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SPATIAL PERSPECTIVE OF FREIGHT DISTRIBUTION AND LOGISTICS
CHAPTER ONE
- Background of the Study
The growing flows of freight have been a fundamental component of contemporary changes in economic systems at the global, regional and local scales. The consideration of these changes must be made within a perspective where they are not merely quantitative, but structural and operational. Structural changes mainly involve manufacturing systems with their geography of production, while operational changes mainly concern freight transportation with its geography of distribution. As such, the fundamental question does not necessarily reside in the nature, origins and destinations of freight movements, but how this freight is moving. New modes of production are concomitant with new modes of distribution, which brings forward the realm of logistics; the science of physical distribution. Although it represents an entire system of space/time interdependencies, we believe that physical distribution has been neglected in current geographical, urban or regional studies.
Up to recently, geography did not pay much attention to logistics and freight transportation, as the focus was mainly on passengers and individual mobility issues. Textbooks on urban or general transport geography, like those edited by Hanson (1995), Taaffe et al. (1996) or Hoyle and Knowles (1998), now raise more freight related questions than they did in earlier editions, particularly with regard to trade and ports. The latter is probably the only logistics subject that received major reference from academic geography. Other core spatial implications of distribution and logistics have been directly addressed in geography by few authors who developed an insight into wholesale activities and their geographical distribution (Glasmeier, 1992; McKinnon, 1983, 1988, 1998; Riemers, 1998; Vance, 1970). Following the nature of retailing as an originally distributive activity, geographic research on retail and although the physical movement of goods appears to be one of the costliest parts of retail activities (Christopherson, 2001). One exception to these observations is in Ralston (2003), who does address issues of inventory carrying costs and supply chain analysis.
Despite the upcoming notion of volatility and placelessness, and contrasting the enduring neglect of transportation by regional and geographical sciences, the material world of physical distribution and the respective locales is considered of geographical significance. The two traditional disciplines for investigating physical distribution are business administration (economics) and transportation sciences. Both cover, to varying degrees, aspects of space and location. However, it is legitimate to state that both disciplines did not pay much attention to the spatial character of their subject. In turn, economic and transport geography, did not develop too large a focus on logistics––keeping in mind the broad geographical relevance of distribution. A substantial amount of research covers different planning aspects of freight transport particularly in the urban context, either from a transport engineering and planning perspective or emphasizing related urban problems (Chinitz, 1960; Odgen, 1992; Woudsma, 2001). Logistics, as a geography, remains relatively unexplored.
Freight distribution is now considered with more attention as productivity gains in manufacturing are increasingly derived from efficiency at terminals instead of from the efficiency of transportation modes (Rodrigue, 1999). Because transport geography is traditionally more engaged in long distance trade issues, freight related work received significant attention. With emerging global trade, production networks and distribution systems, particular emphasis was given to ports and related research covering many of these issues (e.g. Hoyle, 1990, 1996; Hoyle and Pinder, 1992; Nuhn, 1999; Slack, 1998). In this context, an increasing amount of work on intermodal freight transport and terminal issues appeared as well (van Klink and van den Berg, 1998; Drewe and Janssen, 1998). Generally, international trade increasingly contributes to the amount and the nature of physical distribution. Thus globalization is now discussed as having a major impact on goods exchange (Janelle and Beuthe, 1997; McCray, 1998; Pedersen, 2000; Woudsma, 1999).
Still, fallacies are noted in globalization discourses within economic geography, undermining the assessment of the role of transportation. Within the large body of work referring to the globalization discourse or the impacts of internationalization and free trade agreements, transport is not seen as a major issue or is de facto taken for granted (Holmes, 2000). Even classic trade theory neglects the role of transport and logistics (Dicken, 1998, p. 74), particularly the fact that transport costs have a fundamental impact on the amount of trade and goods exchange, as do traffic constraints and opportunities in general. We argue that this perspective is mainly the result of a misinterpretation of role of the transport sector, freight and passengers alike, as a derived demand. Under such circumstances, transportation is perceived as a residual consequence––derived––of other processes or a mere ‘‘space-shrinking’’ function (Dicken, 1998; Knox and Agnew, 1998). However, the same processes behind the focus of the globalization literature, such as international trade, multinational corporations and the division of labor/production, are also revealing a different perspective, which is the management of supply chains and their underlying logistics. Consequently, the role of distribution in globalization remains partially unanswered and a geographical analysis of logistics may provide substantial evidence in that respect.
