上海交通大学：《物流地理学 Geography of Logistics》课程教学资源（教学资料）The transport geography of logistics and freight distribution

JOURNAL OF TRANSPORT GEOGRAPHY ELSEVIER Journal of Transport Geography 12(2004)171-184 www.elsevier.com/locate/jtrangeo The transport geography of logistics and freight distribution Markus Hesse a.,Jean-Paul Rodrigueb Department of Earth Sciences,Urban Studies,Free University of Berlin,Malteserstr.74-100 D-12249 Berlin,Germany Department of Economics and Geography,Hofstra University,Hempstead,NY 11549,USA Abstract Goods movement and freight distribution are widely underrepresented in regional science and geographical research.This is surprising since a large body of traditional spatial theory has been developed with respect to transportation costs or to trade areas: those aspects that were originally closely connected with the exchange of goods.Growing attention is being paid in geography to related subjects,such as the emergence of global production networks,to structural changes in retail or to the commodification of modern consumption.To a certain extent,these processes depend upon the efficient transfer of information,finance and physical goods.Yet,with a few exceptions,the freight sector appears to be neglected in contemporary research.This paper provides an overview of the emerging transport geography of logistics and freight distribution.It challenges the traditional perspective where transportation is considered as a derived demand with the idea that logistical requirements underline transportation as a component of an integrated demand.The paper provides an analysis of the evolution of logistics as it pertains to the core dimensions of transport geography (flows,nodes/locations and networks).The concept of logistical friction is also introduced to illustrate the inclusion of the multidimensional notion of impedance in integrated freight transport demand. 2003 Elsevier Ltd.All rights reserved. Keywords:Logistics:Geography:Freight Transport:Physical distribution:Globalization 1.Logistics and freight transport:from derived to the science of physical distribution.Although it repre- integrated demand sents an entire system of space/time interdependencies, we believe that physical distribution has been neglected 1.1.Introduction in current geographical,urban or regional studies. Up to recently,geography did not pay much atten- The growing flows of freight have been a fundamental tion to logistics and freight transportation,as the focus component of contemporary changes in economic sys- was mainly on passengers and individual mobility issues. tems at the global,regional and local scales.The con- Textbooks on urban or general transport geography, sideration of these changes must be made within a like those edited by Hanson (1995),Taaffe et al.(1996) perspective where they are not merely quantitative,but or Hoyle and Knowles(1998),now raise more freight structural and operational.Structural changes mainly related questions than they did in earlier editions,par- involve manufacturing systems with their geography of ticularly with regard to trade and ports.The latter is production,while operational changes mainly concern probably the only logistics subject that received major freight transportation with its geography of distribution. reference from academic geography.Other core spatial As such,the fundamental question does not necessarily implications of distribution and logistics have been di- reside in the nature,origins and destinations of freight rectly addressed in geography by few authors who movements,but how this freight is moving.New modes developed an insight into wholesale activities and their of production are concomitant with new modes of dis- geographical distribution(Glasmeier,1992;McKinnon, tribution,which brings forward the realm of logistics; 1983,1988,1998:Riemers,1998:Vance,1970).Fol- lowing the nature of retailing as an originally distribu- tive activity,geographic research on retail and 'Corresponding author.Tel.:+49-30-838-70209;fax:+49-30-838- consumption is of interest in the logistics context too. 70749. However,retail geography does not pay much attention E-mail address:mhesse@zedat.fu-berlin.de (M.Hesse). to distribution changes (Marsden and Wrigley,1996), 0966-6923/S-see front matter 2003 Elsevier Ltd.All rights reserved. doi:10.1016j-jtrangeo.2003.12.004

The transport geography of logistics and freight distribution Markus Hesse a,*, Jean-Paul Rodrigue b a Department of Earth Sciences, Urban Studies, Free University of Berlin, Malteserstr. 74-100 D-12249 Berlin, Germany b Department of Economics and Geography, Hofstra University, Hempstead, NY 11549, USA Abstract Goods movement and freight distribution are widely underrepresented in regional science and geographical research. This is surprising since a large body of traditional spatial theory has been developed with respect to transportation costs or to trade areas: those aspects that were originally closely connected with the exchange of goods. Growing attention is being paid in geography to related subjects, such as the emergence of global production networks, to structural changes in retail or to the commodification of modern consumption. To a certain extent, these processes depend upon the efficient transfer of information, finance and physical goods. Yet, with a few exceptions, the freight sector appears to be neglected in contemporary research. This paper provides an overview of the emerging transport geography of logistics and freight distribution. It challenges the traditional perspective where transportation is considered as a derived demand with the idea that logistical requirements underline transportation as a component of an integrated demand. The paper provides an analysis of the evolution of logistics as it pertains to the core dimensions of transport geography (flows, nodes/locations and networks). The concept of logistical friction is also introduced to illustrate the inclusion of the multidimensional notion of impedance in integrated freight transport demand.
