importance of logistic centre

8/17/2019 Importance of Logistic Centre

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Session Eight

Exploiting the city’s role as a

logistic centre


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Outline

Why is it necessary to become alogistics centre, and what does itmean?

What can the government do to help?

Key policy and strategic issues


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The role of logistics in the city economy (1)

lobalisation leads to increased demand for freightdelivery services (i!e! it"s a growth sector)

# city"s position in the space of flows (defined as $the

material organi%ation of time&sharing social practicesthat wor' through flows" by astells) determines, to alarge etent, its position in the global urban hierarchy

Key features of the contemporary economy (e!g!globalised manufacturing system, internationalisation of

service provision, networ' enterprise, just-in-time practice or lean management ) depend on efficient andcompetitive logistics services


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The role of the government

#irports, ports and information interchanges are capital&intensive pro+ects, have long paying&bac' period and oftenreuire investment by the government (e!g! building a thirdterminal in Toronto cost -./01m in 12234 building the new#thens airport was epected to cost -.1!5bn in 1221

(6oganis 1227, p! 58))

They are often deemed to be strategically important in non&economic sense, and are often sub+ect to heavy regulation!

With both positive and negative eternalities!

These are comple operation, and become increasinglycompetitive because of liberalisation and over&capacity insome sectors or areas


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The role of the government

Their operation is often affected by relationship witheternal operators (e!g! conferences 9cartelsestablished by shipping companies&set freight ratesand regulate the provision of services) and therefore

need to be handled carefully

:n air transport Often bilateral agreements merely specifies the

number of cities to be served, without naming them!:mplications; cities need to loo' out for opportunities4

!


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onsiderations (1)

=actors for economic success and commercial viability of transport +unctions;

6emand; good correlation with population and economic growthwithin the hinterland, and with the etent of mar'etisation andliberalisation!

ar'et conditions may be altered by events far way (e!g! $2@11") orfundamental shift in economic thin'ing (e!g! climate change issuesmay reduce trade)

The competitive contet; between transport modes and with other

similar cities@sites! There is overcapacity in airport and seaporttrade in some parts of the world (e!g! #sia&Aacific)

.upply conditions; location and natural conditions, finance,managerial s'ills, union activities, conferences, regulation


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onsiderations (*)

=actors for economic success and commercial viability oflogistics function;

6emand; closely correlated with improved business

practice, etent of specialisation, the use of 'nowledgeand information as source of competitiveness

The competitive contet; a new and emerging mar'et!There is big scope for epansion!

.upply conditions; needs large investment in newtechnology and considerable management s'ills, aswell as capital! =irst mover"s advantage, regulationand inter&modality are important!


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The case of Barcelona

Cominated in 127 to host the 122* Olympic ames!

-ndertoo' massive urban transformation in between!

This included, among others, building ring roads (8D 'm),epanding its container port from 183,333 TE-s to 833,333TE-s, upgrading its airport, and epanding international E6:(electronic data interchange) networ's!

:nvestment represented 5!5> of all ependitures! 07> of

the total investment budget was for transport facilities!(oragas and Botella (eds), 1225, The 'eys to success)!

This illustrates that hosting important events has the potentialof facilitating logistics development


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.trategic options

.peciali%ed service provider; to be or not to be? (there is heavyenvironmental cost)

Transport, logistics or supply chain management?

Which role to play; to be a hub or spo'e?

Which mar'et; domestic, regional or international?

Which competitive strategy; cost @ uality of services@nichemar'et?

ompetition or alliance?

:ntegrated development and synergy with other economic activities


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Aolicy issues


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#msterdam airport .chiphol

# hub airport(Dm ppa) andthe Dth largestfreight airport inEurope

6eveloped an#msterdamonnectingTrade (#T)vision, with

development tobe completed by*31*!

ase of AAA

.chiphol

.outh East

#D %oneWest

Gogisticspar'


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The #T vision

I:n concrete terms, the #T area vision focuses onimproving efficiency within the multimodal logistics hubin the .chiphol region! This means that cargo handlingwill be improved through a renewed spatial layout andinternal connections between the business par's! Thismust also lead to more efficient connections to thehinterland by air, water, road and rail! #T stands foruality, improvement of the areaJs internationalcompetitive position and sustainability! .uch adevelopment can only be reali%ed in the Cetherlands if a

balance is found between accessibility, the economy anduality of life in the region and good cooperationbetween government bodies, private parties and publicorgani%ations! (.chiphol #T website)


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The End

importance of logistic centre

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