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The objective of this assignment is to promote the literature review and analysis evaluation of the topics discussed in this week. You need to select one of the topics from the lecture and make a case study research. From this case study, you will need to develop an one page essay with the following components:
a. Summary of the case study
b. What analytical tools were used to solve the problem?
c. What conclusions the case provide?
d. How do you solve the case?
Transportation and Logistics: The Case for Dubai Ports World
1) What global factors have contributed to the growth of the transportation and logistics industry? How have they contributed to this growth?
Transportation is defined as the movement of people, animals and goods from one location to another. And logistics can be known as the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities and can also include the movement of personnel.
As we know , the global transportation and logistics industry is one of the part of the important factors that contributed to the expansion of transportation and logistics. So there have several factor that led to contribution of growth of transportation and logistics industry which is the advance technology, separation of raw material, risk of supply chin, the environment , exchange rate and the competitive.
Firstly, advance technology is one of the part of factor that led to growth transportation and logistics industry. This is because the advanced technology is the tool to facilitate in industry. The function of technology in this industry is to make the system of industry be more easier and systematic either to employee or customer. Besides that, using the advanced of technology in this industry will be make sophiscated to computer, server, database system that will help to store the data. In fact, advanced of technology will help companies to improve operational efficiency by tracking resources thus the Dubai is the World Ports of this industry.
Next, environment also the factor of growth that will contributed to this industry because of the affection to the air pollution which is that will increase the hazard of health. So, the Dubai Ports World has contributed to this growth by using the affection of air pollution via making the advancement of processing of transportation and logistics. So, that will be advantage to this industry.
Firstly, raw material is the origin of these goods is linked with environmental or geological conditions. The flows of raw materials are dominated by a pattern where developing countries export towards developed countries. Transport terminals in developing countries are specialized in loading while those of developed countries unload raw materials and often include transformation activities next to port sites. Industrialization in several developing countries has modified this standard pattern with new flows of energy and raw materials. Therefore, separation of raw materials can make a transportation and logistics of moving better and systematic.
As a conclusion, the transportation andlogistics industry contributed the growth via several element which is there will able to make them competitive with other country in global industry to make the Dubai Ports World be leader in this industry. Thus, they can contributed the factor to increase the demand for global transportation and logistics industry.
2) What steps have Dubai Ports World taken to benefit from global economic change?
Global economic change can be derived economy of the world, comprising of different economies of individual countries, with each economy related with the other in one way or another. A key concept in the global economy is globalization, which is the process that leads to individual economies around the world being closely interwoven such that an event in one country is bound to affect the state of other world economies
First step that Dubai Ports World taken benefit from economic change is invest their business with other countries in order to make the industry become more efficient and efficiency. Besides that, through the investment undertaken they could make Dubai Ports World can compete with other countries but it could make Dubai famous with the highest investment. For example, the Dubai company will be the first UAE-incorporated entity to have its shares traded on an overseas market, providing an opportunity for international financiers to demonstrate what they think of Dubai as an investment hub. So, there were benefit that DP world was taken during the global economic change to make their industry and country can control all the transportation and logistics industry.
Then, the intention also was the step that Dubai ports World taken from the global of economic change in order to provide the best customer experience to its customer. It exactly heavily invest in its people and technology to provide better customer services worldwide. For example, Dubai has been getting the award that was been voted for “Best Seaport in the Middle East” for 19 consecutive year because of the performance and the good relationship with their customer and superior customer service level.
Last but not least, the benefit of global economic changes is develop the logistics cluster which is provide the external services such as high transportation service, cost and efficient flow of good. So, the Dubai Port World can be known as the Best Port World because of providing the skill, value and others.
As a conclusionthere has been lively debate about the future of the world economy after the global economiccrisis. Some argue that advanced economies will likely enter a period of secular stagnation because of misguided policies. Others claim that the days of robust growth are behind us because today’s innovations are less useful than the major inventions of the past. Another view, though, is that the global economy has enormous potential to generate a healthy dose of growth in the coming decades. Innovations, well-designed policies, and vibrant emerging market and frontier economies can help realize that potential. So, basically Dubai can be a leader of Port World and also be a top of global terminal operators.
4) How can logistics companies increase business with countries in Europe, Asia, or Africa?
Logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, animals, equipment and liquids, as well as abstract items, such as manage time, information, transport unit Pricing & Quantity, particles, and energy. The logistics of physical items usually involves the integration of information flow, which is material handling, production, packaging, inventory, transportation, warehousing, and often security. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation in logistics for import and export. According to Bass (2009), logistics companies provide logistical solutions to other organizations. Specifically, these services involve the management of freight, warehousing and inventory management. Businesses often outsource certain functions to logistical organizations to lower costs and increase the efficiency of their supply chains. Logistics companies are usually third-party logistics service providers and specialize in a specific area of logistics.
Africa continues to be a highly lucrative market for the Middle East’s logistics industry. Strong performance on the Africa-Europe and Africa-Asia lanes in particular, has seen a rise in the number of logistics companies keen to win business in the continent. But breaking into the African logistics market is by no means straightforward. Impeded by political instability, failing transport infrastructure and unnecessarily complex border and customs controls, many logistics firms are simply put off venturing into this unpredictable territory. But for those who do, the potential for growth is enormous.
For global logistics firm Agility, there are many driving factors which make Africa more attractive for logistics operators. “As well as freight forwarding increasing on the back of growing trade volumes, there is a growing population and a consumer class which increasingly wants finished goods and products from Asia,” says Sylvain Kluba, chief operating officer Middle East & Africa (and area SVP Saudi Arabia & Africa) at Agility. “There is also a fast-growing demand for the vast raw commodities available in Africa.” He points to statistics from the UN Commission for Africa, which place 54% of the world’s platinum production, 78% of diamond and 20% of gold output as coming from the continent. Africa also has more than half of the world’s fertile land and vast oil and gas, agricultural and mineral resources.
