One of the main accelerators of the First Industrial Revolution were the improved means of transportation. The invention of the steam engine and of electrical power made developments in railroads and steamships possible. The Second Industrial Revolution was probably the Computer- and Internet Era. We believe that the Third Industrial Revolution will be the combination of both stages of Industrial Revolutions, i.c. transportation and communication combined. The signs are already there ??..

The Industrial Revolution may be defined as the application of power-driven machinery to manufacturing. It had its beginning in the eighteenth century where all of western Europe began to industrialize rapidly, and is still continuing in some places. The Second Industrial Revolution started after World-War II and did rapidly computerize the world with a focus point in the USA. The we see already the signs of an new Industrial Revolution. That a new Industrial Revolution will take place in coming years with it?s main battlefield all over Europe. In our opinion the major players in the next stage of the Industrial will the Revolution will be the Logistic Service Providers, especially the third and fourth Party Logistics (3- and 4PL). Why is that?

First of all, we have entered a Global Economy with a Global Market Place. A market place which has become more transparent due to increased means of communication like Internet. A market place which will operate based on free trade. The early logic that free trade could be advantageous for countries was based on Adam Smith?s 19th century concept of absolute advantages in production. The idea here is simple and intuitive. If our country can produce some set of goods at lower cost than a foreign country, and if the foreign country can produce some other set of goods at a lower cost than we can produce them, then clearly it would be best for us to trade our relatively cheaper goods for their relatively cheaper goods. Using the countries specific comparative advantages, both countries may gain from trade.

Secondly, if we produce goods in a foreign country, we finally have to move the goods to our country. In the past due to a lack of fast communication and transportation, the distance to the foreign countries were limited. Therefore the comparative advantages between countries close to each other became less interesting in comparison with new developing, but in distance further located, fast developing countries. We already see that when transportation of the outcome is not bounded by time constraints (textiles) or can be transferred at high speed (software, information) the process of off-shoring is very soon paying off. On the other hand, when long transportation times and transportation cost can be cut down, the sum of the comparative advantage will become positive.

Thirdly, the actual free trade is more often limited by all types of constraints like regulations, import barriers and other customs rules. These rules and restrictions are becoming more and more complex. Furthermore the modern Supply Chains requires fast responses and short information and communication loops.

In conclusion, free trade based on comparative advantages will give the cheap but fast developing countries new possibilities to further industrialize. The goods produced there have to transported to their final destination. The supply chain, measured in kilometers, is getting longer. In combination with increased complexity of trade barriers, and the difficulties in communication with different culture, the total management of the Supply Chain will is becoming more and more complex. The ultimate party who will be able to control this complexity will be a specialized third party focusing in logistics and information.

In the past decades the Logistics Service Provider Industry has become an industry of major importance. Although they most of time operate in the shade of their customers, their influence and power is gaining. At this moment the biggest Logistic Service Providers have their base in Europe. We can think of Exel, Kuehne and Nagel, but is container shipping we must think of the Danish Mearsk Line. Other big companies in final distribution are not only the American ones like FedEx and UPS, but also the European TNT and DHL. With coming changes in the European (postal) market all Global Logistic companies are looking for opportunities to expand. The conglomerates which will be established will dictate the rules of the Third Industrial Revolution.

The Glossary of Terms in Logistics & Shipping is the most comprehensive paper-based dictionary and therefore the standard for defining terms used in the area of Logistics and Shipping. Use this powerful tool to expand your professional vocabulary and ensure that everyone on your team is speaking the same language. www.theKnowledgeTransfer.com

paperback student version $ 19,99 hardcover executive version $ 29,99

| Permanent Link | Print This eLog |

(Visited over 19992 times)