THE GEOGRAPHY OF
TRANSPORT
SYSTEMS Chapter 5 – International
THIRD EDITION
Trade and Freight Distribution
CONCEPTS
Copyright © 1998-2015, Jean-Paul Rodrigue, Dept. of Global Studies & Geography,
Hofstra University, Hempstead, NY, 11549 USA.
Jean-Paul.Rodrigue@hofstra.edu
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redistribution permitted.
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Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
THE GEOGRAPHY OF
TRANSPORT
SYSTEMS
Transborder Transportation
THIRD EDITION
Concept 1
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
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Geostrategy of International Transportation
Perspective
Issues
Conquest
Acquire and conquer oceans, territories and resources.
Maritime and railroad technology.
Competition
Mean to compete on the global economy.
Prevalent force in shaping modern transportation systems.
Right to carry national passengers and freight.
Jurisdiction
Subject to national rules and regulations.
Territorial sea (22 km); complete jurisdiction.
Exclusive Economic Zone (340 km); access to resources.
Cooperation
Common interests favor agreements.
Involving access to infrastructures or setting standards (river navigation, rail
gauge, trade agreements, transborder transportation).
Control
Controlling strategic locations.
Reduce vulnerability to disruptions.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Exclusive Economic Zones
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Levels of Economic Integration
Political
Union
Economic
Union
Common
Market
Common government
Common currency, harmonized tax rates,
common monetary and fiscal policy: EU
(partial)
Factors of production move freely between
members
Customs
Union
Common external tariffs
Free
Trade
Free trade between members: NAFTA,
Mercosur, ASEAN (partial)
Complexity
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Economic Integration Levels, 2011
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Number of Regional Trade Agreements on Customs and other Trade
Facilitation Measures, 1995-2013
25
300
250
20
200
15
150
10
100
5
50
0
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
New trade aggreements
2011
2012 2013
Total trade agreements
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Oil Transited at Major Strategic Locations, 2010
Panama Canal & Pipeline
0.7
Bab el-Mandab
2.7
Bosporus
2.9
Danish Straits
3.0
Suez Canal & Sumed Pipeline
3.1
Strait of Malacca
15.0
Strait of Hormuz
15.9
0
2
4
6
8
10
12
14
16
18
Million barrels per day
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Types of International Boundaries
Antecedent
Pre-existing;
commonly
corresponds to a
physical feature.
Rivers, Bays, Lakes,
Mountains.
Subsequent
Set after the
settlements of
different groups
meet.
Often correspond to
their respective
ecumene.
Superimposed
Boundary is
imposed by an
outside force
(treaty).
May not reflect
existing cultural
landscape.
Relic
No longer a
boundary.
Often the outcome
of political changes.
Still a visible imprint
on the landscape.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Effect of a Border on a Transportation Network
Border
Border crossing
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Effect of a Border on Freight Distribution
Barrier
Operational Costs
Gateway
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
NAFTA Transborder Truck Flows and Traffic at US Ports of Entry, 2002
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Modal Shares of U.S.-NAFTA Merchandise Trade by Value and Weight, 2013
70
60
50
40
Value
Weight
30
20
10
0
Truck
Rail
Pipeline
Air
Water
Other and unknown
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
THE GEOGRAPHY OF
TRANSPORT
SYSTEMS
Transportation, Globalization and
International Trade
THIRD EDITION
Concept 2
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Country 1
Country 3
Country 4
Country 3
Country 2
Country 4
Without Trade
Small national markets.
Limited economies of scale.
High prices and near
monopoly.
Limited product diversity.
Different standards.
Country 2
Country 1
Economic Rationale of Trade
With Trade
Increased competition.
Economies of scale.
Specialization.
Lower prices.
Interdependencies
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Absolute and Comparative Advantages
Absolute Advantages
Comparative Advantages
25 2
25
Country A: 100 resource units. 10 units for 1 unit
of steel. 4 units to produce 1 unit of textiles.
Country B: 100 resource units. 5 units for 1 unit
of steel. 20 units to produce 1 unit of textiles.
Textiles
15
1
20
Steel output without trade (1): 5+10 = 15
Textiles output without trade (1): 2.5+12.5 = 15
Steel output with trade (2): 0+20 = 20
Textiles output with trade (2): 25+0 = 25
Steel output without trade (1): 5+12.15 = 17.5
Textiles output without trade (1): 5+10 = 15
Steel output with trade (2): 0+17.5 = 17.5
Textiles output with trade (2): 10+6 = 16
15
Textiles
20
Country A: 100 resource units. 10 units for 1 unit
of steel. 10 units to produce 1 unit of textiles.
Country B: 100 resource units. 4 units for 1 unit
of steel. 5 units to produce 1 unit of textiles.
10
10 2
5
5
1
2
1
1
0
0
2
0
5
10
15
20
25
0
5
10
Steel
Country A
Country B
15
20
25
Steel
Country A
Country B
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Favorable and Contentious Factors in International Trade
Comparative
Advantages
Openness
Interdependencies
Specialization reduces
production costs.
Lower prices for
consumers because of
lower tariff and nontariff barriers.
Promotes
collaboration,
standards and
technology exchanges.
Some nations have
limited advantages and
resources.
May impact national
industries and
employment.
Protectionism.
Dependency on foreign
goods and resources.
Vulnerability to
disruptions.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Major Global Trade Routes, 1400-1800
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Drivers of Globalization
Integration
Regulatory
chains.
Harmonization of
regulatory
regimes.
Trade
agreements.
Production
Supply chains.
Offshoring.
Global production
networks.
Transportation
Transport chains.
Containerization.
Transborder
transportation.
Transactions
Information
chains (ICT).
Capital for
investments.
Credit for
transactions.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Standard International Trade Classification (SITC)
SITC
Class
Category
Examples
0
Food & Live Animals
Meat (01), Fish (03), Wheat (041), Rice (042), Corn (044), Orange juice (0591), Sugar
(0611), Coffee (071), Cocoa (072), Tea (0741)
1
Beverages & Tobacco
Wine (1121), Beer (1123), Tobacco (12)
2
Raw Materials
Rubber (23), Cotton (263), Iron ore (281)
3
Fuels & Lubricants
Coal (32), Crude oil (333), Kerosene (3342), Natural gas (343)
4
Animal & Vegetable Oils
Olive oil (4214), Corn oil (4216)
5
Chemicals
Salt (52332), Fertilizers (56), Plastics (57)
6
Manufactured Goods
Paper (64), Textiles (65), Cement (661), Iron & Steel (67), Copper (682)
7
Machinery & Transport
Equipment
Computer equipment (752), Televisions (761), Cars (781)
8
Miscellaneous Manufactures
Furniture (82), Clothes (84), Footwear (85), Cameras (88111), Books (8921), Toys
(894)
9
Others
Postal packets (91)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Changes in the Global Trade Environment
Stage
Nature
Function
Until the 1970s
Immobile factors of production
Cope with scarcity
Late 20th century
Mobility of factors of production
Promote economic efficiency
Early 21st century
Global production networks
Added value within commodity
chains
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Changes in the Global Trade Environment
Before 1970s
Immobile Factors of Production
Bulk point-to-point
Country B
Country A
1970s – 1990s
Mobility of Factors of Production
Container shipping
1990s onward
Global Value Chains
Global Market
Commodity Market
Supply chain
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Economic Integration and Interdependencies
Independent Nations
h
Interdependent Groups of Nations
h
a
a
G1
b
g
b
g
c
f
f
d
d
e
Interdependency Level:
e
(Low)
c
G2
(High)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Flows of Globalization
Trade
Migration
Telecommunication
Nature
Flows of physical goods
Flows of people
Flows of information
Types
Raw materials, energy, food, parts Permanent, temporary (migrant Communication, power
and consumption goods
workers), tourism, business
exchanges, symbolic
transactions
exchanges
Medium
Transport modes and terminals
(freight)
Transport modes and terminals
(passengers)
Transport modes and
terminals (postal),
telecommunication systems
Network
Hub and spoke with
interconnections
Hub and spoke
Redundant and diffuse (point
to point)
Main Gateways Ports
Airports
Global cities
Speed
Low to average
Slow to fast
Instantaneous
Capacity
Very large
Large
Almost unlimited
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
20
55%
18
50%
16
45%
14
40%
12
35%
10
Share of World GDP (%)
Value (Trillions of Current $US)
World Merchandise Trade, 1960-2013
30%
8
25%
6
20%
4
2
15%
0
10%
Value of Exports
Merchandise trade (% of GDP)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Global Merchandise Exports and Container Throughput, 1980-2014
800
Container Throughput (in millions of TEU)
700
2011-
600
2010
2009
500
1997-2007
400
300
2008
2007
R² = 0.98
200
1980-1996
100
0
0
5
10
Merchandise Exports in Current $US
15
20
Trillions
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Modal Shares of World Trade by Volume and Value, 2008
Volume
0.25
Value
9.96
14.32
Seaborne
Airborne
Overland
89.79
12.97
72.71
Seaborne
Airborne
Overland
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Global Trade and Container Throughput (1970=100)
520.4 Millions TEU
10,000
$15.2 Trillion
$63.4 Trillion
1,000
Container Throughput (TEU)
Exports (current USD)
GDP (current USD)
Population
6.84 Billions
100
1970
1975
1980
1985
1990
1995
2000 2005
2010
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and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Global Trade, 2009
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Trade Within and Between Corporations
Between Corporations (66%)
Nation
State
Trade
Nation
State
Within Corporations (33%)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
GATT Rounds
Year
Round
Action
1947
Geneva
45,000 reductions in bilateral tariffs covering 20% of world trade.
