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Defining maritime logistics hub and its

implication for container port
a a
Hyung-Sik Nam & Dong-Wook Song
a
Logistics Research Centre, Heriot-Watt University , Edinburgh
EH14 4AS, UK
Published online: 09 Jun 2011.
To cite this article: Hyung-Sik Nam & Dong-Wook Song (2011) Defining maritime logistics hub
and its implication for container port, Maritime Policy & Management: The flagship journal of
international shipping and port research, 38:3, 269-292, DOI: 10.1080/03088839.2011.572705
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MARIT. POL. MGMT., MAY 2011,
VOL. 38, NO. 3, 269–292
Defining maritime logistics hub and its implication

for container port
HYUNG-SIK NAM and DONG-WOOK SONG*

Logistics Research Centre, Heriot-Watt University,
Edinburgh EH14 4AS, UK
Since the hub-and-spoke concept was introduced to the aviation market after the
US airline deregulation in the late 1970s, it becomes a primary distribution model
employed by leading international logistics companies. This pattern drives the
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
companies to consolidate shipments on the large scale at major terminals (i.e.

hub) and to redistribute the smaller scale of shipments to their respective
destinations via radial links (i.e. spoke). In the field of logistics and supply chains,
however, the hub concept has been often introduced in various terms in
accordance with functionality: for example, logistics centre, logistics zone, freight
terminal, distribution centre and warehouse. Such a heterogeneous terminology
on the concept of logistics hub seems still in usage by practitioners and academics
alike. Having recognised this rather ambiguous concept and definition in the
literature, this article attempts to define the concept applicable to the maritime
industry by synthesising existing studies/perspectives and examine its possible
implications.
1. Introduction
Logistics has become a significant area of interest in global business and
management, and is seen as a way to enhance firms’ performance and outcomes
[1]. The importance of logistics has dramatically increased, as evidenced by the
significant degree of attention paid to it by practitioners and academics alike, due in
large part to the internal and external environmental factors affecting firms, such as
globalisation, changing customer demands, advances in technology and industrial
deregulation. Logistics centre (or so-called logistics hub or distribution centre) was
introduced in early 1980. Initially, the function of logistics centre was mealy limited
in simple warehouse which store the fished goods. However, modern logistics centre
provides a wide range of services including sophisticated and comprehensive value-
adding services. In the field of logistics and supply chains, however, the hub concept
has been often introduced in various terms in accordance with functionality: for
example, logistics centre, logistics zone, freight terminal, distribution centre and
warehouse. Such a heterogeneous terminology on the concept of logistics hub seems
still in usage by practioners and academics alike.
Having recognised this rather ambiguous concept and definition in the literature,
the main purpose of this article is to critically review the concepts and definitions
*To whom correspondence should be addressed. E-mail: D.Song@hw.ac.uk
Maritime Policy & Management ISSN 0308–8839 print/ISSN 1464–5254 online ß 2011 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/03088839.2011.572705
270 H.-S. Nam and D.-W. Song
associated with the existing hub literature applicable to maritime transport and
logistics by synthesising the existing studies and perspectives. As Webster and
Watson [2] and Lewis and Grimes [3] claim; an effective review creates a foundation
for advancing knowledge, closes areas where a plethora of research exists and
uncovers areas where research is needed. In this sense, this article also makes a
further proposition that hub ports (in particular, container ports) should be
examined with not only their container throughputs in terms of Twenty-Foot
Equivalent Units (TEU) but also their connections with shipping lines in the inter-
and intra-region. It is therefore addressed that an applicability of network-based
analyses would be made in the context of maritime logistics hub.
2. Logistics hub in concept

