Executive Summary

What is logistics and supply chain management ? Describe the current logistics problems or issues that are faced in Australia.
 

The following report is a study about the current logistics problems or issues that are faced in Australia. Due to these issues, many companies like Qube logistics also face various challenges. Qube logistics has been recognized as a huge logistics provider in Australia. It has its services in logistics, rail logistics, warehousing and a complete supply chain management. The motive of the company is to be the largest logistics provider of Australia. The company has a plan to increase its significance in rail logistics. Australia is as challenging as suitable it is for the logistics sector. There are various problems and challenges that are faced by logistic companies. The solutions for these problems can be brought with the help of local state government.

The report covers the current logistic network issues and the problems that are faced in the New South Wales, NSW, state of Australia. The ecological, political and environmental aspects of Australia together provide a unique and favorable environment for logistics that also has to experience number of challenges and issues. The report describes the past and current logistics trends in Australia and the current issues that are affecting the logistic company Qube Logistics (Ila et al.2008).

The points covered are domestic and international logistics in Australia including imports and exports and some other challenges related to the logistics. Also the key issues that are faced, are covered and potential solutions to overcome them (Ales, 2009).

Qube Holdings Ltd is an expanded logistics and infrastructure company in Australia.  The company is also rebranded as Qube logistics. It operates services that cover road and rail transport, warehousing and various services. These services are merged as complete incorporated solution to satisfy the client’s need (Harland et al. 1999).

Over the past 4 years, Qube logistics have extensively developed and elaborated its logistics portfolio to be recognized as Australia’s single largest contributor of logistic services (Ila et al, 2008).

Currently its focus is to grow and develop with extreme speed and establish some additional strategic logistic hubs at the port and inland sites. These hubs will have ability to develop rail as an alternative for transportation. Qube continues to prepare cutting – edge technologies and applications to provide the customers with a fair supply chain procedure (Ales, 2009). 

Current logistic challenges in NSW affecting Qube Logistics

The following session designates the different issues or problems that are faced by Qube logistics in NSW. The issues are categorized into geographical, environmental, climatic challenges as well the other challenges: (Sahay and Ramneesh, 2003).

Biological Issues:

Traffic Blockage:

The huge coastal cities in Australia, especially Sydney and Melbourne, where Qube Logistics has its terminal, experiences immense traffic jam every weekday. The peak hours during morning and afternoon cause high traffic jams on the roads, creating blockages. Bridges and motorways are developed in the cities for reducing the traffic problems, but even those ways are heavily jammed.  New plans are developed to decrease the traffic but due to the increase in the population possessing cars and personal vehicles, the plans fail to effect.  The transportation of goods is heavily affected if the transporters approach to travel by these jammed areas during peak hours. Also the firms having warehouse inside the city would have to face these problems daily. Qube logistics has the warehouses developed in the port (Ales, 2009).

The solution to this problem is to develop bridges and motorways. Many private firms build such kind of motorways to transport goods, having a contract with the state government.

Problem with the toll roads and road changes:

There are some toll roads in Sydney and the other cities that are built by private contractors and are the challenges in themselves despite of the roads were built in order to reduce the traffic jams.  Australia adapts the approach of changing and modifying the roads to control the traffic and congestion in local areas.  The highway improvements in local areas enhance the travel time and safety for the pedestrians but whenever the roads are blocked for construction, it resists heavy vehicles to enter. These changes affect the travelling time and create confusion (Ales, 2009). These roads are considered to be more of obstacles then the efforts to improve the transportation.

Distance:

A big issue with Qube logistics is the great distances between the cities.  For example, the distance between Sydney and Melbourne is 880 kilometers. Even rail journeys take a huge amount of time. Also many roads have very fewer petrol stations so it gets necessary to carry petrol. The company has to evaluate the time taken and the cost involved to travel.

Also in these routes, transportation, especially to the mining sites that are at remote locations makes the process of transportation complex. These long distance and complex journeys has to be planned carefully previously. If transportation is to be done at distant places, the planning of alternative routes can be helpful (Ila et al. 2008).

Regional Challenges

Transportation through Road trains is a general method used for transportation in the wide spread areas on Australia. This method is very useful in overcoming the issues of products carried per kilometer by road.

The other issue for long distance travelling is the driver exhaustion. Drivers are burdened to complete the deliveries in short time. It leads injuries accidents and deaths. Drivers are witnessed breaking the speed limitations for completing the journey on short time. (Ila et al. 2008). 

