Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
-
Upload
akshyat-garg -
Category
Documents
-
view
218 -
download
0
Transcript of Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
1/15
SUSTAINABLE DEVELOPMENT OF THE FORWARDER AS THE MAIN
CHALLENGE IN THE WORLD ECONOMY
Ljupco Sotiroski1, Borka Tushevska2
1) 2) University Goce Delchev Stip, Republic of MacedoniaE-mail: [email protected]//00 389 70363006
E-mail:[email protected]/ 00 389 77 910 487
Abstract
This subject refers to the latest developments in the organizational changes and
sustainability of companies in the field of shipping, transport, and logistics in the Republic of
Macedonia and the region. By analysis and elaboration of these issues, it is emphasize the
importance of this sector for the overall domestic, regional and international trade,
simultaneously to point out the necessity of its imminent transformation that is basic step for
achieving sustainable development of the freight forwarders.
The complexity of planning the forwarder's activities in organising of the logistics
chain indicates the need for appropriate methodology in order to simplify the procedure of
planning.
The phenomenon globalizationand diversification of trade activities put the freight
forwarders and transporters before a big challenge. At the same time this challenge was a test
of their survival. The Companies from this area had to decide whether to invest in their
transformation in logistic operator (3PL and 4PL services providers), to allow a friendlytakeover by higher shipping (freight forwarders) companies, or finally to get lost in the
ferocious competition, and gradually disappear from the shipping market.
Research conducted on these issues adduce us to a several key points that it seems
functional for creating and implementing successful business politics, in domestic and
regional logistics sector.
Namely, by using a few basic methods of research, interview, questionnaire, and
comparative methods it is concluded that the concentration of capital in the hands of a few
global logistics giants will throw out market freight forwarders who operate as small and
medium enterprises. Theory pointed and practice confirms the fact that the small and medium
sized forwarders that will not be able to transform into logistics providers, will disappear
from the market.The research done in this field point out that in terms of world crisis
and strong competition posed by countries in Southeast Asia, the only relevant way to ensure
sustainable development of this sector refers to transformation, organizational changes and
acting in the position of logistic operator.
Keywords
Sustainable development, organizational change, logistic operator, freight forwarder, 3PL,
4PL, service provider
mailto:[email protected]//00mailto:[email protected]/mailto:[email protected]//00mailto:[email protected]/ -
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
2/15
Introduction
In terms of modern trade, traditional freight forwarders are increasingly losing theirmeaning. The process of globalization, diversification of trade activities and concentration of
capital, contribute to moving the boundaries of freight forwarders, and their transformation
into a logistic operators (Kumar, 1999, p. 4). Influenced by global trends mentioned above,
freight forwarders became a companies for logistic in transport and productions. Gradually,
logistics in transport and production have become essential components with severe impact
on the implementation of trade deals on leading trade companies.
Classical freight forwarders moved their limits of action, transforming itself into a
fuller logistic management providers with broad logistics capabilities. In the transport process
and logistics, forwarders developed into a centers which ensure an effective supply chain,
with the potential to increase income, to expand production, and minimize costs by creating a
rational distribution system. All of this, contributed to the need of further research in the fieldof shipping and transport, emphasis the process of transformation as a condition sine qua non
for survival and competition in the global market. Namely, as any service sector and
forwarders approach to meet the megalomaniacal export-import needs.
Alone here, global needs imposed the creation of global services, which in ultima
linea means global services companies.
From the conceptual view, the Logistics forwarder, as organizer and planner of
coordination and integration of all the transport and logistics chains elements, uses adequate
ways and methods in the process of planning and decision-making.
The wave of transformation that swept the industry is reflected in forwarding
business. Hence, the numerous statutory changes that have affected shipping companies.
Increased global trade makes changes on the structure and nature of the service sector. Most
companies, have been transformed into international and global trade companies. The
complexity of the business environment contributed to the signing of cooperation agreements
between the suppliers, customers, competitors, etc. Based on these cooperation agreements, a
network of complex business relationships was build up. Number of status changes (mergers,
acquisition, joint venture) marked modern trade world.
.
