the trends of trade and development

8/2/2019 The Trends of Trade and Development

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CHAPTER 1

INTRODUCTION

1.0 Introduction

Freight transportation and logistics trends are the worlds largest industries. They play

a substantial role in modern world. Freight transportation is the movement of people

and goods from one location to another. Modes of transport include air, rail, road, water andpipeline. Transport and logistics trends are important since it enables trade between peoples

and goods, which in turn establishes civilizations. They are closely connected to

the economics of country. When economic activity is buoyant, demand for transport and

logistics services is equally strong. The research will cover at central region such as

Selangor, Kuala Lumpur and Negeri Sembilan. It will involve with port authority, shipping

companies and government agency. This research will provide because in Malaysia have not

efficient technology compare with worldwide. So, to implement it must have the role ofperformance management and technology solution. It will be carried to ensure the solution

from these problems. The field can be divided into infrastructure, vehicles, and operations.

1.1 Background

Logistics is the management of the flow of materials and services between the point

of origin and the point of use in order to meet the requirements of customers or corporations.

Logistics involves the integration of information, transportation inventory, warehousing,

material handling, and packaging, and often security. Logistics is a channel of the supply

chain which adds the value of time and place utility. They are high due date reliability, short

delivery times, low inventory level and high capacity utilization.
http://en.wikipedia.org/wiki/Cargohttp://en.wikipedia.org/wiki/Modes_of_transporthttp://en.wikipedia.org/wiki/Aviationhttp://en.wikipedia.org/wiki/Rail_transporthttp://en.wikipedia.org/wiki/Road_transporthttp://en.wikipedia.org/wiki/Ship_transporthttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Vehiclehttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Materials_managementhttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Supply_chainhttp://en.wikipedia.org/wiki/Securityhttp://en.wikipedia.org/wiki/Materials_managementhttp://en.wikipedia.org/wiki/Business_operationshttp://en.wikipedia.org/wiki/Vehiclehttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Pipeline_transporthttp://en.wikipedia.org/wiki/Ship_transporthttp://en.wikipedia.org/wiki/Road_transporthttp://en.wikipedia.org/wiki/Rail_transporthttp://en.wikipedia.org/wiki/Aviationhttp://en.wikipedia.org/wiki/Modes_of_transporthttp://en.wikipedia.org/wiki/Cargo


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The trend towards globalisation and logistics is in the process of reshaping transport

activities. New strategic uses of logistics will continually alter the nature and culture of

operations in industry, governments will have to match these changes. The strategic

advantage of logistics is likely to be most pronounced in terms of improvements in

coordination and planning resulting in transport efficiency gains. However, it is important for

governments to fully understand concepts of logistics and to stimulate economic

competitiveness to achieve positive economic development. At the same time, governments

need to reduce any negative impacts, so as to achieve a more balanced approach to economic

growth, including sustainable development.

One of the most obvious manifestations of logistics activities is the growth in freight

transport due to the worldwide expansion of trade. In particular, the globalisation of industry,

including planning, sourcing, manufacturing and marketing activities has resulted in more

complex trading and much more developed transport networks.

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. The rapid development of logistics has influenced not only supply

chain performance but has also changed industry structures and produced new services.

1.2 Statement of Problems

1. The research is to determine that the competitive in moving freight as compared atwater, air, and road in central region.

2. This research also identifies that whether the operation in the central region logisticstrends to provide competition in other states.


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1.3 Research Objective

1. To identify the relationship between logistics hub and freight transports in the centralregion.

2. To analyse the logistics trends for development of economy in the central region.3. To identify the currently of the development in the technology that having impact of

the movement freight transport and logistics trends with the different mode and the

strength of the mode transport in the Peninsular Malaysia Central Region.

1.4 Research Question

1. What are the relationships in the freight transport to the logistics hub transportation?2. What are the differences between mode and the strengths of freights transportation in

the central region?

3. How the logistics trends can effect economic growth in the state?

1.5 Significant of Study

The logistics trend and freight transportation of study is widespread field especially an

industry, and they not fully utilize. This study can assists the problems of freight

transportation and logistics trends in Malaysia. Therefore, within have an analysis about this

study can help to identify the time, cost, and strength of movement from origin to destination

by each available of modes and route in the region. It also can improve understanding of the

opportunities for improving freight logistics and transport in central region.


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1.6 Limitation of Study

The problems that facing when doing this research such as time consuming process is limited

and resources information is not sufficient to process the data and time is constrains.

1.7 Definition of Term

1) Logistics:The management of materials flow through an organization, from raw materials

through to finished goods.

2) Trends:The general direction followed by a road, river, coastline, or the like.

