The Effect of Logistics Industry on the Economic Growth in Nigeria (a Case Study of the Maritime Industry)
CHAPTER ONE
Objectives of the Study
The main objective of this study is to ascertain the effect of Logistic industry on Performance of Nigerian economy with focus on Maritime Industry. The specific objectives were to:
- Determine the extent to which material handling affects service quality
- Ascertain the extent of the relationship between customer ordering processing and customer satisfaction
- Determine the effect of warehousing on revenue of Nigerian ports
- Ascertain the nature of relationship between container traffic and GDP maritime sector contribution.
- Evaluate the extent to which transportation influences cargo throughput of Nigerian ports.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Conceptual Framework
We reviewed the concepts of logistics, logistics management, maritime logistics and performance.
Logistics
Logistics is defined by the Council of Supply Chain Management Professionals (2010) as “the process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound, outbound, internal, and external movements. (Council of Supply Chain Management Professionals, 2010). Gunther and Tempelmeier (2005) specify logistics as a complete description of the individual functions and levels of the company which has, as its goal, the optimization of the flow of products and materials in respect of the related stream of information.
Oladipo (2012) opines that the word ‘’logistics is of Greek origin i.e. Logistics meaning skilled in calculating. It can also be appreciated that the organization concept of logistics was initially developed in the armed forces. Roman armies used to have administrative officers called logistic (Oladipo, 2012). The term logistics is synonymous to the military but it is now applicable to both military and business world. Logistics in French stands for ‘’Lager’’ which means to lodge or accommodate or quarter and this in military parlance or expression connotes methods of moving armies from one place to another as well as organizing supplies.
Christopher (2005) defines logistics as the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and related information flow) through the organization and its marketing channels in such a way that the current and future profitability are minimized through the cost effective fulfillment of orders.
Brannstrom and Sumper (2005) posit that logistics is the art of managing the supply chain and science of managing and controlling the flow of goods, information and other resources like energy and people between the point of origin and the point of consumption in order to meet customers’ requirements.
CHAPTER THREE
METHODOLOGY
Introduction
This chapter deals with the method that was used to gather data for the purpose of this research. The chapter describes the research design, sources of data and population of the study, while other issues were examine include sampling techniques and the statistical tools of data analysis.
Research Design
Research design means the structuring or investigation aimed at identifying variables and their relationship to one another. For the purpose of this study, descriptive survey design was used for the study. The method is considered adequate and most appropriate because it helped the study to describe, examine, record, and interpret the variables that exist in this study.
Sources of Data
The data for this study were obtained specifically from two sources namely: primary and secondary sources. The websites of six ports in Nigeria ,United Nation Conference on Trade and Development (UNCTAD) Website, Textbooks, Journal, Seminar Papers, Internet.
(a) Primary Sources of Data
These are facts that were collected by the researcher himself specifically for the research through instruments: such as questionnaire, interviews, observation. In this study, a questionnaire along with personal interviews were used to get information from the respondents.
(b) Secondary Sources Data
The secondary source involves the use of existing but related literature, which was produced by earlier researchers for the purpose of the study, specifically the materials used for extracting secondary data for this study include journals, magazines, text-books and internet.
Population of the Study
The target population of the study includes Senior staff and Junior staff of the selected organizations or firms. In addition data were obtained from the central Bank of Nigeria (CBN) statistical bullentin, Nigerian Ports Authority website, Nigerian Maritime Administration and Safety( NIMASA) Website, etc.
CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
Introduction
The essence of this chapter is to present and analyze the data collected for the study. The presentation and interpretation of data were based on the questionnaire administrated to the staff of the selected ports and Agency in Nigeria.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMEDATIONS
Summary of Findings
This study evaluated the Effects of Logistics Management on Performance of Nigerian Maritime Industry. Seven sea ports and Nigeria Maritime Administration and Safety Agency(NIMASA) were studied.
We started the study by first of all setting objectives which were pursued vigorously from chapters 1 to 4 and accordingly we summarized the study in this chapter, drew conclusions and offered necessary recommendations.
Accordingly, the major findings established in this study are:
- Material handling significantly promoted service quality (r = 0.707; F= 249.946; t = 15.810; p <0.05).
- There was a significant positive relationship between customer ordering processing and customer satisfaction (r =. 838, P<.05).
- Warehousing had a positive effect on revenue of Nigerian ports (r = 0.689; F= 266.060; t = 16.311; p < 0.05)
- There was a significant positive relationship between container traffic and GDP maritime industry contribution (r =.583, P<.05).
- Transportation significantly enhanced cargo throughput of Nigerian ports(r = 0.593; F= 249.946; t = 16.509; p< 0.05).
Conclusion
Logistic management is very crucial for effective performance of maritime industry and putting an effective transportation system is a critical factor in logistics that drive this performance. The growing importance of logistics arose from companies becoming globalized towards gaining access to new markets, realize improved service delivery by tapping into new technological advancement in movement of cargoes from one country to another. In recent times logistics has become more prominent and it is recognized as a critical factor in giving maritime firms competitive advantage. Logistic management increases awareness of logistics management implications in maritime industry performance and there is growing awareness of the benefits of leveraging logistics to increase customer value. Hence, measuring of performance of logistics had become a high priority. Based on the data analysis and the findings established we conclude as follows: That material handling promotes serice quality. Customer ordering process is positively related to customer satisfaction. Container traffic has positive relationship with GDP maritime industry contribution .This means that as container traffic increases GDP maritime industry contribution will also increase. Warehousing has a positive effect on revenue of Nigerian ports. Transportation enhances cargo throughput of Nigerian ports.
Recommendations
Based on the conclusions drawn we offered the following recommendations are made
- Cargoes should be handled in most efficient manner in Nigerian ports so as to ensure quick deliveries to their owners.
- Effective internal processes should be put in place by all maritime firms in Nigeria in other to satisfy the customers/clients and go beyond their expectations.
- There should be proper monitoring and control of inflows and outflows of containers at the ports so as to reduce bottlenecks and improve efficiency of operations.
- Effective warehousing infrastructure should be put in place in Nigerian ports so as to increase revenue accruable to government and other stakeholders..
- There is need to put in place effective transportation system which is a critical component of logistic management
- Nigerian ports should be operated on cost effective and efficient manner through putting in place effective logistics measures so that they will continuously contribute to nation’s GDP and revenue growth .
- Nigerian maritime organizations need to build new logistics concepts in order to improve their services by using such tools as real-time information, accurate time windows and goods tracking systems.
- There is need for policy consistency through formulation and implementation effective policies that will bring about the smooth running of ports’ operations.
- Such factors that have been identified like inadequate power supply and incessant removal of management of government agencies in the nation’s maritime industry which impede the efficient running of the Nigerian ports should be addressed.
- Other hitches like the arbitrary arrest of vessels at berth and attendant consequences, friction among maritime statutory agencies due to overlapping functions and lack of national carrier capacity for the United Nation Conference on Trade and Development (UNCTAD) 40:40:20 carriage rights should be tackled without delay.
- All Nigerian ports should key into the use of modern equipment in cargo handling so as to reduce logistics problems to the barest minimum.
- Warehousing facilities should be improved upon in all the ports so as to enhance easy flow of goods and services with a view to attracting more revenue to both the government and terminal owners.
- The full implementation of the nation’s Cabotage Act 2003 should be initiated so as to facilitate the growth and development of the Nigerian Maritime industry.
- There is need for government to fully implement the international port state control policy to discourage the visit to the Nigerian ports by aged vessels with archaic handling facilities.
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