Trade liberalization and globalization contribute to the removal of trade barriers and
strengthening of international (global) competition. Parallel with this, the process of
transformation of the industrial network into a digital economics was in expansion. Advances
in information technology and further expansion of internationalization and globalization,contribute to growth of world economy and the changing business environment.
To ensure its existence and position in ferocious competition, freight forwarders
necessarily transform themselves into logistics providers 3PL and 4PL service providers.
1. Development and promotion of logistic forwardersThe changes that affected industrial production largely reflected to the expansion of
logistic services worldwide. Manufacturing and service sectors have become global centers
for providing products and services. Under these operating conditions, companies have
begun to delegate part (in segment and in whole) of its commitments towards third
parties (outsourcing).
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
3/15
These new modes of production and distribution switch on transport facilities offering
its customers integrated, fast and reliable deliveries.
Along with these changes, the need for global logistic services dramatically increased
These services could only be offered by multimodal transport operators:
3PL and
4PL providers.
The affirmation of logistic forwarders, naturally arise from the attractiveness of the
logistics services, offered by freight forwarders to their customers.
Modern shipping companies, have taken into own hands the entire transportation
process and logistics.
Freight forwarders acted on the disposition of its clients, whose sole duty was to
indicate the order and the place of delivery. Forwarding agent has a full control over every
stage of the transport route. He usually appears as sender and recipient of the goods. At the
port reception, forwarder agent is taking the goods, organizing its unloading, storing the truck
for distribution to the final destination. With their own or leased vehicles, freight forwarder
imported the goods and takes all necessary measures for clearance of goods. All this indicates
that the scale and scope of operation of freight forwarders is growing. Exporters-importers
companies are increasingly oriented towards manufacturing and marketing, letting the
transfer and distribution to freight forwarders.
The surveys conducted in this area show that the attractiveness of the logistics
forwarder growing in the direction of expansion of bundled services that are offered (Wong
C.Y., Karia N., 2009, p. 1-17). Through the implementation of EDI system, training their own
personnel and invest in other heterogeneous sectors, import-export companies transferring
their goods around the world through electronic input of their code, and indicating the point
of loading and unloading.
2. Factors that imply growth in the value of logistics servicesIn recent decades the value of logistics (service) sector has seen continued growth and
development. This affirmation of logistics services is determined by more or less important
factors that directly affect the logistical capabilities of the operators. The underlying global
factors that promote logistics providers is technical and technological progress, the
development of information and communication technology, outsourcing services and
concentration of capital in several global entities.
The process of globalization, the removal of trade barriers, strengthening the
international competition and the spread of individual markets beyond national boundaries,
imply a direct increase in the value of the logistics sector. Namely, by linking numerous
heterogeneous entities in supply chain, inevitably imposes the need of logistical supportservices. Globalization has contributed to the creation of centers for providing logistics
services. Under the influence of this phenomenon, most freight forwarders have expanded
their business, merged to major shipping companies, finally they were taken friendly
(friendly takeover) by larger forwarding companies who promptly invested into segments that
came from the scope of work of the classical firm. All this contributed to the creation of
global logistics centers (mobile operators) who took the bulk of the market.
To meet the needs of this broad category of subjects, freight forwarders must
implement EDI system. It seems that the use of IT services is a condition sine qua non for
development of logistics operators. The emergence of electronic disposal, electronic banking,
electronic signature and electronic supply, electronic bill of lading and loading practically
made possible the communication between multiple related entities that operate under theumbrella of one company (Kolakovi, 2005, p. 207).
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
4/15
Parallel with the development of IT technology stand outsourcing services which also
had implications on the logistics sector. Namely, by indulging in things that are beyond the
basic scope of operations of companies, logistics operators such as specialists are
increasingly coming to the fore and promote the field of transportation and manufacturing.
Gradually the development of transport logistics are developed in the production and
logistics. In this sense, the freight forwarders in the role of 3PL providers frequently takesactions that increase the value of goods: packaging, labeling, marketing of goods declarations
accompanying acts as the basic responsibility for organizing and implementing the transfer of
goods. Finally, series of factors affect the growth of the value of logistics services:
containerization, just in time delivery, door to door delivery etc (Matopoulos, 2009, p. 301).
