EBUS609 Adoption of Port Centric Logistics Strategy for Sustainable Port Critical Analysis Answer

Introduction

Global trade relies significantly on inland logistics and transportation, which can be expensive and harmful to the environment. Several supply chains are connecting with maritime ports to overcome these difficulties and boost competitiveness and sustainability. Seaports now integrate supply chains and provide logistics services (Verschuur et al., 2022). Port-centric logistics (PCL) techniques, which focus on freight transit and distribution directly tied to port terminals, are popular for supply chain sustainability (Bouchery et al., 2020). PCL services and integrated logistics systems boost supply chain efficiency and sustainability.

Figure 1: Liverpool City Region – A UK Freeport

Liverpool's Liverpool City Region Freeport (LCRF) integrates multimodal transport, logistics, and manufacturing in Customs and Tax Zones with special tariffs and tax benefits around the Port of Liverpool (Department for Business and Trade, n.a.). The LCRF wants to develop a logistics cluster for collaboration and integrated logistics. The LCRF's concentration of economic and logistics resources should make Port-centric logistics (PCL) techniques more efficient, improving sustainability in the region (Liverpool City Region Combined Authority, 2022). PCL approaches pose challenges to sustainable inland logistics and supply chain management in several corporate contexts. The study examines PCL implementation in the LCRF, its effects on hinterland logistics chains and supply chain operations, and location-optimization strategies for sustainable logistics and supply chain operations in the region (West, 2022)

This study examines how LCRF PCL deployment affects hinterland logistics chains and supply chain operations. Logistics and hinterland markets. PCL implementation issues in various business scenarios and location-related decisions will be examined to determine the optimum LCRF options for sustainable inland logistics and supply chain management (Anderton, 2017). What are LCRF's major logistics and supply chain goods? LCRF PCL impacts hinterland logistics and supply chains. LCRF PCL installation in different businesses: how hard? How can LCRF optimise location decisions for sustainable inland logistics and supply chain management? This study addresses the LCRF's PCL strategy, its pros and cons, and sustainable logistics and supply chain location optimisation. This analysis aids logistics cluster PCL policymakers and practitioners.

Analysis of the PCL approach as a solution for the case

2.1 Case of Port of Liverpool, LCRF and its hinterland

The Port of Liverpool, as an important maritime port in the United Kingdom, has implemented Port-centric logistics (PCL) as a method to boost the sustainability performance of inland logistics and supply chain operations in the Liverpool City Region Freeport (LCRF) and its hinterland (Thompson, M., Southern, A., & Heap, H. (2020). The PCL technique integrates supply chain operations with the port terminal, allowing commodities and information to move between the port and its hinterland. This integration streamlines logistics and transportation, cutting costs and environmental impact (Invest Liverpool, 2022).

Figure 2: Liverpool city region: Overview Diagram (Invest Liverpool, 2022).

The suggested PCL method for the Port of Liverpool and LCRF hinterland is discussed below. The approach incorporates several critical elements:

1. Customised Logistics Solutions: PCL provides regional businesses with logistics solutions. For efficient and safe transit, this may include providing specific handling and storage facilities for different types of commodities, such as perishables, hazardous materials, or massive loads (Invest Liverpool, 2022).
2. Integrated Information Systems: Under PCL, port operators, logistics suppliers, and hinterland firms can track and share information in real time. This improves supply chain coordination and visibility, reducing delays and increasing efficiency (Jones, 2023).
3. Sustainable Transportation: The PCL technique facilitates rail and inland waterway commodity transport between the port and the hinterland. Road transit causes more traffic and carbon emissions than these modes.
4. Last-Mile Connectivity: The PCL approach improves commodity transport from the port to the hinterland. To alleviate local congestion and pollution, this may entail efficient distribution networks, optimised routes, and eco-friendly last-mile delivery trucks.
5. Value-Added Services: PCL offers packaging, labelling, and quality control to boost product value and marketability. These services at the port terminal or adjacent help businesses save logistical and transportation costs (Helens, 2022).

By applying the recommended PCL method, the Port of Liverpool and LCRF hinterland can obtain numerous benefits in terms of sustainability performance:

1. Lower Transportation expenses: Supply chain integration with the port terminal can improve transportation efficiency, lowering regional enterprises' transportation expenses. Businesses save money and minimise transportation emissions (Paulauskas et al., 2022).
2. Reduce Environmental Impacts: Sustainable mobility and last-mile connections reduce carbon emissions and air pollution. This can boost regional sustainability and encourage green logistics (The Manufacturer, 2021).
3. Improved Supply Chain Visibility and Coordination: The PCL strategy's integrated information systems improve supply chain visibility and coordination, allowing stakeholders to track and share information. This improves customer service, logistics, and delays (Monios et al., 2016).
4. Value-Added Services: Logistics providers and local companies can benefit from value-added services at the port terminal or nearby. Local economies may benefit (Andersson, & Roso, 2016).

