Impact Of Containerization On Transport And Distribution

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Impact Of Containerization On Transport And Distribution


This study is on impact of containerization on transport and distribution. The total population for the study is 200 staff of PZ Aba, Abia State. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made production managers, stock controllers, sales advisors and retail managers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

Chapter One

1.0 Introduction

1.1 Background of the Study

The process of containerization has been surged over the last several decades, but Nigeria ports and their supporting container distribution networks have struggled to increase capacity to match this expansion. PZ was first founded as a trading post called West African Merchants. In Sierra Leone by two partners, George Peterson from England and George Zochonics, from Greece, Peterson and Zochonics started out by shipping palm oil and other produce, such as palm kernels, cocoa, groundnut, and seed cotton as well as animals hides and skins to United Kingdom and bringing back goods from England such as cloths from Manchester. In 1884 Peterson and Zochonics incorporated the company as Paterson Zochonic (PZ).

PZ was established in Nigeria by the year 1899 at Lagos later extended to other branches in the states. The company currently manufactures and distribute over 30 brands of products across its global network, such products like soaps and other personal care item, including shampoo, baby powder, detergents and cleaners, olive oil, packaging material, ever pharmaceuticals etc. PZ has maximum number of workers in various branches located especially Aba branch that has qualified staff that facilitates the organizational growth; they also have very good number of vehicle for easy distribution and conveying of the raw material for production. They also have good machine for steady production.

1.2 Statement of the Problem

Containerization is very essential and useful in the selling of industrial goods; hence it is often referred to as the nearest company’s salesman. There are existing problems associated with containerization on transports and distribution of industrial goods and services. Expanding system wide container capacity is extremely difficult. For one container flows involve a series of linked capacity factors derive by different stakeholders such as ports railroads, truck carriers and steamship lines.

While on the surface the problem appears to be a direct application of goldratt’s theory of constraints (Goldratt 1997) and (ox 2004) there are complicating factors. Container flows may be identified as the drum (i.e. primary, pace setting) constraints, but their handling involves as series of linked factors controlled by the stakeholders. The further compounding the problems are unpredictable changes in security requirement terrorist activities, military deployment (Thomchick 1993) labour strikes and inclement weath.

1.3 Objective of the Study

The objectives of the study are;

  1. To examine maximization of customer service on transportation.
  2. To the impact of containerization on transport and distribution
  3. To ascertain the relationship between containerization and distribution

1.4 Research Hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

  1. H0: there is no impact of containerization on transport and distribution.
    H1: there is impact of containerization on transport and distribution.
  2. H02: there is no relationship between containerization and distribution
    H2: there is relationship between containerization and distribution

1.5 Significance of the Study

The study will cover Aba, Abia State, Owerri and all eastern states in Nigeria and all companies that make use of containerized product like PZ Plc that cover almost Nigerian market with their product. The study also covers their entire product consumer both in urban and rural areas. The study will therefore be limited to Aba consumers market.

1.6 Scope and Limitation of the Study

The scope of the study covers impact of containerization on transport and distribution. The researcher encounters some constrain which limited the scope of the study;

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational Privacy:

Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.

1.7 Definition of Terms

The definitions of terms for this project are:

1. Containerization:

Is an advancement of the concept of unit load. A container is a box with steel framework, a strong floor base, pouched sides and a root. Containers can equally be classified according to their sizes. We have the international standard organization (ISO) standard container of 8×8 fit. Containers vary with respect to length. The lengths are 10ft, 20ft and 40ft are used to suit a peculiar need.

2. The distribution process:

Begins when a supplier receives an order from a customer. The customer is not too concerned with the design of the supplier’s distributive system, nor in any supply problems.

3. Order processing:

The efficiency of order processing has a direct effect on lead times.
Orders are received from the sales team through the sales department. Many companies’s established regular supply performs satisfactorily. Very often contract are drawn up and repeat orders (forming part of the initial contract) are made at regular intervals during the contract period.

4. Inventory:

Is a critical area of (PDM) because stock levels have a direct effect on levels service and customer satisfaction. The optimum stock level is a function of the type of market in which the company operates. Few companies can say that they never run out of stock, but it stock-out “happens regular, then market share will be lost to more efficient competitors”. Techniques of determining optimum stock level are illustrated later in this chapter.