1949
Annency, France
5,000 reductions in bilateral tariffs.
1951
Torquay, England
8,700 reductions in bilateral tariffs covering a new range of goods.
1955-56
Geneva
Reductions in bilateral tariffs.
1960-62
Dillon Round
Reductions in bilateral tariffs. EEC talks begin.
1964-67
Kennedy Round
Reductions in bilateral tariffs. Negotiation rules established.
1973-79
Tokyo Round
Reductions in bilateral tariffs. Procedures on dispute resolution, dumping and licensing.
1986-93
Uruguay Round
Additional tariff reductions. Stalemate for agricultural tariffs.
1995
WTO established
WTO replaced the GATT.
2001-08
Doha Round
Divergences between developing and developed countries. Issues over agricultural
subsidies.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Average Tariffs after the Uruguay Round (%)
Metals
1
Nonelectrical machinery
1
69
68
Wood, paper & furniture
1.5
Other manufactured articles
2
Electrical machinery
65
63
35
3
Chemical & photographic supplies
29
4
Leather, footwear & travel goods
7
Fish & fish products
27
3
Mineral products
25
2
Textiles & clothing
13
All industrial products
15
30
5
0
Tariff
30
5
Transport equipment
Reduction
32
10
20
30
40
50
60
70
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Regional Averages in Trading Across Borders, 2012 (in days)
32.5
32.1
South Asia
Sub-Saharan Africa
37.1
31.5
Eastern Europe & Central Asia
27
Middle East & North Africa
24
20
Latin America & Caribbean
17.8
28.8
19.6
23
21.9
East Asia & Pacific
10.7
10.5
OECD High Income
0
5
10
Time to import
15
20
25
30
35
40
Time to export
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Changes in Global Trade Flows
Before 1970
After 1970
Developed Economies
Developed Economies
Raw material flows
Merchandise flows
Industrial Pole
Developing Economies
Developing Economies
Participation of Developing Economies in Global Seaborne Trade (% of World Tonnage)
70
60
50
40
Loaded
30
Unloaded
20
10
0
1970
1980
1990
2000
2005
2010
2014
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Participation of Developing Economies in Global Seaborne Trade (% of World Tonnage)
70
60
50
40
30
20
10
0
1970
1980
1990
2000
Loaded
2005
2010
2014
Unloaded
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
International Trade of Merchandises, 2003-2013 (in billions of dollars and in % of all
exports)
2003
2013
$1,795.4
$4,560.2
Europe
Europe
(61.9 %)
$164.7
(16.5 %)
$272.3
(9.4 %)
$403.7
North
America
(40.5 %)
(68.6 %)
$297.6
(15.6 %)
$368.3
(15.2%)
$227.2
(7.8 %)
$427.9 (22.5%)
$505.7
(7.6 %)
$666.6
(10.0%)
$949.2
Asia
$218.9 (21.9%)
$854.8
(14.8%)
(49.9 %)
$1169.3
$1,112.2 (17.5%)
North
America
(49.2 %)
$3,075.9
Asia
$501.1 (20.7%)
(53.3%)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Impacts of Integration Processes on Networks and Flows
After Integration
Network
Before Integration
Flows
International border
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Characteristics of Free Trade Zones
Infrastructures
High level of infrastructure, such as land, transport, office space, utilities,
logistics services, business services and other facilities.
Regulations
Streamlined to improve efficiency, including custom services, labor regulation and
permits.
Location
High accessibility location, often close to major terminal facilities such as a port,
inland terminal or an airport. Location often away from conventional industry.
Export-oriented
Activities operating within the zone produce mainly or exclusively for foreign
markets.
Incentives
Variety of incentives, including low cost land, infrastructures, tax and duty
exemptions or various subsidies.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
China’s Special Economic Zones
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Value of Chinese Exports and Received FDI, 1983-2009 (Billions of $US)
1,600
120
1,400
100
1,200
Exports
800
60
600
FDI
80
1,000
40
400
20
200
2009
2008
2007
2006
2005
2004
2003
2002
2001
1999
1998
1997
FDI Inflows
2000
Exports
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
0
1983
0
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Yuan Exchange Rate (per USD), 1981-2015 (Monthly)
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
Jan-81
Jan-82
Jan-83
Jan-84
Jan-85
Jan-86
Jan-87
Jan-88
Jan-89
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
0.0
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The “Four Ts” in International Trade
Transaction costs
Tariff and non-tariff
costs
Transport costs
Time costs
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Phases of the Export-Oriented Paradigm
Phase I
Phase II
Phase III
Capital
Currency devaluation.
Mostly Foreign Direct
Investments (FDI).
Surge in FDI, but growing
share of national capital.
Pressures to revalue currency.
Drop in FDI. National capital
dominant. Providing FDI to other
markets.
Production
Numerous comparative
advantage.
Focusing on labor intensive
activities.
Gradual shift to added value
production.
Loss of comparative advantages
in labor intensive activities.
Growing importance of the
national market.
Trade
Growth of exports and
widening trade balance
(imports versus exports).
Peak trade growth and
imbalances.
Re-balancing.
Relative decline of the share
exports in relation to imports.
Transportation
Modernization of existing
gateways.
Massive investments in new
transport terminals, mostly
ports and airports.