2003 Elsevier Ltd. All rights reserved. Keywords: Logistics; Geography; Freight Transport; Physical distribution; Globalization 1. Logistics and freight transport: from derived to integrated demand 1.1. Introduction The growing flows of freight have been a fundamental component of contemporary changes in economic sys￾tems at the global, regional and local scales. The con￾sideration 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 dis￾tribution, which brings forward the realm of logistics; the science of physical distribution. Although it repre￾sents 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 atten￾tion 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, par￾ticularly 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 di￾rectly 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). Fol￾lowing the nature of retailing as an originally distribu￾tive activity, geographic research on retail and consumption is of interest in the logistics context too. However, retail geography does not pay much attention to distribution changes (Marsden and Wrigley, 1996), * Corresponding author. Tel.: +49-30-838-70209; fax: +49-30-838- 70749. E-mail address: mhesse@zedat.fu-berlin.de (M. Hesse). 0966-6923/$ - see front matter
2003 Elsevier Ltd. All rights reserved. doi:10.1016/j.jtrangeo.2003.12.004 Journal of Transport Geography 12 (2004) 171–184 www.elsevier.com/locate/jtrangeo

172 M.Hesse,J.-P.Rodrigue Journal of Transport Geography 12 (2004)171-184 although the physical movement of goods appears to be trade theory neglects the role of transport and logistics one of the costliest parts of retail activities (Christoph- (Dicken,1998,p.74),particularly the fact that transport erson,2001).One exception to these observations is in costs have a fundamental impact on the amount of trade Ralston (2003).who does address issues of inventory and goods exchange,as do traffic constraints and carrying costs and supply chain analysis. opportunities in general.We argue that this perspective Despite the upcoming notion of volatility and place- is mainly the result of a misinterpretation of role of the lessness,and contrasting the enduring neglect of trans- transport sector,freight and passengers alike,as a de- portation by regional and geographical sciences,the rived demand.Under such circumstances,transporta- material world of physical distribution and the respec- tion is perceived as a residual consequence-derived-of tive locales is considered of geographical significance. other processes or a mere "space-shrinking"function The two traditional disciplines for investigating physical (Dicken,1998;Knox and Agnew,1998).However,the distribution are business administration (economics) same processes behind the focus of the globalization and transportation sciences.Both cover,to varying de- literature,such as international trade,multinational grees,aspects of space and location.However,it is corporations and the division of labor/production,are legitimate to state that both disciplines did not pay also revealing a different perspective,which is the much attention to the spatial character of their subject. management of supply chains and their underlying In turn,economic and transport geography,did not logistics.Consequently,the role of distribution in develop too large a focus on logistics-keeping in mind globalization remains partially unanswered and a geo- the broad geographical relevance of distribution.A graphical analysis of logistics may provide substantial substantial amount of research covers different planning evidence in that respect. aspects of freight transport particularly in the urban context,either from a transport engineering and plan- 1.2.Definition of the subject ning perspective or emphasizing related urban problems (Chinitz,1960;Odgen,1992;Woudsma,2001).Logis- Logistics consider the wide set of activities dedicated tics,as a geography,remains relatively unexplored. to the transformation and circulation of goods,such as Freight distribution is now considered with more the material supply of production,the core distribution attention as productivity gains in manufacturing are and transport function,wholesale and retail and also the increasingly derived from efficiency at terminals instead provision of households with consumer goods as well as of from the efficiency of transportation modes (Rodri- the related information flows (Handfield and Nichols. gue,1999).Because transport geography is traditionally 1999).These activities composing logistics are included more engaged in long distance trade issues,freight re- into two major functions which are physical distribu- lated work received significant attention.With emerging tion;the derived transport segment,and materials global trade,production networks and distribution management;the induced transport segment.More systems,particular emphasis was given to ports and specifically: related research covering many of these issues (e.g. Hoyle,1990,1996;Hoyle and Pinder,1992;Nuhn,1999; Physical distribution (PD)is the collective term for the Slack.1998).In this context,an increasing amount of range of activities involved in the movement of goods work on intermodal freight transport and terminal is- from points of production to final points of sale and sues appeared as well (van Klink and van den Berg, consumption (McKinnon,1988,33).It must insure 1998:Drewe and Janssen.1998).Generally.interna- that the mobility requirements of supply chains are tional trade increasingly contributes to the amount and entirely met.PD comprises all the functions of move- the nature of physical