CHAPTER ONE

INTRODUCTION

The focal point of distribution logistics is the shipment of goods from the manufacturer to the consumer. Distribution logistics comprises all activities related to the provision of finished products and merchandise to a customer. The products can be delivered directly from the production process or from the trader’s stock located close to the production site or, possibly, via additional regional distribution warehouses. Like procurement logistics, distribution logistics is a market-linked logistics system. It links a company’s production logistics with the customer’s procurement logistics. In distribution logistics, customer orientation plays a special role because of the close link to the customer. Workers in a distribution centre frequently have more contact with the customer than sales representatives do. The tremendous significance of service thinking in distribution logistics arises from this customer orientation. The aim is to constantly search for innovative ways that offer the customer improved logistics solutions. In the process, special requirements are being made as the traditional marketing principle of “produce in a market-focused manner” is being replaced by the future oriented marketing principle of “sell first, produce later.” Furthermore, service is increasingly being provided to the customer in a multi-faceted way based on the principle of “just for you.” Both trends require a great amount of service speed and flexibility. If the delivery service is considered to be an instrument of marketing strategy, interdependencies with other instruments must be considered. This therefore means that the road infrastructure has to be excellent linking all nodes in a distribution network.

1.1 Background of the Study

Transportation is an important part of human activity. It forms the basis of all socioeconomic interactions. In many developing countries, lack of transport facilities often hinders economic development. A good transport system is essential to support economic growth and development. Bad roads, inadequate fleets of vehicles, inadequate trains, overcrowded airplanes and congested ports are common features of developing world. Physical problems such as untrained transport managers and planners, capital restructuring and bureaucracies, ineffective traffic regulations exist. Generally, transportation is the actual physical movement of people and goods from one place to another (Ahukannah et al, 2003).

Recently, great emphasis in the logistics area is placed on the smooth distribution of goods, dynamic and flexible ability to react to today’s competitive market environment, and fine-tuning tasks regarding customer satisfaction. Often the success of a logistics company is based on a good company image defined by customer perception (Skowronek, 2003, Krawczyk, 2000, Ławicki, 2005, Wojciechowski, 2011, Chaberek & Karwacka, 2009, Romanowska & Trocki, 2004). The focal point of distribution logistics is the shipment of goods from the manufacturer to the consumer. Distribution logistics comprises all activities related to the provision of finished products and merchandise to a customer. The products can be delivered directly from the production process or from the trader’s stock located close to the production site or, possibly, via additional regional distribution warehouses. Like procurement logistics, distribution logistics is a market-linked logistics system. It links a company’s production logistics with the customer’s procurement logistics.

In distribution logistics, customer orientation plays a special role because of the close link to the customer. Workers in a distribution center frequently have more contact with the customer than sales representatives do. The tremendous significance of service thinking in distribution logistics arises from this customer orientation. The aim is to constantly search for innovative ways that offer the customer improved logistics solutions. In the process, special requirements are being made as the traditional marketing principle of “produce in a market-focused manner” is being replaced by the future oriented marketing principle of “sell first, produce later.” Furthermore, service is increasingly being provided to the customer in a multi-faceted way based on the principle of “just for you.” Both trends require a great amount of service speed and flexibility.

If the delivery service is considered to be an instrument of marketing strategy, interdependencies with other instruments must be considered. This therefore means that the road infrastructure has to be excellent linking all nodes in a distribution network. In the case of the Mezam division of the North West Region, the impact of road infrastructure will be looked at on the logistics distribution of fast consumer moving goods.

Roads play a very crucial role to the development of every sector in the economy. Where roads are adequately developed, people, things and most importantly; goods tend to move quickly and are delivered in the shortest time possible. This therefore confirms the most popular definition of logistics which describes logistics as consisting of the seven R’s: that is having the right product, in the right quantity and the right condition, at the right place, at the right time, for the right customer, at the right price. But in a situation where the construction and maintenance of roads is neglected by the state, economic activities in the light of the distribution of goods cultivated will not reach the market in good condition. There will be a loss in both quantity and quality; there by meaning that a considerable percentage is lost as what is delivered in the market is not what was originally produced. As mentioned earlier, this research focuses on the impact of road infrastructure on the logistics distribution of fast consumer moving goods in the Mezam division of the North West Region of Cameroon. Statistics indicated that, out of a total of 11,589 kilometres of road network in the North West Region, only 277 kilometres are tarred.