Australia’s climate challenges the transportation of the company. It is shown how the climatic changes affect the transportation.

Every company has to follow the green logistics. Minimum waste and pollution has been a primary concern for Qube logistics. The aim of the company is to build renewable energy sources and implement those sources in the near future.

During winter, the snowfall creates huge jams and congestion. Road closures are applied in cities like Sydney Melbourne Queensland etc due to snowfall. Travelling through these roads is very dangerous. This is the situation of the other parts of Australia, particularly Victoria, Tasmania and southern New South Wales where Qube logistics has their terminals and ports. Thus, these factors create delay or cancellation of some transports resulting into heavy loss for the company. These road closures can continue for many days and create problems when alternative options are also not available. Studded tyres are solution but heavy vehicles like semi-trailers must avoid to transportation via these routes. The rail traffic also gets affected by the snowfall but it happens very rarely because of the location of the railway lines (Christopher and Tang, 2006).

During summers very hot climate is discovered in Australia from September to April. The railway logistics of Qube is highly affected due to extreme hot conditions, The railway lines are buckled due to conduction of metals (George et al. 2004).

Also road logistics are affected as, there are many items that are perishable and need to be maintained in cool temperatures. Meat and fish products are commonly travelled and have to be properly refrigerated (Deveshwar and Rathee, 2010).

Also, Australia has been the country where natural disasters are witnessed often. Bushfires, cyclones and flood damage the infrastructure and machineries. Time delay is naturally a cause of disasters. Also during disasters, the need of supplies can increase and it gets difficult to manage the delivery of products at specific time (Deveshwar and Rathee, 2010). 

Environmental Challenges

There are also several other challenges that companies may come across that do not fit into any of the above categories. They are described below.

Rising Fuel Prices

The statistics from BITRE 2008 shows that the roads and freight rates in Australia were increased due to rising fuel prices. The rising fuel prices affect the overall cost of the company. The rise in fuel prices affects the company enormously. Due to this, the costs of transportation also increase (George et al. 2004).

Different Rail Gauges

The proposition of three different rail gauges has resulted in to a challenge. It signifies that the three trains cannot continue to travel on various tracks and the cargo must be unloaded.

Maintenance work on infrastructure like roads and rail results in transportation delay.

Considering the competitors of Qube Logistics, large logistics companies like Toll Holdings and Linfox hold a huge percentage of the market share. They also cover various operations and logistics. These companies as well a new company looking to enter the market, may run into challenges for Qube Logistics.. Toll Holdings itself have acquired many smaller companies during the last decade (Ila et al. 2008).

Also the current road and rail infrastructure shall be inadequate to cope with the future demand. There are questions regarding how can the company use existing road and rail infrastructure more efficiently? Funding is the main problem for developing the rail logistics (George et al. 2004).

It has been witnessed that Qube logistics faces the challenges due to some factors that almost every logistic company in Australia may face. There can be ultimate solutions that can be applied to reduce the issues that are faced by the company (Ila et al. 2008).

As discussed, Road traffic and congestion is the main problem faced in terms of transportation.  As a solution to this, with the cooperation and permissions of local state government, road changes can be applied to improve the traffic flow. Also the use of public transportation can be motivated to reduce traffic. The company shall relocate or establish the warehouses away from the city so that, the internal traffic of the city would not affect the transportation and delivery time. A procedure of allowing heavy materials to travel in the city during fixed timings can be followed. The city vehicles should be excluded from travelling during the special entry timings of heavy vehicles (George et al. 2004).

Other Challenges

Qube logistics can hire planning specialists, to analyze every route, that may lead to heavy traffics, blockages, road closures assuring that these conditions would not affect the transportation. Also the loads in the shall be increased to minimize the number of trips, but not exceeding the maximum limit of weight that a vehicle can carry Gunjan & Rambabu, 2011). 

Considering vast distance between countries in Australia, bigger loads should be supplied to reduce the number of trips Different modes of transportation such as railway should considered for supplying goods to distant places. Dealing with local suppliers would eliminate the need of transportation at distant places. Qube has a number of local suppliers in the cities they have the terminals. Thus, continuing this practice will be more beneficial (George et al.  2004).

Hiring drivers with great focus and efficiency and considering driver exhaustion will decrease the chances of injuries and accidents. Also the company shall   conduct training programs for the drivers for safe transportation (Ila et al. 2008). 

The vehicles through which transportation is done should have some protection equipment to deal with any damage.