Focus on inland transportation.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Changes in the Value World’s Merchandise Trade, Production and GDP, 1950-2012 (in %)
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
Recession
Total Merchandise Trade
World GDP
World Merchandise Production
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Changes in the Value of World Trade per Type of Merchandise, 1950-2012 (in %)
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
Recession
Agricultural Trade
Mining Trade
Manufactures
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
CPB World Trade Index by Volume, 1991-2015 (2005=100)
180.0
World Trade
Imports (Advanced Economies)
160.0
Exports (Emerging Economies)
Latin America (Exports)
140.0
120.0
100.0
80.0
60.0
40.0
Jan-15
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
20.0
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Monthly Value of Exports or Imports, Selected Traders, 2006-2012 (Jan 2006=100)
325
China (Exports)
Japan (Exports)
Korea (Exports)
Germany (Exports)
Canada (Exports)
USA (Imports)
UK (Imports)
300
275
250
225
200
175
150
125
100
75
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
Jan-08
Oct-07
Jul-07
Apr-07
Jan-07
Oct-06
Jul-06
Apr-06
Jan-06
50
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Share of Product Groups in World Merchandise Trade, 1900-2012
100%
90%
80%
40.0
40.0
45.0
44.7
70%
52.3
61.0
55.0
70.4
60%
66.5
64.1
74.8
Manufactures
Fuels
50%
Mining Products
11
40%
30%
Other
Natural Resources
10.2
57.0
9.2
54.2
43.6
20%
31.7
10%
Agricultural Products
23.7
10.7
26.1
18.1
1925
1938
1955
1963
1970
18.8
10.6
13.1
10.7
7.8
7.9
9.2
1980
1990
2000
2008
2012
0%
1900
18.2
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Share of Merchandise Exports by Region, 1948-2012
100%
90%
80%
70%
CIS
Asia
Middle East
Africa
Europe
South & Central America
North America
60%
50%
40%
30%
20%
10%
0%
1948
1953
1963
1973
1983
1993
2003
2012
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
World’s 12 Largest Exporters and Importers, 2010
402.3
388.0
Canada
442.0
401.0
Hong Kong
United Kingdom
405.7
Belgium
390.4
412.2
Imports
560.1
Exports
483.8
447.5
Italy
425.2
466.4
South Korea
605.7
520.7
France
516.9
573.4
Netherlands
694.1
769.8
Japan
1,066.8
Germany
United States
1,268.9
1,969.2
1,278.3
1,395.1
China
0
500
1000
1500
1,577.8
2000
2500
Billions of USD
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
World’s 20 Largest Exporters and Importers, 2011
India
Taipei, Chinese
Spain
Mexico
Saudi Arabia
Singapore
Canada
Hong Kong
United Kingdom
Belgium
Russian Federation
Italy
South Korea
France
Netherlands
Japan
Germany
United States
China
Imports
Exports
0
500
1,000
1,500
2,000
2,500
Billions of USD
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
World’s 20 Largest Exporters and Importers, 2013
Chinese Taipei
India
Imports
Spain
Exports
Saudi Arabia
United Arab Emirates
Mexico
Singapore
Canada
Belgium
Italy
Russian Federation
Hong Kong, China
United Kingdom
Korea, Republic of
France
Netherlands
Japan
Germany
United States
China
0
500
1000
Billions of USD
1500
2000
2500
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
World’s Largest Exporters and Importers, 2011
2,500
United States
2,000
Value of Imports
China
1,500
United Kingdom
1,000
Canada
France
Belgium
Netherlands
India
Italy
Spain
500
Turkey
Viet Nam
0
0
Germany
Japan
Hong Kong
South Korea
Mexico
Saudi Arabia
500
Singapore
Russian Federation
1000
1500
2000
2500
Value of Exports
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Billions
American and Canadian Trade, 1970-2007 (Current USD)
100
2,000
0
1,750
-100
1,500
-200
1,250
-300
-400
1,000
-500
750
-600
500
-700
250
-800
0
-900
Canada (Balance)
United States (Balance)
Canada (Exports)
Canada (Imports)
United States (Exports)
United States (Imports)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Monthly Trade between China and the United States, Billions of USD (1985-2014)
50
5
45
0
40
-5
35
-10
30
-15
25
-20
20
-25
15
-30
10
Exports
Imports
Jan-14
Jan-13
Jan-12
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
Jan-90
Jan-89
Jan-88
-40
Jan-87
0
Jan-86
-35
Jan-85
5
Balance (Right scale)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Personal Consumption Expenditures, United States 2010
1.5%
2.7%
1.2%
81.9%
18.1%
6.1%
0.7%
5.9%
Made in US from US parts
US content of production in China
US content of production in other
countries
Final goods imported from China
Final goods imported from other
countries
Made in US from parts imported from
China
Made in US from parts made in other
countries
Other
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Share of World Goods Exports, Leading Exporters, 1950-2011
20%
40%
18%
35%
16%
30%
14%
25%
12%
10%
20%
8%
15%
6%
10%
4%
5%
2%
0%
0%
United States
Japan
Germany
China
Four large traders (Right axis)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Total Freight Costs for Imports in World Trade (% of Total Costs)
Oceania
Europe
Asia
America
Africa
Developing Countries
Developed Countries
Word
0
2
4
6
2000
8
10
12
14
1990
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Trade Intensity by Ocean, 1980-2010
1980
1990
Atlantic Ocean
Pacific Ocean
Indian Ocean
Mediterranean
2000
2010
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Merchandise Exports by Trade Agreement, 2005
Andean Pact
MERCOSUR
ASEAN
NAFTA
EU (25)
0%
10%
20%
30%
40%
50%
60%
Intra Extra
70%
80%
90%
100%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
International Trade, Transportation Chains and Flows
International Trade
Destination
Origin
A
Custom Procedures
Transport Chain
B
Decomposition
Rail
Road
Maritime
A
B
Composition
Customs
Transshipment
Physical Flows
Distribution Center
Port
A
B
Rail Yard
Transshipment Hub
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
THE GEOGRAPHY OF
TRANSPORT
SYSTEMS
Freight Transportation and Value
Chains
THIRD EDITION
Concept 3
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Elements of an Economic System
Economic System
Production (Supply)
Labor
Regulation
Manufacturing
Land
Capital
Distribution
Consumption (Demand)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Corporation as a Decision, Management and Planning Unit
Management Unit
Decision Unit
Planning Unit
Nature
Maintain operational
conditions.
Decisions about the
allocation of resources.
Anticipate market changes
and opportunities. Allocate its
factors of production.
Scope
Production, sales,
marketing, payroll,
distribution.
Financial, labor, raw
materials, research and
development, etc.
Economic, technological,
social and political change.
Time frame
Short term (production
cycles).
Short to long term (product
cycles).
Medium to long term
(business cycles).
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Corporation and its Expansion
Vertical Integration
Horizontal Integration
Outsourcing
Nature
Expand backward (suppliers) or
forward (customers) along the
supply chain.
Acquiring or merging with
competitors.
Some activities
performed by another
corporation.
Goal
Lower costs. Enhance and protect
product quality. Improve supply chain
efficiency.
Economies of scale. Product
differentiation. Business model
replication. Oligopoly.
Reduce costs. Focus on
core competencies.
Issues
Higher cost structure of suppliers.
More difficult to adapt to changes.
Different business cultures.
Anti-monopolistic responses.
