Role of Transport Innovations in International Business - Essay Example

The Role Transport Innovations, Including Containerization, Play In The Emergence And Development Of International Business Table of Contents Table of Contents 2 Introduction 3 Role of Transportation Innovation in International Business 3 Role of Containerization in International Business 6 Conclusion 9 Reference List 11 Introduction Innovation enabled in transportation operations potentially contributes in the development of new business products and businesses processes. This parameter contributes in the generation of needed benefit to the different stakeholders of the business, located across international boundaries (Paul 2008). Similarly, the aspect of containerization is observed to potentially encourage the growth of international trading activities. Use of large sized containers help in the movement of merchandises along different modes of transport and along different regions in a faster and efficient fashion. This reflects on the growth of efficiency and productivity gained by international firms owing to the use of containers in the transport of merchandises along global regions (Levinson, 2010). Based on the above discussion, the paper intends to critically analyse the use of transportation and containerization practices in the enhancement of international trade. It would tend to analyse the impact of development of transportation infrastructures and containerization in international trade. The above evaluation would be conducted while also endeavouring to understand the factors prompting such growing significance of transport and containerization in international trade. Role of Transportation Innovation in International Business Innovation generated in the existing modes of transportation is observed to potentially impact the growth of global trade and business mechanisms. The development of oceanic transport across the Atlantic Ocean is observed to largely benefit the growth of American trade and economy. Similarly, the emergence of the jet plane is also observed to potentially contribute in the swifter movement of documents and cargo from one part of the globe to another. This also contributed in the development of trade and business activities on a global sphere. Innovation generated in the development of ocean transport systems is also observed to make the same cost effective in nature (Ballenger,2000). The cost effectiveness of transport activities conducted through oceanic transport is observed to sustain a reduced price of products traded on an international business platform. Development of faster and easier means of transport is taken to rightly contribute in the effective utilisation of resources available on a global scale to generate efficiency and productivity in trading activities along multinational borders. This feature in turn contributes in promoting the development and growth of future trading and economic activities along the international markets (Afuah 2009) The aspect of development of several trading and business destinations in different parts of the world is obserevd to largely influence the growth of transportation systems to help in development of needed connectivity. Development of transportation activities on an international scale is thus, taken as the dominating factor that contributed in the growth of global trade and economy. It is observed that, the enhancement of the economic systems in areas like Asia Pacific and China has fuelled the needs for development of the transportation systems. The need of conducting trade and business activities along such long distance areas required the development of the maritime transportation activities and also on the development of effective ports on an international basis (Dutta 2010). The growth and development of the economic position in China is observed to enhance the importing and exporting activities related to the gaining of raw materials for production and exports of manufactured products. This feature thus, enabled the growth of trading activities along the different ports relating to the Pearl River Delta and Guangdong regions. The above discussion reflects that the growth of trading activities along different global regions has helped in the enhancement of the transportation activities in the form of sea and ocean transport. Transportation activities are thus, observed to be a supporting and enabling factor rather than an effective means in the development of international trade. Development of the transportation systems is however observed to largely enable the emergence of and growth of globalization activities (Johnson & Turner 2010). Transportation activities conducted on an international scale facilitate the growth of global trade activities based along three main parameters that can be outlined as follows. Firstly the development of large scale transportation infrastructures related to the growth of terminals, ports, transportation vehicles and networks is taken to contribute in the growth of trading activities on an international scale. On the contrary, unavailability of the right kind of transportation infrastructure tends to affect the conducting of international trade. Secondly, the growth of different types of services related to the transportation systems like enhancement of distribution networks, the potential of the logistics activities, financial and insurance services and also the augmentation of marketing