이 글은 올해초 일본에서 개최되었던 물류 국제심포지엄에서 오사카 샨쿄대학의 쿠니오 미야시타 교수가 발표한 소논문이다.
오사카 샨교대학의 물류전략 교수로 재직중인 쿠니오 미야시타( Kunio Miyashita)씨는 고베대학에서 경영관리학과 대학원의 명예교수와 마케팅 및 유통학 교수 등을 역임한 바 있다. 쿠니오씨는 일본 해운*물류경제학회(Japan Society of Logistics and Shipping Economics)의 이사직을 맡고 있으며, 교통연구원(Institute of Transportation Studies)의 원장, 항공정책연구협회(Aviation Policy Research Association)의 이사를 지냈다.
6권의 저서를 집필했고 155편의 논문을 발표하는 등 물류학과 관련 활발한 연구활동을 벌이고 있는 쿠니오 교수의 관심사는 ‘다국적기업들의 글로벌 물류전략과 국제유통의 추세와 함께 생산사이클에 직접적인 영향을 미치는(인과관계) 항공운송과 해상운송에서 적합한 국제화물운송방식 선택’에 관련한 연구이다.
이 소논문도 최근 쿠니오 교수의 연구내용을 담고 있어 소개한다. 본지가 한글판으로만 발행되기 때문에 논문역시 한글판만 게재하는 것을 원칙으로 하고 있지만, 필자가 강조하는 용어나 문맥의 뉘앙스가 번역 과정에서 변질될 수 있음을 우려해서 예외적으로 원문(영어)을 그대로 전재한다.
1. Overview of Shipping Markets The Beginning of the 2nd Life Cycle
The shipping industry was build up independently of trading industry at the end of 19th century, when world shipping markets began to function in coincidence with the completion of the industrial revolution in Western Europe. From 1880 on, transactions relating to charter shipping service were conducted at the Baltic Mercantile and Shipping Exchanges while liner shipping service was facilitated by the Conference System. Such transaction systems have supported the development of the shipping industry. Since the 1970s, in terms of bulk and oil cargo transportation, a system under which long term transport contracts behind the scene are signed with shipper before ships are built has been adopted. Such a system is still used today through the use of contracts of affreightment. This type of contractual system which utilizes mid to long term contracts has lead to shipper satisfaction and has been highly assessed by also shipping industry because of the guarantee of the long term profit stability. In contrast, the Conference System proved to be sustainable for approximately 100 years until the implementation of the 1984 US Shipping Act. Under the Act, deregulatory in nature, based on contestable market theory, traditional liner shipping tends to change itself into a contract carrier instead of a common carrier.
The early 1980s could be referred to as the turning point for the world shippinghistory. At that time, the growth rate of world shipping services, measured in ton-miles, had declined to almost zero, concluding the first life cycle of world shipping. Faced with a new environment, traditional liner shipping firms, which had been dominated by the shipping cartels, was forced to change market strategy.
Since 1986, the world shipping industry has experienced growth, mainly supported by the continuing economic growth of East, South East and South Asia. In the last 20 years, shipping services have been growing rapidly in compared with the world shipping tonnage. This makes possible to continue a policy of deregulation in the liner shipping industry due to the fact that new entrants face zero sunk costs.
It appears that the world shipping industry has entered a new life cycle and is experiencing growth. The first life cycle continued for approximately a century (1880-1985). How long can the new cycle bring aboutdynamic development in the new environment of the world economy?
Growth in the Asian economy has significantly promoted the globalization of national economies, the deregulation of economic systems and the introduction of information technology. To understand the dynamic development in the Asian economy, it is logical to apply the product life cycle theory to the analysis of multinational enterprises and international physical distribution.
2. Basic Structure of International Physical Distribution
Casson's empirical analysis of US multinationals during the 1980s differentiated four categories under which subsidiaries are dependant on their parent firm. The categories are equivalent to the so called Vernon's product cycle stages which include innovation, maturity, standardized discrimination and simple standardization. In the global economy, the four developmental stages of multinational enterprises can be measured according to the different grades of dependence of a specific subsidiary on imports (procurement) from and exports (sales andphysical distribution) to its parent firm.