Dependency. Loss of
competency.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Private Firms Directly and Indirectly Related to Freight Distribution
Function
Infrastructure
Transport firms
Physical movements of goods
Modes
Terminal operators
Management and operation of terminal
assets
Terminal equipment
Logistic service
providers (third and
fourth party)
Management of transportation physical
and information assets
Stakes in transportation
assets
Commodity producers
Extraction and transformation of raw
materials
Storage facilities and
terminal equipment
Manufacturers
Production of intermediate and final
goods
Distribution centers
Retailers
Procurement and sale of final
consumption goods
Distribution centers and
delivery
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Industrial Agglomeration and Transportation
Diffused
Agglomerated
Corridor
Factory
Manufacturing cluster
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Disconnection of Global Production and Distribution
Core Base
R&D
Distribution
Marketing/Retail
Manufacturing Base
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Operational expenses
Indirect
Factory overheads
Administrative overheads
Selling overheads
Net Selling Price
Wages and benefits
Total Costs
Parts and materials
Factory Costs
Direct
Prime Costs
Manufacturing Cost Structure
Distribution costs
Research & Development
Profit
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Major Components to Price Reductions by the Chinese Manufacturing Sector, 2005
Lax Environmental Regulations
2.3%
Lax Health & Safety Regulations
2.4%
FDI
3.1%
Counterfeiting & Piracy
8.6%
Undervalued Currency
11.4%
Industrial Network Clustering
16.0%
Export Industry Subsidies & Preferences
16.7%
Wages
39.4%
0%
10%
20%
30%
40%
50%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Share of the World Commodity Consumption, China and United States, c2009/10
Cattle
Oil
GDP (PPP)
Wheat
Population
Soybeans
Chickens
Rice
Nickel
Aluminum
Zinc
Copper
Lead
Steel
Coal
Pork
Eggs
Cement
Iron Ore
6.1%
6.8%
10.4%
21.7%
13.6%
19.7%
16.6%
4.9%
19.7%
4.5%
24.9%
19.9%
25.2%
11.3%
30.2%
0.9%
31.9%
10.1%
34.6%
8.7%
38.2%
1.8%
39.5%
42.1%
45.8%
46.9%
49.6%
53.6%
53.6%
54.4%
0%
10%
20%
30%
40%
China
United States
9.1%
13.7%
4.8%
15.2%
8.4%
7.8%
2.1%
1.9%
50%
60%
70%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
American Foreign Trade by Maritime Containers, 2010 (in TEUs)
Importers
Whirlpool
Nike
Red Bull
General Electric
Jarden
Ashley Furniture
Costco Wholsale
JC Penney
Ikea Intl.
LG Group
Samsung
Chiquita
Philips
Heineken
Dole Food
Sears Holding
Lowe's
Home Depot
Target
Wal-Mart
Exporters
64,100
72,300
74,000
76,700
77,100
77,300
83,000
89,900
95,700
101,900
109,100
117,100
127,200
129,000
211,200
212,800
221,600
296,700
455,500
696,000
0
200,000
400,000
600,000
800,000
Eastman Chemical
Scoular
Cargill
Sims Metal Management
SDDC
Cedarwood-Young
Meadwestvaco
BASF
Delong
ExxonMobil
Potential Industries
Allenberg Cotton
Shintech
JC Horizon
Newport CH Intl
Dupont
Dow Chemical
Weyerhaeuser
Koch Industries
America Chung Nam
48,100
50,200
51,200
52,200
60,200
60,400
63,700
70,200
75,300
75,500
78,600
78,700
79,800
82,700
93,100
93,600
109,300
113,900
122,400
300,800
0
200,000 400,000 600,000 800,000
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Sectors of American Imports of Asian Goods Through Maritime Container Shipping, 2004
(in TEUs)
Apparel
Textiles
Machinery
Electrical equipment
Toys
Shoes
Tires
Auto parts
Appliances
Electronics
Furniture
Big box retailer
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Benefits of Improved Freight Transportation on Value Chains
Direct
Cost reductions to carriers and shippers.
Reduced transit times.
Increased reliability of shipments.
Indirect
Improvements in logistics and sourcing.
Lower inventory levels and costs.
Induced
Lower costs for suppliers and customers.
Improved diversity of parts and goods.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Transition Towards Manufacturing Capabilities
High
Added-value /
Complexity
Share of
Manufacturing
Low
Comparative
Advantages
Competitiveness
Capabilities
GDP per capita
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Value Chain (or Commodity Chain)
Stages
1- Commodities
Raw
materials
2- Intermediate Goods
Storage
Attributable to climatic
(agricultural products, forestry
products) or geological (ores and
fossil fuels) conditions.
Manufacturing
and assembly
Warehouse
Transformation that confers
added value. Materials and parts
used to make other goods.
3- Final Goods
Distribution
Distribution
center
Market
Goods shipped to large
consumption markets (cities).
Flow and inventory management.
Flows
Bulk shipping
Unit shipping
LTL shipping
Transport Chain
High volumes
Low frequency
Average volumes
High frequency
Market
Low volumes
High frequency
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Value Chains and Types of Transported Freight
Raw materials
Semi-finished products
Manufactured goods
Extraction
Intra-industrial linkages
Transfer
Processing
Distribution
Manufacturing
Retailing
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Generic Smile Curve in a Value Chain
Patent &
Technology
Brand & Service
Added Value
Fabrication
R&D
(Global Competition)
Marketing
(Area Competition)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Commodity Chains and Added Value
High
Fabrication
Added Value
R&D
Low
Marketing
Design / Branding
Procurement
Concept
Pre-Production
(Intangible)
Sales / Services
Distribution
Manufacturing
Production
(Tangible Activities)
Logistics
Post-Production
(Intangible)
Value Chain
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Upgrading the Value Chain
1. Fabrication
(Value chain entry)
2. Supply Chain
(Functional upgrading)
3. Product Design
(Functional upgrading)
4. Product Brand
(Functional upgrading)
Fabrication
1
Procurement
2
Distribution
1
3
2
1
3
2
1
3
2
3
2
4
Services
2
1
2
2
4
Services
1
2
Broader range of manufacturing-related functions, such as sourcing inputs and
inbound logistics as well as fabrication.
The supplier may also take on outbound distribution activities.
Supplier carries out part of the pre-production processes such as design or
product development.
Design may be in collaboration with the buyer, or the buyer may attach its brand
to a product designed by the supplier.
Marketing
R&D
Process upgrading
2
Design
R&D
Product upgrading
Focus on fabrication; suppliers assemble inputs, following buyers’ specifications.
Inputs may be imported due to limited availability and quality concerns over local
inputs.
Product focus may be relatively narrow.
4
Supplier acquires post-production capabilities and is able to fully develop
products under its own brand names.
Can be in collaboration with the buyer or by establishing a new market channel.
Increase unit value by producing more complex products, which requires
increasing the capabilities of the firm.
Countries must move from low-cost commodities to higher value goods that
warrant higher returns as labour costs increase.
Improving productivity through new capital investments.
Improving IT and logistics.
Reducing lead time and increasing the flexibility of the supply chain process.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Value Creation and Capture, iPhone 4 (in USD)
Distribution
($90.00)
Retail ($329.95)
($600)
Misc.
($45.95)
Apple
($269.05)
Inputs ($24.63)
USA
China
Factory Gate Price
($194.04)
VA ($6.54)
Korea
Inputs ($80.05)
Germany
Inputs ($16.08)
France
Inputs ($3.25)
Japan
Inputs ($0.70)
Other
Inputs ($62.79)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Cost to Manufacture a Cotton Vest, Asia and United States, 2013
United States
17.4
Asia
3.2
18.4
0
5
10
Fabric
17
2.3
15
20
Trim and Hardware
Labor
5.5
3.5
25
Duties
0.5
1.7
30
35
40
Shipping
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Freight Transport Costs as Share of Commodity Market Value
1970
1980
1990
2007
Jute (Bangladesh)
12.1%
19.8%
21.2%
44.2%
Tea (Sri Lanka)
9.5%
9.9%
10.0%
13.4%
Coffee (Colombia)
4.2%
3.3%
6.8%
2.5%
Cocoa beans (Ghana)
2.4%
2.7%
6.7%
3.5%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Supply Chains, Transport Chains and Added Value
Added Value
Transport Chain
Customer
High
Distribution
Center
Customers
Upward
Value Capture / Creation
Value Expansion
Supply Chain
Market Potential
Where?
How?
