This article talks about the challenges faced by shipping industry and what are the methods which can be used to get it out of the crisis considering the current economic downturn. Mr. Peter Quantrill the director general of british international freight association has pointed out these key problems with a very accurate assessment. These challenges are:-
1. Constantly increasing demands of environmentalist and emission norms authorities which are causing immense trouble to companies which works internationally and has to follow different set of rules everywhere they go.
2. Lack of proper infrastructure and there unevenness in different areas making it very difficult for them to provide a constant service.
3. Recently entire European union has changed the system of customs procedure causing a big challenge for the industry which now has to cope up with entire new system.
4. Government’s system of rules for forwarders is very complex in nature and effecting negatively to the business of logistics.
5. With the current economic downturn the demand has been reduced causing many vehicles to remain idle increasing the pressure on the companies for their economic survival. This has forced them to lower down there charges and even shut down some capacity.
6. With pressure of recessive economy the business in all sectors have been reduced causing the over capacity which has been fuelled by there expansion phase before sudden downturn of economy.
Major experts of industry are together trying to find some probable solutions for the shipping industry so not they only survive the recession but also find out there loopholes and become efficient and effective for long term sustainability. Read about UK Legal Framework.
They think the first thing every company should do is review their business model and see if there is any flaw with the basic concept of their way of doing business and how it can be improved. They also believe the cost cutting should not be a blanket method but it should be focused and targeted on those areas where it really reduces cost without effecting service quality. The contracts should be made by third party logistic providers on gain sharing and new and creative ways of cost saving should be find out. The financial benefits between contractors should be shared if they are jointly finding new ways of making system cost effective. The supply chain should be made more streamlined. The extra land available to all ship companies especially near inland water ways can be used for commercial purpose to get monetary benefits. The investment should be made in industry keeping long term requirements in mind rather than building capacity more emphasis should be done on greener technology’ improving supply chain’ reducing carbon emission and better port facilities. There is more requirements of regional ports with good facilities all over the country. The recovery from downturn by market will also help in future to shipping industry if they survive these tough times.
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