How industrial shutdown affects transportation logistics? …

Paper industry case study

an article by Pekka Koskinen and Olli-Pekka Hilmola in World Review of Intermodal Transportation Research Volume 3 Number 4 (2011)

Abstract

Paper production has been one of the key drivers of Finnish welfare for decades. However, very recently this industry has experienced severe factory closure wave. Main purpose of this research is to describe the financial and resource closing down effects on the distribution logistics service providers, and at the same to develop a financial and a resource adaptation model for estimating the closing down effects. Two case studies show, that the financial consequences in terms of lost revenue for logistics service providers are significant, not to mention job loss in transportation logistics sector itself.

Hazel’s comment:
Labour market information is a complex issue as the short abstract above indicates [the full article provides a better idea of this complexity]. 
Paper is produced from wood pulp, wood pulp comes from trees, trees grow on land, people own land and expect it to provide a financial return. Less paper being made means that:

• there is no return to the landowner who employs fewer people to harvest the trees and requires less transport to take said trees for processing;
• the facility where the processing used to take place (often two different places - the sawing/pulping mill and the actual paper-making factory) requires less labour; and
• transport is not required to take the processed paper to wherever it is to be made into books, newspapers or other paper-based products.

Of course, all of these people without work are not spending money on non-essential items so retail and wholesale trade is affected, holidays are a luxury and so it goes on, and on, and on!

There is no easy answer – never has been in my overly-long experience of working with labour markets – but one thing I do understand is that local knowledge is essential.

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