Port
Value Retention
Distribution Efficiency
Production Costs
Downward
Low
Supplier
Suppliers
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Global Production Networks
Value Chain
Space
(Differences in
input costs and
market potential)
Global
Production
Networks
Goods
(Differences in
manufacturing
capabilities)
Links/Flows
(Differences in
distribution
efficiency)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Geographical and Functional Integration in Value Chains
Supplying
Manufacturing
Distribution
Regional Value
Chain
S
S
M
M
D
Orders
Physical Flows
D
Origin / Destination
Relationships
Supply / Demand Relationships
S
1
2
M
D
Global
Value Chain
Functional Integration
4
D
Value Chain
S
M
S
M
3
Geographical Integration
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Producer and Buyer-driven Value Chains
Producer-driven
Manufacturers
Distributors
Retailers and
Dealers
Domestic and foreign subsidiaries
and subcontractors
Buyer-driven
International
National
Branded
Marketers
Traders
Factories
Retailers
Overseas
Buyers
Branded
Manufacturers
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Characteristics of Producer-Driven and Buyer-Driven Global Commodity Chains
Producer-Driven Commodity Chains Buyer-Driven Commodity Chains
Drivers of Global Commodity Chains
Industrial capital
Commercial capital
Core Competencies
Research & Development; Production
Design; Marketing
Barriers to Entry
Economies of Scale
Economies of Scope
Economic Sectors
Consumer Durables; Intermediate
Goods; Capital Goods
Consumer Nondurables
Typical Industries
Automobiles; Computers; Aircraft
Apparel; Footwear; Toys
Ownership of Manufacturing Firms
Transnational Firms
Local Firms, predominantly in
developing countries
Main Network Links
Investment-based
Trade-based
Predominant Network Structure
Vertical
Horizontal
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Product Life Cycle
Sales
Monopoly
Idea
Competition
Promotion
First competitors
Mass production
Obsolescence
Research and
development
Growth
Maturity
Decline
Stage 1
Stage 2
Stage 3
Stage 4
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
CRB Index (CCI), Monthly Close, 1970-2013
800
700
600
C
500
400
B
300
I
A
1
II
a
b
2
III
c
3
4
200
d
5
100
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
0
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Global Merchandises Exports by Product, 1990-2005 (in % of value)
Ores and other minerals
Non-ferrous metals
Raw food materials
Iron and steel
Textiles
Clothing
Other semi-manufactures
Food
Chemicals
Automotive products
Fuels
Office and telecommunication equ.
Other machinery and transport equ.
0
2
4
6
2005
2000
8
1990
10
12
14
16
18
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and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
1
2
Basic Enterprise
Regional
National
International
Factory
Distribution center
Penetration of a National Market
Geographical Growth of a Multinational Corporation
Multinational Corporation
Penetration of Foreign Markets
Representative
3
4
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Global Production Networks and Location Strategies
Country B
Country C
Country D
Regional Production
Centralized Production
Country A
Multidomestic
Vertical Integration
Regional Specialization
Globally Integrated
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Velocity of Freight
Transshipment Speed
Speed barrier
Future improvements
Pull Logistics
Logistical threshold
Containerization
Push Logistics
Shipment Speed
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Key Information Technology Drivers in Freight Distribution
Freight Visibility (tracking)
Improve the reliability of supply chain management.
Status and locations of shipments (vehicles, rail cars, containers and individual loads).
Mobile communications and Global positioning systems (GPS).
Radio-frequency identification (RFID) tags and bar codes.
Asset Management
Maximize equipment utilization.
Equipment location (tractors, trailers, rail cars, containers, ships).
Real Time Locating Systems (RTLS; GPS and RFID tags).
Status monitoring of vehicle and cargo conditions.
Efficiency Improvements
Improve productivity and reduce errors in data transmission.
Verification and exchange of shipment information.
Non-intrusive inspection and information technologies such as optical character readers (OCR), RFID
tags and bio-metrics (to identify drivers).
Freight Information Exchange
Information exchange using web-based technologies and electronic data interchange (EDI).
Real-time terminal information systems.
Regulatory Compliance
Pre-screen loads and direct low-risk freight to quick clearance.
Enhance security at international borders.
Electronic pre-notification of shipment information.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Market Share by Freight Transport Mode, Western Europe, 1980-2002 (in ton-km)
100%
90%
80%
70%
60%
Inland Waterways
50%
Road
40%
Rail
30%
20%
10%
0%
1980
1985
1990
1995
2000
2002
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Market Share by Freight Transport Mode, United States, 1965-2005 (in ton-miles)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1965
1970
1975
1980
Intercity truck
1985
Rail
1990
1995
2000
2004
Coastal
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Fluxes in a Fordist and Post-Fordist Production System
Fordism
Post-Fordism
Raw materials
and parts
Manufacturing
Sales and
distribution
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Fordist and Post-Fordist Production Structure
Characteristics
Fordism
Post-Fordism
Production Mode
Mass Production
Mass Customization
Organization
Structured (Pyramidal)
Networked (Flexible)
Focus
Supply
Demand
Market Reach
Regional / National
Global
Expansion
Vertical or horizontal integration
Outsourcing and offshoring
Core Resources
Physical Assets
Innovation/ Knowledge
Value Chains
Discontinuous
Integrated (continuous)
Inventories
Months
Hours
Production Cycle Time
Weeks / Months
Days
Information
Monthly / Weekly
Daily / Real-Time
Product Life Cycle
Years
Months
Quality
Affordable Best
Zero-Defect
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Level of Embeddedness of Production and Distribution
Embeddedness
Pure
Standardization
Segmented
Standardization
Customized
Standardization
Tailored
Customization
Pure
Customization
Design
Design
Design
Design
Design
Parts
Parts
Parts
Parts
Parts
Assembly
Assembly
Assembly
Assembly
Assembly
Distribution
Distribution
Distribution
Distribution
Distribution
Market
Market
Market
Market
Market
Processing
without order
Shipment to order
Assembly to order
Manufacturing
to order
Design to order
Push (expectation)
Pull (response)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Fuel for road transport
(50-70%)
Sea transport
Crude oil
Construction
Fuel for airplanes
(5-10%)
Iron ore
Fuel for ships & barges
(10-15%)
Scrap
Oil refining
Pipeline transport
Food
(ca. 20-25%)
Construction
Steel
production
(ca 30%)
Transport equipment
Other durable
consumer goods
Coal
Energy
Production
(ca 70%)
Transport
equipment
Other durable
consumer goods
Chemical industry
(5-15%)
(commercial)
storage
Steel
production
Industry (ca. 40%),
(incl steel &
chemical plants)
Households & services
(ca 60%)
Chemicals
(ca. 10-15%)
Containers
Consumer goods
(ca. 20-35%)
Intermediairies
(ca. 10-15%)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Global Car Production Network, 2003
Mazda
Jaguar
Isuzu
Land Rover
Suzuki
Vauxhall
Ford
Volvo
Skoda
Daewoo
Lancia
VAG
Seat
VW
Dailmer Chrysler
GM
Aston Martin
Bentley
Mercedes Benz
Opel
Maserati
Fiat
Audi
Ferrari
Equity ownership
Joint venture
Equity relationship
Functionally integrated group
Daihatsu
Citroen
Renault
Jeep
Toyota
Alfa Romeo
Porsche
Nissan
Chrysler
Saab
PSA
BMW
Rolls Royce
Honda
Peugeot
Hyundai
Mitsubishi
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Automobile Supply Chain
Supplying
industries
Steel and other
metals
Bodies
Manufacture and
stamping of body
panels
Body assembling
and painting
Rubber
Components
Electronics
Manufacture of mechanical and electrical components
(wheels, tires, seats, breaking systems, windshields,
exhausts, etc.)