All the above factors imply growth in the value of the logistics sector. Specifically,
each of these factors makes a kind of influence on appearance and development of logistics
operators as specialists in transport and shipping. The lack of logistics providers in large
measure would impede the transfer of goods and would definitely reduce the volume of
goods that can be transferred in a certain time interval, due to logistics arising from their
actions.
3. 3PL and 4PL services providerExpansion of logistics as a process of planning, implementation and monitoring of
cost-effective flow, storage of raw materials, semifinished products, finished products and
transfer of information, marked the modern industrial production and global trade (Zelenika,
Pupavac, 2008, p.16). Logistics providers are companies which often act as an intermediary
who undertake execution of logistics activities. In business practice logistics providers often
act in the form of carriers, forwarders, NVOCC (non-vessel operating common carrier) and
finally as a 3PL and 4PL service providers.
3PL represent companies that provide logistics services for multiple needs of its
customers (import-export sector). Contrary to conventional forwarders and carriers, 3PL offera wider range of services participating in all phases of the transfer of goods. The expansion of
these entities result from their participation in the transaction and the process of concentration
of capital in one entity . This also result from the ability to realize all the necessary activities.
As entities focused on organizing the transportation, storage, packaging, transportation,
loading and unloading of goods, 3PL contribute to the reduction of distribution costs, greater
security in the cattle operation, and finally, speed of transaction execution.
In business practice, the most important LPs are 3PL providers. In contrast, such
providers exist in the advanced stage of 4PLs providers whose engagement means flexibility,
efficiency and cost reduction in the supply chain of the maximum level. Despite 3PL that
actually relate to storage and transportation of goods, 4PLs are usually part of completeoutsourcing companies. The role of 4PL is to implement a production value of companies. In
essence, the creation of added value service, is reflected in the overall operations (Mason G.,
2005, London, p. 1-143).
The engagement of 4PL providers as an agent of integrating traditional 3PL providers
is growing. Namely, in practice, more and more companies pretend to operate as a 4PL
services providers. Specifically, there are companies that pretend to "full packet service",
providing a reduction in cost and maximum efficiency in the operations of companies. These
global trends are typical for Macedonia.
4. Research methods
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
5/15
Empirical research is the main concept which has been used during this research. As a
confirmation of our theoretical views, we use comparative methods, questionnaire and face to
face interview for analysis and elaboration of these issues. The main research refers to the
companies with domestic capital vis a vis companies with foreign capital. Comparing these
two categories of subjects, we conclude that freight forwarders in Republic of Macedonia
more or less are part of world shipping business.Bearing in mind the results from the questioner, we emphasize that almost every
freight forwarder in Republic of Macedonia build a strategy for stability, sustainability and
prosperity. In order to follow the world shipping trends, freight forwarders made
organizational change, and transform themselves in 3PL and 4PL.
Of course there are great differences between small and ground freight forwarders.
Namely, the great forwarding companies continuously invest in extending their range of
activities. Simultaneously, small freight forwarders invest in a small scope and learn how
continuous with their work. The results from the interviews made with management show
that almost every freight forwarder in Macedonia made organization change, or made attempt
to do it.
Proper results about this research also came from the questioner. Namely, accordingthe questionnaire, 100 % of the freight forwarders present a concept for their transformation
in 3PL. In the same time, practical aspects trace that every freight forwarder is working on
extending his business. Finally, these methods of research help us to come to certain
conclusions and suggestion for the freight forwarders.
5. The position of Macedonian freight forwarders in global supply chainIn the field of domestic logistic, freight forwarders seriously joined the global trend of
3PL and 4PL. Regardless of the source of capital (domestic or foreign), freight forwarders in
the Republic of Macedonia joined the world trend of transformation and diversification oftrade activities. According to our research, there isnt a freight forwarder in the Republic of
Macedonia, which doesnt pretend to act or act as a 3PL or 4PL services provider.