The field of logistics and freight distribution plays a pivotal role in the global economy, facilitating the movement of goods and ensuring their timely delivery to various destinations. The spatial perspective of freight distribution is a critical aspect of logistics, encompassing the geographical considerations, infrastructure, and spatial patterns that influence the efficiency and effectiveness of freight movements. Understanding how spatial factors impact freight distribution is essential for optimizing supply chains, minimizing transportation costs, and enhancing overall logistics performance.
The impact of information technology on the freight transportation system has been significant and likely will increase sharply. The steadily declining prices of new technology, coupled with an increased awareness among freight operators of the technology’s potential benefits, will encourage the freight industry to increase its use of information technology. The industry already has implemented cutting-edge technologies to improve customer service and to reduce expenditures.
Information technology also will have varying effects on the different modes of transportation. Carriers in all modes increasingly will rely on continuous updates on the location and status of the vehicles and containers in their system. Additional growth in the intermodal freight market requires an increase in information sharing across companies. The productivity of integrated freight transportation providers such as Federal Express and United Parcel Service will improve with increased use of information technology. Nonintegrated intermodal users may achieve even greater gains as electronic waybills replace the paper trail that follows freight movements and as shipper service and status requests take place via electronic data interchange. Electronic commerce (e-commerce) probably will bring about changes in both the configuration and profitability of a portion of the freight sector. It also might lead to reductions in average shipment size, corresponding increases in shipment frequency, and an emphasis on time-definite delivery.
Recent technological advances include but are not limited to electronic data interchange (EDI) technologies, automatic vehicle and container identification systems, location and navigational systems, mobile communication technologies, mobile computers, database management and value-added data manipulation systems (e.g., data mining), container status information systems, and advanced traffic information and management systems. The result of these developments is that freight transport is moving toward operational integration, both within and between companies. Information technology will make nonintegrated transport providers more competitive with integrated ones. Appropriate sharing and integration of information will substitute for full-scale control.
The information revolution is responsible for changes that originate both inside and outside the freight transportation system. Information technology available to manufacturing and retail firms affects their distribution strategy in many ways. Just-in-time manufacturing and distribution systems rely on a continuous and reliable stream of information on the current and near-term status of every link in the supply chain.
Manufacturers and distributors leverage information to reduce their inventories significantly and to shift inventories from warehouses and distribution centers to rolling stock in the transportation network. This shift increases the burden of responsibility on the carriers as well as the need for shippers and carriers to cooperate. Information sharing by shippers and consignees will reduce inventory further, if the providers of freight transportation are integrated into the information stream.
Logistics is concerned with the efficient flow of raw materials, of work in process inventory, and of finished goods from supplier to customer. In addition to transportation, logistics entails inventory control, warehousing, materials handling, order processing, and related information activities involved in the flow of products. How these activities are managed and organized determines the quantity and quality of transportation demanded and
Transportation in the New Millennium
the nature of the commercial relationships between shippers and transportation service providers.
The globalization of business has increased the need for global supply chains that are longer, more complex, and inherently costlier. Businesses will seek logistics service suppliers who can meet their global logistics needs. This development will spur the growth of global third-party logistics (3PL) providers who provide a full portfolio of logistics services, including transportation. It also will encourage the development of modern and efficient transport infrastructures to minimize the cost of transport operations on major trade routes. These infrastructures include right of way, intermodal facilities, and communications links for all modes.
The need to reduce inventory investment by reducing cycle time has led away from these push systems, which are driven by the supply of materials and goods, to pull systems, in which actual demand for goods triggers product flow. Just-in-time and quick-response are some of the names given to these logistics systems. Production or ordering is postponed until products are sold or consumed. The product is produced and transported in smaller quantities. Because the product demand is known with great accuracy, products bypass the traditional storage and holding processes in warehouses and distribution centers. Instead, they are delivered directly to customers or are mixed with other freight for immediate delivery in cross-dock facilities.
Pull processes require fast, frequent, and reliable transportation systems with shipment visibility. This requirement has fueled the growth of time-sensitive transport alternatives such as air freight and priority ground transport. Full-load transport is not inappropriate for the frequent delivery of small quantities of a particular product, because full loads can comprise multiple products from multiple sources. At the same time, direct delivery of small, individual shipments via parcel carriers to consumers is becoming the rule rather than the exception, as speed is built into the logistics system rather than being reserved for emergencies. Transport suppliers must be able to provide shipment visibility by adopting mobile communication, e-commerce, vehicle status, and other technologies.
