Alternative Tourism And Ecotourism

Alternative Tourism And Ecotourism The critical climatic conditions and the disappearance of endangered species in the worlds ecosystems is the concern of all, and affect our everyday lives, businesses and industries. The tourism industry is not spared, having adversely and greatly contributed to the destruction of micro-ecosystems and biodiversities over decades through Mass Tourism. Nonetheless, governments, tourism-planners and international organisations are now investing into alternative forms of tourism in order to counter the still ongoing damages of Mass Tourism. The goal is to consume differently and to sensitise tourists about sustainable practices, not only during their holidays, but to implement it in their very thinking and everyday life. This paper combines the material of four different papers, based on Alternative Tourism and Ecotourism respectively. They describe the principles of each and the features required for its successful fulfillment. Introduction Lifestyles and consumer behaviour have been known to evolve and adapt to changes in global needs and the availability of resources in the world all throughout history. As such, it is not surprising that the increase in awareness, concerning the precarious environmental, social and economic situation of todays world, is leading to new trends and behaviour in the way people live and consume. Likewise, the tourism industry has been undergoing a similar transformation since at least the past two decades with the advent of Alternative Tourism. This form of tourism has been introduced since the early nineties and has began to grow in magnitude as from the 1980s. It is considered as a sustainable alternative to counter the adverse effects and low-level authentic experiences provided by the so-called Mass Tourism. The latter has boomed dramatically with the technological advance of transport facilities (air, sea and land) and the open-sky agreements between countries worldwide, amongst various other factors. Inspite of the huge, fast economic gains of Mass Tourism, it has been found to be severely disastrous on the environment and the socio-cultural aspects of host countries and communities, respectively. In contrast, Alternative Tourism has responded in retaliation into the clean or sustainable form of tourism, which takes into account, the impacts of tourism on nature, society (for both the host community and travelers), culture and economy. Here, locals are also directly involved in the making of the tourism product and are often the financial beneficiaries. The umbrella of Alternative tourism covers a vast range of tourist activities such as rural, adventure, cultural and historical, heritage, sports (such as hiking, mountaineering, caving, diving, and so on), ecotourism and any other forms of tourism that is not Mass Tourism, as long as it does not impact adversely on the host country. Ecotourism has emerged since the 1960s and is popular amongst nature and culture lovers. It fits perfectly the concept of Alternative tourism and is considered as the fastest-growing form of sustainable tourism, according to the UNWTO (2003). Hetzer (1965) described the characteristics of ecotourism as: minimizing environmental impacts, respecting host cultures, maximizing benefits to local people and maximizing tourist satisfaction. Literature Review Alternative Tourism is a process which promotes a just form of travel between members of different communities. It seeks to achieve mutual understanding, solidarity and equality amongst participants. (Holden, 1984, p.15: cited in Smith Eadington, 1992. P.18) McIntyre (1993, p.11) defines Sustainable Tourism as a model form of economic development that is designed to improve the quality of life of the host community, and provide a high quality of experience for the visitor. Moreover, to maintain the quality of the environment on which both the host community and the visitor depend. He also states that it seeks decision-making among all segments of the society, including local populations, so that tourism and other resource users can coexist. Firstly, Alternative Tourism does not damage the environment, is ecologically sound, and avoids the negative impacts of many large-scale tourism developments undertaken in areas which have not previously been developed. Secondly, it is thought to consist of smaller scale developments, or attractions for tourists which are set in villages or communities and organised by them. These are seen as having fewer negative effects social or cultural and a better chance of being acceptable to the local people than mass tourism. Thirdly, there is the question of who benefits. Certain kinds of tourism are called alternative because they are not exploitative of the local people, because the benefits flow to local residents, or in general to poorer communities. Also known as Soft Tourism, Sustainable tourism denotes a mutual understanding between the local population and their guests, which does not endanger the cultural identity of the host region and which endeavours to take care of the environment as best as possible. Soft tourists give priority to using infrastructures destined for the local population, use the same accommodation and transport facilities as the natives and do not accept substantial tourist facilities harmful to the environment (Smith Eadington, 1992). Further, as they want to get more information before and during their holiday, it may actively try to encourage a respect for the cultural realities encountered by the tourists through education and organized