Transport Logistics

1.2.4. Refinement of transport and warehousing management

Transport and warehousing management is refined by optimal use of different transport modes

and by the increasing use of Information and Communication Technology (ICT). For example,

selective use of international transportation modes is now common in the personal computer industry,

in which parts are transported either by air or sea, depending on the degree of added value. Items with

low added values are normally carried by sea in order to reduce transportation costs, whereas key parts

with higher added values are selected according to demand shifts and transported by air immediately

prior to assembly. This enables manufacturers to maintain the quality of parts used in finished

products, ensure consumer satisfaction, and at the same time eliminate the risk of declines in the price

of product inventory.

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The real cost of international freight movements has been declining. Air freight, previously seen

as too expensive and complex, has emerged as a more viable option due to declining unit costs, excess

capacity on some lanes, reduced international trade bureaucracy and the growth of integrators with

comprehensive door-to-door services.

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.

ICT will greatly impact transport and warehousing management, with electronic communication

along the supply chain being set for massive growth. Automatic positioning and navigation systems as

well as real time order processing, routing and scheduling systems are predicted to expand. Many

transport companies have invested heavily in “track and trace” systems to identify the location of any

consignment at any time, improving the visibility of the global supply chain to shippers and their

customers. This has emerged as a key issue in inventory management.