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20 November 2017

Logistics and Shipping


Logistics and Shipping involve managing the transfer of products from the place of their origin to the place of their consumption. It includes activities such as material handling, warehousing, packaging, transportation, shipping security, inventory management, supply chain management, procurement, and customs service. Logistics and shipping is a part of the supply chain and value chain in most industries. It is an essential component of the supply chain and value chain for any successful business. All manufacturing companies need logistics and shipping activities for the distribution of their products.

Infrastructure development plays a vital role in the economic growth and development of any countries. Transportation networks such as Railroad, road transport, water transport, and air transport networks form the backbone for any country to move ahead toward development. These transportation networks also play a vital role in the Logistics and Shipping industry; and are the segments of the Logistics and Shipping industry infrastructure.



Globalization and outsourcing are important trends that are currently witnessed in the Logistics and Shipping industry. Both these approaches help logistics and shipping players reduce their operational costs. Globalization and outsourcing are driven by the rapid growth in international trade. Globalization helps the industry players in global expansion through global distribution and marketing activities. This also provides players the competitive advantage in the global level and exposure to the global competition. It also offers worldwide long and complex supply chain to the logistics and shipping companies.

Outsourcing allows companies to involve more players in the supply chain, and this is giving rise to third-party logistics (3PL) players and fourth-party logistics (4PL) players. It also allows logistics and shipping companies to collaborate with other manufacturing companies from different industries to provide logistics to the manufacturing companies. 3PL and 4PL players are specialized in incorporated transportation and warehousing services. These integrated services can be customized to meet the needs of companies from different industries. The need to control logistics costs and the increasing need to focus on core competencies are driving the companies to search for such 3PL and 4PL players and providers, which is another trend witnessed in this industry.

Another trend witnessed in the industry is the manufacturing companies from different industries are increasingly opening their manufacturing units in the location where they get different mode of transportation for easy shipping and logistics activities in domestic and global level. As a result of which, the number of supply chain activities is increasing, and creating several growth opportunities for logistics service providers.

 Mergers and acquisitions (M&A) between manufacturing companies and 3PL & 4PL service providers are also witnessed in this industry. M&A provides the manufacturing companies a quality warehousing and transportation facilities and enhance the logistics and shipping activities of manufacturing companies.

The growing demand for warehousing in another trend witnessed in this industry. This is driven by the increase manufacture as well as consumption of finished goods, which is driven by increasing consumer’s need and demand.

Global transportation policies and regulations also play an important role in the supply chains of goods manufacturing and logistics and shipping companies. Increasing energy costs, carbon dioxide taxes, and the need for energy reduction in transportation are some of main challenges faced by the manufacturers of finished goods and logistics and shipping companies across the globe. Carbon dioxide emission is growing rapidly in the global transport, mainly due to road transport. Other challenges in the industry include the need to reduce operational costs, improve goods delivery performance, and enhance customer satisfaction.


Value Chain

The value chain of any industry lists all the activities from the procurement of a product to its distribution to the customers. Thus, logistics and shipping plays an important role in the value chain of any industry.

Service asset providers constitute the first link in the value chain of the Logistics and Shipping industry. The players in this link are transporters, fleet owners/operators, communication providers, IT providers and warehousing and packaging providers. This step includes activities such as identifying suppliers, material handling, inventory control, and warehousing. Sometimes, material handling and warehousing are handled by 3PL and 4PL players.

The next step in the chain includes infrastructure providers. It includes companies that provide the infrastructure required for logistics and shipping. These companies provide ports, airports, terminals, transport equipment, information and communication technology, IT software and tracking solutions, automation services, etc. They also provide air transport, rail transport, road transport, and water transport facilities and infrastructure for logistics and shipping.

Service providers form the next link in the value chain. This link includes logistics companies, shipping companies, courier companies, cargo handlers, and automation companies, and the services provided by these companies. Service users constitute the final link in the value chain. These include all companies where logistics and shipping is a part of the value chain.


Top Exporters, Importers, and Producers

Some of the top countries in logistics are the US, China, the UK, the UAE, and France. Some of the top importers in this industry are China, the US, Switzerland, the UAE, and the UK. The US, the UAE, China, the UK, and France are some of the top exporters in this industry. Brazil, India, Mexico, South Africa, and Turkey are some of the emerging countries in this industry.


Source : https://www.businessvibes.com/content/logistics-and-shipping-overview