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Abstract
The effective management of transportation and logistics systems is crucial for the success of businesses and the economy. However, managers in this field encounter many challenges leading to delays, rising costs, and overall business inefficiency. This paper aimed to identify the challenges faced by transportation and logistics management. The literature review was conducted, which showed that the issues encountered by transport and logistics managers included poor infrastructure, limited transport capacities and resources, a lack of skilled labor force, the need to comply with CO2 emission regulations, and rising costs due to warehousing issues. Further, the paper provided the researchers ideas on transportation and logistics management issues. Finally, the solutions to the discovered issues were suggested, including establishing partnerships with the private sector, hiring and training a highly skilled labor force, and implementing new technologies.
Introduction
Transport, supply chain, and logistics are crucial operations for businesses to maintain their competitive position in the current significant economic activities. The transport sector, particularly the operations area, is one of the substantial contributors to toxic substances such as greenhouse gases (GHGs) emitted into the air, which causes devastating consequences on humans and the environment, including global warming. The adverse outcomes of pollution have increased the concern on limiting the number of emissions globally. Currently, the competence of a business organization is based on various factors such as lower costs, lower emissions, shorter production time, short lead time, less stock, excellent product variety, highly reliable supply time, effective customer services, high value, and offering proficient arrangements between demand, supply, and production (Brdulak, H. & Brdulak, A., 2021). Various components of a company determine the effectiveness of the logistics operations. The logistics system of different companies categories has to be efficient to enhance the performance and profitability of a business. An efficient logistics system is vital for the corporate sustainability of various firms such as dairy industry organizations. A practical and reliable national transport system is also crucial for the sustainable economic growth of a region.
Several factors determine the efficiency and reliability of the transport and logistics operations of any organization. Infrastructural development is a significant component of transport and logistics. The quality of road and rail networks is a vital feature of infrastructure in the transport and logistics industry. The technological environment includes digitization, automation, storage systems, and other new technologies in the industry. The technical setting has various ways of shaping the success of transport and logistics. On the other hand, macroeconomic environmental factors such as demand and supply, trade routes, and market determine the transport and logistics sectors productivity (Brdulak, H. & Brdulak, A., 2021). The organizational background contains several characteristics that affect the operations of the logistics sector. These environmental elements include demand for warehousing services, outsourcing, workforce availability, and pressure on wages, which are essential for transport and logistics operations. A legal setting that consists of rules and regulations in road transport in various regions needs consideration when examining its productivity.
In addition to the numerous requirements a firm must meet to become successful, most companies face difficulties concerning their operations and management in transport, logistics, and supply. Corporate entities encounter many obstacles to realize effective management of transportation and logistics systems. Some of the challenges are related to the various elements above, which determine the systems operations success. This sector faces management issues connected to infrastructure, costs, government policies and regulations, and the availability of human resources and information technologies. The hindrances differ depending on geographic location, the policy setting, and other contextual factors. Consequently, Brdulak, H. and Brdulak, A. (2021) assert that solutions to these problems can hardly be universal. Some difficulties are also related to broad categories of organizational settings, legal, environmental, and macroeconomic background.
This research paper identifies some concerns facing transportation and logistics management. The literature review conducted shows the hitches and issues influencing transport and logistics managers to achieve the research papers objective. The study discusses several problems, including poor infrastructure, limited transport capacities and resources, a lack of skilled labor force, the need to comply with CO2 emission regulations, and rising costs due to warehousing issues. Further, the paper offers the researchers ideas on transportation and logistics management difficulties. Lastly, identification of the solutions to the complications described is given. Intervention measures, including establishing partnerships with the private sector, hiring and training a highly skilled labor force, and implementing new technologies, are suggested.
