The Transportation Geography of Logistics

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The Transportation Geography of Logistics

• Jean-Paul Rodrigue
• Dept. of Economics Geography
• Hofstra University
• Hempstead, New York, 11549 USA
• Jean-paul.Rodrigue_at_hofstra.edu

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Outline

• 1. Transportation and Logistics
• 2. The Spatial Structures of Logistics
• 3. Logistical Spatial Paradoxes

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Transportation and Logistics
1

• Distance
• Core concept to transport geography.
• Location and accessibility.
• Transportation technologies.
• Time
• Core management concept.
• Communication technologies.
• Managing distribution systems
• Information technologies.
• Gaining time by using efficiently distribution
  systems.
• Compromising space and time.
• Mainly support the New Economy.

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Logistical Transport Structures
1
Hub / Interface
Feeder
Corridor
Distribution
Warehousing
Financial / Insurance
Retail / Wholesale
5
Fluxes in a Fordist and Post-Fordist Production
System
1
Fordism
Post-Fordism
Raw materials and parts
Manufacturing
Sales and distribution
6
Fragmentation of the Industrial Production System
1
Region A
Region
Factory
Region B
Inputs
Outputs
Task
Logistics
Region C
7
International Configurations of Production
1
Country A
Country B
Centralized Production
Regional Production
Country C
Country D
Regional Specialization
Vertical Integration
8
Logistical Improvements, Manufacturing Sector,
1960-2000
9
Just-in-Time and its Logistic
1
Delivery units for finished goods
Delivery units for parts
Production Unit
Old warehouse before Just-in-Time
Warehouse
FACTORY
Assembly Line
Moving storage units
Assembly and warehousing
Moving storage units
?
?
?
10
of Products Shipped for Just-in-Time
Manufacturing
1
11
Effects of Logistics on a Transport Chain
1
Terminal
A
B
Large shipments Low frequency
Warehousing (accumulation) function
Logistics
A
B
Small shipments High Frequency
Transfer warehousing
12
Distance and Network Connectivity
2
Average Path Length
Minimum Network
Fully Connected Network
Geographic Barrier
Network Length
13
The Emergence of the Logistics Industry
2
Parts

• Distribution Dilemmas
• Delays and bottlenecks.
• Increasing distribution costs.
• High investment costs for expansion.
• Logistics Industry
• Separate service function.
• Specialization.
• Mergers, acquisitions and strategic alliances.
• Controlling the whole transportation chain.
• Consolidation of deliveries.
• Warehousing management.
• Key players UPS, FedEx, DHL, TNT.

Distribution
Manufacturer
Conventional
Products
A
B
C
Subcontracting
Distribution
Emerging
Logistics Industry
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Major Air Hubs, UPS, FedEx and DHL, 2001
2
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The Logistics of Mitsui Co.
2

• Needs
• Increase production efficiency.
• Reduce distribution costs.

• Services
• Offer and develop a logistical distribution
  system.

• Needs
• Reduce inventory costs.
• Offer better services to customers.

Mitsui
Production
Sales
Information fluxes
Distribution System
Freight fluxes
Orders
Orders

• Logistical center
• Supervisions of orders and the inventory.
• Consolidation of deliveries.

Producer
Customer
Producer
Customer
Producer
Customer
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National Semiconductors, Supply Chain, 1996
2
Prime Distribution Center
Wafer Fabrication
Assembly Testing
Portland Salt Lake City Midget Haemek Santa
Clara Arlington Greenock
Swindon Portland Santa Clara Tokyo Hong Kong
Cebu Malacca Penang Bangkok Toa Payoh
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National Semiconductors, Improved Supply Chain,
1998
2
Prime Distribution Center
Wafer Fabrication
Assembly Testing
Portland Salt Lake City Midget Haemek Santa
Clara Arlington Greenock
Singapore
Cebu Malacca Penang Bangkok Toa Payoh
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National Semiconductors, Logistical Impacts
2

• Before
• 5 regional distribution centers.
• 2 weeks delivery cycle.
• 700 logistics employees.
• Distribution costs 2.9 of sales.
• 42 freight forwarders contracting with 14
  airlines.

• After
• 1 global distribution center (Singapore).
• 4 days delivery cycle.
• 200 logistics employees.
• Distribution costs 1.2 of sales.
• 1 logistical supplier (FedEx).

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Logistics and E-commerce
2
Supply chain
Supply chain
E-Retailer
Retailer
Customers
Customers
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Logistical Friction
3

• Transportation costs
• Distance / time.
• Energy / Environmental impacts.
• Complexity of the supply chain
• Number of parts and tasks.
• Number of suppliers and clients.
• Extent of warehousing and of consolidation.
• Transactional environment
• Customs procedures and tariffs.
• Corporate management.
• Payments and foreign exchange.

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Logistics and instability
3
Collapse
Efficiency
Logistical Friction
Instability
Application of logistics
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Major Road Bottlenecks in the United States, 1998
3
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Hub-and-Spoke Network and the Environment
3
Hub
Feeder
Environmental Pressure
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Environmental Vicious Circle of Logistics
3
Application of logistics
Activities less Spatially constrained
More ton-km transported
Energy consumption Pollutant Emissions
Space consumption