Analysis of Freight Logistics and Challenges at Melbourne Port

This report provides an in-depth analysis of freight logistics management within the Port of Melbourne. It identifies key challenges such as handling large ships, high operational costs, and environmental sustainability concerns. The study examines the port's commodity import and export processes, highlighting logistical bottlenecks and supply chain disruptions. It explores effective strategies, including government interventions and automation, to improve physical distribution and address market failures. The report emphasizes the importance of a national port strategy to enhance freight logistics, offering recommendations for port expansion and operational improvements to reduce costs and increase efficiency. The report highlights the importance of technology and workforce in maximizing commodity movement and emphasizes the need for value-added activities such as cargo loading and discharging. The study concludes by underscoring the critical role of freight logistics in the economic environment and the need for strategic management to overcome the challenges faced by the Port of Melbourne.

Running head: DISTRIBUTION AND FREIGHT LOGISTIC
Distribution and Freight Logistic
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
This present report focuses on the management of the freight logistics in the context of
Melbourne Port. However, tackling of the big ships and high operation cost is the major barrier
to such logistics management. On the other hand, environmental sustainability issue is another
big challenge of such port. It has been received that government has taken initiatives to improve
the infrastructure of the port by investing more. Therefore, automation in the port will be an
effective freight strategy for this port to maximize the physical distribution of the commodities
and to reduce the logistic challenges. Therefore, by following the rules of national port strategy
will be effective to manage the freight logistic effectively.

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Table of Contents
1.0 Introduction................................................................................................................................4
1.1 Project Objectives..................................................................................................................4
1.2 Questions...............................................................................................................................5
2.0 Freight logistic and Identification of the challenges..................................................................5
2.1 Freight logistics of the Melbourne Port.................................................................................5
2.2 Key Challenges of the Freight Logistics in context of Melbourne........................................6
2.3 Commodity, import and export process of Port of Melbourne..............................................6
3.0 Methodology..............................................................................................................................7
3.1 Selection of the Port of Melbourne........................................................................................7
3.2 Collection of the data.............................................................................................................8
4.0 Result and Discussion................................................................................................................8
4.1 Identification of the various activities and the movement of the commodities in context of
Port of Melbourne........................................................................................................................8
4.2 Discussion of the value addition in context of commodity supply chain..............................9
4.3 Identification of the logistical bottlenecks and disruption in the supply chain management
...................................................................................................................................................10
4.4 Effective strategies and Government intervention in order to reduce the logistic disruption
...................................................................................................................................................11

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4.5 Failure of the port logistics and the government interventions in the context of Port of
Melbourne..................................................................................................................................12
4.6 Recommendations................................................................................................................13
4.7 Development of the freight strategy to improve the physical distribution and the market
failure in context of Melbourne Port.........................................................................................14
5.0 Conclusion...............................................................................................................................15
References......................................................................................................................................17

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1.0 Introduction
Growing level of the freight logistic and the distribution brings contemporary changes in
the economic environment at the local, regional and global level (Gupta 2017). However, the
changes are considered as the operational and structural level. Changes in the manufacturing
zone refer to the structural changes while changes in the transportation refer to the operational
changes. A wide set of activities involved in the logistic highlight on the distribution and the
transformation of the goods. Sourcing of the raw materials to the final market distribution of the
products is categorized under logistic management. However, freight logistic refers to the IATA
affiliated air forwarder and NVOCC operator that provide air and ocean services for the export
and import of the goods.
Freight logistic offers a contract logistics, value-added service and warehousing. In order
to improve the complex global supply chain, freight logistic provides integrated and
sophisticated logistics solutions (Ahmad et al. 2017). On the other hand, customers of the freight
logistics get maximum value through the utilization of the supply chain service. This current
study deals with the freight logistics management in the context of Port of Melbourne. However,
the major issue of handling the logistics is to tackle the big ships in this port and expansion of the
port volume. Hence, possible strategies will be discussed in this section to resolve this logistics
issue.
1.1 Project Objectives
 To identify the issues of the Port of Melbourne
 To develop freight strategy to resolve the issue of the port

