CHAPTER 1

INTRODUCTION

1.0

Introduction

Freight transportation and logistics trends are the worlds largest industries. They play a substantial role in modern world. Freight transportation is the movement of people and goods from one location to another. Modes of transport include air, rail, road, water and pipeline. Transport and logistics trends are important since it enables trade between peoples and goods, which in turn establishes civilizations. They are closely connected to the economics of country. When economic activity is buoyant, demand for transport and logistics services is equally strong. The research will cover at central region such as

Selangor, Kuala Lumpur and Negeri Sembilan. It will involve with port authority, shipping companies and government agency. This research will provide because in Malaysia have not efficient technology compare with worldwide. So, to implement it must have the role of performance management and technology solution. It will be carried to ensure the solution from these problems. The field can be divided into infrastructure, vehicles, and operations.

1.1

Background

Logistics is the management of the flow of materials and services between the point of origin and the point of use in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation inventory, warehousing, material handling, and packaging, and often security. Logistics is a channel of the supply chain which adds the value of time and place utility. They are high due date reliability, short delivery times, low inventory level and high capacity utilization.

The trend towards globalisation and logistics is in the process of reshaping transport activities. New strategic uses of logistics will continually alter the nature and culture of operations in industry, governments will have to match these changes. The strategic advantage of logistics is likely to be most pronounced in terms of improvements in coordination and planning resulting in transport efficiency gains. However, it is important for governments to fully understand concepts of logistics and to stimulate economic competitiveness to achieve positive economic development. At the same time, governments need to reduce any negative impacts, so as to achieve a more balanced approach to economic growth, including sustainable development.

One of the most obvious manifestations of logistics activities is the growth in freight transport due to the worldwide expansion of trade. In particular, the globalisation of industry, including planning, sourcing, manufacturing and marketing activities has resulted in more complex trading and much more developed transport networks.

Developments in vehicle and handling technology also offer the potential to change the operating costs of different modes of freight transport and bring about a change in the pattern of traffic flows. The rapid development of logistics has influenced not only supply chain performance but has also changed industry structures and produced new services.

1.2

Statement of Problems

1. The research is to determine that the competitive in moving freight as compared at water, air, and road in central region. 2. This research also identifies that whether the operation in the central region logistics trends to provide competition in other states.

1.3

Research Objective

1. To identify the relationship between logistics hub and freight transports in the central region. 2. To analyse the logistics trends for development of economy in the central region. 3. To identify the currently of the development in the technology that having impact of the movement freight transport and logistics trends with the different mode and the strength of the mode transport in the Peninsular Malaysia Central Region.

1.4

Research Question

1. What are the relationships in the freight transport to the logistics hub transportation? 2. What are the differences between mode and the strengths of freights transportation in the central region? 3. How the logistics trends can effect economic growth in the state?

1.5

Significant of Study

The logistics trend and freight transportation of study is widespread field especially an industry, and they not fully utilize. This study can assists the problems of freight transportation and logistics trends in Malaysia. Therefore, within have an analysis about this study can help to identify the time, cost, and strength of movement from origin to destination by each available of modes and route in the region. It also can improve understanding of the opportunities for improving freight logistics and transport in central region.

1.6

Limitation of Study

The problems that facing when doing this research such as time consuming process is limited and resources information is not sufficient to process the data and time is constrains.

1.7

Definition of Term

1) Logistics: The management of materials flow through an organization, from raw materials through to finished goods.

2) Trends: The general direction followed by a road, river, coastline, or the like.

3) Logistics transport: Primary modes of transportation such as truck, rail, air, water, pipeline, intermodal transportation

4) Integrated: Involved in use multimodal transport, intermodal transport and combined transport.

5) Intermodal: The concept of transporting passengers and freight on two or more different modes during a single journey

6) Multimodal: Namely the use of a variety of different transport modes for the movement of unitized freight from its place of origin to the final destination.

CHAPTER 2

LITERATURE REVIEW

2.0

Trade and Development of Transportation.

According from the united nations conference on trade and developments article in efficient transport and trade facilitation to improve participation by developing countries in international trade (2003) mention that the advances in information and communication technology have further impacted on trade and transportation processes. Development of sophisticated management and operating systems has provided efficient cost control, optimum use of equipment and a new quality in customer relations.

Developing countries need to put in place the necessary physical and legal infrastructure to benefit from information and communication technology. Providers of transport services also need to develop information systems to improve their competitiveness. The existing legal infrastructure needs to be adapted to the requirements of electronic transactions.