Literature Review
This section identifies and analyses the studies by previous scholars on the challenges in transportation and logistics management. Despite operating in different sectors, administrators working within the transport and logistics industry face common problems. The extant literature review reveals that transport and logistics managers face numerous common challenges despite the difference in the industries they serve. For instance, the agro-food sectors such as the dairy industry experienced several challenges that can be identical to other industries such as the logistics service companies. Various segments, including warehousing, overseas shipping, and market forces, face difficulties that affect the general transport and logistics sector.
Advancement in research and innovation has promoted autonomous vehicles and drones to offer sustainable solutions to conventional transportation and logistical issues. Azmat and Kummer (2020) investigated and identified numerous logistical problems in a humanitarian supply chain. The study found that technological developments in mobility limit the potential to reduce the International Humanitarian Organizations (IHO) current issues. Challenges such as long distances, customs clearance, border control, or the host government regulations affect transport and logistics in IHO (Azmat & Kummer, 2020). Scarcity in resources such as workforce and inadequate vehicles is the most significant challenge in humanitarian operations. On the other hand, infrastructural factors such as poor road networks and additional coordination and communication facilities limit an organizations functions (Azmat & Kummer, 2020). The researcher has identified IHO as a sector that highly depends on transport to deliver its services and, hence appropriate and relevant for understanding the challenges.
Various studies have attempted to address the problem of environmental sustainability with the supply chain network. Carbon control has become a significant challenge to the logistics and freight transport field. Herold and Lee (2017) researched carbon control in the logistics and transportation area for fifteen years, focused on several components. Carbon approach, risk evaluation, target setting, curtailment measures, reporting, and performance constitute the core elements for the criteria for managing GHGs.
Security is a significant element for effective operations of the transport and logistic industry. Goodrich and Edwards (2020) carried out their study on security challenges within the transport and logistics sector. Terrorists have invented new tactics and attack strategies against transportation assets. Vehicles and railway lines are potentially self-destructive by design and hence vulnerable targets for terrorists. Poor infrastructure and maintenance of transportation facilities expose the transport facilities to easy terrorist attacks. Although Goodrich and Edwards (2020) focused their study on security aspects, the factors that determine their operations safety are also direct challenges to the transport sector and consistent with those discussed by other authors in this section.
Warehousing is an essential component of transport and logistics in numerous countries. A study by Karim et al. (2018) in which they adopted an analytic hierarchy procedure established the three primary limiting determinants for warehouse efficiency in the Malaysian logistics division. Labor output, warehouse exploitation, and inventory usage are the three primary sources of warehouse production limitations (Karim et al., 2018). Accidents and miscommunication due to language barriers between the locals and the foreign workers negatively affect warehouses labor productivity. Less advanced technology that results in a smaller value of hourly demands reduces the logistics sectors warehouse utilization. On the other hand, inventory storage utilization faces poor layout design challenges that manifest as less surface allocated for goods storage (Karim et al., 2018). The research findings indicate that warehouse management challenges are similar to other transport sectors and consistent with the study by (Azmat & Kummer, 2020). Warehouse productivity, therefore, determines the effectiveness of transport and logistics management.
In identifying the main targets of imports and exports, ports play an important role in logistics. A ports ability to promote cargo transfers is a vital parameter of the general responsibility as a transport mode. Rahman and Najib (2017) studied the effects of various port parameters as potential transport and logistics challenges. Long distance, high bunker cost, long journey time, and inadequate port facilities such as warehouse and material handling vehicles have negative effects on logistics and transport using ports (Rahman & Najib, 2017). The study findings are related to the broader categories, including infrastructural settings, which determine its capacity.
The current transport and logistics systems experience significant global challenges, including traffic jams, environmental pollution, noise, traffic accidents, and freight flow congestion in freight terminals. Changing environmental conditions pose different serious challenges to the transport and logistics sector. Road transport safety is significant for effective operations. Increasing demand for transportation of dangerous goods has created difficulties to road transport safety in the Baltic Sea Region (Hwang et al., 2017). Consequently, the number of carriers, vehicles, and operators is also increasing on the European Union roads, which poses a threat to road safety.