2.1. Defining logistics

Since a logistics concept was introduced in the early 1960s, the role of logistics, as a
main centre for firm’s cost reduction and consequently gaining its competitive
market position, has been ever more important to the business world [4]. As Stroh [5]
indicates, the term of logistics deriving from military that often refers to the
management of troops’ movement (i.e. equipments and supplies from one location to
another). After this military term ‘logistics’ was introduced in the field of
management, it has been defined mostly as to manage the movement of products
or items in business environment.
The term of logistics is often used to imply a number of different aspects of its
related functions, such as physical distribution, materials management, procurement
and supply and supply chain management. Growing interests in logistics have been
mainly due to the fact that logistics is one of the very few areas being utilised to
establish substantial economies. The logistics concept provided by the Council of
Supply Chain Management Professionals [6] is one of the most popular, where
logistics is defined as part of supply chain management that plans, implements and
controls the efficient, effective forward and reverse flow and storage of goods,
services and related information between the point of origin and the point of
consumption in order to meet customers’ requirements. This definition implies all the
relevant activities of the flow of goods from the origin to ultimate destination,
including transportation, warehousing, purchasing, distribution, etc.
As an important business function, logistics has drawn attention of business
operators as well as academic and scholars. Logistics has been a frequently studied
area, and a great number of studies and discussions have contributed enormously to
the overall development of logistics. There are several authors who make an effort to
define the logistics concept based on their own views. The generic strategy
framework by Porter [7] proposes that cost readership and differentiation are the
two main sources of competitive advantage. Stock and Lambert [8] identify that
logistics can be used as an offensive weapon for firms to gain a differentiation and
create a sustainable competitive advantage. David and Stewart [9] view logistics as
part of the supply chain process that plans, implements and controls the effective
forward and reverse flow and storage of goods, services and related information
from the point of origin to the point of consumption. An emphasis of logistics
functions differ from authors to authors. Rushton et al. [4] address that logistics
should be characterised by both ‘material management and distribution’, while
Agapio et al. [10] claim that ‘transport and distribution’ are cornerstones of logistics
Defining maritime logistics hub and its implication for container port 271
and its most visible manifestations. Logistics has traditionally been viewed first and
foremost as the physical distribution brought about by a focus on transportation and
warehousing [11], and is often regarded as the ‘whole process in managing the flow of
goods, services and information flow from raw materials to final customers’ [12].
Baudin’s [13] definition also encompasses all the relevant activities associated with
the flow of goods, including the functions of transportation, warehousing,
purchasing, distribution and so on. Christopher [14] employs a marketing and
cost-effective oriented approach, which highlights that logistics is a planning
framework with marketing channels to create a single plan for the flow of products
and information.
Coyle et al. [15] provide three major stages in terms of logistics developments. The
first stage is in 1960s to 1970s when logistics was considered as mere physical
movement of goods. There existed recognition on relationships between the various
functions within logistics, and companies recognising the change in the structure and
control over their distribution chain. Large retailers developed their own distribution
structures, which were based on the concept of regional or local distribution depots
to supply their stores. Moving to late 1980s and 1990s, the second stage is linked to
implementation of information technology concept [16] and integration of individual
logistics functions in that logistics was regarded as materials management (i.e.
inbound logistics) with physical distribution (i.e. outbound logistics). Finally, the
third stage of logistics development took place in 2000 and beyond. Companies
experienced a number of business challenges in order to maintain or improve their
competitiveness against competitors. During this period, there was a positive value
added role of logistics, while the traditional view of logistics being treated as merely a
cost burden became a minor viewpoint, regardless of any other implication.
Brief processes and related activities of logistics can be summarised as presented
in Figure 1.
Management actions
Inputs into Outputs from
logistics Planning Implementation Control logistics
Natural Marketing
resources orientation
(land, facilities (competitive
and equipment) advantage)
Customers
Suppliers
Human Logistics Management Time and

resources place utility
Raw In-process Finished
materials inventory goods Efficient
Financial
movement to
resources
customer
Information Proprietary
resources asset
Logistics activities
•Customer services •Plant and warehouse site selection

•Demand forecasting •Procurement
•Distribution communications •Packaging
•Inventory control •Return goods handling
•Material handling •Salvage and scrap disposal
•Order processing •Traffic and transportation
•Parts and service support •Warehousing and storage
Figure 1. Components of logistics management.

