EVALUATION OF THE FUNDAMENTALS OF FREIGHT FORWARDING MANAGEMENT AND PRACTICE IN NIGERIA

1.1 Introduction

Freight forwarder is defined as an “architect of transport,” and the main roles provide efficient specialized transport solutions through integrating its fundamental roles such as; quotation/booking, consolidation, cargo warehousing, custom clearance, delivering and insurance for manufacturer firms in the execution of international transport. Globalization affects all sectors deeply and sharply, the global logistics sector has been subjected with various structural changes, many organizations faced comprehensive challenges to execute of their international transport activities in the utilization of global sourcing. Hence, these structural changes enabled global logistics firms to set up new a customized logistics service provider which is named as freight forwarder (FIATA, 2014).

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Limitations of the Study and Definition of technical terms.

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1.2 Background of Study

Since logistics advanced from 1950s, there were numerous researches focused on this area in different applications. Due to the trend of nationalization and globalization in recent decades, the importance of logistics management has been growing in various areas. For industries, logistics helps to optimize the existing production and distribution processes based on the same resources through management techniques for promoting the efficiency and competitiveness of enterprises. The key element in a logistics chain is transportation system, which joints the separated activities. Transportation occupies one-third of the amount in the logistics costs and transportation systems influence the performance of logistics system hugely. Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum.

Nowadays, the manufacturer companies still continue to export their produced goods all over the world and import some unique raw material from another countries therefore transporting goods from one country to another country underlines much emphasis at the shipping activities and capabilities which have fairly significant for competitive advantage. However, the process of logistics are increasingly being burdensome, complex and schedule-dependent transactions which need an accurately systematic process flow, therefore, the fundamental roles of freight forwarder service provider is to make available just-in-time delivery and smoothly logistics services by using multi-modal transport models.

Moreover, it is also intermediary institutions that act on behalf of importers, exporter, or other companies in order to make transport organization safe, efficient and cost- effective shipping (Ciltuk.org.uk, 2015). From this perspective, the main roles of freight forwarder is to arrange appropriate customized transport models by taking the advantage of the collaboration of the fundamental freight forwarding components in order to transport manufactured goods to its final destination under convenient circumstances. Murphy and Daley (1996) said that the most firms employ international trade specialists to assist with documentation requirements and other vagaries of cross-border commerce and booking spaces, the payment of freight charges, shipment consolidation, and the preparation of documentation for smoothly custom clearance by an expert international freight forwarder.

The purpose of this research is to integrate the fundamental roles of freight forwarder on a case study in order to investigate and identify, and illustrate its impact on the transport operation, transaction and organization of the manufacturer firms in terms of transporting produced goods smoothly to the final destinations. Poor infrastructure, lack of efficient transport organization, unaccomplished documents and erroneous custom clearance transactions have huge impact on the transport expenses while increasing efficiency and productivity, delivering time and security to be competitive. Therefore, manufacturer companies prefer to transport their goods by hiring an expert freight forwarder service who provides standard quotation and professional differentiated transport solutions with the understanding of cross-border operations in order to satisfy customers and industry expectation with their multimodal transport network capabilities, both nationally and internationally. Manufacturers and retailers are relying more on freight forwarders to be the managers of their intercontinental logistics and supply chain activities (Knigge, 2015). This is to say, cooperating with an expert freight forwarder service provider is enabled manufacturer firms to (CME, 2003):

1. Reduce the complexity of logistics requirements,
2. Establish relationships and liaisons with supply partners, both internally and externally,
3. Improve trade volume,
4. Reduce the overall transport costs and lead-time by providing integrated transport solutions.

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Evaluation of the fundamentals of freight forwarding management and practice in Nigeria.