encounters (de Kadt, 1990). Alternative Tourism, also brings about constraints. For a variety of reasons, alternative tourism in developing countries has been much more limited and less successful than Mass Tourism. The alternative projects in the Third World are frequently handicapped by the cost of international travel in the first place and poor local connections within destinations in the second. Language barrier, differences in culture and standards of living between hosts and guests tend to hinder communication and understanding (Smith Eadington, 1992). Some of the implications of alternative tourism need to be examined more closely. These include the reduction in numbers of tourists, the change in type of tourist, the education of all parties involved, and the impacts resulting from a new set of activities. Reducing numbers of tourists has two aspects, reducing numbers in areas where numbers are currently too great, and limiting potential visitors to levels compatible with capacity parameters. It is extremely difficult to reduce numbers in a free market situation without prejudicing the viability of the industry. Revenues can be expected to decline (unless massive market replacement occurs at the same time), which can result in loss of employment and reduction in local standard of living (Butler, 1990). Also, soft tourists may not only represent a not large enough market, but may also not be a repeat market. While mass tourists are for the most part sedentary and spend their money in a limited number of locations, much of the expenditure of the alternative tourists may be pre-spent on packages or spent in small amounts in a wide variety of locations (Butler, 1990). Furthermore, educating people is an alternative that is hard for Butler (1990) to reject, but it is a mammoth and long term project. He states that most people would probably accept the wisdom of the concept of sustainable development and developing suitable and low-impacting forms of tourism, but short-term reality dictates that the window of opportunity is often limited and time-scales of most entrepreneurs are short. Those of a tourist spending a week on a beach are even shorter. It is not realistic, even if naively optimistic, to expect a tourist wishing to lie on a beach in the Caribbean to be too interested in the impact he or she may have on the social fabric of the island visited, especially when they may not wish to associate with local residents or move out of the hotel complex. However, Alternative Tourism help cleaning physical surroundings, protecting environments and often the distinctive cultural patterns of local communities. It can be a significant factor in conserving the environment. Moreover, it also helps to conserve an areas cultural heritage. Archaeological and historical places, distinctive architectural styles, local dance, music, drama, ceremonies, arts and crafts, dress, customs and value systems all comprise the culture of an area (McIntyre, 1993). He emphasises on the fact that Alternative Tourism raises awareness concerning the impacts of tourism on the natural, cultural, and human environments. It ensures a fair distribution of benefits and costs. It incorporates planning and zoning which ensure tourism development appropriate to the carrying capacity of the ecosystem. It monitors, assesses and manages the impacts of tourism, develops reliable methods of environmental accountability, and counters any negative effect. Furthermore, nature tourism encourages productive use of lands which are marginal for agriculture, enabling large tracts to remain covered in natural vegetation. Cultural tourism enhances local community esteem and provides the opportunity for greater understanding and communication among peoples of diverse backgrounds. Environmentally sustainable tourism demonstrates the importance of natural and cultural resources to a communitys economic and social well being and can help to preserve them. As opposed to Mass Tourism development, which is predominated by multinationals and tends to be unplanned and uncontrolled, taking up the most scenic regions and altering them beyond repair, Alternative Tourism requires extensive initial planning with greater reliance on local labour, and local sources of capital in line with locally promulgated regulations. Tourism assumes a complementary industrial role emphasizing the importance to continuing traditional lifestyle patterns. Existing resources (e.g., buildings) are used and renovated when necessary rather than relying on new construction. Features of Alternative Tourism Also known as Sustainable Tourism, Alternative Tourism adheres to the triple bottom-line of sustainability, that is to develop and progress without depleting environmental, socio-cultural and economic resources for future generations. In other words, these resources must be used, preserved and managed in such a way as to move forward, while keeping in mind the Native American proverb: we do not inherit the world from our ancestors, we are borrowing it from our children. Tourism can be environmentally feasible, as opposed to the pre-conceived idea exhibited by Mass Tourism during the past decades. It is not all about deforestation, land and water pollution or chains of gigantic resorts all over the place. Sea, Sun and Sand Tourism, a major form of Mass Tourism, has caused its own death by saturating the most popular and splendid coastal spots with hotel resorts, hence permanently disfiguring these locations physically, depleting and polluting its resources and attributes respectively. This has led to an increase