5. Transportation:

Usually represent the greatest distribution cost. It is usually easy to calculate because it can be related directly to weigh or numbers of units. Costs must be carefully controlled through the mode of transport selected amongst alternatives, and these must be constantly viewed. During the past 50 years, road transport has become the dominant transportation mode in Nigeria. It has the advantage of speed couple with door-to-door delivery. The patterns of retailing that have developed, and the pressure caused by coin stock holding indispensable. Where the volume of goods being transported reaches a certain level, some companies as purchase their own vehicle rather than use the service of haulage contractors.

6. Distance:

This is the range cover on transportation while container is on shipment.

7. The value of the goods:

Freight rate is chargeable according to the value of the goods: this is because valuable item requires extra care attention and protection from damage and loss, hence it attracts higher premium from insurance companies. In the way bill preparation shippers are advised to make a declaration of the value of their shipment valuable items attract higher rate.

8. Condition of the road:

The prevailing road condition is similar to that of distance since bad roads know to consume more fuel and lubricants as well as high maintenance expenses. Bad roads attract high freight rates.

9. The nature of the cargo shipped:

Some cargoes are known to require the provision of extra-ordinary facilities to make its carriage safe. These goods are hazardous in nature as their carriage but both the vehicle and the operating crew in dangerous position throughout the trip. Some chemicals are corrosive while some are inflammable and require extra handling care and equipment. Freight rate for such shipment are high.

10. Availability of return cargo:

Promising a hauler of return cargo can induce acceptability of the contract as this helps in reducing the average operating expenses of each return ship. Availability of return cargo improve the capacity utilization of the vehicle and the productivity of the operating crew. Lower rates are therefore changeable where heavy traffic occurs at both ends of the trip.

11. Availability of competing modes:

Freight rates are known to be high where there is no effective competition among the transport modes. In Nigeria, the demise of the railway as a cost effective mode of cargo haulage gave the road trucking power to high rates of shipment at the slightest chances.

12. Promotional rate:

Planning to establish a new trucking may attract a low freight rate but the rate must be at a level that will guarantee the covering of the operating costs. The carriers firms normally use the promotional rate to create awareness for their services.

13. Material handling:

It is a means of supporting and simplifying production process and efficient distribution.

14. Freight Forwarders:

This provides important service in physical distribution and logistics. They do not operate with their own transportation facilities. The consolidate Less Than Car Load (LCL) or Less Than Truck Load (LTL) consignments from various slipper into Car Load (CL) or Truck Load for onward shipping at the benefit of themselves and their client.

15. Carriage of goods:

These occur when a company or a person carry goods on behalf of another company or person from one place to another with a consideration of payment for the service rendered. The person or company accepting to carry goods for another is regarded as the carrier and the one whose goods are being carried is the shipper who may either be the consignor or the consignee.

16. Warehousing:

Is a large centralized store, usually in a convenient location in relation to the market area to be served. The warehouse is basically designed to bridge any large gap between when goods are produced and when consumers require them.

17. Scheduling:

Is the process of effectively planning transport routes so that deliver of the require orders is carried out timely with minimum delays and cost possible.

18. Routing:

It involves scheduling vehicles to match as best as possible customers demand for delivery with the availability and capacity of vehicles and taking into account constraint such as early closing days, preferred delivery times, lorry access restriction etc.

19. Piggyback:

Here a tractor pulls the loaded trailer from plant to rail loading yard or tactic where the trailer is placed on flat platform of an open coal, which holds several trailers.

20. Fish back (Roll on/Roll off):

RORO is similar to piggyback except that it combines the use of truck and water carriers. The main objective is to reduce the extremely high cost of loading and unloading individually packaged items abroad ship.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain impact of containerization on transport and distribution. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing challenges of containerization on transport and distribution

5.2 Summary

This study was on impact of containerization on transport and distribution. Three objectives were raised which included: To examine maximization of customer service on transportation, to the impact of containerization on transport and distribution, to ascertain the relationship between containerization and distribution. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of PZ Aba, Abia State. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made production managers, stock controllers, sales advisorsand retail managers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies

5.3 Conclusion

International trade is a key dimension of globalization and globalization plays a central for economic development and economic growth. But what are the drivers of international trade and globalization? Business experts and historians who have studied or made a living from the shipment of goods across international borders have long conjectured that “the shipping container made the world smaller and the world economy bigger” (Levinson’s (2006) subtitle). In his recent world history of technology, Daniel Headrick (2009, p.146) discusses containerization as the major 20th century technological change that has propelled the globalization of the world economy”.

5.4 Recommendation

Government should provide adequate security in the border and roads for smooth transportation and distribution of goods to consumers

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