Wednesday, January 8, 2014

International Freight Forwarding Group Advises the UN to Accept More Logistics Industry Input

Nobody Knows More About the Supply Chain and its Economic Impact than Shipping Agents says FIATA
Shipping News Feature

SWITZERLAND – WORLDWIDE – The latest press release from the International Federation of Freight Forwarders Associations (FIATA) stresses how important the logistics sector and an efficient supply chain is to growing the international economy, stressing that the United Nation’s post 2015 Sustainable Development Goals must include logistics connectivity. The concept which FIATA has it says is evidenced by, and largely based upon, the ‘Life Cycle’ or Product Cycle theory first proposed in 1966 by Raymond Vernon, the US economist who specialised in trade globalisation and the growth of multinational corporations and their effects on society.

Vernon’s theory broadly interprets something which is readily apparent to any freight forwarder worth their salt that, when a very successful new product is developed, it rapidly moves from sourcing both intellectual know how and raw materials close to its original site into regions which are best equipped to provide room for rapid development and manufacture, hence the rise of Asia in general, and China in particular, over the past few decades particularly, where goods such as personal computers are concerned.

FIATA interprets the life cycle theory as saying when the Logistics Index exceeds its point of equilibrium, 2127.5 (FIATA is one of the contributors to the Logistics Performance Index published by the World Bank), logistics has a benevolent industry on the whole local economy whereas dropping below this level hinders the economy. Given that supply chain and logistics processes are deeply embedded in value creation throughout different sectors and industries, FIATA says it is clear that the logistics industry is of equal strategic importance in achieving sustainability as it is in terms of economic development. Additionally, as the logistics industry is expected to continue growing, so will its energy consumption and GHG emissions, unless changes are made.

In this light, FIATA has urged the 30-Member States Open Working Group on Sustainable Development assembled by the United Nations to recognise the importance of international trade in boosting economic prosperity. In designing these Sustainable Development Goals (SDG’s), FIATA could not fail to notice the powerful contribution that logistics provides to development is, in its view, generally insufficiently visible or perceived.

Recently, FIATA published a position paper which argued the design of SDG’s needs to be action-oriented and conscious of the transport industry. Additionally, in order to ensure that SDG’s are coherent with, and integrated into, the UN development agenda beyond 2015, there needs to be more involvement by relevant stakeholders in the upcoming sustainable development sessions. FIATA insists that the effect of increasing this audience base and expanding those present beyond the scope of the usual attendees will result in more useful suggestions and proposals generated that will add great value in designing impactful SDG’s.

FIATA has issued a position paper which advises the UN Secretary General of its views in the matter of Sustainable Development Goal's which you can see here.