2.2. Defining logistics hub

The development of international trade and industrial distribution patterns has been
impacts on the development of logistics facilities as they have been recognised a main
strategic contributor to achieving competitiveness and attractiveness [17]. There has
been no clean cut definition towards what a logistics hub is. A dictionary [18] defines
the term ‘hub’ as a central part of vehicle’s wheel and exchangeable with ‘centre’. The
hub is commonly used in the aviation (especially, passenger sector) industry after the
US airline Deregulation Act in 1978; the route structure has been since then adopted
by a large number of airlines that operate in the deregulated market. A hub is
strategically located at an airport utilised as a collection–distribution centre for
passengers serviced generally by a single carrier [19]. Since the Deregulation Act
eliminated routing restrictions, networks based on a hub-and-spoke architecture
have proliferated in the US freight transportation industry as well. In the period of
1990s, the hub concept became the primary distribution model employed by logistics
integrators such as DHL, TNT, UPS and FedEx and leading international carriers.
Shipments coming from several origins are consolidated at major terminals (i.e. hub)
and redirected to their respective destinations through radial links (i.e. spoke) [19].
The hub concept has been often introduced in various terms in accordance with
mainly its functionality of storage and transportation: for example, logistics centre,
logistics zone, freight terminal, distribution centre, warehouse, intermodal
terminal international transport terminal, intermodal terminal and so on. Such a
heterogeneous terminology on the concept of logistics hub seems still in usage by
practioners and academics alike.
According to Rimiene and Grundey [20], the ‘logistics facilities’ (so-called logistics
centre) concept appeared around 30 years ago and can be classified into three
different generations over the course of its evolution. Europlatforms [21] provides a
precise definition of logistics centre that the hub for a specific area where all the
activities relating to transport, logistics and good distribution, both for national and
international transit, are carried out, on a commercial basis, by various operators.
Johnson and Wood [22] views logistics centre as cost reduction centre which is
defined as a facility where commodities move constantly to the end of circulation and
the warehousing amount and relevant costs are reduced as much as possible. An UN
report [23] states that a logistics centre should be able to equipped with all the public
facilities necessary to carrying out the all logistics related activities. Logistics centres
serve a variety of purposes including cargo transhipment, production synchronisa-
tion, facilitating business and trade, whereas others aiming to strengthen the logistics
capability for transforming a region a more attractive or competitive market.
However, the fundamental requirements as per logistics centre are on nodal point of
transport network, common infrastructures, intermodality and logistics and trans-
port services [24].
Over time there have been changes to how things are stored, produced and moved,
which have been significant for the development. The logistics facilities concept
could be, however, derived from three different perspectives such as a ‘traditional
logistics and supply chain management’ perspective (i.e. distribution centre or
warehousing), a ‘freight transport’ perspective (i.e. load centre, freight village and
transport node point) and a ‘Foreign Direct Investment’ (FDI) perspective (i.e.
international logistics zone and international free trade zone). Rimiene and Grundey
[20] provide three stages of developments of logistics facilities: (i) 1960s–1970s,
(ii) 1980s-early 1990s and (iii) mid 1990s-present, respectively. At the first stage,
logistics facilities are viewed as a mere warehouse that is understood as a physical

location for inventory, and have no direct linkage with production. Relevant
references, terms and highlights are summarised in Table 1.
Bowersox [25] defines ‘distribution centre’ as a physical facility used to complete
the process of product line adjustment in the exchange channel, and its primary
function is placed upon product flow in contrast to storage However, Reynaud and
Gouvernal [29] expand its simple warehousing function into transportation that is
defined as a place where consignments from different origins are grouped or split,
and is above all a transportation organisational centre, located at nodal point in the
logistics system. At the second stage of development, they are engaged with
additional outbound transportation functions [16] and often called to be a ‘transport
terminal’ and a ‘freight village’. Freight village is a defined area within which all
activities relating to transport, logistics and distribution of goods, both for national
and international transit, are carried out by various operators [20]. It is claimed that,
there are four requirements for being a freight village – that is, (i) it must allow to
access to all companies involved in the logistics activities in order to comply with free
competition rules, (ii) it must be equipped with all the public facilities including staffs
and equipment, (iii) it should preferably be served by a multiplicity of transport
modes (i.e. intermodal transportation) and (iv) it is imperative that a freight village
be run by a single body, either public or private [21]. Logistics facilities at the last
stage have become a supplicated logistics node, which offers value-added services
and a point where diverse routes converge to [30]. UN [23] identifies determinant
factors that can be a successful logistics centre as follows:
. A community desire to have a comprehensive hub development strategy,
. Existence of comparative cost advantages,
. A favourable fiscal environment,
. Existing high-tech manufacturing industry base,
. One-stop-shop local marketing organisation that proactively promotes the
location,
. Supporting infrastructure at all transport terminal facilities and human
resources and
. Appropriate incentive packages for foreign investors.
3. Maritime logistics hub in perspective