Final
Assembly
Consumer
market
Plastic
Glass
Textiles
Engines and transmissions
Forging and casting of
engine and transmission
components
Machining and assembly
of engines and
transmissions
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Cereals Supply Chain
Manufacturing
Extraction
Farm
Grain
Processing
Facility
Cereal
Distribution and Retailing
Packaged Cereal
Converter
Paperboard
Packaging
Wood Pulp
Wood Pulp
Mfg
Distributor
Store
Packaged Cereal
Wood Pulp
Label Mfg
Labels
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Scope of a Supply Chain, Logistics Chains and Transport Chains
Supply Chain
Processing
Transport Chain 1
Fabrication
TC 2
Assembly
Gate
Port
Maritime
Port
Road
Gate
Processing
Rail
Gate
Order
planning
Sorting
Gate
Order
planning
Logistics Chain 4
TC 3
Extraction
Product Focus
LC 3
Distribution
TC 4
Retailing
TC 5
Transport Focus
Extraction
LC 2
Gate
Sorting
Storage
Gate
Storage
Production
planning
Logistics Chain 1
Retailing
Distribution
Assembly
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Supply Chains: Alternating First and Last Miles
Logistics Chain 1
Extraction
LC 2
Processing
Transport Chain 1
LC 3
Fabrication
TC 2
Logistics Chain 4
Assembly
TC 3
Distribution
TC 4
Retailing
TC 5
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
THE GEOGRAPHY OF
TRANSPORT
SYSTEMS
Logistics and Freight Distribution
THIRD EDITION
Concept 4
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and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics Goals and Operations
Fulfillment (Goals)
Demand (Operations)
Order
Transportation
• Right product
• Right quantity
• Handling
• Packaging
Delivery
• Right location
• Right time
Quality
• Right condition
Cost
• Right price
Stock Management
• Production scheduling
• Warehousing
Orders Processing
• Sales
• Purchase
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics and Integrated Transport Demand
Derived Demand
Materials
Management
Logistics
(Integrated
Demand)
Physical
Distribution
Induced Demand
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Value-Added Functions and Differentiation of Supply Chains
Value-Added Functions
Supply Chain Differentiation
Production Costs
Logistics Costs
Location
Transit Time
Time
Reliability
Control
Risk
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Supply Chain Differentiation: Selective Performance Preferences
Costs (38%)
Stability of the cost structure.
Relation with the cargo being carried.
Time (12%)
Influence inventory carrying costs and inventory cycle time.
Routing options in relation to value / perishability.
Reliability (43%)
Stability of the distribution schedule.
Reliability can mitigate time.
Risk
Potential deviation from expected costs, time and reliability.
Potential cargo damage or theft.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Taxonomy of Logistics Decisions
Level
Description
Production structures
Commercial decisions on outsourcing, offshoring and sub-contracting.
Number, location and capacity of production units.
Transport structures
Choice of a freight network linking a company and its suppliers and customers.
Choice of modes and terminals; the transport chain.
Distribution structures
Choice concerning the number, location and capacity of distribution centers.
Frequency and timing of distribution (e.g. just-in-time).
Logistics structures
Usage of production, transport and distribution capabilities to fulfill short, medium and
long term strategies (e.g. lower costs, gain market share, improve service efficiency,
reduce response time, reduce environmental footprint). Usage of third party logistics
providers.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Total Logistics Costs Tradeoff
Costs
Total Logistics Costs
Warehousing Costs
Transport Costs
Shipment Size or Number of Warehouses
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics Costs and Economic Development
Agriculture
Mining
Industry
Services
Information
Logistics Costs / GNP
30%
Argentina Brazil
Kenya
20%
Poland
Ukraine
Belgium
Canada
10%
Japan
Singapore United States
Economic Development
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics Costs and Economic Development
35
Peru
30
Indonesia
Logistics Costs (Share or GDP)
25
Brazil
Argentina
Vietnam
Colombia
20
Mexico
Thailand
Chile
China
15
10
France
Malaysia
India
South Korea
Canada
Japan
South Africa
5
Germany
Finland
30,000
40,000
GDP per Capita (in current US dollars)
50,000
Australia
United States
Singapore
0
0
10,000
20,000
60,000
70,000
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistic Performance Index, 2010
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Logistics Virtuous and Vicious Cycles
Low quality
services
Limited
incentive to
invest
Trade
Facilitation
Complex
procedures
Vicious
cycle
Regulatory
burden
Lack of
market
forces
Seamless
procedures
High quality
services
Liberalized
market
Virtuous
cycle
Incentive to
invest
Scale
economies
Protectionism
Logistics Performance
Logistics
Unfriendly
Partial
Reforms
Comprehensive
Reforms
Logistics
Friendly
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Worldwide Logistics Costs, 2002
6%
4%
39%
24%
Transportation
Warehousing
Inventory Carrying
Order Processing
Administration
27%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Evolution of Logistical Integration, 1960-2000
1960s
Fragmentation
1980s
Consolidation
1990s
2000s
Functional Integration
Value Capture
Logistics
Supply Chain
Management
Demand Forecasting
Purchasing
Requirements Planning
Production Planning
Materials
Management
Manufacturing Inventory
Warehousing
Warehousing
Materials Handling
Materials Handling
Packaging
Packaging
Inventory
Distribution Planning
Order Processing
Transportation
Customer Service
Physical
Distribution
Information Technology
Marketing
Strategic Planning
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
From Push to Pull Logistics
Push
Pull
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Supplier
Freight flow
Manufacturer
Distributor
Manufacturer
3PL
Returns / Recycling
Distributor
Customer
Point-of-sale data
Customer
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Changes in the Relative Importance of Logistical Functions in Distribution Systems
Demand Driven
Inventory
Transport System
Information System
Supply Driven
0%
20%
40%
60%
80%
100%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Benefits of Demand-Driven Supply Systems
Cause
Consequence
Inventory turnover
Working capital
Customer service
Net income
Labor productivity
Operating expenses
Capacity utilization
Return on assets
Logistics costs
Operating expenses
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Fragmentation of the Production System and the Logistics Industry
Fragmented
Logistics
Region A
Agglomerated
Supply Chain
Inputs
Outputs
Factory
Region B
Regional manufacturing cluster
Region C
Global supply chain
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistical Improvements, Manufacturing Sector, 1960s to 2010s
20
40
18
16
35
35
30
12
25
25
10
20
8
Days
% of GDP
14
15
6
10
4
7
2
5
4
0
1960s
1970s
Logistics Costs (% GDP)
1980s
1990s
Inventory Costs (% GDP)
3
2
2000s
2010s
0
Cycle Time Requirements (days)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Some Issues in Supply Chain Management
Issue
Outcome
Location of inventory and production
Wider geographical sourcing and distribution of goods
Development of break-bulk / transshipment systems
Concentration of international trade
Major port and airport gateways
Development of hub and spoke systems
Intermediary hubs,
Time management
Postponement, Nominated day delivery and timed delivery systems
Rationalization of the supply base
Vertical disintegration of production
Direct deliveries
Green logistics
Reverse logistics
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Average Order Lead Times of European Manufacturers, Wholesalers, and Retailers
25
20
Days
15
10
5
0
1985
1990
1995
2000
2005
2010
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics Costs, United States, 1980-2011 (in billions of $)
1400
1200
1000
800
600
400
200
Inventory Carrying Costs
Transportation Costs
2011
2009
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
0
Administrative Costs
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistic Costs Breakdown
Other
1.2%
Supplies
2.2%
Administration
2.7%
Rent
4.3%
Customer Service
7.8%
Labor
9.5%
Inventory Carrying
21.8%
Transportation
50.3%
0%
10%
20%
30%
40%
50%
60%
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics Costs as % of GDP
12.0
10.0
8.0
6.0
4.0
2.0
0.0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2011
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
% of Products Shipped for “Just-in-Time” Manufacturing
50
45
40
35
30
25
20
15
10
5
0
1990
1994
1996
1998
2000
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Conventional and Contemporary Arrangement of Goods Flow
Distribution
National
Distribution
Storage
Regional
Storage
Local
Distribution
Retailers
Contemporary
Supply Chain Management
Raw
Materials
Material flow (delivery)
Manufacturing
Information flow (order)
Distribution
Center
Retailers
Customers
Conventional
Raw
Materials
Manufacturing
Customers
Raw Materials & Parts
Core component
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistical Activities Related to Containerization
Container Management
Broking/Leasing.