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 To implement the strategy in order improve the logistics and distribution in context of
Port of Melbourne
1.2 Questions
 What are the major challenges of the Melbourne Port?
 What are the freight strategies to reduce the challenges?
 What are the actions are taken to implement the strategies?
2.0 Freight logistic and Identification of the challenges
2.1 Freight logistics of the Melbourne Port
Melbourne port is one of the busiest ports in Australia, which is situated in the Victoria in
Melbourne. This is the largest container port in Australia. However, this port includes a huge
export and the import process with different countries. This port is offers warehousing and
logistics to different companies of Australia and other foreign companies to export or import
their product via this port. However, multiple technologies are associated with this freight
logistic management. This port includes many major man-made docks as for example, Victoria
dock, Webb docks, Station Pier and many others. These are beneficial to improve the
management of the freight logistics in Australia (Portofmelbourne.com 2017).
In Australia, freight is considered as the critical component in maximum business
industries. Freight logistic needs a quality service for the transportation of the goods (Allen et al.
2017). Poor quality in the logistics management of the ports may cause risk or the business. In
the context of Melbourne Port, the main responsibilities of the freight people are to manage the
logistic requirements of the warehouse and the transportation of the goods. Cutting edge tracking
technology is the vital area of logistics management of Melbourne Port.

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2.2 Key Challenges of the Freight Logistics in context of Melbourne
Handling of the transport and the operation cost in the freight logistics management often
leads the port to face challenges (Verdonck 2017). In the context of Melbourne Port, it is a big
challenge for them to navigate the large ships in the Yarra river. On the other hand, the Victors
dock is too small to handle the big container ships. On the other hand, operation cost is too high
in this port to maintain the freight logistic. This is another major challenge of such Australian
Port. Hence, it is essential for this port to establish proper freight strategy to expand the port and
to develop the operation management system.
High transportation cost of the shipping due to the rising price of the fuel is a big barrier
Melbourne Port in Australia. However, due to the high cost of the fuel, it is often difficult for the
port to reduce the operation cost of freight logistic management (Crainic and Feillet 2017). Such
high transportation cost affects the quick delivery of the goods to the customers. This is the
major drawback of the freight logistics. In order to reduce such cost issue, modern freight
strategy should be implemented.
2.3 Commodity, import and export process of Port of Melbourne
Goods are exported and imported via Port of Melbourne in worldwide. However, U.S,
UK, and other countries are the main commodities of Melbourne Port. From U.S the goods are
imported while in U.K goods are exported via Melbourne Port. Beverage, cereal grains, dairy
products, and stock feed are mainly exported via Port of Melbourne. On the other hand,
furniture, fruits, vegetables, paper, machinery and electrical equipment are imported through this
port (Economicdevelopment.vic.gov.au 2017). However, such import and export are carried out
via ships in Melbourne Port.

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3.0 Methodology
3.1 Selection of the Port of Melbourne
Melbourne Port is selected for this study in order to understand the freight logistics
management and the issues regarding this logistic. However, in this port, it has been addressed
that the big ships are critical to handle (Sakai et al. 2017). Selection of this port is beneficial for
this study as the problems statement is identified clearly in this study. Port of Melbourne is the
largest Australian container port involves in export and import of the goods. For this reason, such
port is selected for this study. According to the statistical data maximum container, volumes are
concentrated in Melbourne.
Figure 1: Logistic of container port
(Source: Sakai et al. 2017)

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3.2 Collection of the data
The secondary process has been taken in this report to collect the information regarding
this topic. However, various journal articles are reviewed in order to collect authentic data
regarding the freight logistic management in the context of Melbourne Port. Secondary data
collection method is beneficial to get reliable and valid data from the article sources (Yip and
Haider 2017). However, data based on the challenges of the freight logistics over the Port of
Melbourne has been collected in this study. Data is available in different sources hence, it is
necessary to standardize the data from the sources. Inclusion and exclusion criteria have been
used in this methodology to detect the authentic journals for collecting the data.
4.0 Result and Discussion
4.1 Identification of the various activities and the movement of the commodities in context
of Port of Melbourne
Ports include various activities that require long-term, specialized and expensive
investment to carry out the port operation (Ertem et al. 2017). However, ports provide ships to
export and import of the products (Karakikes and Nathanail 2017) Value-added activities take
place in the port one of the most important is cargo loading and its discharging. Import of the
industrial services and goods is another operation of the Melbourne Port. On the other hand,
ports involved in combining and separating the cargoes. Therefore, contain up to date
information on the cargo movement and the inventory management is associated with the freight
logistic operation.
Cargo is loaded into the crates and crates are loaded on pallets this is the major operation
of Port of Melbourne. On the other hand, labeling, wrapping, weighing, and packaging are the