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1.3 Statement of Problems

Poor infrastructure, lack of efficient transport organization, unaccomplished documents and erroneous custom clearance transactions have huge impact on the transport expenses while increasing efficiency and productivity, delivering time and security to be competitive. Therefore, manufacturer companies prefer to transport their goods by hiring an expert freight forwarder service that provides standard quotation and professional differentiated transport solutions with the understanding of cross-border operations in order to satisfy customers and industry expectation with their multimodal transport network capabilities, both nationally and internationally. Manufacturers and retailers are relying more on freight forwarders to be the managers of their intercontinental logistics and supply chain activities (Knigge, 2015).

Over the years, the operations and services rendered to users within the confines of the operating environment have not been satisfactory due largely to lack of shipping policy and some government policy inconsistencies. Shipping operations and services have over the years been dominates by foreign shipping companies and vessels of which Maersk-line is inclusive. Therefore, a critical analysis of the challenges and opportunities facing these shipping lines and services in Nigeria is very important. Also many factors like the management of bunker, activities of pirates, application of information and communication technology, safety practices and ship turn round time affect the growth and survival of a shipping line. Some shipping lines know this fact. While some have taken the lead in innovating trends that would help them overcome these challenges, others sit with no attempt to innovate; still waiting for the changes to blow them away.

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1.4 Aim and Objectives of Study

The aim of the study is to evaluate the fundamentals of freight forwarding management and practice in Nigeria. In achieving this aim, the following specific objectives were set out as follows:

1. To identify the how the fundamental roles of freight forwarder can be integrated, and its impact on the manufacturer in the execution of transport.
2. To investigate the fundamental roles of freight forwarder.
3. To examine the on multi-modal transport functions in order to express a convenient shipping model based on requirement.
4. To analyze and provide data concerning the operational management process of international logistics that must be fulfilled by the freight forwarder.
5. To illustrate freight forwarder's roles on logistics operations, respectively.
6. To facilitate required transactions while transport operation which is according to the government regulations based on the documentation.
7. To determine the advantages of hiring freight forwarder services for the manufacturer companies.

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1.5 Research Questions

The following questions will be addressed to evaluate the fundamentals of freight forwarding management and practice in Nigeria:

• Does the fundamental of freight forwarding enhance maritime industry?
• Does adequate cargo handling equipments leads to faster turnaround time of vessels?
• What is the future of shipping line operations in Nigeria?
• What are the shore-based initiatives that will influence ship operations?
• How do you leverage integrated Communications and Information technology to drive fleet performance?
• How do government policies affect shipping line operations and services?

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1.6 Research Hypotheses

In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

Hypothesis One

• H0: There is no significant relationship between government policies and shipping operations.
• H1: There is significant relationship between government policies and shipping operations.

Hypothesis Two

• H0: There is no significant relationship between the activities of pirates in Nigerian waters and the profitability of shipping lines.
• H1: There is significant relationship between the activities of pirates in Nigerian waters and the profitability of shipping lines.

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1.7 Significance of Study

The operations carried out by shipping lines are complicated as much they are technical. And as we know, the shipping industry drives national economic development. Also for any shipping line to remain on top in the industry, it needs to keep abreast with the current trends, the market and technological factors that drive efficiency.

A lot of factors affect the effectiveness and efficiency of a shipping line’s operations, ranging from the port infrastructure, bunker management strategy, safety practices, government policies, ship replacement technique etc. A critical investigation and analysis of these shipping operations will bring to the fore, more insight into the opportunities and challenges being faced by shipping lines in Nigeria, so as to help keep managers and students abreast of the survival techniques in the ever competitive shipping industry. The business of shipping is a world encircling enterprise whose devotees must have a vast knowledge of matters great and small.

Besides, the study will serve as reference material for subsequent researcher in the field or related topics.

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1.8 Limitations of the Study

During the course of this study, many things militated against its completion, some of which are:

1. Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
2. Establishment Policies: Establishment policies posed a serious limitation as most staffs are not ready to release information needed for this project work. There were lots of information needed from the staffs of this institution to enhance the study which took them time to release or they did not release at all for security purposes, hence the scope was reduced.
3. Research material: availability of research material is a major setback to the scope of the study.
4. Frequent power failure: This made the researcher append more money on fuel to ensure sustainable power.
5. Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).