Chalmers2006 JPR

Transport, Logistics and Global Production Networks: A Geographical Perspective: 

Transport, Logistics and Global Production Networks: A Geographical Perspective Jean-Paul Rodrigue, Hofstra University, New York “There’s no business like flow business” Email: ecojpr@hofstra.edu Paper available at: http://people.hofstra.edu/faculty/Jean-paul_Rodrigue

Introduction: 

Introduction Geography and logistics Global Production Networks Macro-economics and global freight distribution Integrated transport systems Corridors and distribution clusters

Introduction: 

Introduction So, what about geography and logistics? The same problem seen from a different perspective: Geographers: marginal in a field dominated by engineers and economists. Engineering: the physical reality of freight distribution: Infrastructures (construction, maintenance, upgrade). Technologies (innovations, technical improvements). Organization (managing flows; scheduling, timing). Geography: the spatial reality of freight distribution: Locations (accessibility, gateways / hubs, comparative advantages). Networks (transport links; modes and terminals) Flows (relationships and complementarity).

Transportation and the Mobility of Passengers and Freight: 

Transportation and the Mobility of Passengers and Freight Intensity Distance Passengers Commuting Shopping Recreation Business Tourism Migration Waste disposal Local distribution Trade Energy & Raw Materials Commodity Chains Freight

Introduction: 

Introduction Supply chain trends Disintermediation: Higher level of competition for parts, finished goods and logistical services. Migration: More and more activities “climbing up the supply chain” to be relocated in low cost locations. Geographical process. Macro-economic impacts: Lower employment opportunities & potential high transportation costs. “Let them sweat and let us think”? Manufacturer Wholesaler Retailer Consumer Physical flow Information flow Wholesaler Retailer Consumer DC Manufacturer Suppliers DC Supply Chain

Fragmentation of the Production System and the Logistics Industry: 

Fragmentation of the Production System and the Logistics Industry Inputs Outputs Factory Region A Region A Region B Region C Conventional Emerging Distribution Logistics

APL Logistics Freight Distribution Center, Shenzhen, PRC, December 2005: 

APL Logistics Freight Distribution Center, Shenzhen, PRC, December 2005

Box Label at the APL Distribution Center: 

Box Label at the APL Distribution Center Kenneth Cole Productions (designer) Largest apparel store chain in the US Spring 2006 fashion

Costs of a Shoe Sold $100 in the United States and Made in China: 

Costs of a Shoe Sold $100 in the United States and Made in China Factory Shoe Company

Container Waiting to be Loaded, APL DC - Shenzhen: 

Container Waiting to be Loaded, APL DC - Shenzhen

Entry Gate, Port of Yantian, Shenzhen: 

Entry Gate, Port of Yantian, Shenzhen

Container Assembly Yard, Yantian Port: 

Container Assembly Yard, Yantian Port

Containership Loading Management System: 

Containership Loading Management System

Loading a Post-Panamax Containership: 

Loading a Post-Panamax Containership

TJ Maxx Main Distribution Centers: 

TJ Maxx Main Distribution Centers Evansville Charlotte Pittston Worcester Las Vegas LA / LB Oakland Seattle / Tacoma Landbridge (double-stack) Chicago

Corwith BNSF Intermodal Rail Yard, Chicago: 

Corwith BNSF Intermodal Rail Yard, Chicago

Global Production Networks: A Synopsis: 

Global Production Networks: A Synopsis Global Production Networks Right Product Right Quantity Right Price Right Location Right Time

Paradigms of Global Production Networks: 

Paradigms of Global Production Networks Region Rent / Value (Creation, Enhancement, Capture)

Paradigms of Global Production Networks: 

Paradigms of Global Production Networks Optimal market potential (upward move) New markets, improved products or more efficient and timely retail distribution. Growth of global retailing and marketing: Many products (e.g. technical goods and apparels) have an international reach and recognition. Optimal production costs (downward move) Lowest production cost possible in view of global differences in comparative advantages. Move of labor intensive components of the commodity chain (more technical complexity recently). Fragmentation of GPNs through a spatial division of production (FDI).

Geographical and Functional Integration: 

Geographical and Functional Integration Functional Integration Geographical Integration S M D D S M M S Origin / Destination Relationships 1 2 3 4 S M D Supply / Demand Relationships Information Flows Physical Flows Supplying Manufacturing Distribution S M D “Principle of Flow” “Principle of Location”

National Semiconductors, Supply Chain, 1993, 2001, 2005: 