3) Logistics transport:Primary modes of transportation such as truck, rail, air, water, pipeline,

intermodal transportation

4) Integrated:Involved in use multimodal transport, intermodal transport and combined transport.

5) Intermodal:The concept of transporting passengers and freight on two or more different modes

during a single journey


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6) Multimodal:Namely the use of a variety of different transport modes for the movement of unitized

freight from its place of origin to the final destination.


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CHAPTER 2

LITERATURE REVIEW

2.0 Trade and Development of Transportation.

According from the united nations conference on trade and developments article in

efficient transport and trade facilitation to improve participation by developing countries in

international trade (2003) mention that the advances in information and communication

technology have further impacted on trade and transportation processes. Development of

sophisticated management and operating systems has provided efficient cost control,

optimum use of equipment and a new quality in customer relations.

Developing countries need to put in place the necessary physical and legal

infrastructure to benefit from information and communication technology. Providers of

transport services also need to develop information systems to improve their competitiveness.

The existing legal infrastructure needs to be adapted to the requirements of electronic

transactions.

Transport is of increasing relevance to the development of nations. It is a crucial

determinant of production and trade patterns and consequently also of economic integration.

For some countries it may also contribute to the generation of income through the provision

of transport services. Participation in world trade depends increasingly on the type, quality

and costs of transport services.

At present, intra company trade and trade in intermediate products are growing faster

than trade in finished goods. This trend is closely linked to improvements in transport andlogistics services.


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In order to explain who trades what with whom, and by what mode of transport, it is

not enough to look only at transport costs. Other quantitative aspects such as connectivity,

safety, security, reliability, service speed, port facilities and inland connections also need to

be taken into account. Furthermore, it is not only the supply of transport services that

influences trade, but also vice versa: different volumes and types of trade encourage the

supply of different types of transport services. From being an external factor, transport has

become an integrated part of the global production and distribution system.

As in the relation between globalization and international transport, the relation

between regional integration and regional transport is twofold: less expensive and better

intraregional transport services lead to further regional integration, and at the same time

regional integration also affects the markets for transport services.

Within the European Union, maritime cabotage services are liberalized for European-

registered vessels, trucks from member countries are free to move national cargo in other

countries, and common standards help to create not only a common market for goods, but

also a common market for transport services. This is part of a virtuous cycle, where transport

and regional integration mutually benefit each other.

2.1 Trends in Intermodal Freight Transport

A well functioning transport system is essential to our national prosperity and

defense. Advances in freight transport and logistics in recent decades have been a major

source of productivity growth in the U.S economy. The pictorial representation of intermodal

system is given in the following figure.


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Figure 1 : Intermodal Freight Transport

Source: Dharnikota Ujwal Kiran. Portland State University. Department of Civil and

Environmental Engineering(16 march 2007)

From the figure above is about the concept of intermodal freight transportation that

has been use. Many of the advances in freight transportation have been in intermodal

transportation. Intermodal transportation is defined as The concept of transporting

passengers and freight on two or more different modes during a single journey in such a way

that all parts of the transportation process, including the exchange of information are

efficiently connected and coordinated.

However, the term intermodal is often used to identify the important overall advances

in freight transportation and logistics of recent years. Intermodal involves conducting

business within existing governmental policies and regulations, managing the transfers

between modes through the use of developing technologies, and the interactions between

many intermediaries to enable the seamless and real time tracking, scheduling documentation

and delivery of the intermodal shipment to the customer.

Intermodal freight transport is also defined as the transport of goods in containers that

can be moved on land by rail or truck and on water by ship or barge during a single journey


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Many changes have occurred in intermodal transportation over the past century and

some of the key historical developments in the United States have been:

i. Seatrain Intermodal serviceii. Truck-Rail Intermodality

iii. Land Bridgesiv. Pipelinesv. Cargo Containers

vi. Air-Surface Intermodality

From the article by Dharnikota Ujwal Kiran, (16 march 2007) he highlighted that

today intermodal is often associated with a variety of transportation activities and is often

used to refer many of the important overall advances in freight transportation and logistics of

recent years.

The government provides major infrastructure components like ports and harbours,

airports and airways, and inland waterways. The transportation industry is rapidly changing

due to technological advances and search for faster and cheaper ways to transport freight

across the globe.

Intermodal freight transport is a system for transporting goods, particularly over

longer distances and across international borders, which uses a combination of two or more

individual modes, such as road haulage and rail freight, or road haulage and inland waterway

barge, to achieve the most economic, efficient and environmentally-friendly delivery of loads

to their destination.


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2.1.1 Rail

Intermodal rail technology has changed rapidly especially in the areas of automation

and flat car equipment. Most advances have been incremental changes to existing

technologies. Articulated cars represent the type of technology. Articulated cars are light

weight, have lower purchase prices, are less expensive to maintain, and prevent cargo by

eliminating most slack action and roll dynamics between cars.