Transport is of increasing relevance to the development of nations. It is a crucial determinant of production and trade patterns and consequently also of economic integration. For some countries it may also contribute to the generation of income through the provision of transport services. Participation in world trade depends increasingly on the type, quality and costs of transport services.

At present, intra company trade and trade in intermediate products are growing faster than trade in finished goods. This trend is closely linked to improvements in transport and logistics services.
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In order to explain who trades what with whom, and by what mode of transport, it is not enough to look only at transport costs. Other quantitative aspects such as connectivity, safety, security, reliability, service speed, port facilities and inland connections also need to be taken into account. Furthermore, it is not only the supply of transport services that influences trade, but also vice versa: different volumes and types of trade encourage the supply of different types of transport services. From being an external factor, transport has become an integrated part of the global production and distribution system.

As in the relation between globalization and international transport, the relation between regional integration and regional transport is twofold: less expensive and better intraregional transport services lead to further regional integration, and at the same time regional integration also affects the markets for transport services.

Within the European Union, maritime cabotage services are liberalized for Europeanregistered vessels, trucks from member countries are free to move national cargo in other countries, and common standards help to create not only a common market for goods, but also a common market for transport services. This is part of a virtuous cycle, where transport and regional integration mutually benefit each other.

2.1

Trends in Intermodal Freight Transport

A well functioning transport system is essential to our national prosperity and defense. Advances in freight transport and logistics in recent decades have been a major source of productivity growth in the U.S economy. The pictorial representation of intermodal system is given in the following figure.

Figure 1 : Intermodal Freight Transport Source: Dharnikota Ujwal Kiran. Portland State University. Department of Civil and Environmental Engineering(16 march 2007)

From the figure above is about the concept of intermodal freight transportation that has been use. Many of the advances in freight transportation have been in intermodal transportation. Intermodal transportation is defined as The concept of transporting passengers and freight on two or more different modes during a single journey in such a way that all parts of the transportation process, including the exchange of information are efficiently connected and coordinated.

However, the term intermodal is often used to identify the important overall advances in freight transportation and logistics of recent years. Intermodal involves conducting business within existing governmental policies and regulations, managing the transfers between modes through the use of developing technologies, and the interactions between many intermediaries to enable the seamless and real time tracking, scheduling documentation and delivery of the intermodal shipment to the customer.

Intermodal freight transport is also defined as the transport of goods in containers that can be moved on land by rail or truck and on water by ship or barge during a single journey
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Many changes have occurred in intermodal transportation over the past century and some of the key historical developments in the United States have been:

i. ii. iii. iv. v. vi.

Seatrain Intermodal service Truck-Rail Intermodality Land Bridges Pipelines Cargo Containers Air-Surface Intermodality

From the article by Dharnikota Ujwal Kiran, (16 march 2007) he highlighted that today intermodal is often associated with a variety of transportation activities and is often used to refer many of the important overall advances in freight transportation and logistics of recent years.

The government provides major infrastructure components like ports and harbours, airports and airways, and inland waterways. The transportation industry is rapidly changing due to technological advances and search for faster and cheaper ways to transport freight across the globe.

Intermodal freight transport is a system for transporting goods, particularly over longer distances and across international borders, which uses a combination of two or more individual modes, such as road haulage and rail freight, or road haulage and inland waterway barge, to achieve the most economic, efficient and environmentally-friendly delivery of loads to their destination.

2.1.1

Rail

Intermodal rail technology has changed rapidly especially in the areas of automation and flat car equipment. Most advances have been incremental changes to existing technologies. Articulated cars represent the type of technology. Articulated cars are light weight, have lower purchase prices, are less expensive to maintain, and prevent cargo by eliminating most slack action and roll dynamics between cars.

Figure 2: Intelligent Railroad System Source: Dharnikota Ujwal Kiran. Portland State University. Department of Civil and Environmental Engineering(16 march 2007)

The figure 2 is the intelligent railroad system that use in industry .The government and rail industry are developing Intelligent railroad System that will incorporate evolving information into train operations and maintenance. Some of them are client service system and a train control and dispatching system.

Other developments are Nationwide Differential Global Positioning System (NDGPS), Positive Train Control (PTC), electronically controlled pneumatic (ECP) brakes, automatic equipment identification tags for all equipments, way side equipment sensors to identify defects on passing trains, and intelligent grade crossings to reduce grade crossing collisions.
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Technology based improvements such as real-time grade crossing supervision and warning systems, supervisory control distributed networks; solid-state interlocking controls will enhance railroad safety operational efficiency.