Outsourcing noncore activities previously involved a single logistics service, such as transportation. Today, 3PL providers offer an array of bundled logistics services, including strategic planning and control of the logistics process. The attractiveness of outsourcing is evidenced by the rapid growth of the 3PL industry from $10 billion in gross revenue in 1992 to $40 billion in 1998, and annual growth forecast between 15 and 20 percent through 2003 (1). Some of the leading suppliers are subsidiaries of transportation companies, and most large transportation companies offer comprehensive logistics services through subsidiaries or affiliates.
Shippers traditionally purchased transportation from asset-based carriers that could provide service at less cost because of economies of scale, utilization, and specialization. However, non-asset-based logistics suppliers are increasingly important as information technology plays an ever-greater role in supply chain integration and as operations research models become more sophisticated. Increasingly, economies of scope, or the benefits arising from being able to manage and integrate complementary logistics services, have become the source of reduced cost or improved service and therefore are prime criteria for choosing a logistics service provider.
Traditional transport firms face the dilemma of expanding their capabilities and becoming 3PLs or becoming suppliers to 3PL providers that represent the end customer.
The competitive boundaries between transport companies and 3PL providers are blurred because both are competitors and partners in meeting the demand for transportation and logistics services. Similarly, regional or domestic providers must decide how to provide the seamless, one-stop service demanded by global customers. Direct expansion was considered the most effective means to achieve broader coverage in the past, but alliances and partnerships rapidly are becoming an effective alternative for extending logistics services and geographic areas.
Partnerships between firms and logistics suppliers are growing and taking on more importance with the outsourcing trend. The traditional transaction-based relationship will continue, but more companies will seek the benefits of coordination and collaboration through partnerships. Successful alliances often involve concentrating business to fewer suppliers to leverage the customer’s buying power and make the process economical.
The ability to build partnerships will be a critical advantage for a transportation company or 3PL. Partnerships with customers and suppliers will be important, but so will alliances with other transportation and logistics suppliers. These alliances provide the strategic advantages of multiple partners to meet the demand for one-stop, seamless, global, and comprehensive logistics services. Although the adoption of interfirm communications technology will be important in implementing partnerships, the ability to build and sustain relationships with other firms will be the key to success.
Freight, also known as cargo or goods, refers to items or commodities transported from one location to another via various modes of transportation. The characteristics of freight can vary widely based on the nature of the goods being transported, the mode of transportation, and the specific requirements of the supply chain. Here are some key characteristics of freight:
Weight:
Freight can vary significantly in terms of weight, ranging from lightweight parcels to heavy machinery or bulk materials.
Size and Dimensions:
The size and dimensions of freight items can vary, influencing the choice of transportation mode and the design of packaging and storage facilities.
Value:
Freight may have different levels of economic value, ranging from everyday consumer goods to high-value and sensitive items like electronics or pharmaceuticals.
Fragility:
Some freight items are fragile and require careful handling during transportation to prevent damage. Examples include glassware, electronics, or artwork.
Perishability:
Perishable goods, such as fresh produce, pharmaceuticals, or certain chemicals, have a limited shelf life and may require specialized transportation and storage conditions.
Hazardous Nature:
Certain freight items are classified as hazardous materials due to their potential to pose risks during transportation. This includes chemicals, flammable materials, or radioactive substances.
Stackability:
The ability to stack freight items can impact the efficiency of storage and transportation. Some goods are stackable, while others may require specific handling to prevent damage.
Packaging:
Freight items are packaged in various ways to ensure their protection during transit. Packaging materials and methods depend on the characteristics of the goods and the mode of transportation.
Density:
Freight density refers to the amount of space occupied by a given weight of goods. High-density freight may require less physical space but be heavier, affecting transportation costs.
Transportation Mode:
Different freight characteristics influence the choice of transportation mode. For example, air transportation is suitable for high-value and time-sensitive goods, while bulk cargo may be transported more economically by sea.
Temperature Sensitivity:
Some goods, such as pharmaceuticals, certain foods, or chemicals, may require specific temperature-controlled conditions during transportation to maintain their quality and integrity.
Lead Time Requirements:
The urgency of delivery can vary, influencing the choice of transportation mode. Some goods may have strict lead time requirements, while others allow for more flexible delivery schedules.
Regulatory Compliance:
Freight may need to comply with various regulations and standards, such as customs requirements, safety regulations, and environmental restrictions.
Understanding these characteristics is crucial for logistics and supply chain management, as it helps in making informed decisions regarding packaging, transportation modes, storage, and overall logistics planning to ensure the safe and efficient movement of goods from origin to destination.
