Port acts as a natural decoupling point in the supply chain and hence represents the most convenient place to position inventory and undertake customising activities. In this fundamental, port-centric logistics might be considered as a way for businesses to streamline their supply chains and reduce their impact on the environment. For lots of organisations, post-centric logistics can help to remove unnecessary freight miles.
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What is port-centric logistics?
The term “port-centric logistics” means different things according to circumstance and where the port’s role is seen to offer the most efficient and effective solution. The interpretation will also vary depending on the supply chain strategy adopted.
However, according to the Port-Centric Development book published by IDB, the concept of port-centric logistics has its origins in location theory and transport geography, where the location of logistics and distribution services of goods arrive. It is considered as an alternative to inland depots and centrally located national distribution centres. It allows businesses to store shipment at the port and decrease the number of handling stages throughout storage and distribution processes, saving time and money.
Roles of port-centric logistics
Developing effective supply chains requires an integration of all companies in the supply chain and ports play a key role in improving productivity in international logistics operations. Ports are a component of the supply chain where many opportunities for positive change have been identified. Ports also commonly offer a proactive environment where cutting-edge services will interface with complex transport and logistics environments. Optimising both port operations and the overall supply chain can lead to significant efficiency gains. Below is the list of benefits of port-centric logistics solutions:
- Flexibility at its core as it gives options to intercept the container early and delays the decision of where best to deliver the goods
- Reduce the movement of empty container that could cost more for businesses
- Good choice to avoid potential delays and vehicle waiting times, thus creating lower container handling or demurrage costs
- Offer shipper the flexibility to feed into or bypass inland warehouses at a time to suit demand
- Improve the backload opportunities for inland deliveries and collections, hence reducing inland transport costs
- Improve sustainability for the environment and businesses as it is able to carry less empty containers
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