Abstract
Cargo transport is generally the transportation of goods over varying regions with commercial instincts. There are different modes of transportation employed to ensure successful mobility of goods. The mode to be used varies mainly on the type and size of goods, region over which the goods are to be transported, cost and to some extent the urgency required. Logistics generally refers to all the processes involved in the transportation of physical goods from their point of production or original locality to the intended destination. Different products possess different forms of logistics. In essence, the logistics differ for different products depending on the geographical characteristics of the distance covered. There are global transport environments in which goods and products are moved from one region of the globe to a different region using means like trains, ships or air depending on the nature of the product and the geographical layout of the distance between the two points. On the other hand, there is domestic environment in which goods and products are transported to two distinct destinations within the same region. The difference in transport environment described in the situations above necessitates changes to the supply curve unique to each environment. To establish the nature of changes made requires a comparative analysis of the global environment and the domestic environment.
Comparative Analysis of the Global Logistics versus the Domestic Logistics Environment
There are numerous emerging trends and challenges in the transport sector, therefore, the supply chains are constantly adjusted to tackle challenges and maintain consistency in services. This is a fundamental supply chain followed by different forms of transport service providers but distinguished by the unique features that characterize their regions of operation. For instance, regional transportation involves larger distances and large quantities of cargo as compared to domestic transportation which is characterized by short distances and comparatively smaller quantities of cargo. Therefore, the supply chain in global logistics is adjusted to suit the long distances and the corresponding bulk of goods. In essence, the transportation of products in a global platform requires the use of bigger and more sophisticated methods of transportation like trains, ships and airplanes. These are vessels characterized with large capacities of cargo space and the ability to navigate large distances. In comparison to domestic logistics, cargo is significantly transported with simple and relatively fast vessels owing to the reduced distance and sizes of the cargo.
A study of supply chain systems reveals fundamental aspects of transportation noting the significance of transport vessels in its operation. For example, a trader in the verge of transforming his domestic business to a global one will find it necessary to change his means of transportation. He will have to secure vessels with increased cargo capacities coupled with the ability to cover global distances. On the other hand, another trader willing transform his global corporation into a domestic business will have to dispose his large transport systems to acquire smaller and faster means. Common to the significance of these vessels in the supply chains of both types of logistics is the need for technological and innovative adjustments to put the system at par with emerging trends and challenges characterized with transport systems.
The essential objective of logistics in the commercial aspect is the ability to satisfy customer expectations and make transactions successful. This is a factor common to both global and domestic transport services. Time is of essence in this process. For instance, a business dealing with perishable goods like flower stems will engage in a faster and safer means of transport. In such circumstances, air transport is preferred owing to its guarantee of safety in products and its speed of delivery. On the other hand, one dealing with more durable goods which do not have a lot of urgency will prefer shipment. This is because ships offer safety of the highest order to such products but is relatively slow; therefore, it would take days or even months to navigate from one part of the globe to another depending on the geographical gap between the destinations.
In comparison to domestic logistics, business entities have a variety of alternatives to choose from in terms of speed, distance and capacity of transport vessels to use. The presence of heavy vehicles, boats, trains and other simpler means of transportation available at domestic level simplify the chain of supply for domestic logistics. In general, global logistics has a supply chain with limited means of transportation to choose from. On the other hand, domestic chain of supply can take any form from the available alternatives, which makes it simpler and more flexible than global logistics.
Supply chains are also unique to the distance between production points and markets or delivery points. Global logistics is characterized by large geographical gaps which increase the determinants of the means of transport to use. The presence of a water body (sea or ocean) between business destinations would necessitate the use of ships and the presence of railway lines between the destinations would avail railway transport as an alternative means. However, a geographical gap with sophisticated geographical features like mountains, valleys and lakes would leave air transport as the sole alternative of transportation. This means that the global logistics supply chain would take either of the transport means above with respect to the distance and nature of the geographical gap separating the regions.
On the other hand, domestic logistics is favored by the simplicity of its transport means and the distances involved. There are always faster and readily available alternatives for the transportation of goods in domestic settings. The interconnected nature of roads and the availability of different forms of vehicles make it more flexible to choose the type of transport route or system to employ. In essence, the supply chain in domestic logistics can take any form from all the available alternatives presented by the simplicity of domestic settings. Moreover, the use of technology in the transport sector is of great significance.
Both global and domestic logistics have embedded technological advancements in their chains of supply. The transport sector is vast with numerous technological tools and gadgets that aid in implementing the organizational objectives delegated to the transport sector. Global logistics make significant use of technological advancements in the transport sector in form of different modifications in the vessels of transportation used. There are electric trains which transect countries to deliver goods from one country to another. There are also modified cargo ships which are only specialized for the shipment of cargo across global regions. For instance, airplanes are fitted with fridge compartments to enhance the transportation of perishable goods across global destinations. Products like fish, flower stems and horticultural products require refrigeration to be transported fresh.
On the other hand, domestic logistics also employs technological devices in its transport operations. All the means of transport available in domestic settings have technological modifications to enhance the transportation of goods to and from local destinations. The supply chains in both global and domestic logistics are characterized with technological gadgets and adjustments of normal vessels to more specialized vessels for the transportation of cargo. The nature of the technological modifications depends on many factors. For example, the transport of seedlings or indoor plants through a global gap will require a lighting system in the vessel of transportation to prevent the plants from wilting and promote photosynthesis during transportation. Also, ships are fitted with heat exchange systems to provide ample heat through the adverse temperatures of the sea. This is to protect passengers from freezing and to provide a constant temperature for goods and products requiring a constant temperature.