TYPES OF FREIGHT
Freight, also known as cargo or goods, refers to items or commodities transported from one location to another via various modes of transportation. The characteristics of freight can vary widely based on the nature of the goods being transported, the mode of transportation, and the specific requirements of the supply chain. Here are some key characteristics of freight:
Weight:
Freight can vary significantly in terms of weight, ranging from lightweight parcels to heavy machinery or bulk materials.
Size and Dimensions:
The size and dimensions of freight items can vary, influencing the choice of transportation mode and the design of packaging and storage facilities.
Value:
Freight may have different levels of economic value, ranging from everyday consumer goods to high-value and sensitive items like electronics or pharmaceuticals.
Fragility:
Some freight items are fragile and require careful handling during transportation to prevent damage. Examples include glassware, electronics, or artwork.
Perishability:
Perishable goods, such as fresh produce, pharmaceuticals, or certain chemicals, have a limited shelf life and may require specialized transportation and storage conditions.
Hazardous Nature:
Certain freight items are classified as hazardous materials due to their potential to pose risks during transportation. This includes chemicals, flammable materials, or radioactive substances.
Stackability:
The ability to stack freight items can impact the efficiency of storage and transportation. Some goods are stackable, while others may require specific handling to prevent damage.
Packaging:
Freight items are packaged in various ways to ensure their protection during transit. Packaging materials and methods depend on the characteristics of the goods and the mode of transportation.
Density:
Freight density refers to the amount of space occupied by a given weight of goods. High-density freight may require less physical space but be heavier, affecting transportation costs.
Transportation Mode:
Different freight characteristics influence the choice of transportation mode. For example, air transportation is suitable for high-value and time-sensitive goods, while bulk cargo may be transported more economically by sea.
Temperature Sensitivity:
Some goods, such as pharmaceuticals, certain foods, or chemicals, may require specific temperature-controlled conditions during transportation to maintain their quality and integrity.
Lead Time Requirements:
The urgency of delivery can vary, influencing the choice of transportation mode. Some goods may have strict lead time requirements, while others allow for more flexible delivery schedules.
Regulatory Compliance:
Freight may need to comply with various regulations and standards, such as customs requirements, safety regulations, and environmental restrictions.
Understanding these characteristics is crucial for logistics and supply chain management, as it helps in making informed decisions regarding packaging, transportation modes, storage, and overall logistics planning to ensure the safe and efficient movement of goods from origin to destination.
1.2 Statement of the Problem
The efficient distribution of freight is crucial for sustaining economic activities, yet challenges and inefficiencies persist within contemporary logistics systems. These challenges may include congestion in urban areas, inadequate transportation infrastructure, suboptimal route planning, and environmental concerns. To address these issues, it is imperative to explore the spatial dynamics of freight distribution and identify the factors influencing the movement of goods within different geographic contexts.
1.3 Research Objectives
The primary objectives of this study are:
To analyze the spatial patterns of freight distribution in [specific region or industry].
To identify the key factors influencing the efficiency of freight movements in the selected spatial context.
To assess the impact of spatial factors on the overall performance of logistics and freight distribution systems.
To propose recommendations for optimizing freight distribution from a spatial perspective.
1.4 Research Questions
The study will seek to answer the following research questions:
What are the spatial patterns of freight distribution in the chosen region or industry?
What factors influence the efficiency of freight movements in the selected spatial context?
How do spatial factors impact the overall performance of logistics and freight distribution systems?
What recommendations can be proposed to optimize freight distribution from a spatial perspective?
1.5 Significance of the Study
This research holds significance for various stakeholders in the logistics and transportation sectors, including policymakers, logistics professionals, researchers, and businesses involved in freight distribution. By gaining insights into the spatial dynamics of freight distribution, decision-makers can implement strategies to enhance the efficiency and sustainability of supply chains. Additionally, the study contributes to the academic understanding of spatial logistics, providing a foundation for future research in this evolving field.
1.6 Scope and Delimitations
This study focuses on [specific region, industry, or type of freight distribution] to provide a detailed analysis of the spatial perspective of freight distribution within this defined scope. Limitations may include the availability of data, regional variations, and the specific characteristics of the chosen spatial context.
1.7 Structure of the Thesis
The thesis will be organized into distinct chapters, each addressing specific aspects of the spatial perspective of freight distribution. Chapter Two will review relevant literature on spatial logistics, while Chapter Three will detail the research methodology. Subsequent chapters will present and analyze the research findings, discuss implications, and conclude with recommendations for optimizing freight distribution from a spatial perspective.
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