenhagen in 2009 and examined alternative strategies where the private sector was at the heart of "practical solutions." None of those solutions were easy, agreed panelists drawn from Deutsche Post DHL and academia during the ensuing dialog on "The Environmental Responsibility of Global Players." Carbon taxes or oil price hikes are not only unfair but could stall economic development for those who needed it most. Informing people about the true "carbon price" of their products is a deceptively complex undertaking, but could put consumers back in control where governments had failed. Sustainability is already an integral part of DPDHL's strategy "Logistics companies themselves have a particular responsibility to the environment," asserted Deutsche Post DHL Chief Executive Officer Frank Appel, the man in charge of the greenest logistics company in the world, according to a recently published study by the Carbon Disclosure Project. And Deutsche Post DHL has long since reacted to the challenge of climate change: Sustainability is already an integral part of DPDHL's strategy. On the other hand environmental awareness is stimulating a new business paradigm, Appel said: "The fastest growing product we have is our carbon-neutral GoGreenproduct, which is shipping five times more than the year before. That is encouraging, and customers are willing to pay for it." "Our initiative to put our own targets out and put products into the market like GoGreen is pushing our competitors to follow," he added. "It's a huge benefit for us as well. If we are smarter in using our fuel, it saves a lot of cost. It's a win-win situation." Who is responsible for the carbon that is emitted for a specific product? Appel expounded a vision of the world's major companies united to beat climate change, engaging their workforces of millions to "make a change in their private lives", too. Robert de Souza, Executive Director of The Logistics Institute in Singapore, added that not only competitors need to share their ideas to improve

the overall impact of business on climate change. Thinking forward, he envisioned a greater coalition of industry, government, and academia to reach really sustainable solutions. But one question remains to be answered in advance, Kelvin Leung, CEO of DHL Global Forwarding North Asia Pacific, mentioned: "The manufacturer, the shipping company or the consumer: Who is responsible for the carbon that is emitted for a specific product? And who has to pay for it?" For Kelvin Leung this shows that carbon accounting and carbon allocation still needs to be professionalized. For Frank Appel this does not mean that mitigating climate change has to be a negative experience for investors. "I see global warming not only as a threat but as a business challenge," Appel stated. "We can turn it around to a business advantage let's make green products, reduce our footprint and become more competitive - and an even more attractive investment." A breath of fresh air for choking cities "The carbon footprint of the city of Tokyo alone is 1.5 times as high as that of the rest of Japan", Johannes Dell, urban planner and partner of Albert Speer & Partner, the renowned architect's office in Frankfurt, Germany, stated in his speech during the panel discussion on "Challenges for City Logistics in Megacities". One of the main reasons for that is the overwhelming congestion which is choking modern megacities. The fact that average London traffic had recently been slower than horse-drawn carts indicated "just how strangled our cities have become" explained Paul Graham, CEO of DHL Supply Chain Asia Pacific. During his speech he highlighted some real-life solutions, such as DHL's consolidation sites at Heathrow airport and the city of Bristol in the UK. Both reduced the need for constant ad-hoc deliveries, preventing overload on existing infrastructure and reducing carbon emissions too. Meeting ever-rising customer expectations of logistics companies in the ever-more congested megacities would require similarly innovative new thinking, and could change the complexion of a

highly competitive industry. But beside being a great challenge, this also has a great upside potential. Or, as Petra Kiwitt, Executive Vice President of DHL Solutions & Innovations at Deutsche Post DHL noted: "As a logistics company we see a lot of opportunities in megacities." Making use of public transport for smaller deliveries Technology would play a critical role, Paul Graham and Petra Kiwitt told the guests. Night deliveries with electric trucks could cut down on daytime traffic, while reducing emissions too. Smart trucks with intelligent systems to plan their way around the jams were another. Making use of public transport for smaller deliveries could alleviate the pressure on road networks. And "Bring Buddies," ordinary people coordinated by social media and mobile communications to play a part in the logistics chain, could change logistics in the same way that "citizen journalists" are revolutionizing the media. One of the main reasons for today's enormous challenges in megacities lies in the fact that they mainly work with a historically grown infrastructure, Johannes Dell explained. This focuses on the challenge of individual traffic. While most megacities do not have a clear concept of how to cope with the fact of growing individual traffic, Prof. Dr. Yeung Yue-Man, Emeritus Professor of Geography, Chinese University of Hong Kong and an expert on urban development showed that Hong Kong is a positive example on how to deal with the situation: "No other megacity in the world has a public transportation system that is so well planned, efficient, and affordable."

Reference: www.dp-dhl.com

References:
http://www.wikipedia.org/ http://EzineArticles.com/?expert=Sam_Miller www.dcvelocity.com www.aqualogistics.com www.dp-dhl.com