The Logistics Environment in Australia
Discuss about the Implementing High Productivity and Vehicles.
This report provides an analysis of the major features of intermodal company- ACFS in Australia. It has been identified that intermodal organizations utilize special standardized containers to transport cargo on trucks, freight trains and ships and this is commonly referred to as drayage. ACFS uses a specialized trucking that runs between ocean ports and inland shipping docks (Auscfs.com 2018). The purpose of the report is evaluate the significant issues that ACFS faces at the current logistics network in New South Wales and develop suitable solutions for the organization. This research particularly describes the logistics environment in Australia before moving on to describe the barriers that are present. It has been observed that logistic network of New South Wales have achieved a great amount of success in the recent past but the sector in which it operates is highly unpredictable as well as competitive. Thus, the logistic operation of ASFS is often problematic. So, this report provides the analysis of the issues and develop a suitable solution for ASFC which would help to address the challenges.
It has been identified that in 2013, NSW Freight and Ports Strategy provides a framework for the all organizations in the sector. Consequently, the government of NSW and other stakeholders will guide the investment decisions to improve freight as well as logistics in NSW (Ghaderi, Cahoon and Nguyen 2015). The major objective of this framework was to maintain a suitable delivery of freight network which would effectively support the estimated growth of NSW economy. However, the organizations ACFS estimates a significant skill gap as current workforce of the company is not adequate to deal with the requirements of the framework developed by NSW government. It has been identified that in order of model labor demand, the organization will have to use an in-house microeconomic and computable general equilibrium models, which would help to company to estimate employment at the state as well industry level. Particularly, Jiang, Hanson and Dowdell (2015) mentioned that organizations in logistics sector of NSW is supposed to face a very tight labor market over the coming years and this happens due to the larger demand of supply network. The sustainability and anal record of the company indicates that the major skills that company faces is that an ongoing skills shortage in the engineers and this shortage of skilled employees create a significant long-term challenge. On the other side, Mankoo and Tabone (2014), mentioned that Australia’s container landside logistic activities are arguably the most complex as well as challenging supply chain in existence. It has become highly competitive but the margins are low, with profitability depending largely on the strong operational relationship as well as savvy business decisions which is big challenge. Thus, understanding such highly regulated market, the CEO of ACSF requires a constant balance between safety compliance, future innovation as well as productivity enactment (Wang, Jie and Abareshi 2015). The organization is in the need of an appropriate vehicle type such as higher productivity freight vehicles and streamline intermodal. Furthermore, it is also identified that safety of the container, risk management and compliance remains as the major challenge for the container transport logistic company. The following are some of the major challenges that organizations faces when dealing with the logistics operation in New South Wales.
Challenges Faced by ACFS
As put forward by Chow and Gorgievski (2014,), several manufacturing activities have relocated to the low cost markets for the labor and other inputs. Moreover, in the Australian’s economy is under fluctuation which affects the confidence of the marketers. This is probably the reason that ACFS is not able to hire the desired workforce.
Koukoulas (2016) mentioned that distance and the number of links are rapidly increasing which create the issues with respect to the collection of information and sharing it with other members involved both up and down of the chain. On the other side, Tan (2015) mentioned that short lead time but the “delivery in the fill time” is a big challenge for the organization, Despite the operational challenge is in the sector, the customers expectation are increasing. This happens because the market has become dynamic and industry trends are changing rapidly (Wang, Jie, and Abareshi 2015). Therefore, the consumers do not compromise with the delivery of the goods.
As the numbers of players in the sector are rapidly increasing, the government has become tougher. This happens because the security measures need increased information about the cargo and the records of movement. In addition, the safety and environmental regulations need enhanced monitoring as well as management.
Aguezzoul (2014) mentioned that there are changes that large markets could demand more freight but create more traffic and another has also mentioned that conflict and congestions with passengers could increase in the metropolitan areas.
It is observed that increasing demands are currently placed on business to become environmentally sustainable. In addition, logistic and freight organizations is a large contributor to CO2 emissions as well as has a significant influence on the local air quality (Ghaderi et al. 2015).
It is observed that new distribution models are emerging, especially with respect to e-trading through internet and long supply chain. However, the organizations in the sector such as ACFS currently find it difficult to become flexible with models; hence, entire workforce of the operation needed to be flexible which requires time.
As put forward by Jiang, Hanson and Dowdell (2015), beyond the traditional challenge to innovation that influence all organizations such as cost and expenditure, issues related to make and consistent skill gap, there is also large set of factors could remain as the significant challenge to innovation within the freight logistics sector of NSW. These barriers are further divided into three different groups
Solutions for ACFS
Restricted Co-opetition- It is observed that complex and fragmented supply chain as well as unsophisticated end-users may act as the challenge to developing efficiencies.
Limited Interfacing-As put forward by Chow and Gorgievski (2014) transport operations are considered as delivering a competitive benefit which could further prevent the organizations from working together in a different market. Additionally, it has also been found that increasing number of transactions along with the chain, poor implementation of technology and unavailability of technology is a significant issue for the organizations in freight logistics sector of New South Wales.
As there is high barrier for new organizations and long-term contractual arrangements, the organizations in the sector often find it difficult to apply innovation to the existing process (Ghaderi, Cahoon and Nguyen 2015). In addition, the existing organizations in the sector have the observed the need for government leadership t guide the industry to respond to the changing environment
It is true that multiple levels of government could make it difficult for one particular organizations to guide policy in the field of freight and logistics. The inconsistence across State and Local boundaries which increases inefficiencies (Demir et al. 2015). For example, the accreditation as well as the load restrictions for transportation can be a challenge.