3.1. Defining maritime logistics
Having the aforementioned definitions on logistics in mind, maritime logistics is
concerned with maritime transport (i.e. shipping and ports), traditional logistics
functions (e.g. storage, warehousing, offering distribution centre services) and
integrated logistics activities (e.g. value-added services including labelling, assembly,
repairing). Despite the fact that there have been a large number of attempts to
investigate the convergent role between maritime transportation and global logistics
[11, 12, 31], the term maritime logistics has not yet been clearly addressed. Panayides
[32] initially introduces the concept of maritime logistics within the context of global
supply chains, but the definition and other related attributes such as scope, process
and characteristics of the concept have not been fully examined in his study. In this
respect, this article makes an effort to fill in the literature gap by defining the
maritime logistics based on the literatures of logistics and maritime transportation.
274
Table 1. Perspectives on logistics centre/hub.
Perspectives Types of hub Key points References
Traditional Distribution Place for a physical facility used to complete the procedure for the [4, 19, 20, 22, 25, 26]
logistics and centre/warehouse product line adjustment in the exchange channel.
supply chain Warehouse for storing finished goods.
perspective Facility from which wholesale and retail orders can be filled.
Place where consignments from different origins are grouped
and/or split.
Control the product flow in contrast to storage.
Place for creating value-added services.
Connecting link between producer and customer.
Freight Freight village/ Place for transport, logistics and goods distribution functionality. [21, 24]
transport logistics node Provide geographic coverage.
perspective Facilities which include warehouse and storage area.
Provide for public service and full territory access.
Freight terminal A terminal for freight transport modes change. [24, 27]
Provide a service for handling operation.
Place for value-added services.
H.-S. Nam and D.-W. Song
Dry port Inland location for consolidation and distribution of goods. [27, 28]
An integrated and intermodal extension of ports.
FDI/international International Parts of the territory of a state where any goods introduced are [29, 30]
facility location logistics zone generally regarded, in so far as import duties and taxed are exempted.
perspectives (or international Space for an arrangement where different trading entities, usually
free trade zone) member countries, agree to cut or scrap taxed in order to lower
business costs and remove bureaucracy.
Source: Compiled by the authors.

Maritime logistics is often referred to as a process of planning, implementing and

managing the movement of goods and information with ocean carriage being
involved. It has, in particular, highlighted the role of maritime transportation in
global logistics and supply chains [33], and its strategically significant role within the
logistics integration system [11]. However, as Notteboom [34] indicates, maritime
logistics is concerned with individual functions relating to sea transportation as well
as an effective logistics flow as a systematic entity of the logistics integration system.
Maritime logistics consists of three key players of maritime transportation –
shipping companies, port operators and freight forwarders. Although shipping is
mainly concerned with moving goods from one port to another, it also provides
related logistics services in order to support an overall logistics flow, including pick-
up services, inbound/outbound bills of lading, intermodal services and container
tracking. Ports in modern logistics systems involve not only loading/off-loading
cargoes to/from a vessel, but also various value adding services including
warehousing, storage and packing and arranging inland transportation modes.
Freight forwarding as the third component of the whole maritime logistics systems,
encapsulates the process of sea transportation in order to arrange the complex
process of international trade such as booking vessels on behalf of shippers,
preparing documents for ocean carriage and arranging logistics services for the
shippers. Figure 2 illustrates those elements in relation to the traditional logistics
functions.
Over the past decade, the maritime industry has experienced a number of
challenges occurred mainly due to changes in trade patterns, deployment of larger
vessels, regional competition among shipping lines and ports and intermodality.
Because of cost and capacity advantages, maritime transportation has always
remained a primary choice in global trading. As of 2007, seaborne trade accounted
for approximately 90% of global trade in terms of volume and 70% in terms of value
[35]. The liner shipping industry is the major contributor to this significance to the
world economy as it accounts for over 70% of total trade value shipped by sea [36].
A substantial volume of containers are delivered every day through its fast, frequent
and reliable transport network to almost any destination worldwide. The develop-
ment of the liner shipping industry has been accelerated through the process of
globalisation. The total volume of international container trade reached 117.2
million TEUs in 2006, more than twice that of 1999. In order to cope with this
increasing demand for container transportation, the total capacity of liner shipping
services was increased from 4.7 million TEUs in 1999 to 10.8 million TEUs in 2006,
an average annual growth rate of 8.7% [37].
Having been affected by the growth of containerisation traffic, shipping lines now
compete to acquire vessel sizes as large as they can, in order to gain the advantages of
economies of scale while also attracting the interest of powerful shippers with a large
amount of products to be shipped [31]. This movement redefines the geographical
structure of sea transport. Huge vessels now make it possible for only a few ports
(e.g. hub ports) to accommodate them, leading to the division of container ports into
hub and feeder ports. Under these conditions, an imbalance of power tipped in
favour of the shipping lines and the added capability of dealing with huge amount of
cargo has posed a new threat to both small-sized shipping lines and port terminal
operators.
Most shippers traditionally arrange two or more forms of transport modes in
order to ensure that their goods are efficiently delivered to their final destination.
276
Demand forecasting
Purchasing
Key components
of maritime logistics Requirements planning
Production planning
Materials management
Shipping lines Manufacturing inventory
Warehousing Logistics
Maritime
logistics
Materials handling
Port operation
Industrial packaging
Finished goods inventory
Physical distribution
Distribution planning
Freight forwarding
Order processing
Transportation
Customer service
Figure 2. Maritime logistics in perspective.