2.1.2

Motor Carriers

Most of the advances in this mode are in fuel efficient factors and lighter and stronger trailers with increased cargo capacity. Also the commercial vehicle operations (CVO) initiative, which is a part of the intelligent Transportation system, is expected to improve administrative efficiency, highway data collection, safety and reduce operating costs to commercial vehicles.

2.1.3

Aviation

Aviation continues to expand its role in intermodal freight transportation in shipment of high value and time sensitive cargo. From his article, Dharnikota Ujwal Kiran, (16 march 2007) has been highlighted that large aircrafts like Boeing 747-400 freighter and MD-11 and now Russias Antonov-124, can accommodate 20 and 40 foot international organization for standardization (ISO) ocean containers. However until lighter and stronger sea air containers are developed and used, the additional handling cost of transferring cargos between the heavier ISO ocean containers and the ISO air containers will continue to be more costly than all ocean service. To accommodate this growth and enhance safety the Federal Aviation Administration (FAA) is engaged in a comprehensive program to modernize Air Traffic (ATS) Control System. This includes replacing radar surveillance systems, modernizing voice communication systems introducing enhanced automated navigation aids, data links, and improved weather systems.

A common standard for containers would help ports to have standardized equipment resulting in streamline of the transfer processes. It exploits technologies like tracking, control and communication to form integrated carriers like FedEx.

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2.1.4

Water Ways

Todays containers vessels have 50 % more cargo capacity than those of 1975 and some triple the size. He also mention that an 8000 twenty foot equivalent unit (TEU) ship was developed in 1997 and 13000 TEU ship design is currently being studied. When these ships were produced in 1970s, they required many waterways and ports to be deepened to accommodate the increasing drafts of these vessels.

Along with the development of the transportation systems there is also a need for the standardization and modularization of container design. Not only is the container sizes increasing but also the design is evolving to make containers stackable, roll able and solid able onto freight carriers like ships, trucks, and others. Recent innovations have included the use of advanced materials for higher capacity, lower weight, better performance and life.

In many countries, governments are concerned with viability and survival of such enterprises, and want to ensure this survival through providing awareness programs, educational and resource-expansion export. Although freight transportation has benefited from improvements in information and equipment technologies over the past years, the progress linking the evolving information and transportation systems has been slowed by lack of network infrastructure, and lack of expertise in some sectors that participate in the freight transportation system.

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2.2

The Trends of Trade and Development

According the article Impact of Todays Trends (October 5, 2001), Most experts talk about inventory and shipment visibility as the key to successful logistics execution. But, when asked to define visibility, those same experts give a fancy response that in plain English means knowing the status of in-transit shipments or inventory. Unfortunately, the reality is that knowing the status of something once it is already in-transit adds no value to the supply chain. What many companies fail to realize and understand is that there are four conditions that are changing the way companies are thinking about visibility and the logistics operation as they struggle to meet the ever increasing customer demands:

a) The Internet B2B Economy: A dramatic transformation in the use of the Internet for business transactions between companies

b) Reverse Logistics: The management of returned products to distributors, manufacturers or retailers; a fifth of all purchased items are returned annually

c) Real-time Logistics Event Management: The need for accurate and timely management of information in order to maintain ontime deliveries, reduce inventory levels and ensure that the right product is in the right place at the right time

d) Technology Solutions Provide Visibility: New logistics event management technologies to gain real-time visibility into logistics operations; ensure a more accurate, efficient and effective flow of goods; reduce costs and increase customer satisfaction

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The four conditions outlined above have significantly changed the role and expectations of the logistician. Companies must radically adapt their logistics management strategy in order to compete in todays tumultuous marketplace, marked with ever-decreasing turnaround times, increased competition and lower profit margins. This article focuses primarily on how these conditions are affecting logistics today, with a particular emphasis on the new technologies that are improving the flow of goods.

There are numerous companies in the marketplace that offer technology solutions claiming real-time visibility into inventory levels and logistics unfortunately, what most offer does not match up with what businesses really need to improve costs and customer satisfaction.

