Evolution of maritime logistics in the age of integrated supply chain management

• Main Author: Tey, Wee Tee.
• Other Authors: Teo Chee Chong
• Format: Final Year Project
• Language: English
• Published: 2009
• Subjects: DRNTU::Engineering::Maritime studies::Maritime management and business
• Online Access: http://hdl.handle.net/10356/16035
• Institution: Nanyang Technological University

Many companies have realized that real competition is not among companies but rather among companies’ supply chains. The responsiveness and cost competitiveness of supply chains are essential in gaining competitive advantage. Companies have increasingly adopted the concept of supply chain management. In response to the needs of companies, many liner shipping companies have expanded their range of services to offer intermodal transportation and value added logistics services. The benefits of vertical integration into logistics segment include increment of profit, diversification of business risk, and enhancement of market visibility and bargaining power. As a party of the supply chain liner companies enjoy inherent strengths such as demand complementarities and synergies from combined capabilities. They can also exploit their role as liner service operators by offering guaranteed space and competitive pricing when bundling logistics services with their shipping services. Logistics integration is not without disadvantages. The attractiveness of logistics business attracted other new entrants and the returns expected in the long run are uncertain. To provide excellent logistics offerings requires certain level of resource strengths. Liner companies may face tough decision in selecting the suitable organization structure for providing logistics services and changing their organization culture in pricing practices. The report provides a holistic coverage on vertical logistics integration by liner companies. It gives an overview of the logistics industry and various strategies used by liner companies to compete for market shares. Besides supply chain management, factors like acute competition, globalization and changing customer demands that drive logistics integration will be elaborated in detail. It also highlights the benefits and difficulties faced by liner companies and provides an analysis on how leading liner-logistics companies handle those challenges.