Chapter 8: Bundling Transport and Logistics Services in Global Supply Chains
Hercules E. Haralambides and Michele Acciaro 1 Introduction 1.1 Developments in the liner shipping industry and the role of logistics Although carriers have been providing intermodal services since the 1980s, it is only recently that the major shipping lines have set up logistics operations, giving this type of activities a more central role in their group strategies (Midoro and Parola, 2006). In this way, carriers are increasingly competing with some of their own customers, notably freight forwarders and non vessel operating common carriers (NVOCCs). The reasons behind the decisions of carriers to step into the logistics sector are: increasing shipper demand for integrated supply chain solutions; service and price differentiation; revenue stabilisation; and long-run profitability and market share. The increasing demand of shippers for integrated logistics solutions derives from the widespread importance of just-in-time and make-toorder production–distribution systems. Inter alia, such technologies help manufacturers cope with the vagaries and unpredictability of the business cycle, and to plan for business development in a more cost-effective way (Haralambides, 2009). The port-to-port ocean transportation service is highly homogenised. Competition among carriers is thus intensive and profit margins are squeezed as a result. The provision of logistics services offers carriers the opportunity for service differentiation aimed at premium pricing. The predominance of long-term service contracts with shippers, based on volume discounts, attests to the relevance of such strategies.1 In addition, vertical integration along the supply chain and the bundling of logistics services around ocean transportation give carriers a strong comparative advantage (yet to...
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