As indicated in Fig.1, for innovative industries (e.g. electronics, pharmaceutical, and machinery), subsidiaries have the highest dependency on their parent firms for international procurement from and international sales to them. On the contrary, in simple standardized industries (e.g. textile, steel) subsidiaries have the lowest dependence on parent firms for both export and import procurement. Subsidiaries in mature industries (e.g. chemical) depend to a larger degree on imports rather than exports from the parent firm and those in the standardized discriminative industry (e.g. automobile, electric household appliances) depend considerably more on exports than imports to them..
Fig.1 provides us with useful insights on how to investigate international physical distribution. The products created by innovative and mature industries on the right hand side of the chart are more oriented to air transport. On the left hand side of the chart, products produced by standardized discriminated and simple standardized industries are more oriented to sea transport. Nonetheless, there is overlap and modal competition continues to play an important role in international transport.
3. Review of Flying Geese Theory on the Container Shipping Cargo Flow
Using PIERS data (informed by the Journal of Commerce) on container cargo flows from Asia to the US for the period from the 1980s to the 1990s, it appears that industrial organization in the Asian economy has been changing drastically, especially in Japan, NIES, ASEAN and China. The automobile, electric household appliance and textile industries can be considered three of the representative industries when container cargo flows are considered. The growth of such flows in each country or in each industrial economy follows in principle the flying geese model, which depicts a cycle which starts at the textile industry, moves to the electric household appliance industry and finishes at the automobile industry as shown in Fig.2.
The vertical axis in Fig.2 denotes the share by industry (textile, electric household appliances and automobiles) of total export cargo flows in each country or industrial economy. The horizontal axis represents the degree of technological innovation as measured by the coefficient of the variation in cargo share. In Japan, the automobile industry constitutes the largest share of export flows. This replaced household appliances and in turn textiles as the largest share of export flows and thus follows the traditional flying geese model. Also, in the graph, Japanese industrial organization is represented by a relatively vertical line. This demonstrates that technological innovative ability in all three industries is similarand dominant. Even the textile industry in Japan has been restored and ranked at a standardized discriminative level that is not consistent with the results of Casson's analysis.
Fig. 2 also shows that, in China and NIES the electric household appliance industry has the highest degree of technical innovation while in ASEAN it is the textile industry.
China, as a WTO member, has not followed the traditional flying geese model and has surpassed ASEAN countries and is rapidly approaching NIES. In the 1990s, following national economic policy, China concentrated its efforts on the infusion of foreign investment into the electric household appliance industry. In the 2000s, China has shifted its focus to concentrate on the automobile industry.
In addition, Korea, which overcame the Asian currency crisis, has returned to a high level of economic growth as an OECD member. The tremendous growth in China and NIES has resulted in East Asia driving the Asian economy, generating large volumes of international container cargo distribution flows.
ASEAN's position has been severely affected by both China and NIES and is becoming weaker. Though there is political discussion on how much further East Asia should be allowed to develop, the international logistics industry has ensured a wide range of business opportunity in Asiaby taking advantage of the competitive advantages and disadvantages in each country. The Asian economy has driven the logistics industry firms to developand improve upon their economies of scale and economies of scope.
4. Buffer Function of Air Cargo Trade with Asia
The flows of value added air cargo in Asian trade has been growing. This trend is supported by data generated from a time series of air export prices per cargo tonnage from Japan to the USA and Asia. In 1985, export prices to the USA were about 5 million yen higher per cargo tonnage as compared with prices to Asia. However, in 2004, export price levels to Asia slightly exceeded levels to the US.
On the contrary, the price to import air cargo from Asia into Japan has been almost half of levels from the US and the EU. In other words, the terms of trade for air cargo are approximately double the levels as compared with the terms of trade from the US and the EU. Thus, the Asian economy has started to play a buffer function role as related to Japanese trade, which has an effect on the global economy.
Both the driver and buffer functions played by Asian trade in the global economy have forced not only the international logistics industry but also the shippers' business world to take note. When shippers develop a logistics strategy relating to Asian business, it has become impossible to avoid the role of the Asian economy.
Thus, due to the development of the Asian economy, the quality and quantity of world trade hasbeen growing. In particular, the value added trend in Asian trade has accelerated the importance of time costs in addition to the traditional space costs. Shippers have focused efforts on minimizing total costs in order to reduce inventory costs.