The above discussion helps to observe that there are set of issues which are affecting the operational state of ACFS. In addition, the future needs of the sector is also concern for the organizations. Thus, following are some of the solutions that have been suggested to ACFS to address the stated logistics challenges.
The current skill gap might create a long-lasting negative impact on organizational operation. Therefore, it is necessary for the organization to hire talents from the global environment. The current skills in Australia will not be adequate to meet the increasing needs of the industry. In addition, technological needs and poor use of technology also indicates the needs of hiring skilled people. Thompson and Hassall (2014) also mentioned that regional talents often lack variation. Currently, the organization is in need of the candidates who are having outstanding skills to manage the freight operation. In addition, to remain flexible with the advanced technology the organizations also global expertise. Rezaei, Hemmes and Tavasszy (2017) mentioned that the candidates that have worked in the global field of logistics and freight operation have knowledge compared to the people worked in the same work environment for years. So these facts clarifies that the organizations ACFS needs to hire people from the global environment.
Improving policy making through better information
The organizations nee to develop a complete strategic vision for the NSW freight logistics sector with the inclusion of the agenda for further actions
2. Enhance a freight databases for NSW and examine which could collect information on container movement within NSW
The organizations enhance the capability of freight modeling and work with other states to enhance comprehensive integrated freight for future trends and planning
2. The organization needs to investigate feasibility of enhancing air freight hubs outside Sydney.
3. ACFS can work with the state as well as federal government to enhance the standardization of rail gauges, enhance long-term relationship for container double stacking on interstate rail. The organization can also priorities development of intermodal rail freight terminals
Increasing competitiveness and productivity through better regulations
1. The firm should continue with NSW’s Transport Commission to comply with the freight transport regulations and to get the approval schemes between the states
2. The organization can examine any regional authority or the government issues which could impede the operation of 24 hour supply chain
As the middle term plan, to organization should work with the state and federal bodies to enhance the standard of rail accreditation
Table 1: Strategies to deal with the production issues
Objectives or solution
Medium Term Action
To receive back up from the government in freight and logistics operation , the organization needs to help the industry and make informed decisions
1. The organization needs to review newt technology and enhance the suggestions on the capabilities
2. The organizations needs to identify the best practices and program as well as guide the sector with the evaluation of cost and benefits
ACFS could develop a series of quantitative and qualitative indicators to guide both sector and the government to analyze the influence of policies on innovation and enhance performance.
3. The organization could develop a framework for regular measurement of innovation and productivity development across the sector
Table 2: Best practices to adopt technology in logistics and freight operation
It is identified that intermodal terminal are relevant and critical to increase productivity and efficiency especially in the freight and logistics industry. So, without intermodal terminals, different states and national aspirations about the movement of the goods by rail may not be fulfilled. The organization needs to develop a more effective intermodal facilities which can enhance the productivity. Thus, to implement a sustainable efficient network of well-loaded, optimally developed internal modal terminals will be required, which could further involve,
- Victoria: “Altona, Somerton, Dynon, Lyndhurst, Western Interstate Freight Terminal (proposed)”
- South Australia: “Penfield, Islington, Dry Creek”
- Queensland: “Acacia Ridge, Bromelton (proposed), Ebenezer”
- Western Australia: “Kewdale, Forestfield”
- Tasmania: “Brighton”
- New South Wales: “Moorebank, Enfield, Chullora, Minto Eastern Creek/Badgery’s Creek (both proposed)”
The government of NSW has identified the freight logistics industry as the priority for financial growth through innovation. In late 2014, the NSW Premier introduced the NSW Government Statement on Innovation to:
- Enhance an innovation strategy to support economic development in NSW
- Pay more attention to industries that are significant to State Economy and that have the largest potential for innovation
The freight logistic industry has been observed as the most significant and enhancing and a necessary sector which represent the GDP around 14% in Australia (Hepworth 2014). According to the new regulations imposed by the government, the productivity is measured by both cost reductions and increase sales. The government imposed there regulations that productivity should be targeted to the most significant and largest sector. The innovation should begin with the identification of customers’ need but it needs support of infrastructure, resource and capability. The profits of innovation should be scaled and the risk should be shared. Furthermore, it has also been identified that the Freight Logistic Council of NSW has commissioned such initiative to deliver foundation for a series of innovation strategies as well as actions for the freight logistics industry.
The initial phased of the work should outline as the series of action that should be taken by Government to excite innovation as well as importance within the NSW Freight Logistics sector in both short and long-term. Furthermore, the image given above helps to observe that this project is envisaged two further phases of work which could involve a detailed benchmarking and policy development.
In conclusion, it can be mentioned that as the market has become dynamic, the organizations in the sector will also have to understand this dynamic needs. The current state of the sector implies that organizations tend to face a significant labor challenge. It is observed that with demands of service and customers, expectations have rapidly ben increasing, but the marketers in the sector find it difficult to deal with those growing needs because the organizations currently have a significant skill gap. Especially, ASFC faces the long-lasing and consistent skill gaps among the engineers in the organizations. This is probably the reasons of several delays of project in the sector.
ACFS can address the issues related to its functions and operation but the issues identified the external environment such as the fluctuating economy, poor governmental back up are still a challenge for the organization. Thus, the proposed solution of complying with the regulations developed by the government can help the firms to gain control over the areas. On the other side, skill gap in the internal and external environment can only be resolved when the organization starts hiring people from the global environment. The global expertise can be expensive but for current situation, the firm needs global expertise because in the coming future, the consumption of technology will increase and to use those advanced technology, the organization needs to global workforce who are in touch with the use of new technology. Furthermore, it can be mentioned that the organization in the sector gain benefits in the coming future because presently, the market is price driven and price-driven market cold delivery a huge amount of incentive to minimize the cost in the supply and provide product at the lost cost to the eventual buyers.
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