What Is the Issue?
Sustaining long-term growth requires marine suppliers to define their pricing strategies in a holistic fashion. However, pricing is an under-managed activity in many companies. Especially when moving towards servitization, services or integrated solutions are frequently underpriced or promised at performance levels that cannot be delivered profitably.
Why Is It Important?
Pricing is one of the most important elements for all business and everything in the business works to justify the input value for a price and turn it into a profit. It therefore has a dramatic but frequently underappreciated effort on achieving profitability and keeping business thriving.
What Can Be Done?
The marine supplies industry needs radical change in pricing by thinking about customer’s needs and aligning the incentives between suppliers and customers for long-term relationship. Value-based pricing is the way forward. An intensive discussion has been made with regard to the key challenges of applying value-based pricing in the marine supplies industry. Understanding these challenges is crucial for a move towards value-based pricing and will shed light on how to tackle these challenges.
Purpose This study aims to explore how operational resilience can be achieved within supply ecosystems in the delicate yet harsh natural environments of the Arctic. Design/methodology/approach An in-depth, multiple qualitative case study of offshore supply operations in Arctic oil and gas field projects is conducted. Data from semi-structured interviews, personal observations and archival materials are analyzed through institutional work and logics approaches. Findings The findings suggest that achieving social-ecological resilience depends on the interaction between social and natural (irreversible) systems, which are shaped and influenced by various institutional dynamics. Different resilience solutions were detected. Research limitations/implications This study develops a comprehensive understanding of how social-ecological resilience emerges in supply ecosystems through institutional dynamics. The study's empirical basis is limited to offshore oil and gas projects in the Arctic. However, due to anticipated future growth of Arctic economic activities, other types of supply ecosystems may benefit from the study's results.Originality/value This research contributes with empirical knowledge about how social-ecological resilience is created through institutional interaction within supply ecosystems to prevent disruptions of both social and ecological ecosystems under the harsh natural conditions of the Arctic.
As a young researcher—admittedly a long time ago—I was struggling with capturing the connections of the many published articles on logistics management. Apparently, many articles dealt with the same topics, yet they were not the same. There seemed to be different viewpoints on what was a scientific contribution and what kinds of methods were allowed. Why did everyone not agree with these questions? Without an understanding of the different research traditions, it was difficult to compare results, validate them and create a meaningful discussion of the various contributions.
Within the Nordic research community, which consists of economists, engineers and management researchers, there were several answers to these questions. In this community, I learnt about systems from engineers. Then, it became clear that there are various philosophies of science that do not have the same understanding of what a theory is and what appropriate methods are. I was searching the philosophy of science literature for a systems perspective and the research implications of such a perspective. To my surprise, I did not find it here, but luckily, I came across a book about methodologies in business research where the systems approach was one of three approaches. I also learnt that, depending on the methodology, the term theory has a different meaning depending on the philosophy of science it originates from. That made a lot of sense to me. Understanding this better, I published my research on this topic in “Schools in Logistics Research” in 2004 (Gammelgaard, 2004). This rather old article is still my daily research guide.
This article analyses contractual governance practices within the value chains of large companies based in the USA and Europe between 2012 and 2017 with focus on human and labour rights. In line with the existing scholarship, we find that the use of contractual governance for safeguarding human and labour rights is best practice among large American and European businesses. The results show that value chain contractual governance should be studied in an interdisciplinary environment taking both legal and non-legal aspects into consideration. Moreover, we detect a general positive impact of the business and human rights regulatory wave of 2010–2011 on sustainable contractual governance practices.
As policy makers acknowledge the high degree of supply chain vulnerability and the impact of maritime emissions on coastal population health, there has been a consistent effort to strengthen maritime security and environmental regulations. In recent years, overdependence on deeper and wider multinational supply and production chains and lean-optimization has led to tightly integrated systems with little “slack” and high sensitivity to disruptions.