This situation contributed to the increasing need of research in this field. In this
article, we focus on the analysis and elaboration of differences between the innovation of
domestic and foreign companies in the Republic of Macedonia. Actually, we explore the new
organizational change in the field of freight forwarders, and their impact on stability and
sustainability of the Macedonian freight forwarder companies. Much attention is paid to the
analysis of methods for building long-term development strategy, and the role of the
management in that process.
The situation is different in foreign and domestic companies. To be clearer, the small
domestic companies operate with low capacity. This isbecause they invest less in innovations, new technology, skilled labor and management. They
dont have a strategy for development. Generally they focus on retaining existing customers.
In contrast, foreign companies are oriented to the development of retaining existing ones, and
conquest new markets
However, they have the opportunity to learn how to increase their profit. In any
case, this is a great advantage for small freight forwarders.
Thats how they build their capabilities to respond on global need of export-import
sector. In this direction are the results of the survey.
Under the influence of globalization, diversification and global downturn, freight
forwarders worldwide inevitably had to accede to organization, personnel, marketing and
other changes. This was also the case in the Republic of Macedonia. Indisputable fact
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
6/15
is that there are differences between companies, but the fact is that small companies have
made move, which was inevitable for their existence on the market.
5.1. Freight forwarders with domestic capital in the Republic of Macedonia
In Republic of Macedonia act numerous and heterogeneous types of freight
forwarders. Generally, in the global market, the biggest part of the freight forwarders of
services is conducted by large (foreign) freight forwarders, known as forwarders providers of
services that offerfull package services.
The research done in this filed point out that the biggest part of shipping market is
conquering by freight forwarders with foreign capital.
Figure 1. The Origin of the capital
The freight forwarders established exclusively by domestic capital, almost did
not take action other than what is called classical transport. In this sense, the freight
forwarders in the Republic of Macedonia act as a customs agents.
Most of them until recently were not known categories to the local customs,
authorized economic operator, added value services etc.
This situation will inevitably contribute to the disappearance of small freight
forwarders from the market or their takeover by larger freight (logistics) providers. The
process of survival of freight forwarders with domestic capital is directly conditioned by their
transformation. Hence, as the practice itself, the Macedonian freight forwarders build strategy
to expand its business and providing long-term selling of their services.
5.2. Freight forwarders with foreign capital in the Republic of Macedonia
In Macedonia operate multinational companies for transport consolidation (Logwin
AG - International & Transport Air Freight, Deny Cargo, DB Schenker, etc.). These
companies offer full logistics of moving goods in the international market. More specifically
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
7/15
under the legal framework of these companies exist several business ventures that contribute
to increasing their attractiveness to the market.
In terms of this, the offer of full package services, inevitably leads to market success.
This factual situation in the field of freight forwarders resulting from the global trend
of offering systematized and centralized packet of services and information for
implementation of trade deals.The opinion of discarding small freight forwards from the trade market is excitedly
based on a different concentration of commercial activities into one entity.
The Macedonian factual situation is facing with such situation. This is about the
freight forwarders established by foreign investment. Namely, there are numerous statutory
changes which these companies have done in the last decade. As a part of the overall
development strategy is the establishment of services providers in the Republic of
Macedonia.
In this context, the German company LOGWIN which offers wide range of services
in the market as well as transport, insurance, packing, inspection, labeling. Especially,
characteristic in this segment is the temporary trend of import which for the Republic of
Macedonia doesnt represent anything else taking advantage of using cheaper labor.The same factual situation can be found in the case of operating of German company
Schenker. The package of services offered by this company to the market consists of
all those specified and managed under the umbrella of value added
services, which give practical added value of transferred products.
The same line is following the world famous company DHL, whose base of the
service sector is door to door transport, just in time delivery, etc.
All of these companies, through the process of expansion of its business into
new business ventures, investments in information technology, are successfully surviving and
ruling on the market.
In this context, the main idea was to focus on some real practical research,
which confirmed the above mentioned constructed theoretical views.
This research is aimed to serve as a guide to Macedonian freight forwarders towards what to
direct their activities. The main goal is focusing to maintain its business, which simply leads
to the enhancing of Macedonian economy at all.
