5.5 Types of clusters
5.5.3 Logistics clusters
In the past two decades, there has been an increase in logistics clusters in Europe and North America. The specific term “logistics cluster” does not appear to be widely used, although
there are about ten locations that refer to themselves explicitly as maritime clusters. Indeed, within the United Nations, various agencies associate the term logistics cluster with humanitarian aid programmes where a number of different clusters have been established, including logistics clusters. For example, there are Logistics Clusters in Ethiopia, Somalia and Kenya, as well as a Regional Logistics Cluster for the Horn of Africa (United Nations World Food Programme, 2006). Clusters of logistics service providers follow the same pattern as other industry clusters in certain ways. Economies of scale are relevant for land rental, for warehousing and for enlarged markets for transport, such as that established through free trade between member countries of the European Union (Meijboom and. Rongen, 1995).
Box 5.2. Also Danuber
The Also Danube system is a collaborative, multi-jurisdictional effort in the European community that involves key private industries and stakeholders in the development and application of collaborative public and private transportation decision support technologies.
The Also Danube project was developed by a consortium of:
(1) Shipping Companies (sea and inland transport) (2) Inland waterway transport operators
(3) Transport operators - rail and road
(4) Ports, sea and inland (port authorities and transshipment operators) (5) Logistic service providers and forwarders
(6) Industrial companies (consignor/consignee) (7) RTD [Road Transport Directive] organizations (8) Telematic System Providers
(9) Software and Consulting companies
(10) National Authorities (e.g. customs, emigration authorities, public administration organizations for inland waterways, etc.)
The project commenced with the development of a strategic concept to provide a technology based logistics and transportation system for the Danube River. The concept had the objectives:
(1) Promoting the use of inland waterway transportation for value-chains
(2) Implementing an advanced concept to manage inter-modal transportation chains (3) Establishing highly integrated logistic networks and operational platforms (4) Improving the efficiency of the waterway and
(5) Demonstrating the functionality of logistic applications for the waterway.
The approach was to develop WEB-based client applications, advanced EDI solutions, and innovative telematic technologies to be integrated, demonstrated, and evaluated in specific supply chains representing different transportation markets. This entailed the development of a common-source logistics database for all transportation and logistics information relating to the waterway, involving all members of the consortium.
Applications and interfaces for specific logistic channels were developed to meet the needs of shippers, carriers, public entities and other channel members. The result is a collaborative, technology-based intelligent transportation network built around a common-source logistics database with interactive links for information provided regarding: supply operations, logistics processing, planning and operation of infrastructure and ports, tracking and processing information from industries and carriers. The Also Danube system contains many features of both private sector logistics systems and public ITS systems in the US. The characteristic which makes the Also Danube example distinctive is the degree to which it incorporates transportation system information from carriers, industries and public entities in the development of a cohesive system to use transportation technology to support freight efficiency. Because the process began with the identification of key industries and value-chains, and was developed by members of these chains; it is fundamentally different from American-style systems that involve only information flows among public agencies supplying and managing infrastructure. The involvement of value-chain industry groups in the initial concept of Also Danube was critical to its success. The common source logistics database at the heart of Also Danube would have never developed, and would not have users, had key value-chains and their members not been involved early in the conceptual planning. By identifying value-chain industry clusters, and incorporating industry groups
into the conceptual planning process for freight ITS in the American setting; more integrated technology solutions can be developed for freight transportation.
Source: (Duncan and others, 2005), http://www.alsodanube.at/index.htm.l.
However, the concept of the industry cluster has yet to be widely applied in transportation planning according to Duncan and others (2005) who investigate the appropriateness of the value chain industry cluster for ITS (intelligent transport systems) planning. Of course, transport has long been a factor cost in industrial location decisions. With the development of logistics and supply chain concepts, groups of firms have made greater use of information technology linking inventory, transport and distribution decisions, and as Duncan and others (2005, p. 8) point out, it is “not individual firms, or singular industries; but interactive clusters of industries that use the freight transportation system”.
Therefore, it could be argued that a logistics cluster (particularly the transport element of logistics) is unlikely to be limited to one location, although a specific location (e.g. a port) could be the focus of the logistics cluster. The role of logistics in value-chain industrial clusters is described in the example of the “Also Danube” project (Box 5.2), which offers a potential framework for the development of other inland logistics ports. In Box 5.3 Duncan and others (2005) provide a further example of the benefits of logistics (specifically ITS planning) in value chain industry clusters through a collaborative clustering of air cargo forwarders. This extract associates clustering with the concept of consolidation introduced in Chapter 2.
Duncan and others (2005) advocate the use of the “freight village” with intermodal facilities as a shared resource for members of value-chain clusters so that it becomes more than just an intermodal centre, and combines the benefits of both regional proximity and value-chain linkages. As they state (p. 13):
“Naturally, when co-located shippers are members of the same value-chain clusters, they can significantly leverage their co-location to reduce the transportation times and costs in the value-chain. Incorporating an integrated cluster-based ITS concept of operations and associated architecture in the transportation planning for a Freight Village may increase the viability and effectiveness of the Freight Village concept, by explicitly accounting for the industry cluster linkages when recruiting firms into the Freight Village and enabling the Freight Village to offer members something more than a location with proximity to both an inter-modal facility and a major trade centre.”
Box 5.3. Consolidating information architecture for improved asset utilization within the cluster
ITS planning can offer benefits at the value chain industry cluster level by optimizing the utilization of the assets of transportation related technologies and information flows. This goal has been suggested in recent discussion of an integrated approach to information systems international air cargo operations in the Twin Cities Metropolitan Area. An Air Cargo Task Force in the Mpls/St. Paul region has lead a number of studies which have identified more than 50 air cargo freight forwarders.
A significant issue for the region is that international air cargo drayed to Chicago is often interred for several days while a forwarder attempts to “fill” a truck. A study of the issue has proposed the creation of a consolidation centre whereby all participating air cargo forwarders would operate on a “shared” information system and drayage fleet. This would increase the efficiency of not only the information technology, but of the trucks, warehouse facilities and other key transportation resources in the value chain. By identifying the relevant value-chain clusters to be served by the facility with their relevant strategies and technologies, ascertaining their transportation requirements at the value-chain level, defining the roles and responsibilities of public and private entities and establishing key decision points and decision support requirements as described in the previous section, a cluster-based concept of operations for such a system could offer reduced costs and increased efficiencies for private sector cluster members, and an optimal use of the relevant ports and highways for public sector collaborators.
Source: (Duncan and other, 2005).