distribution.Thus globalization ment and handling of goods,particularly transporta- is now discussed as having a major impact on goods tion services (trucking.freight rail,air freight,inland exchange (Janelle and Beuthe,1997;McCray,1998; waterways,marine shipping,and pipelines),trans- Pedersen,2000;Woudsma,1999). shipment and warehousing services (e.g.consignment, Still,fallacies are noted in globalization discourses storage,inventory management),trade,wholesale within economic geography,undermining the assess- and,in principle,retail.Conventionally,all these ment of the role of transportation.Within the large activities are assumed to be derived from materials body of work referring to the globalization discourse or management demands the impacts of internationalization and free trade Materials management (MM)considers all the activi- agreements,transport is not seen as a major issue or is ties related in the manufacturing of commodities in de facto taken for granted(Holmes,2000).Even classic all their stages of production along a supply chain. MM includes production and marketing activities such as production planning,demand forecasting, IThe special issues on containerisation in GeoJournal 48.1999 and purchasing and inventory management.It must in- on terminals in the Journal of Transport Geography 7,1999. sure that the requirements of supply chains are met

although the physical movement of goods appears to be one of the costliest parts of retail activities (Christoph￾erson, 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 place￾lessness, and contrasting the enduring neglect of trans￾portation by regional and geographical sciences, the material world of physical distribution and the respec￾tive 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 de￾grees, 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 plan￾ning perspective or emphasizing related urban problems (Chinitz, 1960; Odgen, 1992; Woudsma, 2001). Logis￾tics, 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 (Rodri￾gue, 1999). Because transport geography is traditionally more engaged in long distance trade issues, freight re￾lated 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 is￾sues 1 appeared as well (van Klink and van den Berg, 1998; Drewe and Janssen, 1998). Generally, interna￾tional 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 assess￾ment 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 de￾rived demand. Under such circumstances, transporta￾tion 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 geo￾graphical analysis of logistics may provide substantial evidence in that respect. 1.2. Definition of the subject Logistics consider the wide set of activities dedicated to the transformation and circulation of goods, such as the material supply of production, the core distribution and transport function, wholesale and retail and also the provision of households with consumer goods as well as the related information flows (Handfield and Nichols, 1999). These activities composing logistics are included into two major functions which are physical distribu￾tion; the derived transport segment, and materials management; the induced transport segment. More specifically: • Physical distribution (PD) is the collective term for the range of activities involved in the movement of goods from points of production to final points of sale and consumption (McKinnon, 1988, 33). It must insure that the mobility requirements of supply chains are entirely met. PD comprises all the functions of move￾ment and handling of goods, particularly transporta￾tion services (trucking, freight rail, air freight, inland waterways, marine shipping, and pipelines), trans￾shipment and warehousing services (e.g. consignment, storage, inventory management), trade, wholesale and, in principle, retail. Conventionally, all these activities are assumed to be derived from materials management demands. • Materials management (MM) considers all the activi￾ties related in the manufacturing of commodities in all their stages of production along a supply chain. MM includes production and marketing activities such as production planning, demand forecasting, purchasing and inventory management. It must in￾sure that the requirements of supply chains are met 1 The special issues on containerisation in GeoJournal 48, 1999 and on terminals in the Journal of Transport Geography 7, 1999. 172 M. Hesse, J.-P. Rodrigue / Journal of Transport Geography 12 (2004) 171–184

M.Hesse,J.-P.Rodrigue I Journal of Transport Geography 12(2004)171-184 173 Manufacturing Requirements The purpose of the paper consequently is to assess Materials Management how geography is related to logistics and how logistics enforces a specific geography of production/distribution Induced Logistics Derived by exploring the integrated transport demand function. Demand (Integrated Demand) Demand It will first investigate the processes that have led to the integration of different functions into what has become Physical Distribution Mobility Requirements known as supply chain management.Second,its under- lying geographical dimensions are introduced,namely Fig.1.Logistics and integrated transport demand. the core concepts of flows,nodes and networks,which supply chain management has substantially modified. by dealing with a wide array of parts for assembly Last,spatial impedance (friction)factors linked to and raw materials,including packaging(for transport logistics are discussed and retailing)and,ultimately,recycling discarded commodities.2All these activities are assumed to be inducing physical distribution demands. 