2.2.1

The Internet B2B Economy

There has been explosive growth in business-to-business (B2B) transactions via the Internet. According to Forrester Research, The Impact of Todays Trends (October 5, 2001), the B2B e-Commerce segment of the economy will grow to $2.7 trillion by the year 2004. AMR is even more optimistic, predicting that the market will reach $5.7 trillion during the same time period. (The New Logistics Management Paradigm: The Impact of Todays Trends October 5, 2001)

Forrester predicts that as much as 20 percent of all transportation transactions will take place over the Internet by 2004. With this dramatic growth in Internet-based transactions, e-logistics has created new categories of logistics management providers including:

a) Fourth Party Logistics (4PL) firms: Organizations that manage the full scope of logistics services for companies by aggregating and coordinating the services of multiple logistics service providers

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b) Logistics Exchanges (LX): Internet-based marketplaces for the buying and selling of logistics services, management of logistics content, and the optimization of logistics activities

c) Logistics Visibility Providers (LVP): Internet-based service providers that capture data from logistics service providers; cleanse, verify and analyze the data; and report on logistics activities to facilitate total supply chain visibility. All of these providers rely on the Internet in some way to provide a service to a business organization. However, it is difficult to determine who participates in which category and who really delivers the functions they promise.

2.2.2

Reverse Logistics

At a recent National Association of Purchasing Management seminar, it was presented that the top five reasons for electronically-generated orders not meeting customer expectations are:

a) Late delivery b) Wrong product/quantity c) Not shipped at all d) Technical problems e) Returns

If it is true that 90 percent of these issues could have been avoided in the first place, then logisticians must focus on the root cause. In order to improve this process, companies need real-time visibility into what is actually going to

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2.2.3

Real-time Logistics Event Management

From this article mention that, market today now have three to 100 times the departmental interdependencies across organizations, international borders and myriad systems. But, if even a small component of the process can be managed well, significant improvements will be gained. Consider the fact that total supply chain management costs typically account for eight to nine percent of sales, according to benchmarks from the Performance Measurement Group, LLC. The largest single driver of this is logistics. Typical benefits from integrating the supply chain range from 28 percent to 60 percent improvement in delivery performance and inventory reduction, to 10 percent to 30 percent improvement in capacity realization and fill rates.

Therefore, the potential money savings from real-time logistics visibility is staggering. The combination of supply chain complexity and market conditions puts even more pressure on manufacturers to provide the right amount of products, at the right time, for the lowest possible price.

A few factors have made this increasingly difficult. There have been many recent inventory debacles as a result of the inability of ERP systems to properly forecast demand and prevent inventory build-up. In addition, the lead times for producing products has shrunk dramatically. And finally, most organizations now outsource manufacturing of components to third- party organizations. Our current connected economy has drastically changed the role and operations of transportation.

As a result, the logistics management departments must try to perform transportation miracles on a daily basis in order to meet these monumental goals. That is a significant concern for companies. It becomes an even bigger concern if what was shipped was shipped out incorrectly and has to be returned or routed differently. In this collaborative economy, enterprises have to acknowledge the increased role of transportation management and how to use technology to their best advantage. Figure 1 compares old school logistics with the logistics of today.
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Figure 3: Compares old school logistics with the logistics of today. (The New Logistics Management Paradigm: The Impact of Todays Trends October 5, 2001)

From the figure 3, we can conclude that the improvement from the old logistics become logistics today. Many of the improvement be made from these. So, automatically the logistics trends have been improved.

The result is that the customer gets what they ordered, but at a significant cost to the enterprise. There is technology that exists today to manage customer requirements before the product is shipped. In logistics management, from the raw materials procurement to the customer destination, value or cost is added along the way. To correct a deviation from the original customer requirements as it approaches its destination is a very costly proposition; not only in terms of money but in terms of time. There is a solution. It is real-time logistics event management using some of the leading edge technology solutions available today.

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2.2.4

Technology Solutions Provide Visibility

Very few companies can compete on price alone. Speed, accuracy and completeness with which orders are filled and delivered are the sustaining differentiators in todays fastpaced economy. Effectively managing events is key. The solution is real-time logistics event management. Logisticians must gain real-time pre shipment visibility and proactive event management before shipment. But be warned some technology providers state they have visibility to facilitate proactive tendering and management of all freight through to the final destination. There are solutions available that provide visibility through a collection of realtime, Web-based data and analytics.