Maritime transportation is an inter-mediate mode which connects other modes of

transport such as road, rail, air and sea. In order to offer a single transport package
service and achieve quick door-to-door delivery, maritime operators are forced to
amalgamate all possible transportation modes and to coordinate with other modes of
transport [38]. Song [39] points out that ports should ensure that cargoes are
smoothly and safely connected to road or rail modes to facilitate delivery to their
final destination. Nowadays, it is crucial for maritime operators to combine the
intricately connected intermodal systems in an efficient and reliable manner, since it
may affect the performance of logistics integration.
As far as the scope of managerial functions are concerned, maritime logistics
involves not only the activities relating to maritime transportation, e.g. contracting,
shipping, sea voyage, moving cargo, loading/unloading, but also other logistics
services, e.g. stripping/stuffing, storage, warehousing, inventory management,
offering a distribution centre, quality control, testing, assembly, packaging,

repacking, repairing, inland connection and re-use. There are broadly three major
trends in logistics in the maritime industry [35, 40] including firms’ pursuing
globalisation, shift in supply chains and logistics integration and consolidation in the
logistics service provider industry One of the main driving forces for change in the
port industry emerges from the globalisation of production. Multinational enter-
prises are the key drivers of global production networks and associated distribution
networks. As a result of changing business environments (such as globalisation and
expansion into new markets, mass customisation in response to product and market
segmentation, and lean manufacturing practice), service expectation of customers
have moved towards a push for higher flexibility, reliability and precision [41]. It has
led to increasing the number of products to be shipped and the shipment frequency,
and decreasing average product life cycles and supply chain cycle.
The integrating of supply chain processes (including customer order management,
procurement, production planning, distribution, etc.) to enhance performance
typically results in collaborative networks with logistics partners. Firms have
acknowledged that warehousing and transportation are not part of their core
business and as a result these operations are outsourced to logistics service providers
(either third or fourth party). Increasing degree of firms’ globalisation pursuit and
outsourcing have provided opportunities for shipping companies, forwarding
companies, terminal operators and other transport operators. As manufacturing
firms have been looking for global logistics packages rather than just straight
shipping or forwarding services, most entities in the transport chain have responded
by providing new value-added service in an integrated package throughout a vertical
integration along the supply chain. The vertical integration has created mega-carrier
through merger and acquisitions. Mergers and acquisitions have occurred not only
driven by companies searching for takeover candidates, but also by companies which
have decided to divest aspects of their business, and were consequently looking for
buyers of these business [42].
Among the three key components of maritime logistics (i.e. shipping lines, port
authorities and freight forwarders), both shipping lines and port authorities are the
main players in the field of maritime logistics, although freight forwarders, often
called international trade specialists, are a key players in the middle to facilitate
cross-border trade. Liner companies operate regular, reliable and frequent services,
but they incur high fixed costs. Once the large and expensive shipping networks are
set up, the pressure is on to fill them with freight. In the 1990s, great attention was
Table 2. Increasing scale of vessel size.
1991 1996 2001 2006
45000 TEU 0 1.0 12.7 30.0

4000–4999 TEU 7.5 14.4 15.6 17.1
3000–3999 TEU 17.6 20.6 16.6 11.4
2000–2999 TEU 29.0 22.6 20.5 17.7
1000–1999 TEU 30.5 28.4 23.9 16.8
51000 TEU 15.3 12.9 10.7 7.1
Note: Figure indicates percentage of total fleets. Unit: %.