activities help in promoting the aspect of international trade. Thirdly, transportation activities conducted in an international framework are observed to be largely impacted by the alterations in the social, economic, political, cultural, financial and regulatory parameters of different regions. Changes in the exchange rates, tariffs and quota rates and also in the changes in consumer demands is observed to largely impact the transactional environment along the different regions. The above aspects thus, tend to govern the changes in the transportation systems for conducting of regional and international trading activities (Dunning, 2013). Transport modes relating to the aspect of maritime trading activities and also in the growth of air transport potentially help in the growth of international trade. Maritime shipping activities conducted along ports contribute to around 90 percent of the global trading activities. Developments in the global maritime transport system are largely triggered by the increase in number of different gateways that accrue to the growth of production and consumption activities. The need of growth of trading activities along such ports and gateways contribute in the enhancement of maritime activities. Similarly, the aspect of air transport is also observed to largely promote the growth of movement of cargo along different regions (Great Britain: Parliament: House of Commons: Transport Committee 2007). This contributes in the growth of global trade activities. Air transport mechanisms are observed to contribute to around 15 percent of the trading activities conducted on an international scale. Growth of international trade related to electronics items is observed to gain needed impetus owing to the development of air transport operations. Trading activities related to the regions falling under the NAFTA agreement are observed to be supported by the growth of road transport systems conducted based on use of trucks. Likewise, the use of road and rail transport mechanisms contributes in the reaching of cargo to the airports and ports (Rodrigue,2014). This reflects that the development of transportation mechanisms related to sea, air, road and rail in a total contribute in the enhancement of international trading activities. Role of Containerization in International Business The development of containers in the shipping transportation infrastructures is observed to largely promote the movement of cargo across international borders. Containerization is observed to gain needed significance in the conducting of trading operations on an international scale. The companies focusing on the development of container shipping activities focus on the scheduling of transportation activities along an international scale based on the use of such liners. Containerization is also observed to contribute in the development of specialised shipping vehicles that contribute in the movement of cargo across international boundaries (Jephson and Morgen, 2014). The development of carriers helps in the enhancement of the sizes of the different maritime vehicles with also the growth of strategic business alliances on a global scale. The above features contribute in enhancing the significance of the use of shipping corporations in the development of operations conducted along a global scale (Lun, Lai and Cheng, 2010). The aspect of containerization is observed to help in revolutionising the existing transportation activities conducted along the international platform. Growth of development of shipping carriers and containers contributes in lowering the cost of movement of commodities from one region to another and thus, promotes the event of international trade (Ham 2012). Further, the aspect of containerization also contributes in the movement of cargo across international boundaries in a faster fashion and also requires lesser involvement of manpower. Owing to the above aspects, an increase in the number of container shipping companies and vessels contributes in the enhancement of international trade. The growth of use of container shipping vehicles is taken to enhance the level of efficiency and productivity of the international trading activities conducted over ocean routes (Hill and Jain 2011). In the current era, the development of container shipping vehicles is observed to gain needed significance owing to the parameters of cost effectiveness and also in the efficiency of transportation of products in a faster and easier fashion along international borders. Growth of containerization along the periods ranging from 1970 to 1980 is observed to increase the level of international trading activities by around four times (Varma n.d.). The growth of containerization is observed to largely contribute in the reduction of capital investment to be generated along the different ports and in also enhancing the mode of distribution of commodities. Containerization has also gained use, relating to the transportation of merchandises to different forms of transport like rails, trucks, freight and air in a faster and efficient manner. Efficiency is guaranteed in terms of reduction in cost of manpower and faster means of transport (Clark, 2006). The size of the containers used for transportation of products across international borders tends to vary along two sizes like 20 and 40 foot. Though the use of the 20 foot container reflects prevalence in the earlier stages of international transportation of