China
Africa
Explore chapters and articles related to this topic
Cost and Production Analysis: The General Concepts
Published in Bijan Vasigh, Ken Fleming, Thomas Tacker, Introduction to Air Transport Economics, 2018
Bijan Vasigh, Ken Fleming, Thomas Tacker
Economies of density are achieved through the consolidation of operations. The airline industry is a good example of this as it has developed the so-called hub-and-spoke system for air travel. That is, airlines have found it more cost-effective to consolidate operations at a single airport rather than operate a point-to-point service. For example, consider five airports that could all be connected together either by using one airport as a hub (Figure 4.5), or by flying between each city (Figure 4.6). Using a hub, all the airports can be connected to each other with a minimum of four flights, while the point-to-point service would require ten flights. The difference in the number of required flights is a cost saving as the airline can provide service to all the cities with less resources. of course there are other benefits to flying point-to-point services, such as being able to offer nonstop flights for the passengers. In addition, the advent of the regional jet has enabled airlines to offer an increased amount of point-to-point flying. However, the hub-and-spoke network is still the dominant flying structure in the United states, and will probably continue to be so for the foreseeable future.
Airline Passenger Marketing
Published in John G. Wensveen, Air Transportation, 2018
Airlines have tried to maximize the number of passenger seats filled by eliminating unprofitable routes and concentrating on lucrative high-density routes serving large-and medium-size airports. The hub-and-spoke system establishes a number of routes connected to a central hub airport where passengers are collected from feeder flights, transferred to other flights on the same line, and then carried to their ultimate destination. The traffic pattern at a hub airport consists of closely spaced banks of arrivals and departures. Passengers land at the airport and transfer to another flight within 40 to 50 minutes. Although Delta used Atlanta as a hub long before deregulation, most of the other majors adopted this practice during the 1980s, because it permits service between more origin and destination points. Moreover, passengers can be retained by the airline for longer distances, raising the average revenue per passenger. In most cases, carriers choose a busy airport as a hub so they can offer passengers a wide variety of possible connections and capitalize on already heavy origin and destination traffic. About three-quarters of the passengers at Atlanta and one-half at Chicago, Denver, and Dallas–Fort Worth arrive merely to change planes for other destinations.
Freight logistics, distribution and transport Concepts
Published in Tolga Bektaş, Freight Transport and Distribution, 2017
In many cases, trade-offs between volume and frequency of shipping, along with the cost of transportation, render customised services impractical. In such cases, consolidation is used for serving a number of demand points using a particular service. Freight consolidation transportation is performed by Less-Than-Truckload (LTL) motor carriers, railways, ocean shipping lines, regular and express postal services, etc. One example of LTL transportation is when the loads of a given set of customers are consolidated at a given source (e.g. a depot), and the deliveries are multiple destination points. In this case, a truck or a lorry is loaded with all the goods at the depot and is dispatched to visit the customers in a particular order to perform the deliveries. A consolidation-based transportation system can also be structured as a hub-and-spoke network, where shipments for a number of origin-destination points may be transferred via intermediate consolidation facilities, or hubs, such as airports, seaport container terminals, rail yards, truck break-bulk terminals and intermodal platforms.
Logistics and supply chain network designs: incorporating competitive priorities and disruption risk management perspectives
Published in International Journal of Logistics Research and Applications, 2021
Yalda Esmizadeh, Mahour Mellat Parast
According to our findings, a hub-and-spoke network is flexible to uncertainty, due to the storing operation in hub centres. A hub-and-spoke network is a good option for companies that want to provide transportation to distant areas with low transportation cost and want a network that is easy to grow. This network will be able to manage disruption by using alternate hub centres. On the other hand, cross-docking networks have a low inventory cost but with inflexibility to disruption due to lack of a storage feature. A cross-docking network can grow easily, covering a large area by unloading and loading of goods with adjacent final destinations. The direct shipping and milk-run systems, by eliminating the switching and storing facilities and having limited-capacity vehicles, would be inflexible to changes. Because different logistics designs emphasise different competitive priorities, it is important for logistics and supply chain managers to design a logistics system that supports the organisation’s overall competitive priority. This suggests that a logistics design that is aimed at minimising cost would not be a good fit for an organisation that strives to enhance customer service quality.
The role of dry port in hub-and-spoke network under Belt and Road Initiative
Published in Maritime Policy & Management, 2018
Hairui Wei, Zhaohan Sheng, Paul Tae-Woo Lee
The spokes in the hub-and-spoke system are liner services between regional terminals and the hubs. At the hub, the transport units are transferred from one liner service to another connecting the hub with the destination terminal. Ideally, hubs are located near to the center of gravity of transport demand. In this way, detour distances and trip times between origin and destination terminals can be minimized. A hub-and-spoke system is designed to combine small flows arriving and departing in different directions, which is a fundamental network structure of massive land transportation, water transportation, air transportation and integrated transportation logistics system thanks to its advantage of consolidating flows, exploiting economies of scale, reducing transportation lines and decreasing network investment cost. The reasonable hub-and-spoke network layout and adjustment can not only improve the level of logistics service, but also effectively improve the configuration efficiency of logistics resources.
Nature inspired supply chain solutions: definitions, analogies, and future research directions
Published in International Journal of Production Research, 2020
Nazli Turken, Vincent Cannataro, Avinash Geda, Ashutosh Dixit
Supply chains consist of interconnected entities that transport and transfer information and materials among each other to benefit the whole system. Similarly, nature houses ecosystems where a variety of organisms exist in harmony to survive. Hence, there are a plethora of analogies between the transportation, logistics, and networks that exist in nature and supply chains. For example, to provide services and products to a large number of customers in a cost-efficient manner, many firms, e.g. FedEx, utilise a hub-and-spoke system of centralised logistics where the products are consolidated at a central warehouse and distributed to the retailers at low cost (Fedex 2016). While the hub-and-spoke system is considered to be a human invention, it has already existed within mammals for millions of years. The hub-and-spoke system is present in the mammalian immune system. Lymphocytes, a type of white blood cells that aid in fighting infections in the human body, travel along the body using a hub-and-spoke system. This system is readily apparent in autoimmune diseases, such as multiple sclerosis, where T cells pass through and get sorted at the hub (lungs) before they travel to a spoke (brain) (Steinman 2013). This hub-and-spoke system allows a large number of nodes to be connected using the smallest number of connections. Another example of a natural hub-and-spoke system is elaborated upon within Conn et al. (2017), who show that the plant shoot structure of tomatoes, tobacco, and sorghum are Pareto optimal in total branch length and nutrient transport distance. Nutrients moving within a plant are analogous to passengers travelling along a network of roads. The specific structure and operating characteristics of nature's hub-and-spoke networks provide indispensable information about creating and managing resilient networks that minimise waste and costs.