Source: [46].
devoted to larger and more fuel-economic vessels, and these indeed produced
substantial reductions in cost per TEU of capacity provided [43]. Larger ships have
often have a lower cost per TEU-mile than smaller units with the same load factor
[44, 45]. Table 2 shows the increasing scale of vessel size (in terms of percentage of
total shares) during the period of 1991 to 2006. Since late 1990s, there have been
three main integrations in shipping lines including trade agreement (i.e. liner
conference), operating agreement (i.e. vessel sharing agreement and strategic
alliances) and mergers and acquisitions [41].
Traditional function of ports has been limited for transhipment in order to
transfer goods from one mode of transport (shipping) to another (either another
maritime transport or inland transport) [47]. At present, however, ports play an
important role in the management and coordination of materials and information, as
the transport is an integral part of the entire supply chain. In order to develop
maritime transport as an integrated logistics system, ports have to simultaneously
work in several directions, by taking into account the requirements of the senders
and receiver of goods (such as physical accessibility from land and systematic
organisation of the information flow, which are regarded to the choice of seaport) as
they become their business partners in addition to the traditional ones (such as
shipping companies, terminal operators and forwarding companies). Chen [48]
pointed out that the main contribution of modern ports depend upon: the
availability of efficient infrastructure and inland connections, as part of a global
transport system; and the ability of logistics and transport operators to contribute to
the value creation and to accomplish also the qualitative attributes of customer
demand (such as reliability, frequency, availability of information, security, etc.).
As Notteboom and Rodrigue [12] indicate the main roles of traditional seaports
have been viewed as areas made up of infra- and super-structure capable of receiving
ships (such as pilotage and towing) and other modes of transport, and handling their
cargo from ship to shore and vice-versa (i.e. stevedoring that facilitates the loading
and uploading of cargoes). At present, however, ports play an important role in the
management and coordination of materials and information, as the transport is an
integral part of the entire supply chain [47], and as the importance of port’s
capability of providing logistics services (i.e. creation of value-added service) is
highlighted [49].
Among a number of logistics value-added service (such as consolidation,
packaging, labelling, assembly, economic processing, contingency protection
and operation efficiency), the importance of port’s value-added service is varied
by different authors. Carbone and De Martino [47] indicate procurement and pre-
assembly service are becoming of considerable significance, but Panayides and Song
[33] conclude the provision of port facilities for adding value to cargoes is an
important criteria for ports integrated in the supply chain. In order to develop
maritime transport as an integrated logistics and supply chain management system,
ports have to simultaneously work in several directions, by taking into account the
requirements of the senders and receiver of goods (such as physical accessibility from
land and systematic organisation of the information flow, which are regarded to the
choice of seaport) as they become their business partners in addition to the
traditional ones (such as shipping companies, terminal operators and forwarding
companies). Chen [48] also points out main contribution of modern ports depend
upon: the availability of efficient infrastructure and inland connections, as part of
a global transport system; and the ability of logistics and transport operators to
contribute to the value creation and to accomplish also the qualitative attributes
of customer demand (such as reliability, frequency, availability of information,
security, etc.).
3.2. Defining maritime logistics hub and successful conditions

As definition of maritime logistics and different perspectives of hub reviewed in
Section 3, the functions and spatial features of traditional seaport has been extended,
and coordination with other modes of transport and integration to entire supply
chains are key issues to attract customers. During the Section 3.2, the concept of
maritime logistics hub and their successful condition to be a regional hub port are
discussed within the context of the container port.
From the maritime transportation perspective, the load centre concept, as
summarised in Table 1, for a containerisation port has been particularly highlighted
by several authors including Martin and Roman [50] and Wang and Slack [44]. The
container revolution has provided a technology that was able to produce economies
of scale in the general cargo segment of maritime transport, which have resulted from
the employment of larger and more efficient vessels, a reduction of both time and
cost of port operations and the intermodal integration of ocean shipping with
movements by other transport modes [50]. Seaports have been defined as areas made
up of infra- and super-structures capable of receiving ships and other modes of
transport, handling their cargo from ship to shore and vice-versa [49]. However, the
definition has been expanded to encompass the provision of logistics services which
create value-added [14, 49], and ports constituting a critical link in the supply chain
and their level of efficiency, and performance influencing to a large extent, a
country’s competitiveness [17].
Tongzon [51], Lee et al. [52] provide the key factors to be a successful port (and
also a logistics hub, to some extent). They include: strategic location, large capacity of
port area and port facility capability for larger vessel, operational excellence and
flexibility and government role (including government support, law/regulation and
building free trade zone/free economic zone development). Hub ports should be
located strategically that allows minimum deviation from the trade lanes, and
enabling feedering from the ‘spoke’. Having been hugely affected by containerisa-
tion, shipping lines now compete to hold vessel size as large as they can, in order to
gain advantages of economies of scale and attract powerful shippers with a large
amount of products to be shipped [53]. This movement affects the geographical
structure of sea transport. Larger vessels make it possible for only a few ports
(e.g. hub ports) to accommodate them, which then cause the division of container
ports into hub and feeder ports. These ports must be supply driven, and hence
government support or an entrepreneurial drive should be followed. High produc-
tivity, turnaround time, equipment to cater the larger vessels are key factors when
shipping line chooses the calling port. Robinson [54] studied the history of
containership development and generalised the ports and maritime transport
network evolution in the Far East, and concluded that the hub-and-spoke networks
in the region will evolve continuously based on their operational cost and efficiency.
Operational flexibility must not be undermined. The changing nature of trade results
in lines needing flexibility, and ports that cannot or refuse to adapt will face
consequences in the future.
There have been a number of studies concerned with building seaport based
logistics hub and its integration to the global supply chain network [16, 32, 55]. The
roles of seaports are recognised as main components in determining the competi-