However, using a PCL technique has many drawbacks. Optimising PCL procedures with location-related decisions in varied business environments may need stakeholder preparation and participation. Sustainable transportation may require trade-offs and careful decision-making (Helens, 2022).

In summary, the proposed PCL technique for the Port of Liverpool and LCRF hinterland can improve inland logistics and supply chain sustainability. By integrating supply chain activities with the port terminal, using integrated information systems, promoting sustainable transportation modes, improving last-mile connectivity, and offering value-added services, the PCL approach reduces transportation costs, environmental impacts, supply chain visibility and coordination, and collaboration and networking. Thus, stakeholders must collaborate to overcome obstacles and implement the PCL strategy (Halloc, 2017).

Potential benefits and challenges

2.2.1 Benefits

Using PCL, empty shipping containers and products can stay in the distribution hubs on land rather of being brought back to the port. Since the return containers and goods are already at the port, they can be quickly transferred back to the ship. It is a huge aid to shipping businesses since it lowers the cost of moving and storing empty containers (The Manufacturer, 2021).

Congestion on roads and trains will be alleviated thanks to PCL. The existing logistics strategy in the UK is unsustainable due of the rising container volume. Northern ports are overburdened, rail freight has reached its capacity, and traffic on the roads is unbearable (Liverpool Chamber, 2020). Congestion in the UK may be greatly alleviated if the present logistics infrastructure was reorganised to facilitate the passage of larger ships through the Port of Liverpool. For example, on 12 December 2020, due to the Brexit agreement, there was gridlock stretching for km in front of the Eurotunnel freight entrance at the UK's Port of Dover. As a result of the protracted congestion's impact on the UK supply chain, more and more UK shippers are relocating their container import gateways to Liverpool (Monios et al., 2016).

Multimodal mobility reduces carbon emissions and makes door-to-door PCL transit easier and cheaper (Bouchery et al., 2020). Liverpool Superport is part of an intermodal system that incorporates rail and road transit, allowing fast import and export of goods from around the world. Tesco's 3MG (Mersey Multimodal Gateway) intermodal freight facility complements the region's two main railway lines and great motorway connectivity (Liverpool Chamber, 2020). If all forms of transit operate together to deliver things on time and without incident, keeping less inventory is more cost-effective. Customers can choose eco-friendly transit modes based on CO2 emissions (Invest Liverpool, 2020).

Finally, PCL's decreased CO2 emissions is an additional gain. Reducing CO2 emissions is a potential benefit of PCL due to its ability to cut down on transportation miles, boost supply chain efficiency, shorten the distances at which empty containers must be transferred, and alleviate congestion (Invest Liverpool, 2022).

2.2.2 Challenges

Liverpool PCL struggles with fast consumer demand changes (Hui et al., 2017). First, Liverpool port has a large supply chain. Participants include upstream cargo owners and suppliers, intermediate road carriers, downstream liner enterprises, and maritime ancillary service providers (Singh et al., 2016). The group's members have different goals and sizes (Hui et al., 2017). Liverpool Superport should build a community of interest with all supply chain partners to maximise supply chain benefits.

Due to larger vessels and unexpected events like the New Crown epidemic, the Port of Liverpool's operational capacity is insufficient to meet market demand. Due to congestion in Felixstowe, shipping companies have rerouted their boats to Liverpool, straining Liverpool's land-based operations (Bottalico, 2019). Thus, Liverpool had to improve its terminal operations. Automation has improved cargo clearance, terminal operations, and container truck turnaround times at Liverpool. Parties could also communicate better (Singh et al., 2016). Terminals can better manage and coordinate port supply chain resources by sharing vessel entrance and exit times, loading information, and other data with shipping lines.

2.2.3 Key Facilitators/Enablers

Conclusion

In conclusion, the sustainability performance of inland logistics and supply chain operations might benefit greatly from the suggested Port-Centric Logistics (PCL) approach, especially in the context of the Port of Liverpool and LCRF. The following enhancements show how Liverpool PCL contributes to the long-term viability of inland logistics and supply chain operations. It minimises cargo and empty container transport kms. Multimodal transit and warehouses near the Liverpool Superport improve supply chain efficiency. Containers reduce cargo theft. It also cuts CO2 emissions and traffic. Collaboration, infrastructure, integrated information systems, a supporting legislative environment, market demand for sustainable logistics, and knowledge and skills enable the PCL strategy. PCL approaches are hindered by stakeholder cooperation, infrastructure investments, regulatory compliance, and market demand fluctuations. PCL can increase sustainability in the Port of Liverpool and elsewhere, but further research and implementation are needed.

