Prompted #9: Recognizing Significance of Logistics

Prompted Post
Jordan Thimm

Well when I first started this post I initially went to the MSU’s supply chain management Facebook page to find some ideas and maybe observe the community that has been created around their organization, and I still may. But instead of that, I ran into an article they posted that showed the importance of this field in our world for those of us who don’t recognize it. This article goes into more detail about how the academic research that some of the faculty is doing is being applied in the real world and how they are impacting the world. I thought I would evaluate these claims and add my thoughts to their research.

This article focuses on logistic hubs, and their importance to our economy and keeping things balanced between the public and private sector. Logistic hubs are basically, to put it simply, areas where there is a lot of business focuses on logistics. These hubs do not all look the same, as this article mentions a few different examples written by MSU professors in their research on how they may be structured differently and how government interference with the hubs may be a factor. What I said earlier about logistics hubs “basically” being a group of businesses with a similar interest in logistics, that was exactly what the authors were trying to avoid, they want to convey the message that logistic hubs are much more than that. They are ways to reform and organize economic activity in certain locations. They must understand the flow of the market and who is dependent upon one another, they also have some power to, like I said, reform the flow because it is all derived from one general region. I agree with this notion of logistic hubs being more than what people may think, because I think that is how a lot of things may be viewed by people who don’t know the workings of logistics and their importance to certain areas. When I say certain areas, I say that because these hubs are very dependent on their location and their surrounding economic environment. An example of this is the fact that towns around harbors or close to big sea routes are more likely to sprout a larger logistics based hub rather than say a land locked town with not a lot of business around.

Back to what I mentioned earlier, government interference with logistic hubs. The first type of regional logistic hub is called the “port authority” model, and is defined by its very strong government involvement. Here, many times, the hub is government owned and run, so they have power to levy taxes, fees, tolls, etc. to fund their business. On the other end of the spectrum, we have what is called an “industry collaboration” and this is categorized by minimal government involvement. It is an organization created usually by an economic development agency to organize the supply chain and logistics in an area. This is different from port authority because this organization is voluntary, not government led or funded, so they must communicate more across a broader chain around are aimed at enhancing the economic growth of the hub and the area in which it resides. Not to say that the other form does not aim for this, but port authority structured hubs I feel like, may have other interests in mind as well.

Overall, this article was written to show the significance of logistic hubs and explain how they can be structured and governed. These hubs are so important because they drive economic development and both the public and the private sector benefit from a logistical-based economy. The private sector can go along doing their business and the public sector benefits from some logistic hubs around the world, and in many other ways around the world. My question to you is, what might be other factors that affect the size and location of logistic hubs?

 Staff | From the Quarter 4 2016 issue. "Governance models for regional logistics hubs, and why they matter." Governance models for regional logistics hubs, and why they matter – CSCMP's Supply Chain Quarterly. N.p., n.d. Web. 16 Feb. 2017.