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Posted: July 7th, 2022
General And Containerized Cargo Operations Pestel
The cargo industry is a vital sector in global trade, responsible for the movement of goods across continents and oceans. However, the industry is facing unprecedented challenges due to factors such as the Covid-19 pandemic, the global economic slowdown, and changing consumer behavior. To survive in this competitive landscape, cargo operators need to conduct a comprehensive PESTEL analysis to identify the external factors that may affect their operations. In this article, we will discuss PESTEL analysis in the context of general and containerized cargo operations.
Political Factors
Political factors have a significant impact on the cargo industry. Changes in government policies can result in changes in trade regulations, customs duties, and import/export procedures. For example, the imposition of tariffs by the United States on goods from China in 2018 had a significant impact on containerized cargo operations. According to a study by Wong, Yang, and Li (2019), the US-China trade war led to a decline in container throughput and revenue in Chinese ports.
Moreover, changes in political leadership can also affect the cargo industry. For instance, the Brexit vote in the UK in 2016 had a significant impact on cargo operations between the UK and the European Union. As noted by Cullinane, Song, and Ji (2020), Brexit has led to increased uncertainty and administrative burdens for cargo operators, resulting in delays and additional costs.
Economic Factors
Economic factors also play a crucial role in cargo operations. Fluctuations in currency exchange rates, inflation, and GDP growth can affect the demand for cargo services. For example, during the Covid-19 pandemic, the global economic slowdown has led to a decline in cargo volumes. According to a report by IATA (2021), global air cargo demand in 2020 declined by 10.6% compared to 2019.
Furthermore, changes in consumer behavior can also impact the cargo industry. The rise of e-commerce has led to an increase in demand for last-mile delivery services. As noted by Wang et al. (2019), the growth of e-commerce has led to changes in cargo distribution patterns, with an emphasis on faster delivery times and greater flexibility.
Social Factors
Social factors such as demographic changes, lifestyle choices, and cultural attitudes can affect the cargo industry. For instance, changes in consumer preferences for sustainable and environmentally-friendly products have led to increased demand for eco-friendly cargo operations. According to a study by Lee and Lam (2019), cargo operators can adopt sustainable practices such as reducing emissions, using renewable energy, and promoting recycling to meet the changing demands of customers.
Moreover, social factors can also impact cargo operations in terms of labor and workforce management. For instance, changes in workforce demographics, skill shortages, and changing labor laws can affect the recruitment and retention of talent in the cargo industry. As noted by Chong and Low (2017), cargo operators need to adopt innovative strategies such as talent development and training programs to attract and retain skilled workers.
Technological Factors
Technological advancements have transformed the cargo industry in recent years. Automation, digitization, and data analytics have led to increased efficiency and productivity in cargo operations. For example, the use of blockchain technology has the potential to improve supply chain transparency and reduce fraud in cargo operations. According to a study by Teixeira, Pinto, and Pinto (2020), blockchain technology can enhance cargo security, reduce administrative costs, and improve cargo tracking.
Furthermore, advancements in autonomous technology have the potential to revolutionize cargo operations. For instance, the use of unmanned aerial vehicles (UAVs) for last-mile delivery can reduce delivery times and costs. As noted by Zhang and Zou (2017), the use of UAVs in cargo operations can also improve safety and reduce environmental impact.
Environmental Factors
Environmental factors such as climate change Environmental factors such as climate change, pollution, and sustainability are increasingly important in the cargo industry. As noted by Chung and Wong (2017), cargo operations contribute to greenhouse gas emissions and other environmental impacts such as noise pollution and land use. Therefore, cargo operators need to adopt sustainable practices to reduce their environmental footprint.
One way to achieve sustainability is through the use of alternative fuels and energy sources. For example, the use of biofuels and renewable energy can reduce carbon emissions and other pollutants in cargo operations. According to a study by Steen et al. (2020), biofuels have the potential to reduce emissions by up to 80% compared to traditional fuels.
Furthermore, cargo operators can also adopt circular economy principles to reduce waste and promote recycling. As noted by Van Oudheusden and Bloemhof (2019), circular economy principles such as closed-loop systems and product lifecycle management can improve the sustainability of cargo operations and reduce environmental impact.
Legal Factors
Legal factors such as regulations and laws can also affect the cargo industry. For instance, cargo operators need to comply with international regulations such as the International Maritime Organization (IMO) regulations on container weight verification. Failure to comply with regulations can result in penalties and fines. Moreover, changes in laws and regulations can also affect cargo operations, such as the European Union’s General Data Protection Regulation (GDPR), which affects the storage and handling of personal data in cargo operations.
Conclusion
In conclusion, PESTEL analysis is a useful tool for cargo operators to identify the external factors that may affect their operations. Political, economic, social, technological, environmental, and legal factors all play a crucial role in the cargo industry. By conducting a comprehensive PESTEL analysis, cargo operators can develop strategies to adapt to changing external factors and stay competitive in a rapidly evolving industry.
References:
Chong, W. K., & Low, K. C. (2017). Talent management strategies for the shipping and logistics industry: A review. The Asian Journal of Shipping and Logistics, 33(4), 231-239.
Chung, S. H., & Wong, C. W. (2017). Environmental sustainability in the shipping and logistics industry. International Journal of Shipping and Transport Logistics, 9(4), 395-398.
Cullinane, K., Song, D. W., & Ji, P. (2020). The impact of Brexit on container port throughput in the United Kingdom. Transportation Research Part A: Policy and Practice, 132, 1-12.
IATA. (2021). Covid-19 impact analysis. Retrieved from https://www.iata.org/en/iata-repository/publications/economic-reports/covid-19-impact-analysis/
Lee, C. K. M., & Lam, T. N. (2019). Sustainable development in the logistics industry: A systematic literature review. International Journal of Production Economics, 210, 170-186.
Steen, M., van Hoorn, J. F., van Spronsen, J., & Harmsen, P. F. (2020). The sustainability of biofuels for the shipping sector: A review of the literature. Journal of Cleaner Production, 268, 122085.
Teixeira, R., Pinto, A., & Pinto, L. (2020). Blockchain technology adoption in the maritime industry: A systematic review. International Journal of Information Management, 51, 102029.
Van Oudheusden, D. L., & Bloemhof, J. M. (2019). Circular economy in logistics and supply chain management: A review. Sustainability, 11(6), 1729.
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