5.3. Practical aspects of Macedonian freight forwarders
In order to come to a proper and useful research for the economy, we made an
exploration connected with several questions which gave us answer for some practical
aspects of freight forwarders in the Republic of Macedonia. Basically, we focused on the
organizational change of the companies, and their strategy for growth and development. Inthis contest, we can emphasize the fact that almost every freight forwarder in the Republic of
Macedonia has extended his scope of activities.
Figure 2. Extending the market of activities
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
8/15
In correlation with this issue, stands the question about the reduction of some of
forwarding agent activities. According to the research, there is not a freight forwarder which
stopped to do some activities.
Figure 3. Stopping certain activities or services
Finally, the issues that has a direct connection with stability, sustainability and
prosperity of the freight forwarder: organizational changes and necessity of building a proper
local, national and global development strategy. This question is in direct connection with the
success of global economy. Namely, the growth and development of the economy is
conditional from the successful work of freight forwarders. The reason for this is the fact that
shipping, transport and logistics are basic components of world trade which in ultima linea
take the biggest part from the world economy.
Figure 4. World trend transformation to a 3PL and 4PL services providers
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
9/15
6. Business policy as a factor for the successful operation of freight logistics
provider
Business policy is an essential element for growth and development of each company.
In essence, business strategy is a policy of the company that includes a set of activities
undertaken for successful operation on the market. In the area of transport and shipping,
building the right strategy is a fundamental prerequisite for successful action in ferocious
(global) competition.
Creating a successful business policy is correlated with the question how can a
freight forwarder successfully and rationally achieve the set logistic goals? The latter is
correlated with the intellectual capacities (human resources) and investments made by the
freight forwarders. Within the shipping companies operate more heterogeneous departments
responsible for different segments of shipping operations. Hence, essential for the operation
of shipping is creating incremental business sub policy in each shipping service - commercial,
tariff, customs, acquisition service etc.
The success of forwarding agents work is conventional from a proper strategy for
development. Influenced by contemporary economic trends and the changes in industrial
production, the process of globalization and development of IT technology, finally the impact
of the global economic crisis, freight forwarders were in a position to create more sub
policies combining with staff available to, marketing, finance, production etc..
Finally, in the last decade, influenced by the global crisis, freight forwarders were
forced to create and implement strategies to maintain their business. Influenced by the global
economic crisis, work on shippers, transporters, logistics operators fell by 30 percent. Thisimposes the need for determination of new objectives to be achieved in a predetermined time
interval through the use of new instruments, stocks and other assets that ensure growth and
development.
6.1. Freight forwarders personnel policy
Creating and implementing successful personnel policy is essential for the survival
and development of freight forwarding companies. This is quite logical considering the
impact of human capacity on the ability of the forwarder to realize the disposition of his
principal under specified conditions. Personnel policy is one of the basic sub policies of
forwarder agent. Considering the organizational structure of the shipping companies and their
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
10/15
role in the implementation of orders, it is clear that the importance of creating and
implementing the correct strategy is overriding for the success of the companies.
In this sense, knowledge, experience, skill, motivation and lucidity of services in
shipping, no efficiency and effectiveness, growth and development will ultimately not
successful logistics firm (Holly, Pavlic, 2004, p. 116.).
The successful personnel policy is closely related to the education, training, acquiringnew knowledge and experience in the field of organization and realization of goods: transfer,
storage, insurance, packing, control of goods, external trade etc. The process of training
involves training services at all levels of management. In this sense, effectiveness and
efficiency in the operation of forwarder comes to the fore at full capacity if all levels of
management effectuate proper business policy.
Therefore, improvement of high, middle and low management leadership is necessary
for concentration of forwarding agent to the needs of modern economic operations.
Investment in freight forwarding services represents one segment of the activities undertaken
by top management in order to maintain and increase the growth and development of the
forwarder.
Occurrence of electronic banking, electronic offer and signature, electronic bill oflading, imposed as necessary electronic training at all levels of management.
