Transport Logistics

EXECUTIVE SUMMARY

International business has been undergoing a period of rapid transformation. Trends towards

globalisation, integrated logistics and the development of Information and Communication

Technology (ICT) are all reshaping the world’s trading patterns and consequently physical trade flows.

Such restructuring is contributing to economic growth, better allocation of resources and more

freedom of choice for consumers, as well as increased competition.

In order to be internationally competitive, businesses are organising strategic worldwide networks

that can deliver an efficient and high-quality response to demand from any segment of the world

market. The efficient and integrated organisation of such activities is often referred to as global

logistics or supply chain management (SCM), and it has become the core of global competitive power.

Global logistics networks serve as a circulatory system for the corresponding global value-adding

chain where various components in the logistics network serve different functions in an

organisationally unified manner. Therefore, in order to establish a region as a key component in global

logistics networks, it is necessary to create a vision of how to position the region strategically within

the context of the overall global logistics networks. To achieve this objective, governments both

individually and collectively will need to develop and implement systematic policies for realising the

vision. The essence of this global logistics competence also applies to the private sector.

At the same time, in the midst of growing environmental concerns, efficient physical logistics are

no longer independent from sustainable development objectives. Global logistical competence now

requires a variety of considerations in a much broader perspective including the need for

environmentally friendly logistics.

In order to establish efficient and environmentally-friendly global logistics networks in the 21

st

century, collaborative studies are needed to understand the current state of logistics systems in and

across various regions and to identify the problems specific to each region. In these studies, the

advancement of logistics needs to be assessed not only from the viewpoint of industrial or national

competitiveness, but also from that of global social optimisation taking account of consumers,

shippers, logistic service providers and government perspectives. Hence, a vision of desired global

logistics networks based on global interests and a common framework across regions is required.

Concrete policies and directions for both governments and private corporations, which will enable

them to identify development paths to achieve the vision, should be advanced.

The aim of the OECD TRILOG Project has been to stimulate the exchange of approaches to and

experiences with multimodal management, freight transport logistics and associated policy challenges

encountered on a multi-regional and international basis. The project was initiated in 1996 as part of the

OECD Programme of Research on Road Transport and Intermodal Linkages (RTR Programme).

A central theme is to identify common critical issues regionally and globally and then to compare

or suggest solutions and approaches that could facilitate the development of relevant policies to

promote efficient transport logistics. The solutions or suggestions should lead to policies that can

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better foster private sector development, harmonisation of regulations, standardisation and use of

technologies and practices that improve the overall level of integrated transport efficiency.

The TRILOG project was undertaken through three task forces, which have produced reports

representing the Asian-Pacific, European and North American regions. Japan, the European

Commission’s Directorate General VII (now DG TREN) on Transport and the United States, chaired

the three task forces respectively. In the report, the terms “(advanced) logistics” and “supply chain

management” are used interchangeably. (Advanced) logistics refers to “…the concept of

synchronising the activities of multiple organisations in the logistics chain and feeding back necessary

information to organisations in production and/or physical distribution sectors on a real time basis, by

fully utilising information technology and digital communication networks,” (OECD 1992, 1996).

This extends the original concept of logistics management seen as an iterative process that seeks to

optimise the flow of materials and supplies through the organisation to the customer (Christopher,

1999). In Europe, the term “supply chain management” is used, whereas in North America and the

Asia-pacific the term (advanced) “logistics” is generally used. Hence, logistics and supply chain

management is taken to include the extension of logistics concepts to customers and suppliers,

irrespective of geographical and organisational boundaries.

This plenary TRILOG report aims to identify and incorporate the issues common to all three

regions, and hence develop policy options for co-operative action to facilitate the attainment of

seamless transport systems internationally. There are significant shifts taking place in the way that

business is being done (e.g. e-commerce), but it is not clear what developments will follow, in what

direction they will move, what exactly causes the developments and how to react to or promote them.

The report focuses on the common findings of the three regions and recommendations based on these

findings, and hence should be considered as an overview rather than a set of definitive conclusions.