These solutions help to manage the logistics process between buyers and suppliers, while eliminating costly discrepancies between purchase order, sales order and shipping information. By eliminating these variances and inconsistencies in anything from quantities and shipping locations to ship dates, part numbers and freight terms, logistics providers can:

a) Eliminate missed shipments b) Eliminate shipment discrepancies c) Improve profit margins by inputting more accurate and timely data into optimization tools Enable the reduction of inventory carrying costs for the customer d) Support customers efforts to reduce inventory investments e) Improve customer satisfaction through: f) Improved delivery reliability g) Improved efficiencies in your customers receiving operations

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Figure 4: Typical Logistics Workflow reposition

Figure 4 depicts the typical outsourced logistics workflow. This figure shows an enhanced event managed visibility workflow solution. This solution extends into the supply chain and integrates with the existing logistical systems. Visibility happens this way:

a) As the buyer processes the purchase order, the PO information is sent by line item to a standards based hosted platform. Reference Point 1.

b) As the shipment is picked, packed or staged at the Supplier, the data is sent to the same platform. Reference Point 2.

c) Alerts on pre-defined information inconsistencies will be automatically sent to appropriate users for corrective action on a real-time basis before input into the TMS or the product being shipped. Reference Point 3.

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More advanced technology will provide alerts on business rules and document cardinality violations. For example, a shipping document cannot find reference to a sales order number. Or a primary key field is missing that will impact analytic views later on. In these two examples, alerts would be sent to the appropriate individuals for review and resolution.

The ability for logistics managers to gain visibility into the buyers purchase order and compare that data to the pre-shipment information from all suppliers through exception or event management is of significant value to this market. It takes a truly proactive approach to managing logistics. What comes out of this process is a significant improvement in the flow of goods to the customer. In addition, this technology will arm the logistician with the following capabilities:

a) Exception management enabling the logistics group to manage by exception b) Reduction of inventory carrying costs for the customer by improving shipment reliability c) Alignment with the customers effort to reduce inventory investments d) Provide one version of the truth for dispute resolution e) Improved customer service by enabling: i. ii. Improved scheduled delivery reliability Improved efficiencies in receiving operations

In todays volatile economic climate, logistics management is becoming more important than ever before. Getting the right amount of goods to the right place at the right time is critical, especially in an age when budgets are tight and customers demands are unpredictable and unforgiving.

Logistics management is evolving in significant ways to address these problems. Internet utilization, combined with the proliferation of reverse logistics and the impact of

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technology advancements in real time logistics event management and visibility, are fundamentally changing the role of logistics management in organizations.

In order to succeed in todays global marketplace, companies must be ever cognizant of these trends and develop a logistics management strategy that capitalizes on the best-ofbreed technology solutions available today, so that they can meet the demands of their customers today and be well prepared for the future.

2.3

The Aim of Developing Logistics Performance Indicators

The aim of developing performance indicators for the logistics sector is to evaluate the efficiency and sustainability of logistics systems, monitor the achievement of logistics policies and explore possible improvements. Different players in the logistics chain have different objectives, and achievement of each of these objectives needs to be evaluated.

The private sector aims to achieve optimisation of the supply chain, and hence, be competitive in international markets. The public sector aims to fulfil its responsibility by applying effective policies to address the trend towards increased globalisation of economies and liberalisation of trade while achieving sustainability and social objectives.

The public sector has to be able to monitor freight transportation and the performance of logistics systems to measure the effectiveness of its policies. Therefore, it is necessary to assess the advancement of logistics not only from the viewpoint of industrial or national competitiveness, but also from the viewpoint of global, social optimisation.

Performance indicators can be used to assess impacts of logistics by considering the major players in the logistics system, i.e. consumers, shippers, logistic service providers and governments. Although a complete evaluation of logistics systems may be difficult, a relative
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evaluation is possible and useful by comparing the performances of logistics services in different countries using performance indicators. They can be evaluated by considering best practices as the standard evaluation criteria.

2.4

Central Region As A Logistics Hub ( Port Klang)

The Malaysian government is now actively encouraging the setting up of international procurement centers to foster distribution activities especially at ports. This includes the offer of suitable fiscal incentives to investors and the Customs designation of special free zones areas where such activities could be carried out.

The National Economic Recovery Plan (1998) acknowledged the importance of the value-adding activities as part of the efforts to foster greater competitiveness of the Malaysian economy. The Plan emphasised the need to promote the usage of the various free commercial zones in the country for value-adding and transhipment activities, especially for industries licensed under manufacturing warehouse and free industrial zones.