Inventory management.
Transport chain routing.
Container Transportation
Maritime shipping (Routing, Scheduling).
Terminal operations (Transshipment, Storage/Stacking, Gate access).
Inland transportation (Rail operations, Drayage, Repositioning).
Container Handling
Loading (Packing, Palletizing and Bundling).
Transloading (Re-bundling).
Unloading (Unbundling, de-palletizing and Unpacking).
Container Storage and
Maintenance
Empty stacking.
Inspection.
Cleaning & Repair.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Layers to Logistics Services
Actors
Services
1PL
Manufacturing, Retailing
Carriers
2PL
Transportation
Logistics service
providers
3PL
Lead logistics providers
& consultants
4PL
Service integration
Cargo owners
Logistics
Supply chain
management
Supply chain integration
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Key Drivers for Third and Fourth Party Logistics Providers
Globalization
• Supply chains becoming increasingly global (even within manufacturing
processes), requiring greater management of supply chains
Core competencies
• Manufacturers and retailers are focusing on their core business (and outsourcing
logistics services to specialized firms)
Innovation and management
• 3PLs becoming increasingly sophisticated in supply chain management, making
investments, realizing economies of scale
Asset utilization
• 3PL model promotes greater asset utilization (e.g. balancing flows, backhaul,
within their networks) and asset-sharing alliances
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Main Core Competencies of Third Party Logistics Providers
Sourcing
Shipping
Product
Transport
Warehousing
Routing
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Services Offered by Third and Fourth Party Logistics Providers
3PL ►
◄ 4PL
Standard
Advanced
Complete
Integrated
Transportation services
Carrier selection
Rate negotiation
Fleet management
Warehousing
Cross docking
Pick and Pack
Distribution (direct to
store/home)
Dispatching
Delivery documentation
Shipment consolidation
Vendor managed
inventories
Stock accounting
Customs clearance and
documentation
Assembly
Packaging
Labeling
Managing product returns
Financing
Retail delivery, set up and
on site training
Inventory tracking
Order planning and
processing
Information and
Communications
Technologies (ICT)
management
Single invoice
Landed duty paid cost (per
piece)
Payment collection
Real time inventory updates
Just in Time (JIT) inventory
management
Production planning
Sourcing
Routing transit times air vs.
ocean
Supply chain consulting
Complete real time supply
chain monitoring and
adjustment
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
World’s Largest Third Party Logistics Providers, 2013
Agility
UTi Worldwide
Exel Transportation
J.B. Hunt
GEFCO
UPS Supply Chain Solutions
Geodis
Expeditors Int'l of Washington
Toll Holdings Limited
DACHSER
SDV International Logistics
Panalpina
Sinotrans
DSV Solutions Holding
CEVA Logistics
C.H. Robinson Worldwide
Nippon Express
DB Schenker Logistics
Kuehne + Nagel
DHL Supply Chain & Global Forwarding
0
5,000
10,000
15,000
20,000
25,000
Gross Logistics Revenue (Million $US)
30,000
35,000
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Types of Freight Facilities
Storage
Manufacturing
facilities
Distribution
Fabrication
Heavy manufacturing
Light manufacturing
Intermodal Terminal
Terminals
facilities Bulk or transload terminal
Storage
facilities
Bulk warehouse
Warehouse
Multitenant facility
Distribution center
Distribution
facilities
Importance
High
Average
Low
Cross-docking facility
Cold storage facility
Urban logistics depot
Parcel
facilities
E-fulfillment center
Sortation center
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Nodes and Freight Distribution
Production
Distribution Scope
Globalization of Production
Manufacturing
Regional Distribution
DC
Global Distribution
Retailing
Globalization of Consumption
Consumption
Local
Distribution Scale
Global
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Role of Distribution Centers and Warehouses
Distribution Center Only
Distribution Center and Warehouse
Deliveries
Deliveries
Distribution
center
Producers’
warehouse
Deliveries
Distribution
center
Deliveries
Deliveries
Production unit
Order
Delivery vehicle
Retail store
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Asynchronism and Distribution Centers
Production and Consumption
Supply Chains
Consumption
DC
Production
Shipment Size
DC
Market Areas
DC
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Criteria for Distribution Centers
Cost
Price sensitivity
Price per square foot; Operation costs.
Size
Consolidation
More throughput and less warehousing.
Facility
High clearance; Separate loading and
unloading bays
Improved stacking density (from 20 to 80 feet); More doors for sorting
efficiency; Potential for cross-docking.
Land
Large lot
Parking space for trucks (often not necessary due to high throughput);
Space for expansion.
Accessibility
Proximity to highways
Constant movements (pick-up and deliveries) in small batches (often
LTL); Access to corridors and markets; Co-location with rail, air and
port terminals.
Market
Regional / National
Shorter lead times; Less than 48 hours service window.
IT
Integration
Sort parcels; Control movements from receiving docks to shipping dock;
Management systems controlling transactions.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Typology Criteria of Agglomerations of Logistical Activities
Accessibility
Internal Structure
Function
Governance
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Distribution Network Configurations for Containerized Import Cargo
Type
Supply Chain
Gateway-based
Few mass market goods (economies of scale in distribution).
Few very specialized goods (economies of scale in warehousing).
Little if any transformations.
Transloading.
Tiered-based
Mix of retail goods coming through a few gateways.
Some customization.
Large suppliers and large retailers (Big Box).
Transloading, Postponement and Cross-docking.
Regional distribution centers
Complex set of goods coming from numerous suppliers (e.g. automotive parts).
Regional variation of the nature and extent of demand.
Local distribution centers
Time sensitive bulky cargo (e.g. perishables).
Low lead times.
City logistics.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Distribution Network Configurations for Containerized Import Cargo (Retail) in Europe
Distribution based on RDCs
Distribution based on one EDC
Distribution based on tiered system (EDC+RDCs)
Distribution based on local DCs
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Distribution Network Configurations for Containerized Import Cargo (Retail) in North
America
Distribution based on RDCs
Distribution based on tiered system
Distribution based on two gateways
Distribution based on local DCs
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Basic Operational Characteristics by Number of Warehouses, United States and China,
2009
900
4
800
3.5
700
3
600
2.5
2
400
Days
Miles
500
1.5
300
1
200
0.5
100
0
0
1
2
3
Average Distance to Customers (USA)
4
5
6
7
Number of Warehouses
Average Distance to Customers (China)
8
Lead Time (USA)
9
10
Lead Time (China)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Optimal Location and Throughput by Number of Freight Distribution Centers
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Market Area of Distribution Centers Located in the United States, 2012
Global
Western Hemisphere
United States
Half the United States
Multi State Region
Metropolitan Area
0
5
10
15
20
25
30
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Hours of Operation of Distribution Centers
160
140
120
100
80
60
40
20
0
12:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00
AM AM AM AM AM AM AM AM AM AM AM AM PM PM PM PM PM PM PM PM PM PM PM PM
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
A Typology of Spatial Dynamics in the Location of Logistics Sites
SPATIAL PROCESS
Spatial concentration of logistics sites
Zoning
Spatial diffusion of logistics sites
Dezoning
Logistics zones
SPATIAL LEVEL
Polarisation
Depolarisation
Logistics poles
Multimodal transshipment centre (e.g. Container terminal)
Logistics site (single or multi-user)
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Proximity and Intermediacy for Distribution Clusters
Long distance
transport corridor
Central business district
Sub center
Central area
Logistics cluster
Metropolitan area
Urban Corridor
Mega region
Intermediacy link
Proximity link
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Cross-Docking Distribution Center
Distribution Center
Before Cross-Docking
Suppliers
Suppliers
LTL
Receiving
Sorting
Customers
After Cross-Docking
Shipping
FTL
FTL
Cross-Docking
DC
Customers
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Freight Distribution and Network Strategies
Point-to-Point
B
A
Fixed Routing
B
A
Corridor
Flexible Routing
B
B
A
A
Hub-and-Spoke
B
Transshipment node
Route node
Network node
A
Route
Alternative route
Unserviced node
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics Networks
Network Structure
Point to Point
Hub-and-spoke
Dispersed
Locations
Clustered
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Collaborative Distribution
Back-Haul Matching
A
C
Before
D
Sequence Matching
Empty
B
After
Supplier
Customer
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Types of Container Flows
Balanced
Imbalanced
Loading
Hybrid
Unloading
Export flow
Import flow
Repositioning flow
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistical Strategies to Cope with Higher Transport Costs
Shipping less
Demand responsive systems.