in awareness amongst host communities and potential tourists alike, and hence emerged forms of tourism that aimed at enjoying a destination while minimizing alterations to nature and monitoring the impacts of visits at the same time. First of all, environmentally sustainable tourism businesses would take into account the characteristics of a location at the Planning Stage of a project. This is usually part of the EIA (Environmental Impact Assessment). The fauna and flora would be meticulously studied and limited changes (or none at all) would be permitted, so that micro-ecosystems would be able to survive and cohabit along with the implementation of the project. This way, endangered species (both plants and animals) would still retain their habitat and the environment would be altered in the smallest possible way. Furthermore, the project should not be physically alienating to its surroundings, that is, it should be able to blend in and not be an eyesore. For instance, a state of the art hotel in a remote, under-developed village would be totally inappropriate, even if it respected environmental norms. In the same breath, operating sustainable tourism commerce implies minimizing damages done to the environment through energy and waste management. As far as possible, sustainable forms of energy must be used, and energy-consumption must remain reasonable. Waste water management is a must, and recycling must be practised as far as possible, for ethical disposal of both solid and liquid waste. However, not all businesses are able to afford the above measures, especially, since the number of green-tourists is usually quite limited. This is where the concept of Carrying Capacity comes into effect. The physical carrying capacity of a destination or site, is the maximum number of visitors that it can contain at a particular time. In order to avoid permanent environmental changes and abuse, the number of visitors and the duration of their stay must be under strict control. This is also known as the limits of acceptable change and does not require much financial investment to be accomplished. In addition, Mass Tourism brought along westernisation, the alienation of ethnic and local cultures and commodification throughout the years. Their consequences can be seen today, especially amongst the younger generations in destinations that have suffered Mass Tourism for several generations. The youth have often copied the beliefs and lifestyles so as to resemble those of foreigners, deeming western culture to be superior, and thus resulting in the loss of local cultural heritage and long-standing ancestral traditions. This is due to the fact that cultural exchange between tourists and locals has not been equitable, even though it is usually not in the intention of visitors to have such an impact on local beliefs and traditions. In order to counter this, tourists need to be educated on how to interact, behave and limit the exposure of their cultural identity, with respect to that of the host community. Accordingly, commodification, which is the act of viewing local cultural, historical or religious identity merely as a tourism product, is yet another drawback of mass tourism. Places of worship or of sacred religious importance were being assaulted with camera flashes by hordes of tourists, who were not even aware of the appropriate dress codes and behaviour to be adopted on such sites. Thanks to sustainable tourism and the responsibility of tour operators towards the education of tourists, rules and guidelines have since then been forwarded so as to minimize the impact of loss of cultural identity. Indeed, it is now the tourist that adapts to the culture of locals during visits to sites of religious and cultural importance, thus resulting in a more authentic cultural exchange and experience. Thirdly, the most immediate aspect of Alternative Tourism in a destination is the economic gains to the local community. Despite the fact that large-scale tourism generates astronomical amounts to tourism-related businesses and organisations, the majority of locals do not benefit from these profits first-handedly. In some cases, such as in franchise businesses, most of the profit goes back to the source-organisation, with local employees being paid with low salaries and slim chance of career advancement. On a different level, the concept sustainability implies that one should make reasonable use of its available resources, in such a way as to progress, while benefiting to its environment and stakeholders. This largely goes against conventional tourism, whereby most of the resources required to make the tourism product happen comes from elsewhere, whether in terms of raw materials, expertise and partially labour. It is therefore natural that economic rewards go abroad as well. On the other side, Alternative Tourism encourages entrepreneurship in all forms, from hospitality, entertainment and craftsmanship of locals. They are often offered trainings, participate in empowerment programmes and sometimes even subsided by the state to put their projects into motion. Nevertheless, financial gains, which is not comparable to that of Mass Tourism goes directly to those local entrepreneurs and the money is usually spent within the country, hence improving income distribution, increasing standard of living and indirectly contributing to the national GDP. The Emergence of Ecotourism Being one of the most popular segments of Alternative Tourism, Ecotourism is reaching a peak and gaining educational, sustainable and economic importance within the tourism industry, being one