Figure 2: Intelligent Railroad System

Source: Dharnikota Ujwal Kiran. Portland State University. Department of Civil and

Environmental Engineering(16 march 2007)

The figure 2 is the intelligent railroad system that use in industry .The government

and rail industry are developing Intelligent railroad System that will incorporate evolving

information into train operations and maintenance. Some of them are client service systemand a train control and dispatching system.

Other developments are Nationwide Differential Global Positioning System

(NDGPS), Positive Train Control (PTC), electronically controlled pneumatic (ECP) brakes,

automatic equipment identification tags for all equipments, way side equipment sensors to

identify defects on passing trains, and intelligent grade crossings to reduce grade crossing

collisions.


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Technology based improvements such as real-time grade crossing supervision and

warning systems, supervisory control distributed networks; solid-state interlocking controls

will enhance railroad safety operational efficiency.

2.1.2 Motor Carriers

Most of the advances in this mode are in fuel efficient factors and lighter and stronger

trailers with increased cargo capacity. Also the commercial vehicle operations (CVO)

initiative, which is a part of the intelligent Transportation system, is expected to improve

administrative efficiency, highway data collection, safety and reduce operating costs to

commercial vehicles.

2.1.3 Aviation

Aviation continues to expand its role in intermodal freight transportation in shipment

of high value and time sensitive cargo. From his article, Dharnikota Ujwal Kiran, (16 march

2007) has been highlighted that large aircrafts like Boeing 747-400 freighter and MD-11 andnow Russias Antonov-124, can accommodate 20 and 40 foot international organization for

standardization (ISO) ocean containers. However until lighter and stronger sea air containers

are developed and used, the additional handling cost of transferring cargos between the

heavier ISO ocean containers and the ISO air containers will continue to be more costly than

all ocean service. To accommodate this growth and enhance safety the Federal Aviation

Administration (FAA) is engaged in a comprehensive program to modernize Air Traffic

(ATS) Control System. This includes replacing radar surveillance systems, modernizing

voice communication systems introducing enhanced automated navigation aids, data links,

and improved weather systems.

A common standard for containers would help ports to have standardized equipment

resulting in streamline of the transfer processes. It exploits technologies like tracking, control

and communication to form integrated carriers like FedEx.


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2.1.4 Water Ways

Todays containers vessels have 50 % more cargo capacity than those of 1975 and

some triple the size. He also mention that an 8000 twenty foot equivalent unit (TEU) ship

was developed in 1997 and 13000 TEU ship design is currently being studied. When these

ships were produced in 1970s, they required many waterways and ports to be deepened to

accommodate the increasing drafts of these vessels.

Along with the development of the transportation systems there is also a need for the

standardization and modularization of container design. Not only is the container sizes

increasing but also the design is evolving to make containers stackable, roll able and solid

able onto freight carriers like ships, trucks, and others. Recent innovations have included the

use of advanced materials for higher capacity, lower weight, better performance and life.

In many countries, governments are concerned with viability and survival of such

enterprises, and want to ensure this survival through providing awareness programs,

educational and resource-expansion export. Although freight transportation has benefited

from improvements in information and equipment technologies over the past years, the

progress linking the evolving information and transportation systems has been slowed by lack

of network infrastructure, and lack of expertise in some sectors that participate in the freight

transportation system.


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2.2 The Trends of Trade and Development

According the article Impact of Todays Trends (October 5, 2001), Most experts

talk about inventory and shipment visibility as the key to successful logistics execution. But,

when asked to define visibility, those same experts give a fancy response that in plain English

means knowing the status of in-transit shipments or inventory. Unfortunately, the reality is

that knowing the status of something once it is already in-transit adds no value to the supply

chain. What many companies fail to realize and understand is that there are four conditions

that are changing the way companies are thinking about visibility and the logistics operation

as they struggle to meet the ever increasing customer demands:

a) The Internet B2B Economy:A dramatic transformation in the use of the Internet for business transactions between

companies

b) Reverse Logistics:The management of returned products to distributors, manufacturers or retailers; a

fifth of all purchased items are returned annually

c) Real-time Logistics Event Management:The need for accurate and timely management of information in order to maintain on-

time deliveries, reduce inventory levels and ensure that the right product is in the right

place at the right time

d) Technology Solutions Provide Visibility:New logistics event management technologies to gain real-time visibility into

logistics operations; ensure a more accurate, efficient and effective flow of goods;

reduce costs and increase customer satisfaction


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The four conditions outlined above have significantly changed the role and

expectations of the logistician. Companies must radically adapt their logistics management

strategy in order to compete in todays tumultuous marketplace, marked with eve r-decreasing

turnaround times, increased competition and lower profit margins. This article focuses

primarily on how these conditions are affecting logistics today, with a particular emphasis on

the new technologies that are improving the flow of goods.