The move to encourage the development of international procurement centers and distribution activities forms an integral part of the government's policy to stem the outflow of foreign exchange payments. It is also seen that the role of the ports in the national economy would be further strengthened through the linkages created by the generation of cargo.

The international procurement centers (IPCs) are allowed to be set up at designated free zones only. The free zones offer an environment free from Customs documentation and duties. A wide range of value-adding services are provided in addition to consolidation and storage functions by the IPCs in the distriparks at the Westport Distripark and at the Port Klang Distribution Park in Northport.
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In addition to the Westport Distripark at Westport, the Port Klang Distribution Park, located in the free zone at Northport, also offers space to companies to carry out value-adding services. The Port Klang Distripark, which is located strategically between two container terminals in Northport at Port Klang, offers leased space to cargo consolidators to carry out a broad range of value-adding services. PKDP and Westport Distribution Park are well link by rail network.

The attraction of Port Klang for companies to set up the IPCs has also been fostered by the recent increase in the mainline shipping services. It also offers considerable benefits with prospects for saving in time and costs.

This inception literature assesses the general situation of freight transportation in Malaysia and brings forward the potential of Intelligent Transportation Systems applications and more specifically Commercial Vehicle Operations for providing a way of improving the offered level of service. Malaysia s vision of attaining developed nation status by 2020 is based on expansion towards a service and information economy, but this is only possible by increasing the productivity of the industry.

A major parameter towards a competitive industry is the efficient transportation of freight, since it is calculated that this sector comprises at least 10% of the value of products that highlighted by Sgouris P. Sgouridis Freight transportation in Malaysia (Jun 30, 2003). Domestic and international supply chains rely on the high utilization equipment and infrastructure, as well as the coordination of a series of private and public administrative procedures.

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The streamlining of administrative procedures and their electronic facilitation, the consolidation of the very small carriers, the active support of private initiatives for installation of freight tracking and fleet management systems, the support of intermodal solutions and increase of the utilization of the rail and waterways for domestic and short distance international trade, are some of the more important ones.

All these measures have as end goal to facilitate the creation of an efficient supply chain. More specifically they can improve the traffic conditions and emissions in congested areas like Kuala Lumpur, increase the security level so that it complies with the CSI requirements and give the Malaysian shipping and port industry a competitive advantage, promote road safety and reduce the impacts or prevent incidents that involve hazardous materials.

Furthermore it can encourage the use of new technologies, which is convergent with Malaysia stated goal of the promotion of knowledge-based economy, and give incentive to local manufacturers to enter new technology markets of sensing, monitoring, sealing and other electronic equipment.

Besides that, transportation plays an important role in logistics system and its activities appear in various sections of logistics processes. Without the linking of transportation, a powerful logistics strategy cannot bring its capacity into full play. The review of logistics system in a broad sense might help to integrate the advantages from different application cases to overcome their current disadvantage.

On the other hand, the review of transport systems provides a clearer notion on transport applications in logistics activities. The development of logistics will be still vigorous in the following decades and the logistics concepts might be applied in more fields.

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2.5

Impact Globalization on International Freight Transport Activity The other article from the impacts of globalisation on international road and rail

freight transport activity (2008) have mention about the comparison international freight transport can effect globalisation on activities of transportations in Europe to or from Asia.

In this article mention about the Travel distances between Europe and Asia are generally far shorter by land than they are by sea. This is especially true if the origin and/or destination are inland. Rail services from China to Europe via Central Asia could be provided that take approximately 20 days, whereas this takes approximately 6 weeks by sea. It has been estimated that travelling from Europe to Asia by road would take approximately two weeks (ECMT, 2006).

At present the major trans-Asia land routes are rail routes, including the TransSiberian, the TRACECA corridor, and the southern route via Turkey and Iran. Road routes can be preferable to rail routes in Asia in terms of the denser coverage they provide to larger towns. In addition, the physical terrain in the south of the continent is often better suited to road than rail. China is currently developing a countrywide network of road and rail infrastructure that will link up with connections to Kazakhstan, Mongolia and Russia.

Land transport between Europe and Asia is one of the oldest trade routes in the world (The Silk Route). However, over time long-distance freight flows on this route were largely replaced by maritime transport. The re-opening of the border between China and Kazakhstan for commercial trade has resulted in the recommencing of long-distance freight flows by (road and rail) land between the two continents.