commodities, in recent times the use of the 40 foot container gains needed significance in terms of helping in handling, loading and unloading activities. Enhanced reliability on the development and use of containers in international trading activities is observed to significantly promote the growth of global supply chain and logistics activities (Sudalaimuthu and Anthony Raj, 2009). International trade relating to different types of commodities pertaining to the food sector and also other types of materials like iron castings and rods is observed to largely depend on the use of containers. Trading activities between different countries like the United States and China is observed to largely depend on the enhanced use of containers. Here use of containers contributed in the transportation of merchandises along long distances on sea routes (Rodrigue n.d.). The above discussion reflects the growing significance of use containers in the realm of international trading activities. The speed or rate at which the use of container systems are adopted by the terminals and ports relating to developed regions like the United Kingdom is reflected along the following figure. (Bernhofen, El-Sahli and Kneller, 2011) Business analysts reflected that the growth of containerization has largely contributed in the enhancement of world trade along different regions of the world. The development of container firms is observed to potentially contribute in the growth of trade activities in a bilateral fashion (Bernhofen, El-Sahli and Kneller, 2011). Conclusion Transportation activities conducted along different types of mediums related to air, rail, freight and road acts as effective support systems enabling the growth of international trading activities. Growth in the modes of freight and air transport is observed to potentially contribute in the movement of merchandises across international borders in a faster and cost effective fashion. Countries falling under the NAFTA agreement are observed to depend on the use of road transport to help in developing connectivity with other international regions. Development of transportation infrastructures like ports and terminals along with effective innovation generated in the generation of different types of transport like jet planes is observed to largely contribute in the increase of global trading activities. Likewise, the development and growth of use of different containers of 20 and 40 foot sizes is observed to effectively enable in the movement of heavy loaded merchandises across international borders. Use of containers is observed to help in reducing the cost of transport operations along an international scale. The incorporation of large sized containers is taken to significantly help in the handling, loading and unloading activities in a safe and reliable fashion. Moreover, the use of containers also contributes in the easier and faster movement of merchandises along different international regions thereby, reflecting on its growing need in the international arena. Growth of containerization activities is also observed to potentially promote the development of other concepts related to global supply chain management and global logistics. Reference List Afuah, A., 2009. Strategic Innovation: New Game Strategies for Competitive Advantage. Routledge: New York. Ballenger, N., 2000. Technological Changes in the Transportation Sector Effects on U.S Food and Agricultural Trade. DIANE Publishing: United Kingdom. Bernhofen, D.M., El-Sahli, Z., and Kneller, R., 2011. Estimating the effects of containerization on world trade. [online] Available at: [Accessed 27th October 2014]. Clark, J., 2006. Dictionary of International Business Terms. Dreamtech Press: United States. Dunning, J.H., 2013, The Multinational Enterprise (RLE International Business). Routledge: New York. Dutta, B., 2010. International Business Management (Text and Cases). Excel Books India: New Delhi. Great Britain: Parliament: House of Commons: Transport Committee, 2007. The draft Local Transport Bill and the Transport Innovation Fund: ninth report of session 2006-07, Vol. 2: Oral and written evidence. The Stationery Office: United Kingdom. Ham, H.V., 2012. Development of Containerization. IOS Press: United Kingdom. Hill, C.W.L., and Jain, A.K., 2011. International Business: Competing in the Global Marketplace. Tata McGraw-Hill Education: United Kingdom. Jephson, C., and Morgen, H., 2014. Creating Global Opportunities: Maersk Line in Containerisation 1973-2013. Cambridge University Press: United Kingdom. Johnson, D., and Turner, C., 2010, International Business: Themes and Issues in the Modern Global Economy, Routledge, New York. Levinson, M., 2010, The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, Princeton University Press, United Kingdom. Lun, YH., Lai, KH., and Cheng, TCE., 2010, Shipping and Logistics Management, Springer Science & Business Media, Germany. Paul, J., 2008, International Business, PHI Learning Pvt. Ltd., New Delhi. Rodrigue, J-P 2014, Transportation, Globalization and International Trade, Available at: [Accessed 27th October 2014]. Rodrigue, J-P n.d., Trade and Transportation: Containerization,[online] Available at: [Accessed 27th October 2014]. Sudalaimuthu, S., and Anthony Raj, S., 2009. Logistics Management for International Business: Text and Cases. PHI Learning Pvt. Ltd. : United Kingdom. Varma, S., n.d. International Business. Pearson Education India: New Delhi. Read More