CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
According to Baker et al. (2006), it could be valuable to consider logistics with regards to business and the economy in general. Logistics is an imperative action making broad utilization of the human and material assets that influence a country's economy. A few examinations have been embraced to endeavor to assess the degree of the effect of logistics on an economy. One such examination did in the United Kingdom demonstrated that around three percent of the working populace is related with work that is identified with logistics management. Another examination completed in the USA in the current past showed that logistics alone represented there about 10 and 15 percent of the gross national income of major North America, European and Asia/Pacific economies.
Logistics management incorporates the greater part of the data and materials which stream all through an organization. It involves everything from the development of an item or service that should be rendered, through to the handling of incoming raw materials, creation and storage of completed merchandise, their conveyance to the client and after sales service provision (Gitlow et al., 2005). The pervasiveness of logistics has grown and intensified over time because of the rise of new advances and the development of vital strategic alliances keeping in mind the end goal to contend on adaptability and responsiveness. The developing significance of logistics emerges from organizations getting to be globalized to access new markets and acknowledge more prominent generation efficiencies past their own particular geographical locations (Thomke, 2007).
At present, logistics management operations incorporate acquiring, conveyance, the management and handling of inventories, packaging, production and much client benefit arrangements (Bowers et al., 2010). Logistics organizations give supply chain network management answers which meet traditional and complex client needs. Logistics organizations in Nigeria offer varieties of services through air, sea and street cargo sending; warehousing; dissemination and particular administrations in venture logistics, synthetic coordination activities including fairs and occasions management. Logistics organizations are recognized by their worldwide system and driving position in developing markets, a readiness to customize solutions and provide answers for their clients, an entrepreneurial culture that has driven them to put and develop in regions where others see hazard, and a profound responsibility regarding individual administration for their clients and groups.
As indicated by DHL (one of the leading logistics companies worldwide) incorporated logistics authentic website, the DHL became an international delivery company, similar to Loomis and Purolator who were the only other international courier companies at the time. The only major competitor in the overnight market was Federal Express (FedEx), which did not open its first international service until 1981, expanding to Toronto, Ontario, Canada. Nevertheless, the domestic market was extremely profitable, and DHL was the third largest courier behind FedEx and UPS. Today, DHL is one of the world's biggest incorporated logistics management service providers with more than 1.3 billion parcels delivered per year. The Nigerian based group routinely handles import and fare cargo shipments via air and ocean to and from different world origins and sources. As the Nigerian government continues to invest heavily in infrastructure, logistics companies project management abilities are all around positioned and esteemed especially by the energy sub-sector. Logistics companies in Nigeria are of the major contributors to the economic growth and development of the country and help reduce the rate of unemployment nationwide.
1.2 Statement of the Problem
As indicated by Backer et al. (2006), the components of distribution and logistics have, obviously, dependably been basic to the assembling, stockpiling and development of merchandise and items. It is just moderately as of late, nonetheless, that distribution management and logistics have come to be perceived as indispensable capacities inside the business and monetary condition the world over. The influence of logistics to any nation has changed and it now has a significant effect on the accomplishment of varieties of operations and associations. Fundamentally, the basic ideas and method of reasoning for logistics are not new. They have advanced through a few phases of improvement yet at the same time utilize fundamental thoughts, for example, trade-off analysis, value chains and systems theory together with their related procedures.
Business organizations are confronted with many difficulties as they attempt to keep up or enhance their positions against their rivals, convey new items to the market and improve the benefit of their operations. This has prompted the advancement of numerous new thoughts for advancement particularly perceived in the redefinition of business objectives and the re-building of whole frameworks. A business sector where this has been of utmost importance is that of logistics organisation. True indeed, for some organizations, changes in logistics management have given the impetus to real improvements to their businesses. Major leading companies and institutions have come to appreciate that there is a positive 'value-additional' role that logistics can offer instead of the conventional view that the different capacities inside the logistics function are simply a cost trouble that must be limited paying little mind to some other ramifications (Baker et al., 2006).
Logistics companies have been in operation and contribute to the growth of the country for many years now. As a result therefore, this research exercise has been driven by the need to find out and identify the potential challenges facing logistics management activities on the pursuit of effective service availability in the general logistics service industry in the country.
1.3 Objectives of the Study
The main objective of this study is to examine the challenges affecting the logistics companies in Nigeria. Specifically, the study also seeks:
- To examine the contributions of the logistics companies to the economy of Nigeria
- To understand the factors challenging factors affecting logistics companies in Nigeria
- To find out the challenges faced by logistics companies in effectively and efficiently carrying out their duties in Nigeria
1.4 Research Questions
This study aims at answering the following research questions:
- What are the contributions of the logistics companies to the economy of Nigeria?
- What are the factors challenging factors affecting logistics companies in Nigeria?
- What are the challenges faced by logistics companies in effectively and efficiently carrying out their duties in Nigeria?
1.5 Significance of the Study
The researcher has had an opportunity to well understand the logistics management activities generally and their practical effect on the economy of the country and at the same time, the challenges facing them. The researcher gained indebt knowledge on a leading global integrated logistics management concern in the Nigerian service sector setting.
Since research is cumulative, this study provides the information and data that future researchers can premise on for studies related to logistics management. They would borrow from this study and consider identified gaps as a basis for prospective studies.
This study’s findings would inform policy makers on matters related to logistics management so that they can put in place the right policies for effective management such as on customs clearance regulations. Such policies would guide the logistics service sector to follow the right procedures and channels intended in solving logistics challenges.
1.6 Scope of the Study
This research study mainly focused on the challenges affecting the logistics companies in Nigeria sector. It was carried out in a selected logistics management company located in Industrial Areas (Ikeja and Apapa) of Lagos.
1.7 Limitations of the Study
Sekaran (2006) argued that, it would not be possible to always conduct investigations or assessments that are 100 percent correct. As a result therefore, the obtained findings would not be exact and error free. This is particularly because of the difficulties faced in the actual measurement and collection of data in the subjective areas of respondent feelings, emotions, attitude and perceptions.
The researcher spared a considerable amount of time sharing with DHL staff on an effort to prepare, persuade, convince and assure them that the research activity would only generate findings to be used for academic purposes only. This was necessary for purposes of facilitating the collection and gathering of the required relevant data to make this research exercise a success.
The researcher had to reach out and appeal to target respondents who were unwilling to respond to our data collection team due to fear of victimization by the company’s top management in regard to what they might have had shared with us. The team had to assure them that whatever data they were to share would be considered confidential and was only to be used for academic purposes only.