Regarding the green logistics, the company can use the technologies that are environmentally friendly. For example, the evaluation of the fuel use can be done (Gunjan and Rambabu, 2011).

It is witnessed that the climatic changes affect the company’s transportation on a large scale. This factor is never going to be completely solved as, the climate changes are constant. In this situation, the company can plan for alternative routes that can be taken while snow falls and road blockages. Also to avoid the climate change, the weather forecast is an efficient solution (George et al. 2004).

The vehicles used for transportation, during summers cause the problem of exhaustion and heating temperatures. Many cooling technologies can be used in the warehouses and vehicles for avoiding combustion and also to maintain the goods.

Rising fuel prices have shaken not only the domestic logistics of Qube but also international logistics. To avoid these changes to affect the company, training sessions should be conducted for drivers encasing the methods to improve the fuel economy. The vehicles should be maintained regularly to enhance the fuel economy. Also the company can consider getting in partnership with the fuel companies, so that the cost of the fuel decreases for each purchase (Ila et al, 2008).

To sustain in the market, Qube logistics should come up with different strategies to build up more media of transportation. The cost of transport can be notably reduced if the company has local dealers in every city to provide the goods. The motive of Qube logistics is to be one of the largest logistic supplier in Australia. For this it needs to develop and establish centers or terminals in the maximum cities it is possible to build. Due to this it will be able to connect the cities and states and integrate the whole country as a network. It is very important to manage the goods and maintain the quality of the goods that are supplied by the company. Various measures should be taken to handle and prevent the goods from any damage and defect while transportation. This will lead to complete satisfactory supply of the goods resulting in customer satisfaction. This way, Qube can develop its reputation among customers for reliable services. This will make the customers return with more business changes (Gunjan and Rambabu, 2011). 

Qube logistics is into many modes of logistics. It should plan the most economic mode of transport mode for each delivery.

The company is to establish more rails logistic so it should evaluate the current problems that the logistics companies are facing regarding the railway line. The best transportation mode should be selected for various kinds of deals depending on the quantity of the goods. The most economical mode of transport should be selected. The most cost effective or economical logistics that have a better planning regarding different routes should be considered during climatic changes (Gunjan and Rambabu, 2011).

Most of the solutions that are suggested for the betterment of the company are majorly associated with the government issues. These changes can be applied if the government of NSW allows and permits the changes. For example, motorways for companies can be built in contract with the government. The road changes also can be done by the government officials. Considering the issues that the logistics is facing in Australia, the government can help the Qube logistics and also the other logistic companies to build rules and cover reconstructions for facilitating better transportation (Ila et al. 2008).

Conclusion:

Australia will always be facing the challenges in logistics sector. Both the domestic and International logistics face equal challenges regarding Transportation. Some challenges are easy to be solved while some solutions would take time to be implemented. Qube Logistics shall consider the strategies that can help it to eliminate the various challenges that are faced. Also, some challenges can be eliminated in coordination with the NSW government.

The company can prepare plans and analysis to expand its rail logistics. The funding is available from the NSW government for infrastructure usage. Various barriers like the climate, environmental, biological issues can be solved only by planning and analyzing the conditions previously and by finding the alternative methods and technologies to avoid them. 

References:

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Christopher S. Tang (2006). “Robust strategies for mitigating supply chain disruptions. International Journal of Logistics:” Research and Applications, 9:1, 33–45. 

C.M. Harland, R.C Lamming and P.D. Cousins (1999), “Developing the Concept of Supply Strategy”, International Journal of Operations and Production Management, 19, pp. 650–673. 

Deveshwar and R. Rathee (2010), “Challenges for Supply Chain Management in Today‟s Global Competitive Environment” International Review of Business Research Papers, Volume 6. No. 2, pp. 194 – 203.

George A. Zsidisin, (2004). “An analysis of supply risk assessment techniques. “International Journal of Physical Distribution &Logistics Management , 34, 397 – 413. 

Gunjan Soni and Rambabu Kodali (2011). “The strategic fit between “competitive strategy‟‟ and „„supply chain strategy‟‟ in manufacturing industry: an empirical approach.” Measuring business excellence, 15:2, 70-89. 

Ales (2009), “Current Issues and Challenges of Supply Chain Management,” International Conference on Automation & information, World Scientific and Engineering Academy and Society (WSEAS) ISSN:1790-5117, pp: 2-4. 

Ila Manuj, John T. Mentzer (2008). “Global supply chain risk management strategies. “International Journal of Physical Distribution& Logistics Management, 38:3, 192-223.