5. Developing Trend of Air Transport
The share of air cargo trade, generated from Japanese exports, in value terms, has been increasing since the second half of 1990s (Fig.3). In general, until then, the complementary nature of sea (container ship) transport and transport by air had been predominant over a long period of time. However, at the present, air transport plays a leading role in international logistics and has pushed the limits as to how the logistics industry functions. This has led to a competitive relationship with sea transport. Such a remarkable change in modal competition in value terms demonstrates that shippers have become extremely sensitive to time costs.
The competitive gray zone which exists between container shipping and air transport is not only being influenced by changes in opportunity costs in both business cycles and product cycles, but also recently by the further development of the shippers' logistics strategy and SCM ( supply chain management).
6. Four Stages of Logistics Development
and the Strategic Logistics Support
Fig.4 represents the four stages of logistics development from transportation to SCM.
Since the second half of the 1980s, in a deregulatory environment, it has become a popular and necessary strategy to incorporate a logistics system into a business model with the intent to promote information technology. From that point on, the traditional physical distribution industry has moved beyond the hard infrastructure (transportation) and soft infrastructure (physical distribution including multimodal transportation) stages and reached a stage which supports the logistics strategy of shippers. The third stage is referred to as logistics support and the fourth and final stage as SCM support"DThe logistics system supports intra-firm trade and SCM inter-firm trade.
Following demand from shippers, physical distribution industry firms acting as either the carrier or forwarder have transformed themselves into Third Party Logistics (3PL) firms. Shippers entrust the logistics function to 3PL as a business partner, who promotes new frontier business in order to offer shippers' strategic logistics system.
To enter into such a new business, the freight forwarder forms a much closer relationship with exporters and typically has their staff work at the client firm, putting a greater focus on sublimation of traditional reverse integration strategy.
On the other hand, shipping firms have built up their freight forwarder division and transformed themselves into a shipping integrator in order to competitively challenge 3PL business. This is because shipping firms have been affected by large scale shippers' forward integration strategy under which the forwarder is bypassed and the shipper deals directly with the carrier.
The large scale shippers have traditionally managed their own forwarding division. Therefore, it will not be easy way for shipping firms to provide 3PL services which can bedifferentiated from the large shippers'traditional forwarding services. A knowledge management strategy should be adopted by shipping firmsrather than an infrastructure-based strategy.
Thus in theshipping domain, four kinds of business fields are simply differentiated as follows (Cf. Fig.5):
1. transport service provider with vessel=carrier business=VOCC,
2. transport service provider without vessel=forwarder business =NVOCC,
3. 3PL provider with vessel= carrier business=integrator, and
4. 3PL provider without vessel=forwarder business=3PL forwarder.
7. Concluding Remarks: Perspective
of International Logistics Industry
Freight forwarders already ship cargo by both the sea and air modes of transport. Air cargo integrators (FedEx, UPS, DHL, TNT etc.), on the other hand, have experienced an increase in the demand for their services as a 3PL provider. Taking into account such a considerable increase inthe demand for shipment by air cargo in value terms, there will be strategic advantages for theshipping industry to offer air cargo transport services in addition to container shipping services. This kind of transport operator is generally called a mega carrier. If the operator manages air cargo freight forwarding as well, it can be referred to as a combined 3PL.
The mega carrier as a combined 3PL has become the focus of strategy planning in the international logistics industry. This is because the competitive advantage of such a structure can be found in both long term profit stability and in short term insensitivity (low risk) to the business cycle.
Thus, in the enlarged domain, four kinds of business fields for the shipping industry can be differentiated as follows (Cf. Fig.6):
1.long term profit stability and short term low risk (sensitivity) to business cycle=mega carrier as 3PL=combined 3PL
2.long term profit stability and short term high risk (sensitivity) to business cycle=mega carrier
3.long term profit instability and short term low risk (sensitivity) to business cycle=shipping operator (carrier) or sea freight forwarder contracting with air freight forwarder
4.long term profit instability and short term high risk (sensitivity) to business cycle=shipping operator (carrier) or sea freight forwarder
Which field of business is best selection for a specific firm, depends on the scale of its financial and human resources, in addition to the business concept of top management. Shipping and air cargo industries both complement and compete with each other in this new business field, where forwarders and integrators as well have entered the market as players. Strategic competition in the international logistics industry is an important area for future research.