Sample Logistics Coursework Paper on Comparison and Contrast of The European and North American Freight Transportation Systems

Comparison and Contrast of The European and North American Freight Transportation Systems

The distribution of cargos and goods has been impacted greatly by the uniformity of technology, infrastructure, modes and terminals with globalization bringing about global togetherness as far as international trade is concerned even though there is still no uniformity in the logistical practices. In line with these perspectives, this paper analyzes the cargo transport system with a focus on the comparative analysis of logistics practices in North America and Europe.

Europe and North America are on different paths regarding configuration of transport and logistics. The features of gateways, corridors, hinterlands, regulation, governance, value chains and labor provide a framework to understanding regionalism of cargo distribution. According to Rodrigue & Notteboom (2013), there has been an impact of uniformity in the global set up, containerization being one of the strongest forces to set up standards of cargo distribution systems leading to the emergence of global supply chain management practices. Through this, there has been a reconciliation of price, capacity, efficiency and operational constraints of goods. An example of global supply chain strategies being the maritime shipping companies which establish network servicing in the global markets. This approach makes the modern supply chain management understandable as it seeks to identify how standards and harmony are intertwined in supply chains assisting in improving efficiency and productivity. Due to globalization, logistical practices are still not uniform in North America and Europe. Being based on regional geography, they result in regional logistical strategies having certain features links to the locations as moral preferences, infrastructural ownership, policy, and regulation. In policy making, the historical path dependency has a huge influence on regional differences in the regional distribution tend to last despite having technological and regulatory changes. The commonality between North America and Europe are known to be major markets in strong importation function and advanced cargo distribution systems making them have a link to the global trade flows. Regarding logistical strategies, they differ largely in how logistical strategies take place over their territories. The North American transport policy depends more on the big bang theory while the Europe transport policy is incremental in nature. There has been a concern about the extent to which territorial boundaries of transportation should provide a framework for such analysis. It should be noted that territorial boundaries are very crucial as they bring about the features of the transport system.

Moreover, the gateways provide a very important interface structure between the regional and global transportation systems. Several factors such as policies favoring particular entry points can impact this interface, but if not obstructed, then a natural gateway can be established being based on the level of access ability and economic activity of its hinterland. Expansion of globalization has enabled efficient clarity between different systems of circulation making the relevant. The global maritime shipping networks have brought about a connection of regional and global systems, creating functional regions on the maritime foreland. In the case of maritime, gateways have brought about close logistics with an increase of terminal infrastructures such as ports, rail terminal, and cargo distribution centers. With the high level of concentration of economic activities in North America along the Coastal region, gateways have a tendency of being dormant in the East and the West coasts which play a marginal role for containers as it has remained quite stable.

Regarding reliability, North America relies on many gateways making them have a few chances to fully participate in the international shipping networks. The cargo concentration levels in North American container port systems are spreading from the increasing dominance of long beach (Los Angeles) as the major gateways in the Pacific coast. The hinterland of Western Europe is strong along the coastline but also along the Rhine river system and its tributary rivers, Main and Nectar among others.  Han et al. (2017) postulate that a large part of European economic centers is far from the main shipping lines. The gateways in Europe are therefore not the only major markets but intermediary locations. There is need to shape the hinterland as there is a disconnection between it and the gateways in Europe. The role of gateways therefore in shaping the freight regions within Europe is more recent than North America. Cargo concentration in European ports is slowly going down as most of the ports fully participate in the international shipping. 

Regarding functional division freight flows, both Europe and North America differ. The specialization of European gateways in specific foreland regions is lower than the US. Asian cargo. The cargo flows on secondary routes like Africa, and South America find their way throughout the European container port system. The North America geography has led to a route among gateways. Commercial relations history and the national strategic interest of EU States have contributed to the regional traffic dispersion among European ports leading to a lesser role in cargo dynamics in the North America port system. The regulatory framework had unfolded convergence between North America and Europe bringing about the liberalization of barriers and intermodal activities where ownership can now be transferred to the private sector. Policy implementation has changed over time. North America has had a paradigm shift after the emergence of new policies, for instance, motor carriers act staggers act among others. This, however, does not reflect participation in major markets.  On the other hand, the policy of Europe is more incremental as compromise must be reached with the member states. The division of powers among the European Union and national level is guided by the subsidiary principle as defined in Article 5 of the Treaty of Maastricht. The views of policy on transport system differ. Many of North America and European rail systems operate under passenger and cargo services. The nation rail systems and levels of government in Europe have prioritized the passenger service. The cargo transport, therefore, loses out largely because of the focus on passengers first. North America, on the other hand, have a separation between the cargos and the passengers. According to Kashiha & Depken (2017), the private railway companies could not compete against the automobile and airline industry for passenger traffic, therefore, withdrew from the passenger business in the 70s, leaving them to operate a cargo only system which was a success. A major disadvantage is that they lease trackage from the cargo railways, and because of the scale of jurisdiction, a large share of movements counts as international trade while in North America the same scale can simply be labeled as interregional movements.

     When it comes to ownership and governance, there are significant differences and similarities between North American and European freight transportation systems.  First, the North American freight transportation system is dominantly privatized. Second, both infrastructures and operations are private leading to high segmented market areas. While in Europe, there is a separation between infrastructure management and operations following the European rail liberalization that began in 1991. This separation opened the former national railway networks operated by national railway companies. There are changes in the supply chains to respond to different customer and product services. The value chains are based on the specific economic market of both North American and European markets as customization is important in different regionalisms impact of cargo distribution. North American market is less culture based as it brings about distribution efficiencies. European markets are growing on the other hand as it is based on primarily generic products. This sets the stage for labor mobility, where North American and European markets have critical differences. While it is more limited in Europe despite few restrictions within the European Union, it is much less so in North America.

In a nutshell, what I find interesting is the issue of who makes decisions on the standards of trade. The question here is whether this is to the advantage of the few or whether it is beneficial to the international community in entirety. Therefore, because of factors like globalization, expansion into new markets, logistics outsourcing, integration, containerization, and advances in technology, the gateways logistics will continue to evolve. Customer services are becoming more flexible and reliable leading to stable international supply chains. Many market players have responded by providing new value based services in an integrated package along with the whole cargo distribution systems as they bring about significance in regionalism and cargo distribution.

References

Han, R., Yu, B. Y., Tang, B. J., Liao, H., & Wei, Y. M. (2017). Carbon emissions quotas in the Chinese road transport sector: A carbon trading perspective. Energy Policy, 106, 298- 309.

Kashiha, M., Thill, J. C., & Depken, C. A. (2016). Shipping route choice across geographies: Coastal vs. landlocked countries. Transportation Research Part E: Logistics and Transportation Review, 91, 1-14.

Rodrigue, J. P., & Notteboom, T. (2013). Containerized freight distribution in North America and Europe. In Handbook of Global Logistics (pp. 219-246). Springer New York.