However, volumes of intercontinental freight flows remain relatively small at present. These land routes are mostly used at present for the transport of commodities such as coal, agricultural products, iron and oil, and bulk goods. Only very limited quantities of containerized cargo is transported on these land routes.
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This reflects that maritime transport still dominates these container flows at present. Rail transport (especially the Trans-Siberian Railway) was estimated to account for approximately 3-4% of these containerized freight flows in 2005, and road freight was estimated to represent less than 1% of these containerized flows (The Chamber of Commerce of the United States, 2006).

2.6

Impact of Integrated Logistics on Global Business Practice

The progressive integration of logistics across supply chains has had profound effects on business practices. These include the following trends, note by organisation for economic cooperation and development (OECD):

a) Higher interdependency between firms interlinked within the business network, which has become the new reality of industry. Performance by an individual firm affects the performance of all, and determines the ultimate performance of the network as a whole.

b) A more globalise economy links the sourcing of material and product components with production and markets across national boundaries, invoking problems of time, distance, cultures and diverse market preferences. It intensifies competition and increases the complexity of supply by expanding product variety, searching for higher efficiency while responding to diverse and rapidly changing markets.

c) Changing the concept of corporate enterprise. Organisations have shed peripheral activities to concentrate on core competencies that offer the promise of unique value. Greater external dependence therefore forces attention to inter-organisational relationships for co-ordinating activities and processes. In some cases, the shift towards core business has led to the creation of virtual organisations, where the
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majority of business operations have been outsourced to external parties, including third and fourth party logistics.

d) Transformation of organisational structure of the corporation from a hierarchy, in which the manager dispenses knowledge and workers perform, to the point where knowledge is widely diffused throughout the organisation and workers manage their own activities. This places collaborative decisions closer to the point of action. In a logistics framework, it places a premium on inter-organisational relationships through formal and informal contact, as well as on data and information systems across organisational boundaries.

e) Changing the government environment, creating both problems and opportunities. Much of the economic regulation of transport and telecommunications has been liberated, leading to new market-based combinations of service providers who offer transport combined with warehousing, telecommunications, product assembly and related services. Other forms of regulations to cover consumer protection, environment and safety are replacing the former economic restraints.

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CHAPTER 3

RESEARCH METHODOLOGY

3.0

Introduction

In conducting this research, they are several sequences of steps or stages have been carried out to ensure the objective of the project could be achieved and the target to fulfil the problem statement is completed. Objective for this methodology is to test the significance and validity and reliability of the results. Furthermore, this research is directed to give a pithy answer to the research question. The major purpose is to prove the hypothesis presented before conducting the research.

3.1

Survey Method (Cluster Sampling)

In this research for freight transport and logistics trends use method of cluster sampling. This cluster sampling technique to be use because cost effective and can be administrated to a large number of people. Instead of sampling an entire country when using simple random sampling, the researcher can allocate his limited resources to the few randomly selected clusters or areas when using cluster samples. We create the questionnaire as an instrument for this research. The questionnaire will give to companies which have relationship between freight transport and logistics trend in peninsular central region to get respondent in survey.

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3.1.1 An Example of the Evaluation Form for Data Survey:

Dear Sir/Madam,

Please be informed that, this short survey is undertaken to clarify the freights transports and logistics trends in particular central region. The objectives of the study are:

a) To measure the relationships between freights transport and logistics hub. b) To evaluate for development the economy. c) To determine the movement freights transport and logistics trends.

Participation in this survey is purely voluntary. All your answers will be kept absolutely confidential and will be used for the purpose of this study only. This survey is part of Final Year Project for final semester students in Programmed Bachelor Maritime Operations (Hons). If you have any queries about this questionnaire, please do not hesitate to contact the undersigned for further clarification. A special taken of appreciation will be given for those who participated in this survey. Your cooperation is highly appreciated. Thank you. Regards, i. ii. iii. SHAIDATUL SHEEDA BINTI ABDUL RAHMAN Email: shaidatulsheeda@yahoo.com Tel: 019-4411202

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3.1.2

The Survey Questionnaire

The question use to contribute the overall validation in freight transport and logistics trends in Malaysia. The survey was implemented by posting the questionnaire to a random selection of companies in peninsular central region, requesting them to respond to the questions given. The question is divided in following section:

a) Section A : General Information b) Section B : Relationship between logistic hub and freight transport c) Section C: Development of economy d) Section D: Movement freight transport and logistics.

In section B, C, D the interviewees are asked to rate a series of question using a Y and N: Y=Yes N=No

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Below the examples of question will be asked:

Please take a few minutes to complete this survey.