National Semiconductors, Supply Chain, 1993, 2001, 2005 Wafer Fabrication Assembly & Testing Distribution Center South Portland (Maine) Salt Lake City (UT) Santa Clara (CA) Arlington (TX) Greenock (Scotland) Migdal Haemek (Israel) Cebu (Philippines) Bangkok (Thailand) Penang (Malaysia) Melaka (Malaysia) Toa Payoh (Singapore) Santa Clara Swindon (UK) Tokyo Hong Kong South Portland Regional Distribution Centers (1993) South Portland (Maine) Salt Lake City (UT) Santa Clara (CA) Arlington (TX) Greenock (Scotland) Cebu (Philippines) Bangkok (Thailand) Penang (Malaysia) Melaka (Malaysia) Toa Payoh (Singapore) Global Distribution Center (2001) Singapore (GDC) Singapore (GDC) South Portland (Maine) Arlington (TX) Greenock (Scotland) Supply Chain Rationalization (2005) Suzhou (China) Melaka (Malaysia) Toa Payoh (Singapore) Customers

Macro-Economics and Global Freight Distribution: 

Macro-Economics and Global Freight Distribution Serious imbalances Comparative advantages (global labor arbitrage). Financial schemes (perpetual motion machine). Separation between production and consumption. Divergence in the geography of passengers and freight. Containerized trade.

World’s 10 Largest Exporters and Importers, 2004: 

World’s 10 Largest Exporters and Importers, 2004

The Global Labor Cost Arbitrage: Hourly Cost of Wages and Benefits, 2004 ($US): 

The Global Labor Cost Arbitrage: Hourly Cost of Wages and Benefits, 2004 ($US)

The “Perpetual Motion” Machine: The Real Dynamics behind the World’s Most Significant Trade Relationship: 

The “Perpetual Motion” Machine: The Real Dynamics behind the World’s Most Significant Trade Relationship Goods Bonds (IOUs) Asset Inflation Debt Reserves Interest Rates Unemployment $ for goods $ for bonds United States China USD USD Borrowing Investment

Traffic at the 50 Largest Container Ports, 2003: 

Traffic at the 50 Largest Container Ports, 2003

Containerized Cargo Flows along Major Trade Routes, 2000-2004 (in million TEUs): 

Containerized Cargo Flows along Major Trade Routes, 2000-2004 (in million TEUs)

Integrated Transport Systems: 

Integrated Transport Systems Logistics and multimodal transport systems Factor of coordination. Value added function of integrated transport systems. Modal shifts and their complexities.

Integrated Transport Systems: From Fragmentation to Coordination: 

Integrated Transport Systems: From Fragmentation to Coordination

Value Per Ton of U.S. Freight Shipments by Transportation Mode, 2002: 

Value Per Ton of U.S. Freight Shipments by Transportation Mode, 2002

Principles of Modal Shift: 

Maturity Shift Inertia Principles of Modal Shift Modal Share (A/B) Time Comparative Advantages Real Modal Share Expected Modal Share Underperformance Over performance

Corridors and Distribution Clusters: 

Corridors and Distribution Clusters New logistical spatial structures The development of freight corridors and their gateways. Physical and locational requirement of modern distribution. Freight clusters and “freight villages”. Regional distribution strategies.

Freight Distribution Centers along a Corridor: 

Freight Distribution Centers along a Corridor Intermodal Corridor Spheres of Distribution (A) Metropolitan (B) Regional / Corridor Transport terminal Distribution / warehousing Agglomeration of distribution Freight Diversion Maritime Interface Emerging Situation Conventional Situation Transport Link 1 2 2 1 Sub-harborization 2 Suburban distribution center Maritime Interface

Characteristics of Large-scale Distribution Centers: 

Characteristics of Large-scale Distribution Centers

Freight Corridors & Freight Clusters: 

Freight Corridors & Freight Clusters Geographical consequences Migrating to more affordable locations in the periphery. Growth in tons-km. Competition between passengers (commuters) and freight traffic. Freight corridors Expands the sphere of distribution. Axis along which distribution centers can reliably service many locations along the corridor. Emergence of freight clusters Functionally unrelated distribution facilities. Often located in small intermediary locations. Freight Cluster

Functional Integration of Freight Clusters: 

Functional Integration of Freight Clusters DC Freight Cluster “Freight Village”

Port Inland Distribution Network and Freight Clusters: 

Port Inland Distribution Network and Freight Clusters

Potential Modal Split Changes Due to the PIDN: 

Potential Modal Split Changes Due to the PIDN

Expressrail Lifts, 1991-2005: 

Expressrail Lifts, 1991-2005

Conclusion: Towards a “$100 per barrel” Logistics?: 

Conclusion: Towards a “$100 per barrel” Logistics? GPN and Freight Distribution Containerization; a global freight distribution market. GPN; a global labor, raw materials, parts and retailing market. ITS: Integration of different geographical scales. Reduce congestion for all modes by exploiting their comparative advantages. “$100 per barrel” logistics may be upon us. Unique opportunity to build more efficient intermodal relationships between maritime, rail and truck transport systems. “In the 20th Century, it was said, ‘distance was conquered.’ In the 21st Century, distance shall have her revenge, and the world will become a much bigger place.”