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Unit 9: Characteristics of Shipping Industries

Export Management Companies (EMC): EMCs act as agents for domestic firms in overseas Notes
markets. Using an EMC gives a producer immediate access to foreign market knowledge
and export know-how, regardless of its experience in foreign markets. An EMC is an
independent firm, which in effect acts as the exclusive export sales department for a
producer or industrial group. An EMC functions in foreign markets just as a sales
representative or exclusive wholesaler functions for a manufacturer in the domestic market.

Export Trading Companies: Export trading companies locate buyers in foreign markets
and manage most of the export arrangements for the product. This may include
documentation, inland and overseas transportation, and compliance with foreign
governmental regulations.
Efficient intermediaries enable a manufacturer to effectively move goods in three ways:
through heightened compliance, timelier clearance and movement, and more cost-effective
allocation of resources.

It is essential that the efficiency of transport intermediaries be achieved through universally
agreed-upon trade procedures and practices with the use of electronic techniques for information
transfer. Such practices will significantly improve trade efficiency.

9.11 Latest Trends in Logistics Operations

Logistics management’s primary focus is on optimizing the delivery of service to customers, by
managing complex tradeoffs between customer service, transportation, warehousing and
inventory. Some World Class companies have been able to reduce the costs of their logistics
operations to 50% of the levels of their competitors.

9.11.1 Trends in Logistics

Radio Frequency Identification (RFID)

The first use of Radio Frequency Identification (RFID) was documented in the 1940’s by the
British Royal Air Force to identify aircraft in World War II and was part of the refinement of
radar. During the 1960’s RFID was first considered as a tracking solution in the commercial
world. The first applications involving RFID were developed over the next twenty years. These
commercial applications were concerned with identifying an item inside a single location. The
latest attempt to commercialize the use of RFID started in 1998, when researchers at the
Massachusetts Institute of Technology (MIT) Auto-ID Center began to research new ways to
track and identify objects as they moved between physical locations. This research centered on
radio frequency technology and how information that is held on tags can be effectively scanned
and shared in real time.

Mechanics of RFID

The basic principle of RFID is identifying an object using a radio frequency transmission. The
technology can be used to identify, track, sort or detect a wide variety of objects. Communication
takes place between a reader or interrogator and a transponder or tag. Tags can either be active,
which means it is powered by battery, or passive, which is powered by the reader field. The
communication frequencies used depends to a large extent on the application, and range from
125KHz to 2.45 GHz.

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