2.The evolution of logistics The close integration of PD and MM through logis- Although logistics were initially applied to military tics is blurring the induced/derived demand distinction. operations,its most significant impact is being felt The reciprocal relationship between the induced trans- through the functions of production.distribution and port demand function of physical distribution and the consumption(Rodrigue and Slack,2002).The exchange derived demand function of materials management is of goods is a constant feature of human economic thus considered as the integrated transport demand of activity.It was once essential for the rise of the mer- logistics (Fig.1).This implies that distribution,as al- cantile economy in medieval Europe(Braudel,1982)and ways,is derived from materials management activities became a large scale activity during the industrial rev- (namely production),but also,that these activities are olution.The location of industrial activity and thus the coordinated within distribution capabilities.Production, geography of manufacturing in general evolved with distribution and consumption are thus difficult to sep- respect to accessibility improvements that were partic- arate. ularly offered by railroads (which were then predomi- The more connected the different actors along a nantly freight related).Vice versa,every "long wave"in supply chain are,the harder it is to make a clear dis- the process of industrialization embodies distinct tinction between PD and MM as distribution channels transportation orientations and appropriate infrastruc- extend from suppliers to consumers and as responsibility ture requirements (Hayter,1997,27).This was true for for transport and warehousing is shared between man- the railroad in the fordist economy,as it is for trucking ufacturers,wholesalers and retailers(McKinnon,1988). and air freight more recently.The origins of the modern Logistics must be consistent with the products it sup- distribution sector go back to the emergence of the ports as customers tend to not place any difference be- capitalist economy,the development of specific modes tween a product and the distribution system that of industrial production and the unfolding of a partic- supplies it.Consequently,it is becoming increasingly ular division of labor.This created a distinct"sphere of difficult to consider transportation solely as a derived circulation",situated between production and con- demand,or industrial production,manufacturing and sumption (Marx.1939/1953).To a certain extent,cir- consumption solely as factors inducing transport de- culation allowed for the transition from use-value to mand.We thus argue that the classic transport geogra- exchange-value,and thus made possible the large-scale phy concept of derived freight demand has been blurred capitalization of commodities.Mass distribution and by the diffusion and adaptation of logistics.Manufac- marketing became incorporated in the practice of turing and mobility requirements are both embedded as modern management (Chandler,1977)and have been what is being produced,a part,or a finished product, significant factors of wealth generation. has to be moved at a similar rate along the supply chain. The organization and technology of modern distri- This paradigm shift leaning on supply chain manage- bution are embedded in a changing macro-and micro- ment,materials flow management and freight trans- economic framework.It can be roughly characterized by portation thus requires the elaboration of its own the terms of flexibilization and globalization.Flexi- transport geography bilization represents,far beyond the narrow interpreta- tion of"flexible specialization",a highly differentiated, strongly market-and customer-driven mode of creating added-value.Contemporary production and distribu- 2This is often labeled as reverse distribution,or integrated repair tion is no longer subject to single-firm activity,but and return (Rodrigue et al.,2001). increasingly practiced in networks of suppliers and

by dealing with a wide array of parts for assembly and raw materials, including packaging (for transport and retailing) and, ultimately, recycling discarded commodities. 2 All these activities are assumed to be inducing physical distribution demands. The close integration of PD and MM through logis￾tics is blurring the induced/derived demand distinction. The reciprocal relationship between the induced trans￾port demand function of physical distribution and the derived demand function of materials management is thus considered as the integrated transport demand of logistics (Fig. 1). This implies that distribution, as al￾ways, is derived from materials management activities (namely production), but also, that these activities are coordinated within distribution capabilities. Production, distribution and consumption are thus difficult to sep￾arate. The more connected the different actors along a supply chain are, the harder it is to make a clear dis￾tinction between PD and MM as distribution channels extend from suppliers to consumers and as responsibility for transport and warehousing is shared between man￾ufacturers, wholesalers and retailers (McKinnon, 1988). Logistics must be consistent with the products it sup￾ports as customers tend to not place any difference be￾tween a product and the distribution system that supplies it. Consequently, it is becoming increasingly difficult to consider transportation solely as a derived demand, or industrial production, manufacturing and consumption solely as factors inducing