of its fastest growing sectors (UNWTO, 2003), grossing over $335 billion a year. In todays world, it plays a crucial role in the conservation of nature, in educating tourists about sustainable environmental practices and in benefiting local people. Ecotourism products consist of attractions, tours and accommodation, where each component is marketed and sold separately, but may be combined into packages as well. It is a form of tourism that targets a wide range of tourists, who are willing to experience a get-away holiday from the stress and monotony of everyday life. Its influence lies in the fact that unlike other forms of tourism, it is diverse enough to attract tourists of different age groups, budgets, interests and occupations. However, ecotourism poses a threat to its own existence and operations. Since the tourism product is settled within the type of ecosystem or environment that it promotes, there needs to be careful planning and management. Else, its activities may harm, deplete or alter the fragile and pristine biodiversities that it relies on for sustenance. Limits of acceptable change regarding social, cultural and environmental must be closely monitored in order to minimize impacts. Ecotourism projects are usually of small-scale and low-impacting; waste output is minimized and recycled as far as possible, so as to cause the minimum intrusion and alterations to the surrounding ecosystem. Biodegradable products are favoured over chemical detergents or products toxic or unhealthy for the environment. Clean and renewable energy forms, such as solar or photovoltaic panels, are popular energy sources in the most sophisticated eco-lodges as well as the use of fossil fuels are avoided. Further, infrastructures are designed to be harmonious with the environment in which it is situated. The actors involved in creating the ecotourism product include businesses, scientists, government agencies, non-governmental organisations and local or native communities. The active participation of guests or tourists, is essential for the product to be complete. It is interesting how this tends to foster collaboration and better understanding between the different contributors to ecotourism, hence encouraging local entrepreneurship and strengthening local identity. Emphasis must be stressed upon the preparation and education of ecotourists, before, during and after their holiday trip. This implies that guides and tour operators play a major role in consolidating the ecotourism product. They are responsible to instruct tourists about acceptable behaviour during their stay or trips, sensitize them to be environmentally-friendly and raise their awareness towards the need for sustainability, not only during their holidays, but also in their thinking and everyday lives. Furthermore, their duties include instructing guests about the modes and limits of communication with respect to surrounding local or native culture. Ecotourism has the goal of improving and contributing to the well-being of these people, without altering their beliefs, culture or traditions, but promoting them while empowering their identity and pride. Additionally, ecotourism projects often help natives and local communities to rehabilitate endangered species or animals and plants alike, reinstate their natural habitat and raise-awareness about them. Ecotourists are educated about the importance and relevance of such projects, if not encouraged to actively participate themselves. The profit accumulated through ecotourism is usually re-injected into ecological projects and also to upheave the standard of living of locals and their everyday situation. In the case of culturally sensible communities, such as natives, this is expended differently, in terms of medication and the protection, as well as conservation of their lands and culture. Conclusion and Discussion Alternative Tourism and Ecotourism have both been operating in a moderately successful manner in Mauritius during the past decade and is continuously gaining in popularity, both among locals and tourists alike. Indigenous plants and species are being rehabilitated and their habitat sustained, although there have been some negligence on the part of some stakeholders. The Blue Bay Marine park had been flourishing in the beginning years, but the project is now undergoing a decline due to illegal fishing and the carrying capacity of human interactions exceeded through visits, snorkelling and deep-sea diving. It is however not too late to reverse the situation and additional efforts need to be input from all stakeholders. On the bright side, small surrounding islands such as lIle Plate and lIle aux Aigrettes have known successful rehabilitation of their micro-biodiversities and human intervention is being closely monitored by environmental organisations. Fortunately, Mauritius has the resources and potential to further promote Ecotourism and other forms of Alternative Tourism, such as hiking, outdoor tourism and mountaineering. Additional resources must be made available to qualified people and organisations to implement and diversify the Alternative Tourism projects possible on the island. Emphasis should be put on consistency and regular evaluation, to cater for weaknesses. The objectives of sustainability however do not limit themselves to tourism and the whole Mauritian community must be sensitised for better environmental-friendly attitudes, which requires advocacy, education and a change of behaviour, which is a long-term and never-ending process, to protect, save and respect what remains of our nature and resources.