tiveness of a nation’s economies, and there is a close relationship between
development and expansion of seaport and economic growth [45, 55]. Through
2000s, the logistics hub concept has particularly developed by transport spatial
perspective in Europe, and emphasise that the development of functional special-
isation on inland terminals with related logistics activities and the importance of
hinterland [56], which include platformes logistiques in France, Interporto in Italy,
freight villages in UK, Güterverkehrzentrum in Germany. These terms are often
created within the framework of regional development policies as cooperative
initiatives by companies, intermodal operators, regional and local authorities, the
central government and/or the chambers of commerce [12].
Notteboom and Rodrigue [12], Thai [45] and Lee et al. [52] have shown the
importance of a port’s hinterland as a new phase of development. Hinterlands are
categorised into two types: main and competition margin [34]. The fundamental
(main) hinterland is the space over which a port has almost the exclusivity for
providing its services. The competition margins are the areas where other ports are
in competition. The fundamental hinterland is being challenged by intense port
competition with a port regionalisation mainly composed competition margins and
few fundamental hinterlands. Notteboom [56] explains four phases of port
development (called as Bird’s model) in terms of level of functional integration
that setting, expansion, specialisation and regionalisation. The important role of
hinterland could be found in the last phase, of the hinterland reach of the port
through a number of market strategies and policies linking it more closely to inland
freight distribution centre. Lee et al. [52] provide three regional patterns of
hinterland concentrations by three geographical areas: North America, Western
Europe and South East Asia. According to their research, current Asian ports
characterise that ports are concentrated in the coastal region and there is relatively
low hinterland coverage.
UN [23] provides three evolutional patterns of port development. Until 1960,
ports played a simple role as the junction between sea and inland transportation
systems. At that time, the main activities in the port region were cargo handling and
cargo storage, leaving other activities extremely unrepresented. Such a way of
thinking severely influenced related persons in the government and local adminis-
tration. Also, it even influenced persons related with the port industry, so it was
considered that it was enough to develop and invest in only port facilities, as the
main functions of the port were cargo handling, storage and navigation assistance.
Table 3. The transhipment volume of main ports in Asia-Pacific area in 2005.
Total Transhipment Estimate

throughput estimates transhipment
Port Region (Million TEU) (Million TEU) incidence
Singapore Southeast Asia 23.19 18.79 81.0%

Hong Kong Southeast Asia 22.60 10.15 44.9%
Busan (South Korea) Northeast Asia 11.84 5.18 43.7%
Kaohsiung (Taiwan) Northeast Asia 9.47 4.82 50.9%
Tanjung Pelepas (Malaysia) Southeast Asia 4.17 4.00 96.0%
Source: [57].
It was for these reasons that important changes in transportation technology were
neglected.
Moving to the next pattern (ports built between 1960 and 1980), ports had a
system comprising government and port authority, so the port service providers
could understand each other and cooperate for mutual interests. The activities in
these ports were expanded ranging from packaging, labelling to physical distribu-
tion. A variety of enterprises have also been founded in ports and hinterlands.
Compared to first-generation ports, the second-generation ports have a character-
istic that freight forwarders and cargo owners had a tighter relationship. We can say
that the second-generation ports had begun to notice the needs of customers, but
when it came to keeping a long-term relationship with customers, they took a passive
attitude.
From 1980, container transportation has developed quickly, and the new
intermodal transport system emerged. The activities of production and transporta-
tion have linkage to form an international network. The former services function has
been enlarged to include logistics and distribution services. The environment
protection facilities are becoming more important, so the ports are developing closer
relationships with those in their surrounding neighbourhoods. Compared to the past,
today’s port authorities are focusing on efficiency rather than effectiveness. In the
third-generation ports, the needs of customers were analysed in detail and port
marketing has been actively engaged. The late 1980s saw the emergence of major
changes [12]. Customers began to ask ports to provide a greater variety of services.
Providing value-added services is a powerful way for ports to build a sustainable
competitive advantage. Shippers and port customers are becoming increasingly
demanding. Customers now tend to look at Value-Added Logistics (VAL) services as
an integral part of their supply chain. As a result, ports must attempt to satisfy these
needs by offering differentiated services.
According to hub-and-network development, the container port can be divided
into three categories: hub port, trunk port and feeder port. Huang et al. [57] pointed
out that the main criterion a to be a hub port is not throughput cargo rate but
transhipment cargo rate. They conclude that there are five hub ports in Asia Pacific
region, which are two in Southeast Asia (Tanjung Pelepas, Hong Kong and
Singapore) and three in Northeast Asia (i.e. Kaohsiung and Busan) in terms of total
throughput and transhipment (see Table 3 for more). In 2005, the ratio of
transhipment container and container throughput for these five ports are all over
40%. Singapore port handles the highest transhipment volume, 18.79 millions TEU,
equivalent to 81% of throughput volume. The second highest is Hong Kong, which
handles 10.15 millions TEU of transhipment container equivalent to 44.9% of

