Impact of the Globalisation on the Logistic Service Providers in Belgium



Impact of the Globalisation on the Logistic Service Providers in Belgium

Authors

Inge Cornillie, Cathy Macharis, Vrije Universiteit Brussel, BE

Description

The aim of this paper is to describe the behaviour of logistic providers in terms of strategic decisions, performance, services and international presence.

Abstract

In this paper we will analyse the impact of globalisation on logistic service providers (LSP's) located in Belgium. In the light of the logistics industry we will start with a definition of globalisation and a description of the driving forces behind the ongoing internationalisation process. Secondly we will define the behaviour of the logistic providers in terms of their strategic decisions, performance, services and international presence following this globalisation wave.

An increasing amount of supply chain activities are transferred to the LSP's. In this globalised world companies need to orient their business outside the borders of their home country to survive the fierce competition. Their strategic decision-making is based on the analysis of country and firm specific advantages. Otherwise known as locational advantages and ownership advantages (Dunning's eclectic paradigm). By consequence the organisation of their value chain moved from a vertical to a horizontal structure, crossing company and country borders. Companies need to control their costs and focus on their core business. Therefore off-shoring parts of the value chain to low-cost countries and outsourcing parts of their value chain - in particular tasks that are catalogued as secondary activities such as logistics - are general adopted ways of organising business today. On the contrary, efficient logistics is key to international success and considered as a strategic priority to compete in a globalised economy.

The broader the international dimension of companies the longer their supply chain (distance between source and consumer) and the more complex its logistics management becomes. Logistics needs to operate ?cross-border? in order to be efficient. It is crossing the activities within the value chain (ex.: production, marketing, finance) and the company borders with all the agents of the supply chain. Monitoring the supply chain from source to consumer is a constant quest for optimisation. International success is guaranteed by the continuity of the supply chain and sharp control of the logistics costs, improving customer and shareholder satisfaction. This is true for both the demanding parties (shippers of goods) and the supplying parties (logistic service providers).

The direct impact of globalisation on logistics can be measured by the extended number of tasks executed by LSP's and by their geographical positioning. Companies are increasingly opening manufacturing sites in Eastern Europe and Asia, in particular India and China. The latter's harbours serve as the world's manufacturing hubs with Europe and the US as its main customers. Ocean and freight transport flows as a whole increased as a result of the increasing division of labour. In order to survive LSP's are forced to follow the internationalisation trend and guarantee international presence, serving the global oriented business of today.

The aim of this paper is to reveal the strategic choices and ways of responding to these trends by the LSP's. The case of Belgium is being chosen as Belgium serves as one of the most important logistic gateways for Europe.

It is important to understand how LSP's were organised in the past, how they operate today and how they envisage the future. Next to a comprehensive literature review we will conduct a market survey to answer this research question. The survey will be two-folded. First, we will organise in depth interviews with LSP's at their premises. Second, we will organise a large scale survey targeted at logistics managers.

Publisher

Association for European Transport