transport de￾mand. We thus argue that the classic transport geogra￾phy concept of derived freight demand has been blurred by the diffusion and adaptation of logistics. Manufac￾turing and mobility requirements are both embedded as what is being produced, a part, or a finished product, has to be moved at a similar rate along the supply chain. This paradigm shift leaning on supply chain manage￾ment, materials flow management and freight trans￾portation thus requires the elaboration of its own transport geography. The purpose of the paper consequently is to assess how geography is related to logistics and how logistics enforces a specific geography of production/distribution by exploring the integrated transport demand function. It will first investigate the processes that have led to the integration of different functions into what has become known as supply chain management. Second, its under￾lying geographical dimensions are introduced, namely the core concepts of flows, nodes and networks, which supply chain management has substantially modified. Last, spatial impedance (friction) factors linked to logistics are discussed. 2. The evolution of logistics Although logistics were initially applied to military operations, its most significant impact is being felt through the functions of production, distribution and consumption (Rodrigue and Slack, 2002). The exchange of goods is a constant feature of human economic activity. It was once essential for the rise of the mer￾cantile economy in medieval Europe (Braudel, 1982) and became a large scale activity during the industrial rev￾olution. The location of industrial activity and thus the geography of manufacturing in general evolved with respect to accessibility improvements that were partic￾ularly offered by railroads (which were then predomi￾nantly freight related). Vice versa, every ‘‘long wave’’ in the process of industrialization embodies distinct transportation orientations and appropriate infrastruc￾ture requirements (Hayter, 1997, 27). This was true for the railroad in the fordist economy, as it is for trucking and air freight more recently. The origins of the modern distribution sector go back to the emergence of the capitalist economy, the development of specific modes of industrial production and the unfolding of a partic￾ular division of labor. This created a distinct ‘‘sphere of circulation’’, situated between production and con￾sumption (Marx, 1939/1953). To a certain extent, cir￾culation allowed for the transition from use-value to exchange-value, and thus made possible the large-scale capitalization of commodities. Mass distribution and marketing became incorporated in the practice of modern management (Chandler, 1977) and have been significant factors of wealth generation. The organization and technology of modern distri￾bution are embedded in a changing macro- and micro￾economic framework. It can be roughly characterized by the terms of flexibilization and globalization. Flexi￾bilization represents, far beyond the narrow interpreta￾tion of ‘‘flexible specialization’’, a highly differentiated, strongly market- and customer-driven mode of creating added-value. Contemporary production and distribu￾tion is no longer subject to single-firm activity, but increasingly practiced in networks of suppliers and 2 This is often labeled as reverse distribution, or integrated repair and return (Rodrigue et al., 2001). Logistics (Integrated Demand) Materials Management Physical Distribution Derived Demand Induced Demand Manufacturing Requirements Mobility Requirements Fig. 1. Logistics and integrated transport demand. M. Hesse, J.-P. Rodrigue / Journal of Transport Geography 12 (2004) 171–184 173

174 M.Hesse,J.-P.Rodrigue Journal of Transport Geography 12 (2004)171-184 subcontractors (Dicken and Thrift.1992:Gertler,1992: principles,firms were following a more integrated ap- Hudson,2001).The supply chain bundles together all proach,thus responding to the upcoming demand for this by information,communication,cooperation,and, flexibility without raising costs.At the same time,many last but not least,by physical distribution (Bowersox firms took advantage of new manufacturing opportu- et al.,2000).Globalization means that the spatial frame nities in developing countries.As production became for the entire economy has been expanded,implying the increasingly fragmented.activities related to its man- spatial expansion of the economy,more complex global agement were consolidated.Spatial fragmentation be- economic integration,and an intricate network of global came a by-product of economies of scale in distribution fows and hubs(cf.Dicken.1998:Held et al..1999:Knox In the 1990s.with the convergence of logistics and and Agnew,1998).Logistics thus developed against the information technologies,this principle was increasingly background of long-term structural change in economy, applied to the whole supply chain,particularly to the technology and society affecting all major industrialized function of distribution.In some highly efficient facili- countries (IMF,2001).These interrelated changes com- ties,the warehousing function went down as far as 15 prise sectoral and structural changes,mainly the rise of min worth of parts in inventory.It is now being intro- service economies,the increasing share of goods with duced in service functions such as wholesale and retail high value and low weight,consumerism,the upcoming where inventory in stores are kept at a minimum and high tech and knowledge based sectors (Castells.1996): resupplied on a daily basis. they also include a new