There are numerous companies in the marketplace that offer technology solutions

claiming real-time visibility into inventory levels and logistics unfortunately, what most offer

does not match up with what businesses really need to improve costs and customer

satisfaction.

2.2.1 The Internet B2B Economy

There has been explosive growth in business-to-business (B2B) transactions via the

Internet. According to Forrester Research,The Impact of Todays Trends (October 5, 2001),

the B2B e-Commerce segment of the economy will grow to $2.7 trillion by the year 2004.

AMR is even more optimistic, predicting that the market will reach $5.7 trillion during the

same time period. (The New Logistics Management Paradigm: The Impact of Toda ys

Trends October 5, 2001)

Forrester predicts that as much as 20 percent of all transportation transactions will

take place over the Internet by 2004. With this dramatic growth in Internet-based

transactions, e-logistics has created new categories of logistics management providers

including:

a) Fourth Party Logistics (4PL) firms:Organizations that manage the full scope of logistics services for companies by

aggregating and coordinating the services of multiple logistics service providers


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b) Logistics Exchanges (LX):Internet-based marketplaces for the buying and selling of logistics services,

management of logistics content, and the optimization of logistics activities

c) Logistics Visibility Providers (LVP):Internet-based service providers that capture data from logistics service providers;

cleanse, verify and analyze the data; and report on logistics activities to facilitate total

supply chain visibility. All of these providers rely on the Internet in some way to

provide a service to a business organization. However, it is difficult to determine who

participates in which category and who really delivers the functions they promise.

2.2.2 Reverse Logistics

At a recent National Association of Purchasing Management seminar, it was

presented that the top five reasons for electronically-generated orders not meeting customer

expectations are:

a) Late deliveryb) Wrong product/quantityc) Not shipped at alld) Technical problemse) Returns

If it is true that 90 percent of these issues could have been avoided in the first place,

then logisticians must focus on the root cause. In order to improve this process, companies

need real-time visibility into what is actually going to


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2.2.3 Real-time Logistics Event Management

From this article mention that, market today now have three to 100 times the

departmental interdependencies across organizations, international borders and myriad

systems. But, if even a small component of the process can be managed well, significant

improvements will be gained. Consider the fact that total supply chain management costs

typically account for eight to nine percent of sales, according to benchmarks from the

Performance Measurement Group, LLC. The largest single driver of this is logistics. Typical

benefits from integrating the supply chain range from 28 percent to 60 percent improvement

in delivery performance and inventory reduction, to 10 percent to 30 percent improvement in

capacity realization and fill rates.

Therefore, the potential money savings from real-time logistics visibility is

staggering. The combination of supply chain complexity and market conditions puts even

more pressure on manufacturers to provide the right amount of products, at the right time, for

the lowest possible price.

A few factors have made this increasingly difficult. There have been many recent

inventory debacles as a result of the inability of ERP systems to properly forecast demand

and prevent inventory build-up. In addition, the lead times for producing products has shrunk

dramatically. And finally, most organizations now outsource manufacturing of components to

third- party organizations. Our current connected economy has drastically changed the role

and operations of transportation.

As a result, the logistics management departments must try to perform transportation

miracles on a daily basis in order to meet these monumental goals. That is a significant

concern for companies. It becomes an even bigger concern if what was shipped was shipped

out incorrectly and has to be returned or routed differently. In this collaborative economy,

enterprises have to acknowledge the increased role of transportation management and how to

use technology to their best advantage. Figure 1 compares old school logistics with thelogistics of today.


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Figure 3: Compares old school logistics with the logistics of today.

(The New Logistics Management Paradigm: The Impact of Todays Trends

October 5, 2001)

From the figure 3, we can conclude that the improvement from the old logistics

become logistics today. Many of the improvement be made from these. So, automatically the

logistics trends have been improved.

The result is that the customer gets what they ordered, but at a significant cost to the

enterprise. There is technology that exists today to manage customer requirements before the

product is shipped. In logistics management, from the raw materials procurement to the

customer destination, value or cost is added along the way. To correct a deviation from the

original customer requirements as it approaches its destination is a very costly proposition;

not only in terms of money but in terms of time. There is a solution. It is real-time logistics

event management using some of the leading edge technology solutions available today.


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2.2.4 Technology Solutions Provide Visibility

Very few companies can compete on price alone. Speed, accuracy and completeness

with which orders are filled and delivered are the sustaining differentiators in todays fast -

paced economy. Effectively managing events is key. The solution is real-time logistics event

management. Logisticians must gain real-time pre shipment visibility and proactive event

management before shipment. But be warned some technology providers state they have

visibility to facilitate proactive tendering and management of all freight through to the final

destination. There are solutions available that provide visibility through a collection of real-

time, Web-based data and analytics.