Network is the most essential aspect of business as far as communication is concerned. It is entirely a fundamental requirement of all business interactions that the supplier communicates with the customer. In a broader aspect, there are very many forms of communication. A communication system is chosen in the supply chain depending on the nature of the message and the audience. The technological nature of computers has availed the internet in which various forms of communication are made. Business executives and heads of departments can schedule transportation dates and announce them through the internet.
Moreover, suppliers can easily communicate with customers, on the type and size of goods to deliver on particular dates. Domestic logistics require faster and instant communication systems as compared to global logistics. In the global arena, the business partners have ample time to communicate on the terms and nature of their business before the transportation is commenced. This has to be done well to ensure that no mistakes are propagated in the process owing to how involving global logistics are.
Additionally, the chains of supply for both global and domestic logistics are shaped by the mode of communication used. It is logically a fact that a businessman in the global sector would prefer sending an email for scheduling a delivery of goods from say, England to South Africa, in comparison to writing a letter to the office of delivery in the destined country. This is because a letter would take a lot of time before the communication is complete while email services are instant in nature irrespective of the geographical gap between the sender and the receiver. This shows that the supply chain in global logistics with respect to communication is shaped according to the type, nature, urgency and the geographical gap between the sender and the receiver.
On the other hand, domestic logistics also share the same instinct with global logistics except for its flexibility. The preference of a mode or means of communication being dependent on the various factors mentioned above is common to both types of regional logistics. However, there are numerous alternatives in short distance communication as compared to long distance communication. As a result of this fact, domestic settings have the advantage of choosing the type of communication to use from a wide range of varieties. Global logistics in that aspect is disadvantaged by its long geographical gap which leaves it with relatively a few communication systems to choose from.
Before goods are transported from one point to another, it is logical to analyze the effects the process of transportation have on the original products. Owing to this, there are characteristics that distinguish goods meant for domestic transport with those for global transportation. Depending on the length of the journey, different types of goods endure tests and modifications that ensure the worth of the good is not distorted in the process of transportation. Goods used in global environments are made to endure the long distance and the changing environmental conditions coupled with global logistics.
On the other hand, domestic goods are also modified for short distant transportation systems which ensure the goods are not distorted on the way. As a matter of fact, the handling and packaging of goods in global environment is entirely different with that done in domestic environments. It is also notable that there are goods unique to particular types of logistics. The nature of goods and their ability to withstand the conditions of transportation dictates which product can be transported locally and which ones can be transported globally.
The markets for the transported goods are also a greater determinant of the nature of the supply chain. As a matter of fact, it is the market that determines the significance of each step included in the chain of supply. Markets that are situated near the production firm or stores have smaller and less sophisticated supply chains irrespective of its global or domestic nature. Globalization has reduced the vastness of the globe into a small business community with interconnected markets. This has significantly simplified the chains of supply even for products that need to be transported over long distances. To be particular, domestic logistics have the most simple supply chains owing to the availability of market and their distribution within the regions. This helps in reducing the concerns of transportation. On the other hand, global businesses can secure markets in different countries to reduce the need for covering such distances. This will ultimately transform global business to domestic logistics but in a wider arena.
The existence of a networked economy and the changing consumer/customer expectations necessitates the need to strategically adjust the elements of the supply chain in both global and domestic environments to satisfy these objectives fully. It is observable in this context that most, but not all changes in the global logistics supply chain are geared towards transforming the global aspect of this trade to a domestic environment. It involves the creation of flexible connections between countries to enable the navigation of the globe easy through a business’ wide markets. The aspect of globalization is slowly transforming global supply chains to look like domestic supply chains. However, the domestic environment also requires a number of changes to the supply chain which are effected as a result of adjusting the various elements of the chain discussed above.
One of the distinctive characteristics of global and domestic products is the cost. A market research in any state in the world will display the same trend between these two products. Products from global environments are highly priced owing to the processes it passes to be availed in a foreign market. On the other hand, domestic goods have relatively lower prices owing to the flexibility of producer and consumer relationships. Markets are not situated far from the producers which make the supply chain shorter and concise.
Furthermore, the taxing and duties imposed on domestic goods cannot be compared to export and import duties incurred in global businesses. This actually shows the trend that the longer and more sophisticated the supply chain is, the more expensive the product will be and the simpler it is, the cheaper the product. Changes effected in supply chain are done to reduce the variables coupled with the system and reduce the sophistication which entirely is rewarding for both consumers and producers.
There is certainly a lot that is common in both business environments. They are mandated in business organizations to implement the objective of availing goods in the market. The goods during production are subjected to different operational conditions, which the nature of transportation system used and the market (global or domestic) targeted. It is from this point of the supply chain that evaluation of adjustable processes and variables are analyzed. Cargo in the domestic environment is different from cargo in global environment depending on its nature and the intended market. The relationship between global and domestic environments is evident in the shifts experienced in the global economy. Studies of local markets have unveiled relationships of local market waveforms and their consequences to the global market. This means that changes or modifications which global goods are subjected to mainly depend on the way local goods are structure to meet the economy.
In conclusion, logistics and supply chain are vast areas of the business world that comprehensive scrutiny is required to correctly establish trends and relationships. The supply chain is characterized with major shifts in customer demand volume, product or service mix, government regulations concerning local businesses, importation and exportation, competition as well as short product life cycles. Organizations and corporations are coming up with strategies to equip their businesses with a competitive advantage against products from different regions. Globalization has heightened the effect of competition on the good and products availed in the market at a time, this has shifted the target of business strategies to changes in the supply curve. Businesses are now integrating domestic and global environments to be controlled by the same supply chain. The comparative analysis shows the different aspect of each environment, which in a strategic perspective necessitates the treating of both operations as separate entities. It is clear that the primary condition of cargo before transportation reveals the environment of the destined market.
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