political framework,namely the Whereas contemporary logistics was originally dedi- policies of deregulation and liberalization that were cated to the automation of production processes,in effective for the US in the late 1970s and early 1980s, order to organize industrial manufacturing as efficiently and for Europe since the introduction of the Single as possible,the subsequent modernization of logistics European Market in 1992 (Knowles and Hall,1998). can been characterized by an increasing degree of inte- These policies are now also being adopted by many gration.This trend was already on the way in the 1960s, developing countries,with varied success. as a key area for future productivity improvements The principles of modern logistics can be traced back (Bowersox et al.,1968).However,only with the imple- to Taylor (1947),the conceptual creator of fordism. mentation of modern information and communication Although his ideas were related to improving efficiency technologies did this assumption become possible.They within the factory by organizing the worker's tasks allow for the integrated management and control of along an assembly line,the temporal dimensions intro- information,finance and goods flows and made possible duced.such as sequence.duration,schedule.rhythm. a new range of production and distribution systems synchronization and time perspective are of high sig- (Abernathy et al.,2000).Step by step,and according to nificance to logistical management.What Taylor's improvements in information and communication principles of management were able to achieve within technologies,the two ends of the assembly line became the factory in terms of productivity improvements, integrated into the logistics of the supply chain:the logistics are able to achieve between elements of the timely supply of raw materials and components from supply chain:a system of integrated factories.A mile- outside,and the effective organization of distribution stone that marked rapid changes in the entire distribu- and marketing (Fig.2). tion system was the invention of the concept of lean Flexible order and supply behavior is actually made management,primarily in manufacturing (Womack possible by new technologies,primarily through the real- et al.,1990;Harrison,1997).One of the main premises time exchange of information.Because of information of lean management is eliminating inventories and and communication technologies,firms are able to order organizing materials supply strictly on demand,replac- from point-of-sale,to adjust inventories to meeting de- ing the former storage and stock keeping of inventory. mand (if not to eliminate them entirely)and to reduce During the 1980s,the application of this"principle of redundancy almost totally.Features such as electronic flow"permitted the reduction of inventories in time- data interchange(EDI).automated product flow in dis- sensitive manufacturing activities from several days' tribution centers (DCs)and warehouses,or the recent worth to several hours.Much of these efforts initially computer based tracing-and-tracking systems-which took place within the factory,while supply and output offer on-line control of shipped parcels via the web-are flowed as batches from suppliers and to distributors. primary sources of enormous productivity gains over last High rack storages,which later became automatically two decades(Fig.3).They still seem to be more important driven,or the internal movement of packages by flat than innovations associated with the upcoming electronic robots were early expressions of logistical engineering. commerce(Hesse,2002a;OECD/ECMT,2001). Initially,logistics was an activity divided around the While cycle time requirements substantially decreased supplying,warehousing,production and distribution from the 1960s to 1980s,this came at the expense of functions,most of them being fairly independent from growing logistics costs,notably inventory.From that the other.With the new organization and management point on,the major achievements were related to pro-

subcontractors (Dicken and Thrift, 1992; Gertler, 1992; Hudson, 2001). The supply chain bundles together all this by information, communication, cooperation, and, last but not least, by physical distribution (Bowersox et al., 2000). Globalization means that the spatial frame for the entire economy has been expanded, implying the spatial expansion of the economy, more complex global economic integration, and an intricate network of global flows and hubs (cf. Dicken, 1998; Held et al., 1999; Knox and Agnew, 1998). Logistics thus developed against the background of long-term structural change in economy, technology and society affecting all major industrialized countries (IMF, 2001). These interrelated changes com￾prise sectoral and structural changes, mainly the rise of service economies, the increasing share of goods with high value and low weight, consumerism, the upcoming high tech and knowledge based sectors (Castells, 1996); they also include a new political framework, namely the policies of deregulation and liberalization that were effective for the US in the late 1970s and early 1980s, and for Europe since the introduction of the Single European Market in 1992 (Knowles and Hall, 1998). These policies are now also being adopted by many developing countries, with varied success. The principles of modern logistics can be traced back to Taylor (1947), the conceptual creator of fordism. Although his ideas were related to improving efficiency within the factory by organizing the worker’s tasks along an assembly line, the temporal