Today's shipping companies are geared towards full implementation of electronic
communication starting from the date of the order from the customer, paying the price for
taking notice of the goods and so on. Finally, placing in this segment of freight forwarder
operations, mean realization of an essential part of business policy of the forwarder.
6.2. Freight forwarders market policy
Forwarding market (marketing) policy plays a crucial role in establishing a forwarderservices market. Through good marketing strategy, freight forwarder ensures market for his
basic and special services. Guided by its logistics facilities forwarder creates and implements
marketing policy according to the needs of the import-export sector.
As a process Marketing gives opportunity for creation and implementation of ideas,
promotion and distribution. Although general, this definition is a full application in the field
of freight forwarder marketing. As a concept, marketing present a business orientation of
freight forwarder, focused on import-export sector.
Forwarder builds strategy to perform the tasks before they begin to be realized.
Strategy is a tactic that the forwarder applies in the implementation of business policy
development. Unlike the strategy that serves as a forwarder roadmap for achieving the goals,
tactics refers to the specific methods that will be used in achieving the set goals. In this sense,
the strategy determines the direction of the market action. In contrast, market strategy
(marketing strategy) specification covers the roads and ways that enable the realization of
goals.
The creation and implementation of appropriate strategy (marketing) is conditioned
by prior application of analysis of possible alternative routes to achieving the goal.
At the same time, the composing of an adequate strategy forwarder must be a rational
choice meaning of what strategy the most efficient and most economical way to keep the
whole exercise. Forwarder collects information and data from his offices, conducts analysis
on the tariff system and tariff policy, market conditions and the level of economic growth and
real development in order to position the market and to create a strategy that will positivelyaffect its profitability.
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
11/15
In modern conditions of trade, build a proper marketing strategy is necessary for
survival and development of freight forwarding companies. Namely, in the last few decades
taking into account all the turmoil in the business environment, freight forwarders had to
decide whether to expand its business, whether to incorporate, merge or be taken from other
shipping, trucking company or logistics provider.
Forwarders had to move away from their facilities and opt for what strategy orcombination of strategies that best suit the needs and interests of their principal and interests
of entities whose activities they coordinate. Only shippers had already set a good marketing
strategy persisted market conditions when each industry was hit by the global economic
crisis.
6.3. Freight forwarders financial policy
Financial policy is one segment of business shipping policy. The financial policy is
essentially a monetary expression of forwarder business policy. The main objective of the
financial policy is to ensure maximum financial results of his operations (Nikolovski, 2002,p. 96). The financial policy of the forwarder is aimed to providing a stable financial situation
as a forwarder would be able to carry out orders from his customers. Like any other subject
(participant) in trade, forwarder initially focuses on avoiding financial problems.
Regarding the finances of the forwarder, the role of tariff policy is a key for proper
convey of the client disposition. Namely, in the absence of sufficient funds, forwarder is
unable to continue its operations or to cover material expenses incurred. From these and
numerous other reasons, the creation and implementation of appropriate financial strategy is
crucial for the survival, growth and development of the forwarders.
Forwarder agent establishes and implements policy through its current financial,
medium and long term plans and programs. These plans and programs provide intentional
(planned) directing of the activities of management for selection of optimal solutions inoperation. Proper financial framework, provide growth and development of the forwarder.
This financial stability is influenced by several factors expressed in several sub policy: policy
of obtaining financing, policy financial relationships with suppliers, the policy of obtaining
funds from the purchase policy of obtaining foreign currency assets, depreciation policy,
financial policy setting and allocation of total income and expenditure.
In essence, the successful creation and implementation of each of these sub policies
reflects the general financial policy implemented by forwarder. Namely, in obtaining the
funds, forwarder must go from the principles of cost effectiveness. In case he lends his client,
it is necessary to take into account the finance that pays and to compare the performance
gains from the disposition. Rational forwarding agent approach is necessary and in the
implementation of the policy of financial relations with suppliers.The Freight forwarder enters in numerous legal and economic relations with
heterogeneous entities from which it derives the obligation for payment of debts arising in
respect of completed tasks. In politics with financial relationship, the key issue for freight
forwarder is: which service, how and when to pay. Proper ranking of suppliers for payment is
in close relation with the growth and development of the forwarder. The proper design and
implementation of this policy depends on the success of other sub policy. More precisely, this
sub policy must be in correlation with the rest.