Transport Forwarding Logistics (TFL) faces a wide range of unique problems. Brdulak, H. and Brdulak, A. (2021) investigated the challenges and threats faced by international logistics companies in the Polish market concerning sustainable development in 2020. The findings of this research indicated that the improvement of technical infrastructure, automation, and technology development was the most significant challenges. Economic and social changes, legal regulations, the possibility of entry to new markets, organization transformations, and intermodal transport development also have potentially adverse effects on logistics (Brdulak, H. & Brdulak, A., 2021). Transport and logistics Services Company directly deals with all the aspects of logistics, and hence the challenges cover all the categories, including infrastructure, environmental and macroeconomic environments. Brdulak, H. and Brdulak, A. (2021) also describes the technological challenges that influence the productivity of the company in Poland, which could also affect any logistics service organization operating in other regions.
The technological environment can pose a threat to logistics through innovation and digitization. Artificial Intelligence and blockchain are innovations that offer challenges to the industry and the development of internet commerce (Brdulak, H. & Brdulak, A., 2021). The changes in the legal environment also create problems for transport-freight logistics. For example, Brexit and alterations in other transport-related policies in regions such as the UK create industry issues. The organizational environment can experience changes such as consolidation, industrial standards, offshoring, and challenges. Macroeconomic environmental factors are also significant determinants of the effectiveness of the transport and logistics business. Changes in the macroeconomic environment, such as growth in the collective success, general economic development in the European Union territorial enlargement, and entrance into new markets presents new management dilemmas (Brdulak, H. & Brdulak, A., 2021). These trends impact the transport and logistics operations, primarily due to workforce deficit.
Global attention on the maritime transport and logistics industrys sustainability issues has been less than the attention stakeholders give to aviation and overland freight segments. The establishment of the international marine organization regulations on ships and port town dealings has drastically enhanced sustainability matters across all aviation and transport and supply chains. Lee et al. (2019) investigated sustainability issues in the shipping industry. The International Maritime Organization has taken various strategies to reduce GHGs emissions, but it faces a challenge on achievement, performance, and sustainability implementation in the port section.
Warehousing and the relationship to other factors such as inventory and transport management influence the performance. Lee et al. (2016) discussed warehouse managements impact on logistics and transport operations productivity. Transport and logistics operations determine the sustainability of business activities. Mangla et al. (2019) analyzed the interaction between supply challenges targeting operational efficiency and more remarkable corporate green growth and sustainability perspectives. Food organizations such as the Indian dairy product-based organizations face various challenges such as wastage, financial losses, and environmental issues. The outcomes of the studies by Mangla et al. (2019) and Lee et al. (2016) are inconsistent in that the operational efficacy determines the transport sectors sustainability.
Climate change and the rise in carbon emission are among the significant challenges for businesses and society. In their study, Herold and Lee (2017) examined carbon emission control in the logistics and transportation division along with the corresponding challenges. Despite deeper insights into GHGs footprint, risk assessments, reduction, performance, and reporting, measures taken to contain the release of these toxic gases into the environment focus more on management with little emphasis on prevention.
Discussion of Ideas on the Problem
Warehouse Productivity
Warehousing is a vital industry for countries that depend on trade. Effective warehouse management plays a vital role in increasing warehouse productivity and efficiency while also reducing and controlling inventory and shipping costs. Countries such as Malaysia have experienced a growth of productivity in transportation and storage services, which increased by 10.1% (Karim et al., 2018). Warehouse productivity consists of various factors that act as performance indicators. These parameters include warehouse utilization, inventory space utilization, outbound space utilization, picking productivity, receiving productivity, and turnover (Karim et al., 2018, p. 153). Picking productivity and turnover are essential elements of warehouse management.