These solutions help to manage the logistics process between buyers and suppliers,

while eliminating costly discrepancies between purchase order, sales order and shipping

information. By eliminating these variances and inconsistencies in anything from quantities

and shipping locations to ship dates, part numbers and freight terms, logistics providers can:

a) Eliminate missed shipmentsb) Eliminate shipment discrepanciesc) Improve profit margins by inputting more accurate and timely data into optimization

tools Enable the reduction of inventory carrying costs for the customer

d) Support customers efforts to reduce inventory investmentse) Improve customer satisfaction through:f) Improved delivery reliabilityg) Improved efficiencies in your customers receiving operations


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Figure 4: Typical Logistics Workflow reposition

Figure 4 depicts the typical outsourced logistics workflow. This figure shows an enhanced

event managed visibility workflow solution. This solution extends into the supply chain and

integrates with the existing logistical systems. Visibility happens this way:

a) As the buyer processes the purchase order, the PO information is sent by line item to astandards based hosted platform. Reference Point 1.

b) As the shipment is picked, packed or staged at the Supplier, the data is sent to thesame platform. Reference Point 2.

c) Alerts on pre-defined information inconsistencies will be automatically sent toappropriate users for corrective action on a real-time basis before input into the TMS

or the product being shipped. Reference Point 3.


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More advanced technology will provide alerts on business rules and document

cardinality violations. For example, a shipping document cannot find reference to a sales

order number. Or a primary key field is missing that will impact analytic views later on. In

these two examples, alerts would be sent to the appropriate individuals for review and

resolution.

The ability for logistics managers to gain visibility into the buyers purchase order

and compare that data to the pre-shipment information from all suppliers through exception

or event management is of significant value to this market. It takes a truly proactive approach

to managing logistics. What comes out of this process is a significant improvement in the

flow of goods to the customer. In addition, this technology will arm the logistician with the

following capabilities:

a) Exception management enabling the logistics group to manage by exceptionb) Reduction of inventory carrying costs for the customer by improving shipment

reliability

c) Alignment with the customers effort to reduce inventory investments d) Provide one version of the truth for dispute resolutione) Improved customer service by enabling:

i. Improved scheduled delivery reliabilityii. Improved efficiencies in receiving operations

In todays volatile economic climate, logistics management is becoming more

important than ever before. Getting the right amount of goods to the right place at the right

time is critical, especially in an age when budgets are tight and customers demands are

unpredictable and unforgiving.

Logistics management is evolving in significant ways to address these problems.

Internet utilization, combined with the proliferation of reverse logistics and the impact of


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technology advancements in real time logistics event management and visibility, are

fundamentally changing the role of logistics management in organizations.

In order to succeed in todays global marketplace, companies must be ever cognizant

of these trends and develop a logistics management strategy that capitalizes on the best-of-

breed technology solutions available today, so that they can meet the demands of their

customers today and be well prepared for the future.

2.3 The Aim of Developing Logistics Performance Indicators

The aim of developing performance indicators for the logistics sector is to evaluate

the efficiency and sustainability of logistics systems, monitor the achievement of logistics

policies and explore possible improvements. Different players in the logistics chain have

different objectives, and achievement of each of these objectives needs to be evaluated.

The private sector aims to achieve optimisation of the supply chain, and hence, be

competitive in international markets. The public sector aims to fulfil its responsibility by

applying effective policies to address the trend towards increased globalisation of economies

and liberalisation of trade while achieving sustainability and social objectives.

The public sector has to be able to monitor freight transportation and the performance

of logistics systems to measure the effectiveness of its policies. Therefore, it is necessary to

assess the advancement of logistics not only from the viewpoint of industrial or national

competitiveness, but also from the viewpoint of global, social optimisation.

Performance indicators can be used to assess impacts of logistics by considering the

major players in the logistics system, i.e. consumers, shippers, logistic service providers andgovernments. Although a complete evaluation of logistics systems may be difficult, a relative


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evaluation is possible and useful by comparing the performances of logistics services in

different countries using performance indicators. They can be evaluated by considering best

practices as the standard evaluation criteria.

2.4 Central Region As A Logistics Hub ( Port Klang)

The Malaysian government is now actively encouraging the setting up of international

procurement centers to foster distribution activities especially at ports. This includes the offer

of suitable fiscal incentives to investors and the Customs designation of special free zones

areas where such activities could be carried out.

The National Economic Recovery Plan (1998) acknowledged the importance of the

value-adding activities as part of the efforts to foster greater competitiveness of the

Malaysian economy. The Plan emphasised the need to promote the usage of the various free

commercial zones in the country for value-adding and transhipment activities, especially for

industries licensed under manufacturing warehouse and free industrial zones.

