Source: adapted from Robinson, R. (2002) "Ports as Elements in Value-Driven Chain Systems: The New Paradigm", Maritime Policy and Management, Vol. 29, No. 3, pp. 241-255.
Functional Integration of Supply Chains
The development of intermodal transportation, including the deregulation of the transport industry, is conductive to a functional integration among supply chains. The benefits of this integration can be assessed in a number of ways, particularly in terms of overall transport cost and time reductions as well as a better reliability of the supply chain.
The above figure provides a synthetic representation of different stages of functional integration along a supply chain involving maritime and inland distribution. In an initial form the level of integration is low, implying that several steps are undertaken by different actors and that for each transaction there are associated costs and delays. As deregulation takes place, the merger or acquisition of actors improve efficiencies and the further setting of economies of scale. At some point, a 'megacarrier' can emerge. Such an actor either owns directly whole segments of the transport chain or has strategic alliances with partners able to provide specific transport or supply chain services, such as 3PLs.