Introduction
Logistics plays a critical role in the industrial revolution of an organization. Technology provides organizations with numerous benefits worldwide, and organizations shift from manual operation to digital operation methods to gain the benefits. Therefore, the evolution of logistics has been impacted by containerization since most supply departments use it to improve the outcomes of their operations. This paper elaborates on the impacts of containerization on global logistics.
Development of complementary technology
Profit-making business organizations always strive to satisfy their customers’ expectations. Since the development of the shipment system, organizations have been faced with a need to track their shipments to satisfy their customers’ needs. Most containers are transported via the ocean and trucks from suppliers to the purchasers. The transport systems were fond of delays. Therefore, it was difficult for the organizations to assure their customers of the actual dates to expect the delivery of their orders (Nguyen & Wang, 2022). This resulted in poor relationships between the organizations and their customers. This problem had to be solved, and technology was critical for this course. Technology has enhanced customer relationships since organizations can track their consignments and respond to customers effectively. Organizations use vehicle tracking solutions to track their fleet to determine the real-time locations of their vehicles through GPS systems (Nguyen & Wang, 2022). The tracking systems also help the organization prevent unnecessary delays by their drivers since they can follow up on why the shipments have stopped.
Reduction of labor-intensive workforce
Since organizations’ primary aim is to maximize profits, they have used technology to maximize logistics outcomes. Therefore, organizations use advanced technology instead of labor to reduce the need for labor. According to Cosar and Demir (2018), the extensive labor that was once needed for assembling is not needed by organizations since they use machines and equipment for operations. Forklifts perform even the loading and unloading of containers being practiced. Since containers carry many goods, using machines for such activities has left many people jobless. Since organizations are developing technologies to reduce costs related to containerization, most employees are bound to lose their jobs (Nguyen & Wang, 2018). Government and industrial leaders should regulate the continuous use of technology to protect jobs. However, this solution will attract criticism and protests since organizations must make profits.
Theft and losses of containers and goods
Most businesses lose their shipments through theft or losses. Approximately 1500 shippers lose their shipments at sea yearly (Nguyen & Wang, 2018). Thugs can open containers (on trucks) forcefully and disappear with commodities. This can result in heavy losses to the purchasers. Therefore, logistic departments have been developing security mechanisms to prevent losses. At sea, problems may exist due to bad weather, while on the road, the problem may be due to poor infrastructure or unskilled expertise. Theft may be due to the organization’s poor security or general insecurity in the regions. Continuous theft and losses may lead to the failure of businesses (Nguyen & Wang, 2022). Therefore, organizations should enhance their security systems and train their drivers to reduce the chances of theft and losses. They should also determine alternative routes that do not attract thefts.
Governments are responsible for security within their countries and should develop security measures and conducive business environments. On the other hand, ship owners and managers should elevate security measures during the shipment of containers. This will promote trade and enhance logistics outcomes, thus increasing the profitability of businesses. The positive aspect of government intervention in providing security is that organizations will not spend additional financial resources on security and will make profits. However, some government officials may demand bribes for the program leading to undocumented losses.
High dependency on containers for shipment
Most organizations transporting bulky goods between continents depend on containerization for transporting their goods. This dependency may lead to shortages of supplies when organizations cannot access the containers. According to Grey (2022), logistics practitioners suffer from a serious supply chain challenge due to a shortage of shipping containers. Following the surge of COVID-19 pandemics, most manufacturers stopped production due to the government’s economic lockdowns. As a result, shipping organizations did not have products to transport and had to cease their operations (Grey, 202). Container owners responded by removing their containers from the sea and storing them at inland storage facilities. Furthermore, in response to the falling demand, freight shippers reduced their ships (Grey, 2020). China was the first economy to recover from COVID-19, meaning containers were moved to their ports, leaving other places empty (Grey, 2020). Such shortages affect supply chain progress and organizations were at risk of distribution failure.
Suppliers in North America need containers for their business, while Chinese suppliers need them for continuous supply. The shortage is affecting global logistics significantly and will continue to affect businesses if they cannot find enough containers in time (Grey, 2020). To solve the problem, governments of affected countries should bring the containers back to the seas to balance the demand for containers and supply. Although the strategy can increase the presence of containers in the seas, it may take time to be implemented. Manufacturers can transport their products through other means, such as aircraft. However, this may result in heavy expenses for transporting bulky commodities.
Conclusion
In conclusion, containerization, like many technologies used in the supply chain, has affected operations in global logistics. Organizations and Business students should read this paper and conduct further research to learn how technology affects global logistics positively and negatively and develop mechanisms to correct the problem. Additionally, organizations’ managers will learn to avoid over-dependence on technology since their operations may cease if they cannot access it.
References
Coşar, A. K., & Demir, B. (2018). Shipping inside the box: Containerization and trade. Journal of International Economics, 114, 331-345. Web.
Gray, R. S. (2020). Agriculture, transportation, and the COVID‐19 crisis. Canadian Journal of Agricultural Economics/Revue canadienne d’agroeconomie, 68(2), 239-243. Web.
Nguyen, S., & Wang, H. (2018). Prioritizing operational risks in container shipping systems by using cognitive assessment techniques. Maritime Business Review, 3(2), 185-206. Web.