The move to encourage the development of international procurement centers and

distribution activities forms an integral part of the government's policy to stem the outflow of

foreign exchange payments. It is also seen that the role of the ports in the national economy

would be further strengthened through the linkages created by the generation of cargo.

The international procurement centers (IPCs) are allowed to be set up at designated

free zones only. The free zones offer an environment free from Customs documentation and

duties. A wide range of value-adding services are provided in addition to consolidation and

storage functions by the IPCs in the distriparks at the Westport Distripark and at the Port

Klang Distribution Park in Northport.


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In addition to the Westport Distripark at Westport, the Port Klang Distribution Park,

located in the free zone at Northport, also offers space to companies to carry out value-adding

services. The Port Klang Distripark, which is located strategically between two container

terminals in Northport at Port Klang, offers leased space to cargo consolidators to carry out a

broad range of value-adding services. PKDP and Westport Distribution Park are well link by

rail network.

The attraction of Port Klang for companies to set up the IPCs has also been fostered

by the recent increase in the mainline shipping services. It also offers considerable benefits

with prospects for saving in time and costs.

This inception literature assesses the general situation of freight transportation in

Malaysia and brings forward the potential of Intelligent Transportation Systems applications

and more specifically Commercial Vehicle Operations for providing a way of improving the

offered level of service. Malaysia s vision of attaining developed nation status by 2020 is

based on expansion towards a service and information economy, but this is only possible by

increasing the productivity of the industry.

A major parameter towards a competitive industry is the efficient transportation of

freight, since it is calculated that this sector comprises at least 10% of the value of products

that highlighted by Sgouris P. Sgouridis Freight transportation in Malaysia (Jun 30, 2003).

Domestic and international supply chains rely on the high utilization equipment andinfrastructure, as well as the coordination of a series of private and public administrative

procedures.


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The streamlining of administrative procedures and their electronic facilitation, the

consolidation of the very small carriers, the active support of private initiatives for

installation of freight tracking and fleet management systems, the support of intermodal

solutions and increase of the utilization of the rail and waterways for domestic and short

distance international trade, are some of the more important ones.

All these measures have as end goal to facilitate the creation of an efficient supply

chain. More specifically they can improve the traffic conditions and emissions in congested

areas like Kuala Lumpur, increase the security level so that it complies with the CSI

requirements and give the Malaysian shipping and port industry a competitive advantage,

promote road safety and reduce the impacts or prevent incidents that involve hazardous

materials.

Furthermore it can encourage the use of new technologies, which is convergent with

Malaysia stated goal of the promotion of knowledge-based economy, and give incentive to

local manufacturers to enter new technology markets of sensing, monitoring, sealing and

other electronic equipment.

Besides that, transportation plays an important role in logistics system and its

activities appear in various sections of logistics processes. Without the linking of

transportation, a powerful logistics strategy cannot bring its capacity into full play. The

review of logistics system in a broad sense might help to integrate the advantages from

different application cases to overcome their current disadvantage.

On the other hand, the review of transport systems provides a clearer notion on

transport applications in logistics activities. The development of logistics will be still

vigorous in the following decades and the logistics concepts might be applied in more fields.


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2.5 Impact Globalization on International Freight Transport Activity

The other article from the impacts of globalisation on international road and rail

freight transport activity (2008) have mention about the comparison international freight

transport can effect globalisation on activities of transportations in Europe to or from Asia.

In this article mention about the Travel distances between Europe and Asia are

generally far shorter by land than they are by sea. This is especially true if the origin and/or

destination are inland. Rail services from China to Europe via Central Asia could be provided

that take approximately 20 days, whereas this takes approximately 6 weeks by sea. It has

been estimated that travelling from Europe to Asia by road would take approximately two

weeks (ECMT, 2006).

At present the major trans-Asia land routes are rail routes, including the Trans-

Siberian, the TRACECA corridor, and the southern route via Turkey and Iran. Road routes

can be preferable to rail routes in Asia in terms of the denser coverage they provide to larger

towns. In addition, the physical terrain in the south of the continent is often better suited to

road than rail. China is currently developing a countrywide network of road and rail

infrastructure that will link up with connections to Kazakhstan, Mongolia and Russia.

Land transport between Europe and Asia is one of the oldest trade routes in the world

(The Silk Route). However, over time long-distance freight flows on this route were largely

replaced by maritime transport. The re-opening of the border between China and Kazakhstan

for commercial trade has resulted in the recommencing of long-distance freight flows by

(road and rail) land between the two continents.

However, volumes of intercontinental freight flows remain relatively small at present.

