||Alan Edward Branch, Michael Robarts
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The function of shipping is the conveyance of goods from where their utility is low to a place where it is higher. Goods may consist of raw materials conveyed in bulk cargo shipments or purpose-built containers, equipment components or parts for assembly at an industrial plant or on-site capital project, like a power station, or the whole range of consumer products, many of which are durable and may be shipped in containers, on swap bodies or by an international trucking operation. A growth area in recent years is outsourcing. This involves manufacturers relocating their industrial plant from a high labour cost economy, such as Germany or the UK, to a low labour cost environment as found in many Far East countries. Components are sourced locally or from neighbouring countries to the industrial assembly plant. Subsequently the products are marketed locally to the major trading centres, such as Europe and North America. Outsourcing is logistically driven and relies primarily on containerized shipment. It exemplifies how shipping is contributing to the growing volume of international trade, the relocation of industry from the developed to the developing economies, as well as to the changing pattern of international trade. The factors influencing the shipper's choice of transport mode has changed dramatically since the 1980s. Today it is based on the total product concept embracing all the constituents of distribution logistically driven. These include reliability, frequency, cost, transit time, capital tied up in transport, quality of sen ice, packaging, import duty, insurance, and so on. It favours more strongly multi-modalism, with sea transport undertaking the major leg of the overall transit. Logistics, just-in-time delivery, supply chain management and distribution centres or 'distriparks' play a major role in decision-making. All these aspects will be re-examined later as the basis of how the shipowner can best meet the needs of the shipper in the foreseeable future. The paramount consideration is for the shipowner to empathize with the shipper and strive to become flexible and responsive to the shipper's needs on an innovative value-added basis in a competitive logistic global environment. The freight rate is not the only paramount factor, it is the value-added benefit the shipper gains from the service, which is usually a combined transport operation of road, sea and rail.