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crucial activities of Ports (Rai et al. 2017). Control of the entering mode of the vehicle and the
dangerous cargo are categorized under the port activities. Environmental control is another
activity of the Melbourne port operation. On the other hand, it is crucial to maintaining the safety
and security of the port areas while exporting and importing goods via ship. Melbourne Port acts
as the distribution and the industrial zone. It also acts as the base of the energy supply. Ports are
also considered as the city redevelopment and the urbanization centers.
Physical movement of the commodities is a big part of the freight logistics. However, in
port goods are taken to the cargo by the help of workforce as well as the technology (). In the
context of Port of Melbourne, both workforce and technology are associated with the physical
movement of the commodity in this port. Bulk handling software is used in the port precinct to
maximize the physical movements of the commodity. However, the bulk handling facilities are
present in the Melbourne Port and its continuing work to gain the cargo requirements. Loading,
retrieval and transfer of the goods become more efficient by using the bulk-handling software.
On the other hand, the workforce is also available to maximize the physical movement of the
commodities in Melbourne Port. Such use of technology and workforce are suitable for such port
to enhance their operation process in freight logistics management and to reduce risk form the
port.
4.2 Discussion of the value addition in context of commodity supply chain
Value-added activities of the different nodes of commodities include various steps. One
of the most important is the cargo loading and discharging of the cargo. In order to export and
import of the commodities, loading and discharging of the products are crucial (Klabbers et al.
2017). However, through the shipping process, import and export of the industrial service and
products are completed. In the Port of Melbourne in order to manage the huge range of products,

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combining and separating of the cargo is essential. However, maintain proper information of the
logistics is a big part of the commodity management in the port. It is crucial for the Melbourne
port to keep an up to date information regarding the movement of the cargo and inventory to
intact their business flow.
Stuffing and the de-stuffing of the containers in the port during the transportation are
another vital value-added activities of the commodity nodes (Mesa-Arango and Kumar 2017).
Loading of the goods or cargo is the important part of the port business. However, safety should
be maintained while loading the cargo in crates and the crates in the pallets. Apart from this
reduction of the operation, cost and providing quick service are the crucial part of the business
Port of Melbourne. However, the transportation cost is too high in this port that affects the
business flow of such port.
4.3 Identification of the logistical bottlenecks and disruption in the supply chain
management
Some external barriers are present in the logistics and supply chain management that
affects the business of the port. Such external barriers leave an impact on the internal constraints.
However, for the port it is difficult to control the external factors, as a result, they need to
provide their concern on the internal bottleneck to remove the issue (Rodrigue et al. 2017). The
bottleneck may be long-term or short-term. In the context of Melbourne, one of the major
bottlenecks of the logistics is the expansion of the port. However, it is difficult for the Port of
Melbourne to handle the big ships in their port. On the other hand, high transportation cost is
another major bottleneck of this port. Due to rising price of the fuel, high transportation cost
affects the business of the port. Apart from this issues related to the management environment
sustainability also affects the physical distribution. However, dumping of the mud in the river

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and poor maintenance of dredging is a big environmental sustainability issue that harms the
operation process of freight logistic and physical distribution.
Some factors are associated with the disruption of the supply chain management in the
Australian Ports. One of the major factors is poor visibility of the logistic chain (Karakikes and
Nathanail 2017). However, in the Melbourne Port, the work of the companies are associated with
one step up and down process, which affects the management of the supply chain. On the other
hand, huge competition and the high operation cost also lead this port towards the disruption.
Such barriers in the logistics management make the supply chain management slow. However,
the above bottlenecks are also affected the supply chain management in the Port of Melbourne
(Berg and Karlström 2017).
4.4 Effective strategies and Government intervention in order to reduce the logistic
disruption
Identification of the opportunities in order to improve the protection of the transport of
strategic freight is a beneficial approach for the port to improve their logistic (Taylor et al. 2016).
In the context of Port of Melbourne, strict protection of the transport system allows them to
minimize the logistics disruption. Therefore, it will be helpful for the Melbourne Port to work
with local council and the transport sectors to establish freight hubs in the urban sectors that
allow this port to identify the location to expand their port. This strategy will be beneficial to
mitigate the issues of handling big ships in the port. The B2C strategy will be helpful for the
ports to reduce the cost (Kilibarda et al. 2016). However, in the context of Melbourne Port high
operation cost is a big reason for the disruption of logistics. Hence, by using the B2C technique
this port will be able to deliver the product directly from business to the customers from the
import service.