In close connection with obtaining the funds from the buyer stands policy of selling
financial assets. Forwarder in a position to place part of their faineance only if he succeeded
to obtain part of the funds owed. However, practice shows that freight forwarders take a big
risk just to meet the need of his clients.
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
12/15
All listed sub policies essentially are summarize under the policy of setting and
allocation of revenues and expenditures that are made. Even a freight forwarder start with his
own interest during the creation of financial framework, he also takes care for his clients,
convincing that his commitment is necessary for successful completion of the transaction.
6.4. Freight forwarders development policy
The successful development sub policy is directly conditioned by adequate sub
policies (strategies) that forwarder creates and implements during shipping operation.
Through development policy, forwarder determines the basic mission of growth and
development that strives to forwarder.
Creating robust short, medium and long-term program for growth and development is
characteristic of major shipping companies (logistics operators). In the field of small freight
forwarders, the development program has no meaning. This is because its not able to see the
significance of this component, nor realized the program for growth and development. More
specifically, in modern conditions of trade, creating a program for growth and development is
characteristic of global logistics operators within are sups maze as numerous offices andsubsidiaries worldwide.
The work of each of these units depends on the position of the forwarder (operator) in
the business world. In practice, global logistics operators open and closes business units are
taking the plan and program for growth and development. Everything in the long term
management would appear to be cost effective and cost generally becomes part of program
development. In this sense, logistic operators opened offices at ports and airports, expanding
its activities including being package of goods, control over it, opening warehouses, removal
licenses for local customs clearance etc.
The Development policy is in direct correlation with the inflow of funds, investing in
the personnel office, and marketing. All together towards creating adequate policy
development is going to be a function of permanently ensuring maximum financial resultsthat would provide primary liquidity forwarder, his growth and development.
Conclusions
By definition, The Classic forwarding is becoming a thing of the past.
New forwarding agents have expanded the forwarding services definition with
coordination, organisation and execution of all the activities within forwarding system.
Concerning the development of forwarders' activities in supply and distribution,
companies' networking technological development, information technologies revolution,
which all together represent the uprising of the networked community, new solutions and
technologies as well as modern approach toward forwarding are necessary to create
forwarding for the new millennium.
Modern forwarding activities have enabled the growth process, economic
development as well as selection of forwarders for the new millennium as a coordinator,
integrator and supervisor of efficient logistics activities manager as well as respectable
dominant architect oflogistics system processes at domestic and international marketplaces of
logistics services.
According to the above stated, it is evident that it is necessary to change the current
practise of offering parts of services from numerous participants that has resulted in
uncoordinated and "broken" logistics services such as transport, packing, warehousing which
have then resulted in delays and breaking time limits of deliveries as well as increasing stockquantities within the logistics system.
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
13/15
Therefore, classic forwarders have to consider that the only way to stay and survive
on the logistics and traffic marketplace is to grow, develop and profile into logistics
forwarding operator which should be in the function of optimal connecting potential
resources with suppliers and production centres with consumers.
Using appropriate methods of research, the results are related to the certain empirical
results that confirmed our theoretical views. Taking into account the global situation in thebusiness community, focusing on the logistics sector, the following is concluded:
specialization of freight forwarding services is long past stage after which follows the process
of integration of freight forwarding logistic to transport services, and finally (latest world
trends in this field), centralization of these services in a logistics operator. All this contributed
to the creation of multinational companies in the market of logistics services (logistics
sector).
Empirical research does point to the conclusion that small and medium-sized
forwarding companies in the Republic of Macedonia and elsewhere in the region will not be
able with its capacity to satisfy the needs of regional and global markets. Extensive import-
export worldwide, dictated by the world's great economic powers, contributes to a numerous
mergers, takeover, fusion of the companies. This global trend made a strong impact on freightforwarder environment in the Republic of Macedonia. The great shipping companies with
foreign companies already established in the Republic of Macedonia, accept this world trend
in full capacity.
