Transport Logistics

ii) Need to recognise negative impacts of globalisation and logistics

The shifts towards globalisation and logistics will be dynamic and may necessitate structural

changes involving negative impacts on some regions and sectors. Companies that operate on a

worldwide scale will not necessarily adhere to rules set by regional authorities, even at the EU level.

Production processes have become more footloose. Since production activities, in combination with

choices for certain markets, are most important in constructing supply chains, these choices determine

the geographical direction of the physical flow of goods and may lead to regional imbalances.

---

17

In industry and business, procurement accounts for 50 to 60% of total turnover. Through the use

of information technologies, firms can plan their production activities to better meet end-customer

orders and hence synchronise procurement. In this respect, Business to Business (B2B) and Business

to Consumer (B2C) are interrelated. Co-ordination between B2B and B2C is a key factor in the

management of flows.

However, the growth in transport demand accompanying this development may not always lead

to an efficient outcome by placing uneven pressure on infrastructure and the environment. The

increasing number of freight vehicles on urban roads has been a long-term trend. Currently, freight

traffic accounts for 15 to 20% of all vehicle movements in urban areas.  E-commerce in its present

form is based on home-delivery, which may lead to less consolidated deliveries and thus more freight

traffic. This will have environmental and social impacts for society and major cost implications, as

delivery efficiency could fall sharply and therefore operational costs could rise significantly. The

implications of e-commerce at this level will depend on whether firms can consolidate their

consignments, thereby improving vehicle load factors and reducing the number of trips.

The problem posed by consolidation of transport services, especially large transport firms such as

international forwarders, requires careful monitoring by governments and, where necessary, the

creation of government-sponsored task-forces involving all the players in the sector to ensure that the

use of ICT does not foster the development of anti-competitive practices.  Similarly, while competition

policy should provide a safeguard against such developments, it should not act as a constraint to the

emergence of co-operative transport arrangements between competitors.