In order to manage the trade of these commodities, local organisations are increasingly turning to the professionals to outsource their warehousing and wider logistics operations. “The outsourced logistics market has really started to emerge in Africa. Companies recognise the opportunity to focus on core competencies, reduce operating costs and better serve customers through the use of third party logistics service providers,” says Kluba. Since 2006, Agility itself has invested US$70 million in developing capabilities and assets in its established operations throughout the continent. Many of the company’s African customers use its strategically-located Dubai hub to import from Asia, store, consolidate goods and distribute to Africa.
GAC Logistics is another global logistics firm that has attracted business from the African continent. “Africa’s underdeveloped manufacturing sector has traditionally meant that almost all consumer commodities have had to be imported, making the region a lucrative market for logistics providers,” says Lars Bergstrom, group vice-president, Middle East at GAC. He has found that many multinational companies with distribution operations in Africa have moved their warehousing operations from Europe to the Middle East. This has enabled them to cut warehousing costs and take advantage of the fact that many companies now have their regional or global headquarters in Dubai. “The proximity of Middle East free zones to Africa, and the ease of conducting business transactions in Dubai in particular, have resulted in export growth into the African market,” says Bergstrom. “The increased investment in infrastructure in East Africa and the entry of major Middle East-based airlines into the region are also good indicators of growth still to come.”
When it comes to air cargo, the Middle Eastern airlines have been reaping huge dividends from their freight operations to and from Africa. Saudia Cargo, for example, has pursued an aggressive expansion programme in Africa which has seen the introduction of operations in Johannesburg, Lagos, Nairobi, N’Djamena and Kano – all in the past two years. Peter Scholten, VP cargo commercial at Saudia Cargo, believes that the carrier’s strategic location between Asia/the Far East and Africa makes it perfectly placed to handle this fast-growing market. “In order to make optimum use of our aircraft, our work does not end here. We fly from Asia to Africa and then onwards to Europe,” he says. “Certain routes have proved to be so successful that we have even increased our frequencies in order to meet demand.” Saudia Cargo’s African network now boasts a total of 114 flights per week to 11 online destinations and another nine via its Lagos hub. There are also major plans in the pipeline to expand into East and West Africa.
5) What threats exist for Dubai Ports World? How would you overcome these threats?
Despite the fact that the pending DP World acquisition of P&O was mentioned at least 162 times in the international press between October 2005 and January 2006, only in February was there any sign that Congress or the U.S. public were at all concerned about this deal. Why did uproar about this public deal suddenly explode with such speed and ferocity? The answer appears to be a combination of the fact that the Bush administration did not expect any controversy to arise over the deal and the general lack of understanding, both in the public and in Washington, about the workings of the maritime industry and the intricacies of port security.
Although the U.S. public appears to understand the strategic importance of ports, unlike airports, trains, and highways, few Americans have a deep understanding of the complex systems at work moving cargo from sea to land. The maritime sector is often invisible, and so the details surrounding port security are more difficult to grasp than aviation security, for example. Effective public demonizing of the UAE combined with the general population’s lack of understanding of port security created a generic feeling of anxiety surrounding the ports deal. As Marshall Wittmann, senior fellow at the Democratic Leadership Council stated, “There’s an inherent American fear that their ports are vulnerable and they are made even more so by this deal. Whether it’s based on facts or fears is another matter, but it’s real and it’s bipartisan and it’s visceral. “With Congress out of session, most lawmakers–many facing battles in upcoming mid-term elections–were back in their home districts and directly confronted by a public extremely concerned that U.S. ports were being sold to a hostile government. Forced to respond on the spot, many politicians demonstrated their own limited understanding of the actual organization and workings of ports, as well as the details of the proposed sale. The biggest misconception, emblazoned on newspaper headlines and parroted by lawmakers, has been the idea that entire ports were being sold to the UAE government. That misconception was borne out of a lack of understanding of the fact that ports are extremely large, complex operations, and the deal in question only involves contracted “rights-of-usage” on a number of specific terminals at certain ports. For example, P&O Ports is just one of eight terminal operators that lease cargo berths from the Port of New Orleans. According to Bill Gertz, author of Breakdown: How America’s Intelligence Failures Led to September 11: “Intelligence and security officials opposed to the deal with Dubai Ports World said ports are vulnerable to the entry of terrorists or illicit weapons because of the large number of containers that enter U.S. territory, regardless of who manages them. Besides “Frank Gaffney, president of the Center for Security Policy wrote: at the very least, the company will have to be read-in on these ports’ security plans as it will have some role in their implementation. Susan Collins, Republican Senator from Maine (and Homeland Security Committee chairwoman at the time) said that careful review of the ‘assurances letter’ reveals that DP World is not, in fact, bound to provide the U.S. government with the information it would need to close the intelligence gaps the Coast Guard identified. Indeed, the assurances appear to amount to little more than a restatement of what the FBI or other law enforcement agencies could gather anyway in the course of an investigation. After the DP World announced its decision to transfer the U.S. port operations to a U.S. entity, the BBC quoted Daniel T. Griswold, director of the Cato Institute’s Center for Trade Policy Studies, as saying that the affair would “send a chilling signal”:
It is just assuming that if a company is from the Middle East it is de facto disqualified from investing in the United States, and I think that is a terrible message to send.
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