dimensions intro￾duced, such as sequence, duration, schedule, rhythm, synchronization and time perspective are of high sig￾nificance to logistical management. What Taylor’s principles of management were able to achieve within the factory in terms of productivity improvements, logistics are able to achieve between elements of the supply chain: a system of integrated factories. A mile￾stone that marked rapid changes in the entire distribu￾tion system was the invention of the concept of lean management, primarily in manufacturing (Womack et al., 1990; Harrison, 1997). One of the main premises of lean management is eliminating inventories and organizing materials supply strictly on demand, replac￾ing the former storage and stock keeping of inventory. During the 1980s, the application of this ‘‘principle of flow’’ permitted the reduction of inventories in time￾sensitive manufacturing activities from several days’ worth to several hours. Much of these efforts initially took place within the factory, while supply and output flowed as batches from suppliers and to distributors. High rack storages, which later became automatically driven, or the internal movement of packages by flat robots were early expressions of logistical engineering. Initially, logistics was an activity divided around the supplying, warehousing, production and distribution functions, most of them being fairly independent from the other. With the new organization and management principles, firms were following a more integrated ap￾proach, thus responding to the upcoming demand for flexibility without raising costs. At the same time, many firms took advantage of new manufacturing opportu￾nities in developing countries. As production became increasingly fragmented, activities related to its man￾agement were consolidated. Spatial fragmentation be￾came a by-product of economies of scale in distribution. In the 1990s, with the convergence of logistics and information technologies, this principle was increasingly applied to the whole supply chain, particularly to the function of distribution. In some highly efficient facili￾ties, the warehousing function went down as far as 15 min worth of parts in inventory. It is now being intro￾duced in service functions such as wholesale and retail where inventory in stores are kept at a minimum and resupplied on a daily basis. Whereas contemporary logistics was originally dedi￾cated to the automation of production processes, in order to organize industrial manufacturing as efficiently as possible, the subsequent modernization of logistics can been characterized by an increasing degree of inte￾gration. This trend was already on the way in the 1960s, as a key area for future productivity improvements (Bowersox et al., 1968). However, only with the imple￾mentation of modern information and communication technologies did this assumption become possible. They allow for the integrated management and control of information, finance and goods flows and made possible a new range of production and distribution systems (Abernathy et al., 2000). Step by step, and according to improvements in information and communication technologies, the two ends of the assembly line became integrated into the logistics of the supply chain: the timely supply of raw materials and components from outside, and the effective organization of distribution and marketing (Fig. 2). Flexible order and supply behavior is actually made possible by new technologies, primarily through the real￾time exchange of information. Because of information and communication technologies, firms are able to order from point-of-sale, to adjust inventories to meeting de￾mand (if not to eliminate them entirely) and to reduce redundancy almost totally. Features such as electronic data interchange (EDI), automated product flow in dis￾tribution centers (DCs) and warehouses, or the recent computer based tracing-and-tracking systems––which offer on-line control of shipped parcels via the web––are primary sources of enormous productivity gains over last two decades (Fig. 3). They still seem to be more important than innovations associated with the upcoming electronic commerce (Hesse, 2002a; OECD/ECMT, 2001). While cycle time requirements substantially decreased from the 1960s to 1980s, this came at the expense of growing logistics costs, notably inventory. From that point on, the major achievements were related to pro- 174 M. Hesse, J.-P. Rodrigue / Journal of Transport Geography 12 (2004) 171–184

M.Hesse,J.-P.Rodrigue I Journal of Transport Geography 12(2004)171-184 175 1960s Demand Forecasting 1980s Purchasing Materials Requirements Planning Management Production Planning 1990s Manufacturing Inventory 2000s Warehousing Materials Handling Supply Chain Logistics Management Packaging Inventory Distribution Planning Physical Order Processing Information Technology Distribution Transportation Marketing Customer Service Strategic Planning Fig.2.Evolution of logistical integration,1960-2000 20 40 plier,the producer,the distributor (e.g.a wholesaler,a 18 Logistics Costs (GDP) freight forwarder,a carrier),the retailer,the end con- 口Imventory Cos克%GDP) 35 Cycle Time Requirements(days sumer,all of whom represent important players and 30 particular interests (Bovet et al.,2000;Bowersox et al., 25 2000).Compared with the former,more traditional shape 20 of the freight transport system,the evolution of supply chain management and the related emergence of the logistics industry is mainly characterized by four features: First,a fundamental restructuring of goods merchan- dising by establishing