© Peter Dicken 2015

‘Making the Connections, Moving the Goods’:

Logistics and Distribution Services

Global Shift

Chapter 17

Review

• Concepts to Review– Transport and communications technologies,

resource extraction, buyer-driven industry, clothing, agro-food and automobile industries, key nodes

• Key Words– Distribution, business-to-business/business-

to-consumer delivery, RFID, e-commerce

Logistics and Distribution: Definition and Structure

• Nature of the Industry– Intermediate between buyers and sellers

– Involves complex flows of both goods and information across vast distances

– Obstacles, political and physical, provide barriers to movement

• Globalization of the Industry– Getting things from point to point is a fundamental problem

– Growth of logistics market related to growth of economy

– System is driven by the consumer

– Lean production stimulates lean systems of distribution

Traits and Trends

• Industry Players– Transportation companies, logistics service providers,

wholesalers, trading companies, retailers, e-tailers

• The boundaries between these are slippery

• Consolidation of the Industry– Trend towards consolidation and concentration through

acquisition/merger

– Different types of logistics companies

• traditional transportation and forwarding

• asset-based logistics providers

• network-based logistics providers

• skill-based logistics providers

IT and Logistics/Distribution• Technology

– Time is the basis of competition

– Three key elements • electronic data interchange

• bar code systems and RFID

• distribution centres

• E-commerce– Two types dominate

• business-to-business

• business-to-consumer

– Rise of ‘infomediaries’

– Different types of shipment models

– The Internet is difficult to regulate

Retailers and the State

• Role of the State– Regulatory systems provide a significant obstacle

to logistics

– Try to protect domestic retail markets

– Regional economic blocs (e.g. EU, NAFTA) remove obstacles to distribution

• Retail Industry– Strong domestic orientation• sourcing is increasingly global

– Acceleration in transnational activities

– Transforms retail supply and logistics networks