Capital Budgeting Case Essay

In the two capital budgeting cases corporations (A and B) have different revenues values and expenses as well as variable depreciation expenses, tax rates and discount rates. The members of our team had to compute both corporate cases NVP, IRR, PI, Payback Period, DPP, and project a 5-year income statement and cash flow in a Microsoft Excel spreadsheet. The future cash flows of the project and discounts them into present value amounts using a discount rate that represents the project’s cost of capital and its risk is what’s needs to forecast the investment. Next, all of the asset’s future positive cash flows are reduced into one current value number. Subtracting this number from the original cash expense required for the investment provides the net present value (NPV) of the investment. Using the internal rate of return (IRR) and net present value (NPV) measurements to evaluate projects often results in the same findings. Relationship between Net Present Value and IRR Net present value of an investment is equal to the â€Å"present value of its annual free cash flow less the investments initial outlay† (Kewon 2013 pg 310). Whenever the NPV is greater or equal to zero we should accept the project, whenever the NPV is negative the project should be rejected. Internal rate of return answers the question of what â€Å"rate of return will the project earn† (Kewon 2013 pg 316). IRR is the â€Å"discount rate that equates the present value of the project’s free cash flows with the project’s initial cash outlay† (Kewon 2013 pg 316). The discount rate is the rate that is used within capital budgeting that allows for the net present value of cash flow within a project to equal zero. The higher the IRR the  more desirable the project is versus the lower the IRR the less desirable the project is. In consequence, the NPV method indirectly assumes that cash flows over the life of the project can be invested at the project’s required rate of return, whereas the use of the IRR method suggests that these cash flows could be invested at the IRR. The better statement is the one made by the NPV that the cash flows can be reinvested at the required rate of return because they can either be returned in the form of dividends to shareholders, who demand the required rate of return on their investments, or invested in a new investment project. (Keown, 2013). The NPV shows that Company B is worth more than Company A. After expenses, taxes and depreciation the company has a value that is better to acquire Corporation B because of a higher IRR of 16.94% and NPV of $40,252.02 than Corporation A whom has an IRR of 13.05% and a NPV of $20,979.41. Net Present Value Corporation A $20,979.41 Corporation B $40,252.02 However, with the NPV that Corporation B have it will be give the corporation, over 5 years, a current value cash return of about $40K above the 11% required rate of return. In other words, this plan will not only meet the 11% required rate, but it will give the company an additional $40. Internal Rate of Return When a project is reviewed with the hurdle rate in viewpoint, then the greater the IRR is above the hurdle rate, the greater the NVP, and on the contrary, the more the IRR is below the hurdle rate , the lower the NVP. When using the IRR, the decision rules are as follows: If IRR > hurdle rate, accept the project If IRR< hurdle rate, reject the project. In order for a project to be accepted, the IRR must be greater than or equal to the hurdle rate. If the company is deciding between projects, then the project with the highest IRR is the project to be accepted. As we look at the IRR for both corporations we see that Corporation B is higher than Corporation A and this is why we as a team choose Corporation B. Corporation A 13.05% Corporation B 16.94% Profitability Index, Payback Period and Discount Payback Period The Profitability Index (PI) is just a number and anything 1.0 or higher is confirmation for the project that is being evaluated. The PI is a type of ratio that gives the higher NVP per dollar on an investment. It is better used when you have more than one project comparing. When making decision making measures for the PI methods the best project should be the one that pays off the initial cost outlay. The PB is the less method used in doing a capital budgeting because it does not consider the time value of the money earned in the project. Looking at Corporation B is shows that it will take 3.31 years to payback the cash inflow to the original cash outflow or the cost of the project. So when making a decision on which corporation to use in PB it is best to take the project that pays off the initial cost outlay in less time. If we look at the PI and PB for Corporation A and Corporation B we will see that Corporation B is much better project than Corporation A. Profitability Index Payback Period Corporation A 1.08 Corporation B 1.16 Corporation A 3.64 yrs. Corporation B 3.31 yrs. The Discount Payback Period (DPP) does consider the time value of money. It is computed somewhat like the PB method and the only difference is that DPP method uses the discounted cash flow. As we look at the DPP for Corporation A and Corporation B we see that again Corporation B is less time to pay back the cash flow: Corporation A 4.6 yrs. References Keown, A. J., Martin, J. D., & Petty, J. W. (2013). Foundations of Finance, 8th Edition. [VitalSource Bookshelf version]. Retrieved from http://online.vitalsource.com/books/9781269882194/id/ch10lev2sec2 Keown, A. J., Martin, J. D., & Petty, J. W. (2013). Foundations of Finance, 8th Edition. [VitalSource Bookshelf version]. Retrieved from http://online.vitalsource.com/books/9781269882194/id/ch10lev2sec5

