IMPACT OF CONTAINERIZATION ON TRANSPORT AND DISTRIBUTION

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.

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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.

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1.3 Purpose of the Study

It is necessary to look or to identify the social and psychological past in order to appreciate what we are try to do in the present so as to do better in the future. The study will provide marketing opportunities challenges and prospects that exist for marketer to improve on their packaging through repeat purchases.

The aim of this research survey is to examine maximize customer service while minimize.

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1.4 Significance of the Study

The study will cover Aba, Abia State, Owerri and all eastern states in Nigeria and all company's 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.

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1.5 Research Question

This following are the research question, which this research work is set out to tackle.

• Does container have any effect on the buying pattern of the industrial users?
• What is the role of container with reference to price, quality and quantity?
• How does container affect the decision to buy by the users of PZ Plc product?
• Does container series as a competitive tool in the marketing of industrial product?
• Can container help to maximize profit in the company?
• Does container cost affect the total profit?

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1.6 Hypothesis

In conducting this research, the following hypothesis will be tested.

• Ho: The containerization of a product attract a buyer
• Ha: The containerization of a product does not attract a buyer

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1.7 Limitation of the Study

The research study is very significant in that it will be immense benefit to students in the purchasing and supply management department and interested persons in related fields of study and work who are research minded. The research work indeed vary significant and a treasure chest for the research minded students and scholars because of the comprehensive nature of this investigative survey and realistic write-up. The study will certainly serve as a dependable reference guide for student in the purchasing and supply management department.

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1.8 Limitation of the Study

The limitation of this study includes:

Inadequate financial and material resources with which to carry out such an elaborate production inability of the respondent i.e. those interviewed to give the relevant information on the variables under study, most importantly insufficient time for thorough work since the researcher still have to attained lectures for the completion of her course work. Lack of knowledge to some that were interviewed and reluctant of some staff to release information and co-operate with researcher.

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1.9 Definition of Terms

The definitions of terms for this project are:

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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.