Learning from the successes of Asia
Over the past several weeks, we have been examining the main recommendations for achieving success in port logistics activities as identified in the United Nations' study on Commercial Development of Regional Ports as Logistics Centres, commissioned in the early 2000s by the organisation's Economic and Social Commission for Asia and the Pacific (ESCAP).
Today, we look at the role and impact of information technology, and in the conclusion, next week, we will address a number of critical regulatory and institutional issues.
According to the study, modern logistics activities are characterised by "a fundamental shift in strategy towards information-intensive control system(s) (instead of) asset-intensive strategies, such as warehousing and inventory levels".
Indeed, the study posits that "expenditure on IT and information systems is expected to surpass inventory carrying costs in its priority next to transportation costs in the logistics chain!"
Presciently (for a study completed in the early 2000s), the UN team suggested that "the growing power and speed of information processing is reshaping the port industry ... ." It concludes that "IT has transformed transport operators into value-added logistics service providers".
The over-arching objective, notes the study, is to make the best use of IT to reap the benefits of e-commerce and to improve the efficiency of the logistics chain. With this in mind, two key actions are recommended:
1. "Common-user and robust e-commerce based administrative and commercial services should be available to allow ... (ports) ... to connect to the IT networks of administrations, transport operators and logistics centres".
2. "Steps, based on balanced, coordinated and standardised information systems, must be taken to improve the efficiency of administrative and customs activities in the ports ...".
Next: Regulatory and institutional issues.