America’s Global War on Terrorism Essay

At 8:46 am, on September 11, 2001, the world would take witness to an event that would change it forever. Five hijackers, with the support of a terrorist group named Al Qaeda, crashed a passenger jet into World Trade Center Tower 1, and seventeen minutes later a second passenger jet was crashed into World Trade Center Tower 2. Now, everyone can remember exactly where they were when they received the news of the attack, but, what most American’s didn’t realize is that these events would lead to the majority of the world into war. This was the first time that the United States would participate in a war against and idea, terrorism, and not a declaration of war against a country itself. In every war that the United States had been involved in, they had been faced against an enemy in the form of a country. Whether it was Spain, Mexico, Britain, France, Germany, Japan, or even against itself, the United States always had a target. These â€Å"targets† usually had a uniform; they were also in support of a dictator, king, or even a tyrant. But with the War on Terror, the United States and its allied NATO Nations were not taking actions against a country; they were taking actions against an ideology that had affected the entire planet. The route of this ideology can be traced back to one man, Osama bin Laden. Osama bin Laden, with the help of the United States, forced an invading Soviet Russia out of the country of Afghanistan in the 1980’s. Then, with the support of a radical Islamic state, and the formation of a radical group calling themself al-Qaeda, he declared war on the United States in 1996 (Lansford, Watson & Covarrubias, 2009). Bin Laden was quoted saying, â€Å"If the instigation for jihad against the Jews and the Americans†¦is considered a crime, then let history be a witness that I am a criminal (Lansford, Watson & Covarrubias, 2009).† With this foundation of hatred towards Western influence in the modern world, Osama bin Laden and his radical group al-Qaeda instigated a War against the world. The group al-Qaeda has taken responsibility of many terrorist attacks against the United States and its allied countries. From the World Trade Center attacks of 2001, to the Spain subway bombings of 2004, al-Qaeda has been at the center of these terrorist attacks. Unfortunately, unlike most wars declared against a country, al-Qaeda has roots in many countries. They’ve been linked to attacks in: Africa, Europe, North America; are believed to have ties to other terrorist cells like the Taliban, and the Revolutionary Armed Forced of Colombia; and are known to have cells based in Afghanistan, Iran, and Pakistan (Lansford, Watson & Covarrubias, 2009). Former President George Bush described al-Qaeda as â€Å"a fringe form of Islamic extremism that has been rejected by Muslim scholars and the vast majority of Muslim clerics; a fringe movement that perverts the peaceful teachings of Islam (Holloway, 2008).† This declared War on Terror was against terrorist groups, like al-Qaeda , but many did believe that the Former President had a hidden agenda. With the attacks of September 11th, a new foreign policy known as, â€Å"Bush Doctrine,† was implemented by the Bush administration. The â€Å"Bush Doctrine,† which the Bush administration rarely ever called its new foreign policy was based around four ideas: to make no distinction between terrorist and the countries harboring them, take the fight to enemies overseas before they can attack the United States, confront threats before they become threats, and promote democracy instead of terrorist ideology (Holloway, 2008). At the beginning of the war, the American people being full of patriotism and wanting revenge for the 9/11 attacks were in 100% agreement with this policy, but as time passed and the years that this â€Å"war† has gone on, more and more are in less support and just want the United States military to be brought home. Towards the end of President Bush’s second term, he began to be under constant attack due to the war in Iraq and Afghanistan. He was accused of invading Iraq under false pretenses of: weapons of mass destruction, and a direct influence of 9/11 by Saddam Hussein’s regime (Holloway, 2008), a plateau that our current President, Barack Obama, used to his advantage during his initial campaign. Yet, even though Former President Bush was attacked and scrutinized about his policies, he stood by his initial belief that his â€Å"Global War on Terror† was against an ideology, and not a certain country. Whether or not the current 10-year war was actually waged against Osama Bin Laden, Saddam Hussein, Muammar al-Gaddafi, or any other tyrant is truly unknown, and if the September 9/11 attacks were hoaxed and just a coercion for the American people to be tricked into war, who knows. What can be known is this; the War on Terror is the first time that the United States has declared war on an idea, a way of life, and not against a country of its own, and because of this, the true length of this war has the ability to last forever. Holloway, D. (2008). 9/11 and the war on terror [electronic resource] / david holloway . Edinburg University Press. Lansford, T., Watson, R., & Covarrubias, J. (2009).America’s war on terror [electronic resource] / by tom lansford, robert p. watson and jack covarrubias. (2nd ed.). Burlington, VT: Ashgate.