Different aspects of warehouse management face other challenges, which eventually affect productivity. Labor productivity faces several problems in warehouse management. There is less job satisfaction among various employees in warehouse settings. Ineffective communication levels among the workers also reduce warehouse operations effectiveness (Karim et al., 2018). Inconsistent training programs for the workers and the management prohibits the development of efficient warehouse management. Throughput describes the number of items or goods leaving the warehouse over a certain period. The efficiency of throughput may face problems like errors in the picking procedures and poor management of the inventory. Shipping productivity indicates the total number of goods shipped per period affects warehouse management and efficiency. The sector faces delays in performance pathways in cross-docking (Karim et al., 2018). Also, the late conclusion of activity can delay a vessels departure and, hence, negatively impact warehouse operations efficiency. Warehouse utilization refers to the approximate amount of warehouse space utilized over a particular amount of time.
The utilization may be underutilized due to a small volume of orders in a specific period or a small value of times within a certain period. Several warehouse managers may execute excessive warehouse space division and a challenge to outbound space utilization of the area inside the facility. The control may be ineffective in the picking process that determines the picking productivity. Challenge in the number of products picked within an hour maybe a shortage or excess picking while on the other hand; mix-up of the undetectable objects may result during the picking activity (Karim et al., 2018). Turnover, a ratio between the product prices and the typical inventory level, significantly affects other warehouse facilities. A decrease in inventory turnover will prolong the expiration and record allotment overheads. Therefore, warehouse management faces different problems that have a relationship with various productivity performance indicators.
Challenges Affecting Infrastructure
Infrastructural components include transit-related erections and amenities for signage and patterns, security, illumination, communication, landscaping, and preservation. Poor infrastructure in most developing countries leads to ineffective transport and logistics. The common problems include safety and security concerns, inefficiency and poor odal mix, and the absence of common standards.
The infrastructure network of transport and logistics lacks harmonious transport policies, regulations, and standards and results in high inefficiency and business transaction expenses in the area. Most developing countries such as East African states exhibit much higher transport costs than the developed economies transport costs. Road safety is another challenge in developing regions (Dufour et al., 2018). Safety issues such as road accidents and fatalities are dominant in most parts of the developing areas. Ineffective implementation of road safety regulations and poor infrastructural standards contributes to the high road accident levels. Infrastructure requires modernization of facilities such as the railway network, constructing the central communication port, and investments in road terminals. The challenges affecting countries like Poland in infrastructure include delays in the modernization of road and rail transport (Brdulak, H. & Brdulak, A., 2021). Poor infrastructures, particularly road, rail, and port networks, compromise warehousing management.
Embracing new and advanced technologies is a powerful approach for logistics management to reduce carbon emissions. Companies need to adopt electric vehicles or convert the available cars into electric cars to promote carbon reduction (Richter et al., 2020). Unreliability of battery technology and sustainability of sources of fuel are some of the challenges limiting the use of electric vehicle technology, which eventually make the organizational administration preserve the existing options instead of adopting the innovations.
Local civil uncertainty is an additional severe difficulty that affects the infrastructure in the transportation and logistics division. Developing countries that face political instability issues such as post-election violence witnessed in Kenya during the 2007-2008 election period reduces the efficiency gains (Munim & Schram, 2018). Customs efficiency becomes poor and affects the transport and logistics operations within the region and neighboring states. Furthermore, car ownership levels determine the infrastructural capacity level to sustain the particular number of traffic capacity. Many areas are experiencing an escalation of motorization level due to increasing transit vehicles ownership (Munim & Schram, 2018). However, inefficient regulatory measures prohibit the proactive promotion of mass transit solutions in a more cost-effective and ecologically sustainable way.