These land routes are mostly used at present for the transport of commodities such as coal,

agricultural products, iron and oil, and bulk goods. Only very limited quantities ofcontainerized cargo is transported on these land routes.


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This reflects that maritime transport still dominates these container flows at present.

Rail transport (especially the Trans-Siberian Railway) was estimated to account for

approximately 3-4% of these containerized freight flows in 2005, and road freight was

estimated to represent less than 1% of these containerized flows (The Chamber of Commerce

of the United States, 2006).

2.6 Impact of Integrated Logistics on Global Business Practice

The progressive integration of logistics across supply chains has had profound effects onbusiness practices. These include the following trends, note by organisation for economic co-

operation and development (OECD):

a) Higher interdependency between firms interlinked within the business network,which has become the new reality of industry. Performance by an individual firm

affects the performance of all, and determines the ultimate performance of thenetwork as a whole.

b) A more globalise economy links the sourcing of material and product componentswith production and markets across national boundaries, invoking problems of time,

distance, cultures and diverse market preferences. It intensifies competition and

increases the complexity of supply by expanding product variety, searching for

higher efficiency while responding to diverse and rapidly changing markets.

c) Changing the concept of corporate enterprise. Organisations have shed peripheralactivities to concentrate on core competencies that offer the promise of unique value.

Greater external dependence therefore forces attention to inter-organisational

relationships for co-ordinating activities and processes. In some cases, the shift

towards core business has led to the creation of virtual organisations, where the


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majority of business operations have been outsourced to external parties, including

third and fourth party logistics.

d) Transformation of organisational structure of the corporation from a hierarchy, inwhich the manager dispenses knowledge and workers perform, to the point where

knowledge is widely diffused throughout the organisation and workers manage their

own activities. This places collaborative decisions closer to the point of action. In a

logistics framework, it places a premium on inter-organisational relationships through

formal and informal contact, as well as on data and information systems across

organisational boundaries.

e) Changing the government environment, creating both problems and opportunities.Much of the economic regulation of transport and telecommunications has been

liberated, leading to new market-based combinations of service providers who offer

transport combined with warehousing, telecommunications, product assembly and

related services. Other forms of regulations to cover consumer protection,

environment and safety are replacing the former economic restraints.


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CHAPTER 3

RESEARCH METHODOLOGY

3.0 Introduction

In conducting this research, they are several sequences of steps or stages have been

carried out to ensure the objective of the project could be achieved and the target to fulfil the

problem statement is completed. Objective for this methodology is to test the significance and

validity and reliability of the results. Furthermore, this research is directed to give a pithy

answer to the research question. The major purpose is to prove the hypothesis presented

before conducting the research.

3.1 Survey Method (Cluster Sampling)

In this research for freight transport and logistics trends use method of cluster

sampling. This cluster sampling technique to be use because cost effective and can be

administrated to a large number of people. Instead ofsampling an entire country when using

simple random sampling, the researcher can allocate his limited resources to the few

randomly selected clusters or areas when using cluster samples. We create the questionnaire

as an instrument for this research. The questionnaire will give to companies which have

relationship between freight transport and logistics trend in peninsular central region to get

respondent in survey.
http://www.experiment-resources.com/population-sampling.htmlhttp://www.experiment-resources.com/population-sampling.html


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3.1.1 An Example of the Evaluation Form for Data Survey:

Dear Sir/Madam,

Please be informed that, this short survey is undertaken to clarify the freights

transports and logistics trends in particular central region. The objectives of the study are:

a) To measure the relationships between freights transport and logistics hub.

b) To evaluate for development the economy.

c) To determine the movement freights transport and logistics trends.

Participation in this survey is purely voluntary. All your answers will be kept

absolutely confidential and will be used for the purpose of this study only. This survey is part

of Final Year Project for final semester students in Programmed Bachelor Maritime

Operations (Hons).

If you have any queries about this questionnaire, please do not hesitate to contact the

undersigned for further clarification. A special taken of appreciation will be given for those

who participated in this survey.

Your cooperation is highly appreciated. Thank you.

Regards,

i. SHAIDATUL SHEEDA BINTI ABDUL RAHMANii. Email:[email protected]

iii. Tel: 019-4411202
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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3.1.2 The Survey Questionnaire

The question use to contribute the overall validation in freight transport and logistics

trends in Malaysia. The survey was implemented by posting the questionnaire to a random

selection of companies in peninsular central region, requesting them to respond to the

questions given. The question is divided in following section:

a) Section A : General Informationb) Section B : Relationship between logistic hub and freight transportc) Section C: Development of economyd) Section D: Movement freight transport and logistics.

In section B, C, D the interviewees are asked to rate a series of question using a Y and N:

Y=Yes

N=No


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Below the examples of question will be asked:

Please take a few minutes to complete this survey. Your specific answers will becompletely anonymous, but your views, in combination with those of others, are

extremely important.