Your specific answers will be

completely anonymous, but your views, in combination with those of others, are extremely important.

Section A : GENERAL INFORMATION Name of Company: Address:

Name of Officer: Designation: Tel. No.: Fax No.: Hand phone No.: Email: Website: Table 1: General Information

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SECTION B: RELATIONSHIP BETWEEN FREIGHT TRANSPORTS AND LOGISTICS HUBY = YES I = INADEQUATE N = NO N/A = NOT APPLICABLEYES I = INADEQU ATE N = NO N/A = NOT APP Y=Yes LICABLE N=No

1. Is development in Malaysia affects Transports freight and logistics trends?

2. Did the land transportation in more efficient compare with the rail transports?

3. Is the air, land, and water transports are under freight transport?

4. Advances in transport and logistics industry trends freights are booming to Malaysia?

5. Did the logistics hub have a relationship with the freight transports?

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SECTION C: DEVELOPMENT OF ECONOMY

Y=Yes

N=No

1. Is the impact of land transport to the establishment of national economy?

2. Is development in Malaysia affects the logistics hubs?

3. Is the economy give the long life of the freights transports?

4. Did the freights transports and logistics trends are the main pulse in the development of the economies in Malaysia?

5. Freights transport sector will give good profit to the company and especially to the country?

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SECTION D: MOVEMENT FREIGHT TRANSPORT AND LOGISTICS

Y=Yes

N=No

1. Is the technology in logistics trends give impact to freights transports?

2. Did the government involve in the freights transport and logistics trends operation?

3. Is reliability are provided improvement at the state?

4. Is the safety and operational cost is give a major impact on transit? Y N

5. Is supply chain can provided adequate supply in long run term?

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3.2

Process Data

After get the result from evolutions from questionnaire, process data that can be use in SPSS is Chi-square. From the collective data, the mathematical equation will be derived depending on the scope of research. This Chi-square used to determine whether there is a significant difference between the expected frequencies and the observed frequencies in one or more categories. It because in this research have relationship between data and variables.

3.3 3.3.1

Flow of Project Flow Chart of Project

START

CONFORMATION OF THE TITLE

FIND ARTICLE AND JOURNAL

YES PREPAIR A PROPOSAL AND PRESENTATION MAKE A MORE RESEARCH FOR THE PROPOSAL SUMMARIES THE ARCTICLE AND PROPOSE A NOTE CARD

NO END

Figure 5: Flow Chart of Project This figure 5 show that the starting until the end of flow project.

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3.4

Conceptual of Framework

The sequences of the research are shown in the flow chart that is illustrated in the following figure 6.

Conceptual of framework INDEPENDENT VARIABLES DEPENDENT VARIABLES

Relationship between logistic hub and freight transport Development of economy Movement freight transports and logistics. Trends of logistics and freight transport

Performances of management Technology solution

MODERATION VARIABLES

Figure 6: The flow chart shows the conceptual of framework

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The flow chart shows the conceptual of framework in freight transport and logistics trends in a simplified manner. This concept has related with each others. It can provide improvement of understanding about the flow of freight transport and logistics trends. It has three variables such as independent variables, dependent variables and moderation variables. The moderation variables will be affected to the independent and dependent variables. When role of performance of management and technology solution will be improve, thus the independent and dependent variables become increase.

3.5

Planning of Budget

ITEMS 1) Documentation 2) Toll 3) Fuel 4) Accommodation Total

EXPENSES RM 30 RM 80 RM 80 RM 90 RM 280

Table 2: Planning of Budget

The table show the budget for the next final year project 2. The average that has been calculated is about RM 280.00. So, this budget will use wisely when do it this research at the central region.

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REFERENCES

1. Development, O. F.-O. (2002). Transport Logistics. Shared Solutions to Common Challenges,Organisation For Economic Co-Operation and Development .

2. Kiran, D. U. (march 16, 2007). Trends in Intermodal Freight Transportation. Department of civil and environment egineering freight transport and logistics .

3. P.Sgouridis, S. (June 30,2003). Technological and Organisation issues from an ITS Perspective. Freight transportation in Malaysia .

4. Secretariat, U. (2003). Efficient transport and trade facilitation to improve participation by developing countries in international trade.

5. The Impact of Todays Trends. (October 5, 2001). The New Logistics Management Paradigm , 1-7.

6. Yung-yu TSENG, M. A. (2005). Proceedings of the Eastern Asia Society for Transportation Studies.

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