Reduce returns.
Shipping timing
Allow longer shipping time and outside rush (high cost) periods.
Efficient packaging
Reduce the shipment size (volume) of the same load.
Modal shift
Use a mode that is less impacted by congestion.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Complexity of the Supply Chain
Complex
Simple
National Supply Chain
Multinational Supply Chain
National
Factory
Distribution center
Representative
High-throughput DC
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
National Semiconductors, Supply Chain, 1993, 2001, 2005
South Portland (Maine)
Santa Clara (CA)
Salt Lake City (UT)
Arlington (TX)
Greenock (Scotland)
Bangkok (Thailand)
Santa Clara
Penang (Malaysia)
South Portland
Melaka (Malaysia)
Swindon (UK)
Toa Payoh (Singapore)
Hong Kong
Cebu (Philippines)
Migdal Haemek (Israel)
Customers
Regional Distribution Centers (1993)
Tokyo
Global Distribution Center (2001)
Bangkok (Thailand)
South Portland (Maine)
Penang (Malaysia)
Santa Clara (CA)
Melaka (Malaysia)
Salt Lake City (UT)
Arlington (TX)
Toa Payoh (Singapore)
Greenock (Scotland)
Cebu (Philippines)
Singapore (GDC)
Supply Chain Rationalization (2005)
Melaka (Malaysia)
South Portland (Maine)
Arlington (TX)
Toa Payoh (Singapore)
Greenock (Scotland)
Suzhou (China)
Wafer Fabrication
Assembly & Testing
Singapore (GDC)
Distribution Center
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
20 Largest North American Warehouse Operators, 2007
Menlo Worldwide
APL Logistics
Kuehne + Nagel
NFI Industries
DSC Logistics
Warehouse Specialists, Inc.
Penske Logistics
Ryder System, Inc.
Atlas/Versacold (Eimskip)
MBX Logistics, LLC
Kenco Logistic Services
Ozburn-Hessey Logistics
AmeriCold Logistics, Inc.
Jacobson Companies
CEVA Logistics, North America
UTi Worldwide Inc.
Caterpillar Logistics Services
GENCO Distribution
UPS Supply Chain Solutions
DHL & Exel Supply Chain
0
10
20
30
40
50
60
70
80
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The Evolution of Retail Logistics
1970s
Stores
Suppliers / Wholesalers
Direct
replenishment
1980s
Rationalization
1990s
Global sourcing
Distribution Centers
Import Centers
Overseas suppliers
Distribution Centers
Domestic suppliers
Parcel hubs
2000s
Parcel delivery centers
Sortation centers
E-commerce
E-fulfillment centers
Customer home
Collection point
Local depots
Delivery point
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Logistics Facilities Supporting E-commerce
Facility Type
Facility Attributes
Locational Attributes
E-Fulfillment Center
Large-sized facility (half a million to one
million square foot).
Cross-docking configuration common.
High racks storage.
Push towards automation.
Low land costs.
Proximity to highway.
Access to a major parcel hub.
Parcel Hub / Sortation Center
Large-sized facility (half a million square
foot).
Cross-docking configuration for handling
trucks.
Automated and semi-automated sortation.
Low land costs.
Accessibility to regional distribution.
Parcel Delivery Center / Urban
Logistics Depot
Medium-sized facility.
Cross-docking configuration for loading
vans.
Periphery of metropolitan areas.
Freight Station / Pickup Location Small or micro-sized facility.
Store-like facility (pickup location).
Locker banks (freight station).
High density neighborhood locations.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Retail Logistics and E-commerce
Conventional Retail Logistics
E-commerce Retail Logistics
Suppliers
Regional
Distribution
Center
RDC
Store Deliveries
Retailer
(In store inventory)
Suppliers
E-Retailer
RDC
RDC
Order
Online
purchases
Parcel Delivery
Company
Home
Deliveries
Travel to
store
Customers
Customers
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Shifts of Logistical Operations in the Internet Economy
Traditional logistics
E-logistics
Orders
Predictable
Variable
Order cycle time
Weekly
Daily or hourly
Customer
Strategic
Broader base
Customer service
Reactive, rigid
Responsive, flexible
Replenishment
Scheduled
Real-time
Distribution model
Supply-driven (push)
Demand-driven (pull)
Demand
Stable, consistent
More cyclical
Shipment type
Bulk
Smaller lots
Destinations
Concentrated
More dispersion
Warehouse reconfiguration
Weekly or monthly
Continual, rule-based
International trade compliance
Manual
Automated
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Elements of “Last Mile” Logistics
Terminal
Capacity;
turnover; gate
access
Drayage /
Deliveries
Congestion;
chassis
management
Warehousing
Inventory level;
lead time;
transloading
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
The “Last Mile” in Inland Freight Distribution
Flow Chain
Frequency
Volume
Massification
GLOBAL
REGIONAL
HINTERLAND
Shipping Network
Corridor
Gateway
Drayage
Transloading
GLOBAL
Inland
Terminal
LTL
Atomization
Customer
Distribution
Center
“Last Mile”
Transport Chain
LOCAL
Frequency
Volume
Gateway Logistics
Drayage
Customer
LTL
LOCAL
Maritime
Rail / Barge
Drayage (Truck)
Less than truckload (LTL)
“Last Mile”
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.
Main Elements in Supply Chain Integration
Element
Purpose
Infrastructure Integration
Improving connectivity and interoperability. Synchronizing terminals and distribution facilities to
increase throughput and reliability.
Commercial Integration
Commercial agreements, mergers and acquisitions between companies along the supply chain.
Involves service level and management. Vertical and horizontal integration of actors and processes.
Work Practices Integration
Organizational (managing labor as a group) and skills (managing individual workers) competencies
to move cargo efficiently. Involves operational window, minimal service levels and essential
services.
Information Integration
Interconnectedness of information systems. Involves asset tracking, status monitoring, customs
facilitation, freight status information and transport network status information.
Regulatory Integration
Promote efficient modal choice and avoid subsidized modal preference through the harmonization of
regulation across jurisdictions.
Planning and Funding Integration
Planning and funding of infrastructure provision from an integrated multi-modal and total logistics
chain perspective. Respective roles and competencies of the public and private sectors.
Security Integration
Harmonization of security procedures that protect cargo from theft or damage and protect the
public from risks. Involves assessments of cargo contents, cargo integrity, route integrity and
information integrity.
Copyright © 1998-2015, Dr. Jean-Paul Rodrigue, Dept. of Global Studies & Geography, Hofstra University. For personal or classroom use ONLY. This material (including graphics) is not public domain and cannot be published, in whole or in part, in ANY form (printed or electronic)
and on any media without consent. This includes conference presentations. Permission MUST be requested prior to use.