Crucial transport modes such as ports and airports are significant determinants of logistics and transport managements efficiency. The underperformance of the basic transport modes like ports and sub-optimal modal mix manages the logistics and transport sector. For instance, the underperformance of Mombasas port in East Africa has limited the regional operations and efficiency of handling bigger vessels and cargo while also performing trans-shipment roles (Dufour et al., 2018). Ports such as the Dar es Salaam port experience congestion due to limited capacity and hence fail to manage regional operations in logistics efficiently (Munim & Schram, 2018). On the other hand, rail transport in developing countries is still poorly designed. Efficient infrastructure needs emergency preparedness. However, most developing countries like the East African states have ineffective emergency preparedness strategies, which inhibit the capability to manage natural occurrences such as unpredictable and life-threatening climate conditions that destroy transport systems like roads and rail infrastructure (Brdulak, H. & Brdulak, A., 2021). Unprepared regions need long recovery periods from such natural calamities, posing a challenge to transportation and logistics management.
Infrastructure development also depends on institutional capacity components such as policies, management flaws, and financial funding. Some regions face effective key policy and planning problems that include development clusters and total transport logistics. The lack of planning has led to poor policies that cannot promote the development of sustainable infrastructure. Several regions also face management flaws of the infrastructure for transport and logistics. Ineffective project management and low maintenance drive are among the firms issues (Cho & Lee, 2020). Some areas have weak monitoring and evaluation practices and transboundary project management that lacks high and harmonized supervision and control standards.
The problem of infrastructural financing determines the efficiency of managing transport and logistics. Limited finances to support infrastructure causes inadequate infrastructural facilities such as road and rail networks, resulting in high transportation and logistics costs. The increased transport expenses also result from the high maintenance costs of transport equipment and high cargo and equipment insurance (Munim & Schram, 2018). Munim and Schram (2018) caution that the economy of developing countries such as the East African states has overstretched. These nations lack sufficient public finance to effectively complete and sustain operations and maintenance of the completed infrastructure facilities, contributing to high transport and logistics costs in such regions.
Information and statistical data are essential in supporting the planning, construction, and operation of infrastructure. Incomplete data and statistics are difficulties that deter effective regional transport infrastructure development, building, process, and decommissioning (Cho & Lee, 2020). Majority of regions such as the East African Community face information and data gap (Munim & Schram, 2018). This issue creates a problem to infrastructural development that is important in the transport and logistics industry.
Institutional and regulatory frameworks are significant factors in infrastructure development. Institutional blockages hinder capital budget implementation, which leads to considerable cost overruns, lagging engagement rates of funds meant for infrastructure improvement due to delays and inefficiency in the procurement process, sluggish viability appraisals, inappropriate supervision, and sluggish monitoring and evaluation (Kurul & Yalta, 2017). These framework characteristics are common in many developing countries, which eventually face problems with their infrastructure.
Governments climate regulations are the primary causes of carbon risks. The United States, for instance, have carbon policies on logistics design that produce different challenges in the implementation of the carbon policies that prohibit retailers from embracing carbon taxes. The policy implementation also faces difficulties in reaching a treaty on carbon restraints between the retailers and policy formulating bodies (Herold & Lee, 2017). The existing carbon pricing model is ineffective in initiating a necessary change in transport behaviors to limit carbon emission.
Security Issues
Like other sectors of the economy, the transport and logistics industry face various aspects of security problems. The United States, for instance, has experienced terrorist activities for the past numerous decades. Transport and logistics have been a common target for most terrorist activities have in the recent past shifted their mark to the transport sector, which they perceive to be vulnerable spots (Badassa et al., 2020). The attacks have led to the destruction of vital elements of the transport and logistics operations.
The transport system is an easy target for terrorist activities due to the nature of infrastructure and the security policies to protect the sector. The routes of transport are long with irregular terrain, limiting the development of an effective security plan. The industry also has a problem with ineffective procedures for screening people and vehicles. Peoples high density using transport facilities such as trains and ports creates additional vulnerability to attacks (Badassa et al., 2020). Efforts to improve security face tight budgets, which lead to delays in the maintenance of infrastructural projects in the transportation sector due to terrorist-based destruction.