It was recorded that the Bamenda Sub division is very backward in road communication. In fact, it is its most pressing problem. Many people remain locked behind mountains, their economic urges stymied at the outset for lack of an outlet to markets. They are deprived of the civilising influences and advantages which roads bring in their wake, so many of them, the most valuable of them all, the youth, leave home for the excitement of the south, a permanent loss to the economic productivity of this area. The Bamenda area is one of the richest agricultural areas in West Africa and its climate is suitable for the cultivation of certain sub-tropical crops. The population of Bamenda sub division is estimated at above 300,000, physical fitness is of a very high standard but the area lacks a good road network to link its produce to the surrounding towns in the region and even to other wider markets in Yaounde, Douala or beyond.

In the North West region of Cameroon, traffic flow remains a daily huddle especially in the activity-population concentrated sections along whose roads lead to other towns and areas of the Region like Bafut and Wum leading to Menchum Division, then Bambui, Bambili, Babanki, Mbingo, Njinikom, Fundong in Boyo Division to the North East. This implies that traffic flow towards these areas suffers from car traffic jam pressure to transport goods and persons (Fogwe, 2020).

In the city of Bamenda, much attention in managing traffic traffic congestion and road sidewalks has often been given to the commercial avenue street (Central Business District, (CBD))with less regard to neighbourhood streets which are recently impaired by curb parking. It has been observed that traffic congestion has become a crisis in the Bamenda metropolis which has emerged as bourgeoning trails of economic, social, cultural and intellectual undertakings. This results in too many vehicles, bad roads, vehicle breakdown and on-street parking affecting all age cohorts of urban users. According to Yemmafouo (2019), Stakeholders (municipal councils and transporters) assumed that the detraffic congestion of the urban centres by removing travel agencies and other bus stations at city entrances will reduce the incidence of traffic traffic congestion and free up commercial centres. From the background of the study, such transportation issues will be appropriately addressed with the support of academic research and the influence of policy makers. Within the Bamenda Urban space, most of the bitumised roads in the 80s are now in a dilapidated state. The roads have not been redeveloped in the past four decades (Bamenda City Council Report). Potholes have become an endemic problem at T-Junction, Ngeng Junction, City Chemist Roundabout and neighbourhoods such as Metta Quarters, Ntarinkon, Ntamulung covering 80% of the urban road network. The main roads within the Bamenda Urban space are very narrow to ensure fluidity for all road users. These roads are not developed as multiple lanes, consequently, the degree of traffic congestion is high and has caused many accidents and delays in the demand and supply of economic activities especially during rush hours. One- way streets tend to provide less direct access to destinations. This therefore hinders circulation, leading to their inaccessibly.

The role crude oil plays today in the global economy cannot be underestimated. In the early days, finding oil during a drill was considered less important since the intended treasures were normally water or salt. It was only in 1857 that the first commercial oil well was drilled in Romania (Painter, 1986). Two years later, following the Romanian invention, was the creation of the US petroleum industry. The early demands for oil were for kerosene and oil lamps until 1901 when the first commercial well capable of mass production was drilled in south eastern Texas. According to Painter (1986) the invention of the internal combustion engine mainly influenced the importance of oil. Hethaway (2009) noted that the importance of oil has risen to the extent that a sudden situation of a world without oil may halt economic transactions on a more than local basis and lead to the collapse of the world economy. Crude oil is one of the few production inputs that can positively and negatively affect economic growth (Aarón and Sherzod,2009). Oil price volatility dampens growth through different channels, from an increase in production cost to inflation expectations.