The Change In Port Hinterland Relations Business Essay - Free Essay Example

Sample details Pages: 6 Words: 1824 Downloads: 8 Date added: 2017/06/26 Category Business Essay Type Analytical essay Did you like this example? Since the introduction of containerization system in the mid 50s and the impact of globalization to the increase of international trade, port has developed significantly as the main access and gateway to the trade activities in the world. One of the economic functions of seaports are to give benefit to trade activities through providing enhancement to consumers and producers surpluses by offering flexible and responsive, and at the same time cost efficient logistics networks to the distribution of goods. Nowadays, the market environment where ports and shipping lines operate is changing radically. Don’t waste time! Our writers will create an original "The Change In Port Hinterland Relations Business Essay" essay for you Create order Port holds the key role on the foreland and inland logistics and supply chain distribution which determines the total logistics cost of transporting goods. The developments in supply chains and logistics models urge port industries to constantly evolve with these changes and forced to revise their function in the logistics process to maintain their level of services to meet the recent market demand expectations. Port needs to apply appropriate development framework within their expansion strategy to connecting it with nearby hinterlands area and closing the gap between gateway and hinterlands. Port regionalization (Notteboom and Rodrigue, 2005) offers solution to these problems by extending the freight corridors to hinterland regions which located beyond the port perimeter and integrates port with the other logistics provider thus can give benefit to the supply chain network. Factors Influence Port Regionalization The Change in Port-Hinterland Relations Port serves as the main gateway to facilitate those goods or cargo transfer activity which is including loading, discharging and stacking. A seaport or port (Hayuth, 1985 cited in Rodrigue and Notteboom, 2010) is a transit area through which goods and people move from and to the sea. As such, port are places of contact between land and maritime spaces, nodes where ocean and inland transport lines meet and intertwine, intermodal places of convergence. Port represent valuable resources which attract many companies to get involve in its to support and facilitate the flows of goods. In fact, the geographical connection between ports is seen as a great potential for direct and indirect revenues and benefits to the general society environment surround them because port are part of a larger system consist of foreland, port itself and hinterland which generally represent its function on seaborne leg and inland leg activities. While the definition of hinterland is explaine as the area of which the greater part of the trade passes through the port (Barke, 1986; Blumenhagen, 1981; Sargent, 1938; Weigend, 1958 cited in Rodrigue and Notteboom, 2010). Hinterland, as part of the port system is defined by a group of locations connected to the port through related goods flows and usually the connections are involving various modes of transportation such as road, rail and barge. Langen (2007) distinguish hinterland regions by captive and contestable hinterlands. In contestable hinterlands most ports will have a share of the market as a result of no single port have a clear cost advantage over competing ports in some hinterlands regions. In the other hand, the regions which offer competitive advantage to a port because of lower generalized transport costs to these regions is the captive hinterlands of this port. Hence, the vast majority of cargoes to and from these regions are handled by the port. As the maritime business evolve and the growth of container traffic reached a level in several large port facilities there are a need for more efficient form of hinterland transportation to be organized. This gave birth to the process of port integration with the hinterland where the development of port is now concept of structured integration operational, by which the development of coordinated multimodal corridors has made maritime operator to connect their links with rail and road transport operators to gain wider chance into markets that affect to the optimization of supply chains system. Hence, the incorporation of inland freight distribution centers and terminals act as active nodes in shaping load center development (Rodrigue and Notteboom, 2011). The connecting corridors between ports and hinterlands will affect to the smoothness flow of goods and influence the cost of logistics and supply chain of goods distribution in general, and made hinterland one of the most important factors to the port development. The Evolution of Port in Supply Chain Systems Another driver which affecting the role of port is the development of global logistics and supply chain systems. These supply chains link is largely scattered production and sourcing sites to more geographically concentrated consumption regions. On this basis, shippers and customers have concern on the performance of the supply chain in terms of price, the quality of service and reliability. The focus on the chain as a whole is reflected by the efforts of the supply chain players to consolidate, vertically integrate or otherwise enter into long term contracts, to not only push the costs down but also increase the level of coordination and synchronization (OECD, 2008). Logistics in the other hand is the process of planning, implementing and controlling the flow of storage of raw materials, inventory, finished goods, services and related information from the point of origin to the point of consumption (Coyle et al. cited in Panayides and Song, 2008). Therefore ports function in a log istics system in general would be receiving and delivering goods and information from and to both sea and land, while within supply chain function, ports would contribute in a wider role where other process and activities beyond its perimeter could influence its primary goals in adding value to the supply