integrated supply chains with 1960s 1970s 1980s 1990s 2000s integrated freight transport demand. Fig.3.Logistical improvements,manufacturing sector,1960-2000. Second,whereas transport was traditionally regarded as a tool for overcoming space,logistics is critical in terms of time.This was achieved by shifts towards vertical integration,namely subcontracting and out- ductivity gains in distribution,accompanied by a sourcing,including the logistical function itself(Har- reduction of cycle time requirements,but as impor- vey,1989). tantly,of inventory costs.Another important require- Third,according to macro-economic structural ment was containerization,which conferred substantial changes,demand-side oriented activities are becom- flexibility to production systems in addition to the ing predominant.While traditional delivery was pri- container being its own storage unit.The expansion of marily managed by the supply side,current supply classical infrastructure such as highways,terminals and chains are increasingly managed by demand. airports was also essential for the development of Fourth,the logistics services are becoming complex modern logistics.The remarkable growth of freight and time-sensitive to the point that many firms are transport could not have happened without extensive now sub-contracting parts of their supply chain man- networks of freeways for regional and long-distance agement to third-party logistics providers.These pro- traffic,just as the railway system had provided the basis viders benefit from economies of scale and scope by for industrialization decades earlier. offering integrated solutions to many freight distribu- The flow-oriented mode of corporate management tion problems and organization currently affects almost every single activity within the entire process of value creation.The core component of materials management is the supply 3.The core geographical dimensions of logistics chain,the time-and space-related arrangement of the whole goods flow between supply,manufacturing,dis- The structural change in distribution and logistics tribution and consumption.Its major parts are the sup- has distinct geographical dimensions,investigated by

ductivity gains in distribution, accompanied by a reduction of cycle time requirements, but as impor￾tantly, of inventory costs. Another important require￾ment was containerization, which conferred substantial flexibility to production systems in addition to the container being its own storage unit. The expansion of classical infrastructure such as highways, terminals and airports was also essential for the development of modern logistics. The remarkable growth of freight transport could not have happened without extensive networks of freeways for regional and long-distance traffic, just as the railway system had provided the basis for industrialization decades earlier. The flow-oriented mode of corporate management and organization currently affects almost every single activity within the entire process of value creation. The core component of materials management is the supply chain, the time- and space-related arrangement of the whole goods flow between supply, manufacturing, dis￾tribution and consumption. Its major parts are the sup￾plier, the producer, the distributor (e.g. a wholesaler, a freight forwarder, a carrier), the retailer, the end con￾sumer, all of whom represent important players and particular interests (Bovet et al., 2000; Bowersox et al., 2000). Compared with the former, more traditional shape of the freight transport system, the evolution of supply chain management and the related emergence of the logistics industry is mainly characterized by four features: • First, a fundamental restructuring of goods merchan￾dising by establishing integrated supply chains with integrated freight transport demand. • Second, whereas transport was traditionally regarded as a tool for overcoming space, logistics is critical in terms of time. This was achieved by shifts towards vertical integration, namely subcontracting and out￾sourcing, including the logistical function itself (Har￾vey, 1989). • Third, according to macro-economic structural changes, demand-side oriented activities are becom￾ing predominant. While traditional delivery was pri￾marily managed by the supply side, current supply chains are increasingly managed by demand. • Fourth, the logistics services are becoming complex and time-sensitive to the point that many firms are now sub-contracting parts of their supply chain man￾agement to third-party logistics providers. These pro￾viders benefit from economies of scale and scope by offering integrated solutions to many freight distribu￾tion problems. 3. The core geographical dimensions of logistics The structural change in distribution and logistics has distinct geographical dimensions, investigated by Demand Forecasting Purchasing Requirements Planning Production Planning Manufacturing Inventory Warehousing Materials Handling Packaging Inventory Distribution Planning Order Processing Transportation Customer Service Strategic Planning Materials Management Physical Distribution Logistics Supply Chain Management Information Technology Marketing 1980s 1990s 2000s 1960s Fig. 2. Evolution of logistical integration, 1960–2000. 0 2 4 6 8 10 12 14 16 18 20 1960s 1970s 1980s 1990s 2000s % of GDP 0 5 10 15 20 25 30 35 40 Days Logistics Costs (% GDP) Inventory Costs (% GDP) Cycle Time Requirements (days) Fig. 3. Logistical improvements, manufacturing sector, 1960–2000. M. Hesse, J.-P. Rodrigue / Journal of Transport Geography 12 (2004) 171–184 175