Author: Dr. Jean-Paul Rodrigue
Logistics policies cover a range of freight distribution activities related to modes, terminals and warehousing.
To better adapt to the growing complexity of the transportation system, there has been an emerging shift in transportation policy towards a set of logistics policies. They cover a wider range of activities, such as transportation modes and terminals, warehousing, and manufacturing. The emerging preponderance of logistics is challenging the scale (integrating global, regional, and local considerations) and scope (across modes) of transport policy, which needs to be expanded into a more comprehensive framework. However, this expansion must consider specific policy challenges:
- Cross-sectorial issues. Logistics brings within the realm of policy several actors outside the transport sector that policymakers are not well prepared to deal with. For instance, supply chain management involves transportation, distribution, and manufacturing aspects, which are conventionally considered separate sectors. Thus, the cross-sectorial characteristics of logistics require new information and knowledge to support public policy.
- Cross-jurisdictional issues. Logistics brings complex relationships and linkages across several functional (such as modes) and geographical jurisdictions. Standard transport policy is commonly articulated around modes that are viewed as independent and subject to well-defined jurisdictions (e.g. specific ministries). The cross-jurisdiction characteristics of logistics require new realms of engagement and intervention of public policy.
- Transnational actors. Many actors supporting logistics have a strong transnational presence, operating in several countries and regions of the world. This is particularly the case for 3/4PLs, which are highly globalized entities. These actors often have more leverage than the public authorities they interact with, particularly when it involves setting concessions. The transnational character of logistics requires the consideration of trade and transactions as a policy issue.
2. The Three Pillars of Logistics Policies
Considering these challenges, logistics and public policy can interact over three main pillars, each offering a realm of potential intervention; actors (who controls and manage logistical activities?), operations (what are the logistical activities being performed?), and outcomes (how the logistics performance meet the criteria of the industry?). Each pillar underlines to what extent its components are effectively meeting national goals or the requirements of the industry. Are customs procedures effective? Is there enough capacity at terminals and connectors to meet existing and anticipated needs? Is the workforce sufficient and adequately trained to meet the need of the industry? Is the public sector able to manage its regulations effectively?
Shortcomings over any of these issues should be investigated and trigger appropriate policy responses. A common observation is that logistics policy should avoid directly dealing with operational issues since these aspects should ideally be addressed by the private sector. Public policy should remain an enabler and support for logistics activities, not a provider of logistics services, unless these services are substantially inadequate.
3. Coordination and Implementation
Logistics policies fill an essential gap in coordinating the development of transport infrastructure and the economic activities that generate commercial and trade flows. They are mainly articulated around:
- Improving trade facilitation through the simplification, harmonization, and standardization of trade procedures and the setting of free zones.
- Improving the connectivity of logistics with gateways, corridors, and hinterland accessibility strategies.
- Providing a footprint for logistics with the setting of logistics zones and inland ports.
- Developing logistics capabilities by expanding labor and logistical services skills.
- Supporting digitalization such as freight portals (single windows) and port community systems.
- Developing sustainable logistics with infrastructures and services promoting unique comparative advantages, including green logistics strategies.
- Improving last-mile logistics with city logistics. Many final deliveries are taking place in a congested context with difficulties in accessing the final destination, including parking.
Governments are facing the challenge of coordinating logistics policies since the governance structure of many organizations focuses on specific infrastructures, modes, and locations. This can require the setting of new governance structures with a focus on logistics or the development of a consortium regrouping the key stakeholders.
- Rodrigue, J-P (2017) “L’intégration de la logistique dans les politiques publiques : Enseignements des experiences internationales” in Promouvoir l’investissement dans la chaine logistique en Tunisie: Le role des politiques publiques, Paris: OECD.