References

Andersson, D., & Roso, V. (2016). Developing Dry Ports Through the Use of Value-Added Services. DOI: 10.1007/978-3-319-21266-1_12.

Anderton, D. (2017). Changing leadership in peripheral city region development: The case of Liverpool’s high technology sectors. Local Economy. https://doi.org/10.1177/0269094217707275

Bottalico, A. (2019). Towards the mapping of port labour systems and conflicts across Europe: a literature review. Work Organisation, Labour & Globalisation, 13(1),130-154. DOI: 10.13169/workorgalaboglob.13.1.0130

Bouchery, Y., Woxenius, J., & Fransoo, J. C. (2020). Identifying the market areas of port-centric logistics and hinterland intermodal transportation. European Journal of Operational Research, 285(2), 599-611. https://doi.org/10.1016/j.ejor.2020.02.015

Department for Business and Trade. (n.a.). Liverpool City Region Freeport. Retrieved from: https://www.great.gov.uk/international/content/investment/opportunities/liverpool-city-region-freeport/

Halloc, S. (2017). What factors impact logistics cluster benefits for firms? Australasian Transport Research Forum 2017 Proceedings, 27-29 Nov 2017, Auckland, New Zealand.

Helens, S. (2022). Haydock to host Liverpool City Region Freeport’s First Customs Site. Retrieved from: https://www.liverpoolcityregion-ca.gov.uk/haydock-to-host-liverpool-city-region-freeports-first-customs-site/

Invest Liverpool. (2022). Major step forward for Liverpool city region freeport. Retrieved from: https://www.investliverpool.com/news/major-step-forward-for-liverpool-city-region-freeport/

Invest Liverpool. (2022). Liverpool city region to gain 10,600 new freeport jobs over the next 10 years. Retrieved from: https://www.investliverpool.com/news/liverpool-city-region-to-gain-10600-new-freeport-jobs-over-the-next-10-years/

Jones, J.M. (2023). Large-scale urban regeneration threatening historic urban landscapes. The Liverpool Waters development and the loss of a UNESCO World Heritage Site. Tafter Journal.

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Liverpool Chamber (2020). Can Superport Liverpool help to rebalance the UK economy? Retrieved from: https://www.liverpoolchamber.org.uk/2716/section.aspx/2715/superportliverpool.

Mangan, J., & Lalwani, C. (2008). Port-centric logistics. The International Journal of Logistics Management, 19(1), 29-41.

Monios, J., Notteboom, T., Wilmsmeier, G., & Rodrigue, J.-P. (2016). Competition and complementarity between seaports and hinterland locations for attracting distribution activities. Port Economics Discussion Report 04/2016, Chios, Greece.

Notteboom, T., A. Pallis., & J-P Rodrigue (2021). Port Economics, Management and Policy. New York: Routledge. Retrieved from: https://porteconomicsmanagement.org/pemp/contents/part4/port-clusters/

Liverpool City Region Combined Authority. (2022). Liverpool City Region Freeport. Retrieved from: https://www.liverpoolcityregion-ca.gov.uk/growing-our-economy/liverpool-city-region-freeport/

Paulauskas, V., Henesey, L., Plačiene, B., Jonkus, M., Paulauskas, D., Barzdžiukas, R., Kaulitzky, A., & Simutis, M. (2022). Optimizing Transportation between Sea Ports and Regions by Road Transport and Rail and Inland Waterway Transport Means Including “Last Mile” Solutions. Applied Sciences, 12(20), 10652. https://doi.org/10.3390/app122010652

Singh, A., Chhetri, P., & Padhaye, R. (2016). Understanding the port-centric logistics clusters: concepts, characteristics, and measurements. Innovative Solutions for Implementing Global Supply Chains in Emerging Markets. 257-272

Thompson, M., Southern, A., & Heap, H. (2020). Anchoring the social economy at the metropolitan scale: Findings from the Liverpool City Region. Urban Studies. https://doi.org/10.1177/0042098020972654

The Manufacturer. (2021). What do manufacturers make of the Liverpool City Region freeport? Retrieved from: https://www.themanufacturer.com/articles/what-do-manufacturers-make-of-the-liverpool-city-region-freeport/

Bouchery, Y., Woxenius, J., & Fransoo, J. (2020). Identifying the market areas of port-centric logistics and hinterland intermodal transportation. European Journal of Operational Research, 285 (2), 599-611. DOI: 10.1016/j.ejor.2020.02.015

Verschuur, J., Koks, E. E., & Hall, J. W. (2022). Ports’ criticality in international trade and global supply-chains. Nature Communications, 13. https://doi.org/10.1038/s41467-022-32070-0

West, T. (2022). Liverpool’s European Capital of Culture legacy narrative: a selective heritage? European Planning Studies, 30(3), 534-553, DOI: 10.1080/09654313.2021.1959725

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