Market Forces
Market forces are important factors for consideration in the transport and logistics sector. Demand and supply directly affect logistics since the transportation of goods are towards the areas with high demand. Various market components may pose a challenge to the transport and logistics activities. Blockage of markets nepotism and trade wars in most markets in the European Union create problems in transport and logistics. Other markets have low unemployment rates and higher wage expectations, making transport and logistics operations expensive (Brdulak, H. & Brdulak, A., 2021). International transport markets exhibit differences in exchange rates, which cause uncertainty in the logistics sector. Certain regions experience an economic slowdown, especially in the European Union, which causes a delay in the transport industry.
Currency exchange rates dictate the market dynamics on costs of business operations. Markets are characterized by currency rate fluctuations against major currencies such as the USD and EUR, which creates uncertainty in the transport and logistics sector (Brdulak, H. & Brdulak, A., 2021). Margins in sales determine the volumes of goods handled by a logistics company. Logistics organizations may face a problem of profitability due to decreasing margins on foreign sales.
Several macroeconomic environmental factors may potentially cause difficulties to Logistics organizations. Recession is an economic activity that has affected various countries during the period of a pandemic like COVID-19 reduces the operational capacity of the transport and logistic organizations. The sea freight market has remained a problem to countries like Poland, influencing the firms logistical operations (Brdulak, H. & Brdulak, A., 2021). Importing or exporting companies lengthen the supply chains, which slows down delivering goods to the point of destination.
Transport freight logistics in Europe operates in a market that is currently experiencing numerous constraints. There is enormous uncertainty about the Brexit, which occurred on 31st January, causing unpredictability in customs policy, thus generating interruption. There is no conclusive decision on the exit strategy of the UK from the European Union (Brdulak, H. & Brdulak, A., 2021). The European GDP is also weakening due to various factors and, as such, creates a problem for the transport freight logistics company. The outbreak of Covid-19 has been one primary reason for the decline in the European GDP (Brdulak, H. & Brdulak, A., 2021). Competition exists among the transport and logistics organizations. An increase in competition among logistics companies from different regions affects organizations operations and efficiency. For instance, Polands freight companies face competition from Transport Freight Logistics companies from countries in the East such as Russia, Ukraine, and Belarus (Brdulak, H. & Brdulak, A., 2021). Therefore, the heightened rivalry among transport operators may compromise logistics efficiency.
Workforce deficit is a significant factor that causes challenges to transport freight management. The workforce deficit is an outcome of the economic growth that triggers new employment opportunities in the economy. The dynamic economic growth along with workforce deficit stimulates unsuitable demographic inclinations and alterations in the pension policies. As such, logistics management faces a shortage of workers such as drivers, specialized workforce, and warehouse employees.
Sustainability issues affect the logistics industry in numerous ways. The diminishing quality of roads and congestion threaten the achievement of sustainable development of infrastructure (Herold & Lee, 2017). The challenges create problems to the carbon footprint. Technological innovations in organizations make problems finding solutions. The innovations tend to overlook the conventional logistic operators, which can be appropriate when tackling an issue. Macro-environmental effects in a country may cause sustainable development challenges when a country needs to expand its functionality as a transit country. For instance, Poland faced challenges related to sustainable development. The number of vehicles transiting on the roads in Poland increases in the absence of regulations, increasing pollution, more congestion, and noise.
Carbon target setting can help logistics companies to reduce carbon emissions for their operations. The problem with this approach is that it differs broadly in the field. Companies end up adopting company-level objectives without evaluating the carbon reduction ability by function and operations. Carbon target setting can help logistics companies to reduce carbon emissions for their operations (Herold & Lee, 2017). Another challenge of the carbon target setting is that some organizations can only achieve average emission reduction targets with more negligible effects on the total cost.
Despite the numerous available literature that state the significance of initiatives towards carbon management, few studies discuss the performance implications after implementing or adopting carbon reduction enterprises. Most of the previous research has centered on governing guidelines and their effect on the transportation and logistics business at an organizational level. For instance, Australias carbon pricing model is responsi
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