This new concept of transformation strongly influenced on the creation of a new
strategy for market access and for all participants in the business community.
Research has shown that small and medium sized forwarders attempt to adapt to the
new world trend. Theory pointed and practice confirms the fact that the small and medium
sized forwarders that will not be able to transform into logistics providers, will disappear
from the market.
Actually, in the terms of world crises, the biggest success of this sector is to secure
balance in development, sustainability in the ferocious competition and saving qualified
workforce. By reducing costs, investing in sectors that are profitable, freight forwarders must
created a strategy aimed to secure the sustainability of their business.
These were the main segments on which the freight forwarders were aimed under the
concept of sustainable development in the world economy.
The research point out the sustainability is the highest result that can be achieve in
this conditions. In to achieve this, the organizational change in this sector is necessary. Any
other behavior will bring them in unenviable position consequently they will disappear from
the market. Finally, the choose remains to the freight forwarders.
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
14/15
References:
Anderson, E., 2009. The status and Associated Liability of Ocean Freight Forwarders,
Transport Law Journal, (36), pp. 312-347.
Anonymous, 1967. Intermodal Transportation and the Freight Forwarder. The Yale
Law Journal, 76(7), pp. 1360-1396.
Bowen, J., Leinbach, T., 2003. Market Concentration in the air freight forwarding
industry, Transport Law Journal, (14), pp. 67-82.
Boi, V., Aimovi S., 2010. Marketing logistika, Beograd, pp.1-240.
Davies, G., 1981. The Role of export and Freight Forwarder in the United Kingdom,
Journal of International Business Studies, (12), pp. 86-99.Davies, G.J., 1981. The Role of export and Freight Forwarder in the United Kingdom,
Journal of International Business Studies, (12) pp. 88-92.
Dominic, R., 2005. The changing face of freight forwarding, (Logistics & Transport
focus), pp. 87-96.
Kolakovi, M., 2005. Novi poslovni modeli u virtuelnoj ekonomiji i njihov utjecaj na
promjene u transportnoj logistici i upravljanju lancem opskrbe, pp. 1-33.
Kumar, R., 1999. International logistic, pp.1-309.
-
7/28/2019 Sustainable Development of the Forwarder as the Main Challenge in the Modern Global Economy
15/15
Lemoine, W., Dagnaes, L., 2002. Globalization and networking organization of
European Freight Forwarding and Logistic providers, Paper presented at the 2nd
International Conference On Co-operation & Competition, pp. 1-15.
Leung, W., 2007. The Dual Role of the Freight Forwarder: Vastfame Camera Ltd v
Birkaft Globistics Ltd, 2005 High Court of Hong Kong 117, Stone J, 5 October 2005;2005 AMC 2864 (High Court of Hong Kong, 2005).Journal of Maritime Law &
Commerce, 38(1), pp. 97-109.
Markides, V., Holweg, M., 2006. On the diversification of International freight
forwarders, International Journal of Physical Distribution & Logistics Management,
36(5), pp. 336-359.
Mason, G., 2005. In Search of High Value Added Production: How Important are
Skills? Investigations in the Plastics Processing, Printing, Logistics and Insurance
Industries in the UK, pp. 1-14.
Matopoulos, A., Papadopoulou E.M., 2009. The Evolution of Logistics ServiceProviders and the Role of Internet-based Applications in Facilitating Global
Operations, pp.1-16.
Medveek, I., 1975. Osnove trine politike, Pula, pp.77-96.
Tongzon, J., L., 2009. Port Choice and Freight Forwarders, Transportation Research
Part E(45), pp. 186195.
Wong, C.Y., Karia N., 2009. Explaining the competitive advantage of logistics
service providers,Int. J. Production Economics, pp. 74-92.
Zelenika, R., 1985. Meunarodna pedicija, Pula, pp.46-83.
Zelenika, R., Pavli H., Strategijske odrednice poslovne politike pediterskoga
logistikoga operatora, Rijeka, pp. 202-246.
Zelenika, R., Pupavac, D., Menadment logistikih sustava, Rijeka, pp. 87-111.