Section A : GENERAL INFORMATION

Name of Company:

Address:

Name of Officer:

Designation:

Tel. No.:

Fax No.:

Hand phone No.:Email:

Website:

Table 1: General Information


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SECTION B: RELATIONSHIP BETWEEN FREIGHT TRANSPORTS AND

LOGISTICS HUBY = YES I = INADEQUATE N = NO N/A = NOT

APPLICABLEYES I = INADEQU

ATE N = NO N/A = NOT APPY=Yes N=No

LICABLE

1. Is development in Malaysia affects Transports freight and logistics trends?

Y N

2. Did the land transportation in more efficient compare with the rail transports?

Y N

3. Is the air, land, and water transports are under freight transport?Y N

4. Advances in transport and logistics industry trends freights are booming to Malaysia?

Y N

5. Did the logistics hub have a relationship with the freight transports?

Y N


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SECTION C: DEVELOPMENT OF ECONOMY

Y=Yes N=No

1. Is the impact of land transport to the establishment of national economy?

Y N

2. Is development in Malaysia affects the logistics hubs?

Y N

3. Is the economy give the long life of the freights transports?

Y N

4. Did the freights transports and logistics trends are the main pulse in the developmentof the economies in Malaysia?

Y N

5. Freights transport sector will give good profit to the company and especially to thecountry?

Y N


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SECTION D: MOVEMENT FREIGHT TRANSPORT AND LOGISTICS

Y=Yes N=No

1. Is the technology in logistics trends give impact to freights transports?

Y N

2. Did the government involve in the freights transport and logistics trends operation?

Y N

3. Is reliability are provided improvement at the state?

Y N

4. Is the safety and operational cost is give a major impact on transit?Y N

5. Is supply chain can provided adequate supply in long run term?

Y N


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3.2 Process Data

After get the result from evolutions from questionnaire, process data that can be use in

SPSS is Chi-square. From the collective data, the mathematical equation will be derived

depending on the scope of research. This Chi-square used to determine whether there is a

significant difference between the expected frequencies and the observed frequencies in one

or more categories. It because in this research have relationship between data and variables.

3.3 Flow of Project

3.3.1 Flow Chart of Project

Figure 5: Flow Chart of Project

This figure 5 show that the starting until the end of flow project.

STARTCONFORMATION

OF THE TITLE

FIND ARTICLE AND

JOURNAL

SUMMARIES THEARCTICLE AND

PROPOSE A NOTECARD

MAKE A MORE

RESEARCH FOR THE

PROPOSAL

PREPAIR A

PROPOSAL AND

PRESENTATION

END

NO

YES


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3.4 Conceptual of Framework

The sequences of the research are shown in the flow chart that is illustrated in the

following figure 6.

Figure 6: The flow chart shows the conceptual of framework

Relationship between logistic hub and

freight transport

Development of economy

Movement freight transports and

logistics.

Performances of management

Technology solution

Trends of

logistics and

freight

transport

Conceptual of framework

INDEPENDENT VARIABLES

DEPENDENT VARIABLES

MODERATION VARIABLES


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The flow chart shows the conceptual of framework in freight transport and logistics

trends in a simplified manner. This concept has related with each others. It can provide

improvement of understanding about the flow of freight transport and logistics trends. It has

three variables such as independent variables, dependent variables and moderation variables.

The moderation variables will be affected to the independent and dependent variables. When

role of performance of management and technology solution will be improve, thus the

independent and dependent variables become increase.

3.5 Planning of Budget

ITEMS EXPENSES

1) Documentation RM 302) Toll RM 80

3) Fuel RM 80

4) Accommodation RM 90

Total RM 280

Table 2: Planning of Budget

The table show the budget for the next final year project 2. The average that has been

calculated is about RM 280.00. So, this budget will use wisely when do it this research at the

central region.


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REFERENCES

1. Development, O. F.-O. (2002). Transport Logistics. Shared Solutions to CommonChallenges,Organisation For Economic Co-Operation and Development.

2. Kiran, D. U. (march 16, 2007). Trends in Intermodal Freight Transportation.Department of civil and environment egineering freight transport and logistics .

3. P.Sgouridis, S. (June 30,2003). Technological and Organisation issues from an ITSPerspective. Freight transportation in Malaysia .

4. Secretariat, U. (2003).Efficient transport and trade facilitation to improveparticipation by developing countries in international trade.

5. The Impact of Todays Trends. (October 5, 2001). The New Logistics ManagementParadigm , 1-7.

6. Yung-yu TSENG, M. A. (2005). Proceedings of the Eastern Asia Society forTransportation Studies.

the trends of trade and development

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