In recent times, crude oil prices are not just rising, but the volatility is also worsening; fluctuations are more pronounced than they were in the 1990s, creating unpredictable consequences. However, according to Aarón and Sherzod (2009) the Organization of Petroleum Exporting Countries (OPEC‘s)‘s production capacity in the 2000‘s was not enough to satisfy the world demand. As a result, the price of oil skyrocketed from $11 a barrel in 1999 to all time high in history of $147 a barrel in August 2008. Thus, Hamilton and Herrera(2004) assert that inexpensive oil is crucial for the world‘s demand for energy but its availability is scarce, therefore volatility in supply will have substantial economic impact. According to the EIA (Energy Information Administration) (2006) Global economic performance re- mains highly correlated with oil prices. Overall, an oil-price increase leads to a transfer of wealth from importing to exporting countries through a shift in the terms of trade. The magnitude of the direct effect of a given price increase depends on the share of the cost of oil in national income, the degree of dependence on imported oil and the ability of end-users to reduce their consumption and switch away from oil (EIA, 2006). The oil-gross domestic product (GDP) relationship became a popular research topic in the 1980s. For most developing countries, oil accounts for a large proportion of GDP expenditures in energy production. According to the EIA (2006) oil accounted for 40% of the global energy needed in the year 2000. Significant increases in energy prices will lead to a considerable rise in production and transportation cost for many industries and hence drives wages and inflation upwards, which at the same time will dampen economic growth (O’Neill et al., 2008). Increases and decreases in oil prices have different effects on economic activities. The IMF (2008) estimates indicate that highly-indebted oil-intensive and fragile sub-Saharan African countries would suffer the most from higher oil prices. Based on these estimates, IEA (International Energy Agency) (2004) explains that they would lose more than 3% of their GDP following a $5 increase in the price of crude oil. The impact of higher oil prices on economic growth in OPEC countries would depend on a variety of factors, particularly how the windfall revenues are spent. In the long term, however, OPEC oil revenues and GDP are likely to be lower, as higher prices would not compensate fully for lower production. Crude oil price shocks also have important distributional impacts within each country. This is because of the effects of petroleum products prices on employment and on food and transport prices.

Cameroon began oil exploitation in 1977, and in 1980 the state of Cameroon founded the National Hydrocarbons Corporation (SNH), which was tasked with managing its intereSande Topline Services in the oil sector. Cameroonian authorities have also negotiated advantageous oil contracts. Indeed, the state in Cameroon controls 65% of oil production (Cosse, 2006). Following this discovery of oil, the country experienced significant economic growth, with an annual average of 9.4% during the crude oil boom between 1977 and 1986. This growth rate is the highest ever recorded in the country: In comparison, growth over the previous decade (1967–1976) averaged 3.1% annually (World Bank, 2008).

However, this period of prosperity came to an abrupt halt at the end of the 1980s. The period of bust coincided with a drop in oil prices and the beginning of a decline in Cameroon‘s crude oil production. As a consequence, the country experienced an economic crisis. The average growth of 2.3% in the crisis period of 1987–1996 remains the lowest Growth, 2015, 2(2): 30-40 recorded in the country during these decades since independence. Since the end of the 1990s, the country has regained positive growth, estimated at 4% during the period of 1997–2006 (World Bank, 2008).

1.2 Problem Statement

Traffic demand within the city of Bamenda appears to be one of the urban problems in the study area. This is clearly demonstrated by the rapid development of the city and the increase in the number of car owners. The nature of roads within the city of Bamenda, illegal parking, inappropriate use of road sidewalks and poor traffic management on major urban road networks present the progressively worsening traffic condition of the city. The urban population of the city of Bamenda has increased from 9000 inhabitants in 1950 to about 1,279,904 inhabitants in 2020 (projection, 2020) which is projected to increase to about 1,488,759 inhabitants by 2035 (projection, 2035). The Socio-demographic population explosion seem to have led to increase in the number of dependent people and changed the density in settlement spreading to new areas across the municipalities where road infrastructural development has not been planned. This appears to increase the concentration of the urban population on the limited roads. The Road infrastructural development within the city has not been sustainable in order to sustain the economic activities or transportation demands of the growing population. These roads are deplorable in such a way that they have been reduced to patches of tarred surfaces. . It is for this reason and the fact that the researcher seeks to investigate the challenges faced on distribution by road Bamenda, North West region.

1.3 Objectives of the Study

1.3.1 Main objectives

To examine the challenges faced in distribution of goods by road in Bamenda Cameroon case study SANDE TOPLINE SERVICES Bamenda

1.3.2 Specific objectives

• To examine the effect of traffic congestion on the distribution of goods in Bamenda
• To evaluate the effect of fuel price on the distribution of goods in Bamenda.
• To investigate the effect of poor road condition on the distribution of goods in Bamenda.

1.4 Research questions

1.4.1 Main research question

• What are the effects of challenges faced on distribution by road in Bamenda?

1.4.2 Specific Research Questions

• What is the effect of traffic congestion on the distribution of goods in Bamenda?
• To what extend does fuel price affect the distribution of goods in Bamenda?
• What is the effect of poor road condition on the distribution of goods in Bamenda?

1.5 Research Hypothesis

H₀₁: traffic congestion has no effect on the distribution of goods in Bamenda.

H_02: fuel price has no effect on the distribution of goods in Bamenda.

H_03: poor road condition has no effect on the distribution of goods in the Bamenda