chain process. Seaports have been long acknowledged as the key constituents of many supply chains. Theys, Ryoo and Notteboom (2008) examine that port has actively stimulated logistics polarization in port areas by the accession of smooth custom formalities and advance information system. Port as the terminal of ocean transportation is the assemble point of large cargoes in transport links, which made port holds the most critical node of various mode of transport. The stringent competition between logistics provider and the demand for better and cheaper logistics services have develop port from the pure transportation and distribution center into modern integrated logistics cente r (Wang, 2011). The modern ports used to offer a mixture of the traditional function of seaports with the latest demand in maritime market by acting not only as the place of transshipment of the goods with storage facility but also as a place of circulation processing enhanced by sophisticated warehouse management with the use of advance information processing by electronic data interchange application (EDI). The EDI helps to control the flow of goods through coordination and rational planning and creating a more effective logistics system. The evolution of port role in supply chain system forced many shipping companies to engage an alliance and integrated their business to offer extended port gate service by take control inland transport, inland terminals and depots which resulted in large port clients who possess strong bargaining power to terminal operations and inland transport operations. Port Regionalization and Benefit to Logistics and Supply Chain Port regionalization model extent the previous theory of anyport model which unfortunately failed to show the recent condition of port development which is first, the model does not explain the role of seaport terminal as transshipment hub and second, it does not include the importance of nearby hinterlands regions as driving factors toward ports developments (Notteboom and Rodrigue, 2005). A port development model of regionalization offers efficiency is derived with higher levels of integration with inland freight distribution systems. There are two models on the port regionalization scheme, first is hinterland-based regionalization and second is the foreland based regionalization In the foreland based regionalization, port extent it reach by making integration with off-shore hubs islands location or any locations without local hinterlands (Rodrigue and Notteboom, 2010). The reason behind such type of development is the rise of the ship size. Off shore hubs hold the advantage of g reater depth since it is build in the sea territory thus can handle bigger ship size which has become phenomena because its economy of scale. Off shore hubs can also become the most possible way to improve port capacity with limited land territory for expansion. This foreland based model even further can trigger the possibility of the creation of logistics zones within the precincts of port area that can give value added to the port role on logistics chain rather than just to loading and discharging cargo. The second model is hinterland-based regionalization where there are joint and coordinated developments of certain multimodal logistics platform with load centers in the hinterland that trigger the formation of regional load center network (Rodrigue and Notteboom, 2011). The ultimate characteristics of this second model are the integration of seaports with deep inland waterway ports through barges and seaport with inland terminals through rail freight. However, this integration need additional structures like the viability of dedicated rail for train freight that lies along from seaport to the inland terminal and the possession of distribution centers are often necessary. The driver and direction of intermodal corridor development enables a more nuanced understanding of the process of port regionalization. The increasing level of integration on land distribution has lead to the removal of intermediate steps in transport chain. In port regionalization, land transport cost reduction is a main goal because it is improve the efficiency of inland distribution within supply chain terms by promoting logistics integration and lowering the distribution costs. Globally, inland access costs account for 18% of the total logistics costs, and could be reduced by one third with appropriate regionalization strategies (Notteboom and Rodrigue, 2005). A success in achieving cost reductions from effective management of inland container logistics can provide an important cost savings advantage and adding extra value to the customers. Notteboom and Rodrigue, (2005) explain that the development of port into regionalization is a market driven process as the result of the increasing focus on the attractive logistics integration, Jacobs and Notteboom (2011) added that the window of opportunity as a result of competition between firms in which specialized locations compete for similar investment opportunities can lead to a certain path of regional development. However, the regionalization phase demands good port governance structures in order to overcome the challenges posed by changing port hinterland relationships and the demand on port efficient logistics services. Governments can attempt to direct regionalisation strategies through policies and funding mechanisms to meet objectives of modal shift or economic development (Monios and Wilmsmeier, 2012). Therefore, port authorities are expected to play its role in order to promote the regionalization proce ss in the term of observing current port challenges which mostly related to congestion problem, increase of cost, and the growing traffic in the port. The government can set a framework which recognize the rights and contribution of port stakeholders and perform joint strategic relationship in the form of establishing direct and indirect networking with nodes and market players such as the creation of logistics zones, the construction of dedicated freight rail infrastructures and inland ports, and the extension of customs authorities to the inland terminals or dry ports. Conclusion