This study considers the impact of Emission Control Areas and establishes a link between environmental and network resilience performance for maritime supply chains using operational cost and SOx emissions cost metrics. The proposed methodological framework analyzes various abatement options, disruption intensities, fuel pricing instances and regulatory strategies. The methodology utilizes a minimum cost flow assignment and an arc velocity optimization model for vessel speed to establish the payoff for various network states. Additionally, an attacker defender game is set up to identify optimal regulatory strategies under various disruption scenarios. The results are complemented by a sensitivity analysis on SOx emissions pricing, to better equip policy makers to manage environmental and resilience legislation. The methodology and findings provide a comprehensive analytic approach to optimize maritime supply chain performance beyond minimisation of operational costs, to also minimize exposure to costly supply chain disruptions.
This chapter argues that state-owned Chinese integrated maritime logistics enterprises are about to change the power balance vis-à-vis the hitherto dominant, privately owned enterprises based in Europe. This shift, which has been actively supported as part of China’s ambitious Belt and Road Initiative, will directly affect the European Union’s common transport and competition policy. Within the larger Belt and Road Initiative, the Maritime Silk Road project can be seen as the umbrella concept for the comprehensive management of the entire supply chain between China and Europe. We discuss possible policy implications for both China and the European Union when it comes to managing the subtle balance between geopolitical considerations and efficient operations of trade and transport controlled by a few dominant actors. As part of our theoretical framework, we use two extensions of the classical obsolescing bargaining model: the one-tier bargaining model and a bargaining model of reciprocation. By combining the two models, we aspire to explain the changing nature of bargaining relations between, on the one hand, the Chinese government and its state-owned enterprises and, on the other, the private-owned European companies as a function of the goals, resources and constraints of the involved parties.
Exploring how transnational environmental governance and the operation of global value chains (GVCs) intersect is key in explaining the circumstances under which mandatory disclosure can improve the environmental footprint of business operations. We investigate how the governance dynamics of the tanker shipping value chain (a major emitter of greenhouse gases) limits the effectiveness of the European Union (EU) monitoring, reporting, and verification (MRV) regulation, which mandates the disclosure of greenhouse gas emissions for ships calling at EU ports. Although MRV seeks to help shipowners and ship managers save fuel and reduce emissions, it does not address the complexity of power relations along the tanker shipping value chain and currently cannot disentangle how different actors influence the design, operational, commercial, and ocean/weather factors that together determine fuel consumption. In particular, the EU MRV neglects to reflect on how oil majors exert their power and impose their commercial priorities on other actors, and thus co-determine fuel use levels. We conclude that, in its current form, the EU MRV is unlikely to lead to significant environmental upgrading in tanker shipping. More generally, we argue that regulators seeking to facilitate environmental upgrading need to expand their focus beyond the unwanted behaviors of producers of goods and providers of services to also address the incentive structures and demands placed on them by global buyers.
The interest in sustainability in the maritime industry has been on the rise. Attention has shifted from how to develop and comply with environmental regulation and labour standards to a more integrated view on sustainable maritime transport that aims at incorporating sustainability in maritime firm strategies. The liner shipping industry, which has been at the forefront, plays a crucial role in global supply chains, with its commitment to sustainable maritime container transport gaining recognition. In particular, procurement relationships stand out as an area where sustainability can exert the most significant impact. Ocean transport is among the most widely outsourced services globally both by shippers and by freight forwarders. Unlike bulk transport, container ocean transport is always outsourced, as shippers do not use their own vessels. Yet, the selection criteria that logistics firms use regarding sustainability when choosing ocean transport service providers and the role of sustainability in value creation among shippers/freight forwarders and ocean transport providers have been scarcely explored.
This article delves into value creation via quality improvement and sustainability practices in ocean freight transport. Employing a case study of an ocean carrier, alongside interviews and survey data, it explores how liner shipping companies can leverage high-quality and sustainable operations to enhance service for their clients and create logistics value. A novel aspect of this study is the application of sustainable supplier management concepts to maritime logistics, highlighting how shippers’ sustainability requirements in sourcing ocean freight services shape procurement relationships and how shipping companies can employ sustainable procurement strategies for value creation.