The latest Freight & Trade Weekly (FTW) [Gauteng special edition] publication reminds me of a very interesting article I read a few months back – refer to my post “What are surfaces?” of 23 June 2013. The article dealt with the question of surfaces (i.e. land and sea) in relation to the multimodal movement of containers and envisioned by the logistics and supply-chain management practices.
I bewailed the fact that the actual dissertation would set me back a US$1000 but remained intrigued by the content which such dissertation would contain given the very interesting abstract I had just read. Given the high cost of such, obviously acknowledging the expertise, knowledge and resourcefulness which often goes into the preparation such papers therefore puts them beyond the reach of most.
To my amazement, a few days later I received an email from a fellow blogger – an expert in supply chain logistics – who was happy to share with me his copy of the paper. The paper is titled “Shipping container mobilities, seamless compatibility, and the global surface of logistical integration”, published by Environment and Planning (EPA) volume 45 (2013). The author, a Dr. Craig Martin has delivered a masterpiece (my view) which considers the subject matter way beyond what I, as a Customs and Trade specialist, would consider or envision. I thoroughly enjoyed his bringing together of historical and current concepts and principles (attributed to many experts and peers) in the matter of intermodal containerisation.
Understanding the supply chain is a critical pre-requisite in the international Customs and Trade arena, at least since 9/11. In addition to the various WCO guides and standards, one needs to locate and digest papers such as this – and here I refer also to the many other websites, reference portals and publications of international experts in the global logistics and supply chain field.
Some of the more salient statements contained in the Dr. Martin’s paper confirms that the ‘ideology of containerisation emanates out of a wider body of reasoning based on the notion of integration.’
The Need and Logic of Integration
Integration focuses on interactions between various aspects of a supply chain and is defined as “a systems approach to viewing the supply chain as a whole, and to managing the total flow of goods inventory from the supplier to the ultimate customer”.
From the late 1950s, management theory began to emphasize the importance of “how industrial company success depends on the interaction between the flows of information, materials, money, manpower, and capital equipment”.
By the 1980s, the emphasis of the logistics sector’s control of company functions, including materials management, transport, storage, and information management, highlighted the importance and process of integration.
During the mid-1990s, the notion of integration extended even further with the move towards supply chain management (SCM), where aspects of supply, materials management, distribution, and retail functions were placed under the control of a single company. The overarching ideology of logistics and SCM are systemic completeness and the management of flow.
The movement of containerised cargo is a critical component of SCM, as it accentuates surface control through the integration of land and sea transport. As far back as the 1960’s, experts opined that “most types of liquids and solids may someday be moved in sealed containers interchangeable among road, rail, air, and marine transport. Advantages would include reduction in damage and loss in the time and cost of loading and unloading. Containers may prove to be the catalyst that integrates the various components of the transport sector which are now being independently planned, financed, and operated” – and this is exactly what is happening today.
Standardisation towards Intermodal Integration
In 1953 Malcolm McLean developed the idea of transporting truck trailers on ships rather than on the congested highways of the US East Coast. His rationale was to overcome congestion by consolidating the transport system: at this time the truck and ship industries were entirely separate. He is ultimately credited for the invention of the modern cellular container we have today.
Vital to structural integration was the standardized nature of infrastructure itself – enabling the coupling of a container with a variety of nodes. These include the design of container-cell vessels, the redesign of road haulage vehicles and railway rolling stock, the design of container handling vehicles in ports, the construction of large-scale dockside gantry cranes, the design of spreader bars, and not to forget the design of the container corner fittings – these are standardized across all of the equipment related above.
It can therefore correctly be asserted that “the container links land and sea transport in an almost seamless and profoundly international continuum” (Broeze 2002)
So I guess what I’m trying to emphasize is that close on 70 years of continuous harmonization and integration in the supply chain logistics industry, specifically in regard to multimodal (door-to-door) containerized transport, as well as the substantive facilitation support accorded thereto by both the WTO and WCO, the basis of containerisation must surely be a consideration when applying regulatory control measures whether it be in the export leg or import leg of an international supply chain movement.
The key enabler in a modern Customs environment is undoubtedly automated processing and no less automated risk assessment. Facilitation on the other hand is a tool whereby, in combination with risk assessment, Customs focuses on entities and patterns rather than transnational intervention. Unreasonable (and mandatory) termination of a multimodal movement destroys the benefits of containerization and will add costs and loss of competitiveness for traders. Our beautiful country can ill-afford this given burgeoning competition from our neighbours up north. Finally, The matter of regional integration is another aspect which needs in-depth consideration. As we enthuse and wallow in our new found technological state, physical borders remain the biggest inhibitors to trade. More on this another time.