container throughput. The third is Busan port, the transhipment volume is 5.18
million TEU and ratio is 43.7%. The fourth is Kaohsiung port, the transhipment
volume is 4.82 million TEU and ratio is 50.9%. The fifth is Tanjung Pelepas port, the
transhipment volume is 4 million TEU and ratio is 96%. Although the container
throughput for Shanghai port and Shenzhen port already over 10 millions TEU, but
their transhipment volume are only 0.40 millions TEU and 1.30 millions TEU, the
ratio are lower than 10%. As Huang et al. [57] conclude, it is why Shanghai and
Shenzhen ports can not be called hub port.
Having the aforementioned discussions in mind, it would propose an operational
definition of maritime logistics hub as follows:
A maritime logistics hub is (i) a nodal point of cargo transit or transhipment assuring
flawless door-to-door cargo movements, (ii) a principal distribution centre functioning as
a temporary storage and sorting and (iii) a place creating and facilitating value-added
services on the regional and/or international scale.
The above definition could be easily applicable to the regional or international
container ports, competing to have more shipping lines called at a particular port
that wants to be a maritime logistics hub in the region or on the global by keeping
establishing, extending and sustaining networks for the shipping lines.
3.3. Maritime logistics hub in practice

Perspectives on logistics centre/hub have been reviewed in previous studies. Maritime
logistics hub used to locate near the sea in order to provide logistics service for
maritime industry. However, as Notteboom and Rodrigue [12] emphasise, the
concept and role of hinterland, its location and functional boundary, have been
expanded into entire logistics systems. UNESCAP [23] provides three development
phases of maritime logistics centre: functional division between port and logistics
centre; new integrated port concept due to economic and industrial environmental
changes and provision of value added-services behind hinterland which can diverse
to free trade zone function. As initiated by Lee and Kim [58] and UN [23], the so-
called Distripark (for the cases of the Netherland and Singapore) has been arguably
the most advanced and sophisticated maritime logistics hub that provides traditional
seaport functions, together with miscellaneous value adding activities and services
created and facilitated within the area. What follows is a brief summary of these two
cases.
3.3.1. The Netherlands: European distribution centres. Centralisation of pan-

European distribution is a major trend implemented by major American and Asian
logistics operators in Europe. Not only are multinationals reengineering their total
European manufacturing and logistics structure, but also medium-sized enterprises
are setting up their first warehouse in the European market. Centralisation of
European distribution brings many logistical and other advantages to the firms
involved, which include reduction of logistics costs, increased sales, improved
control, better product availability, enhanced competitive position, faster market
response, etc. as well as economising on workforce and investment. The Netherlands
has three main Distriparks (i.e. Distribution Parks) in Rotterdam port area. A
Distripark is a large-scale VAL complex connected directly to container seaports.
The main activities in Distriparks are storage, consol/transfer, labelling, testing/
examination, packaging and distribution. Dutch and foreign logistics service

providers in the Netherlands meet the requirement of non-European (mainly
American and Asian) manufactures serving the European market. There has been an
increasing trend towards outsourcing warehousing and distribution activities in
Europe. The number of outsourced EDCs has grown tremendously since mid 1990s,
especially in the Netherlands. Two-third of American European Distribution Centres
(EDCs), 60% of Japanese EDCs, and almost all Taiwanese and Korean EDCs have
outsourced their distribution services to logistics service providers in Europe. This
means that only 30% to 40% of American and Japanese manufacturers operate their
own EDCs themselves in the European Markets. The main advantages of
outsourcing services to third party logistics service providers in Europe include:
. No capital investments needed and thus, bearing less risks,
. Reduced total logistics costs,
. Flexibility in space and manpower requirements,

. Ability to exploit economies of scale,
. Local firms have insight into logistics planning and
. Multinational companies can concentrate on their core business of marketing
and scale.
The Netherlands assist American and Asian firms to strengthen their position
in European market by means of VAL. One out of every three EDCs in the
Netherlands implements VAL. Through VAL in EDCs, firms combine logistics and
industrial activities in an international gateway to create country-specific and/or
customer-specific variation of generic products. The main VAL activities are
customising/localising generic products, quality control and testing of products. The
biggest advantages of VAL in EDCs are to reduce the costs and risk of keeping
stocks as well as to enable a larger range of products to be offered.
Several international logistics hubs have been established at major Asian and
European airports and seaports, which have resulted from both multinational firms’
global business strategy, and host countries’ investment to attract foreign firms. Lu
et al. [26] have provided a summary of recent trend of logistics zones (as a logistics
hub in terms of functionality) which provides not only a place for firms to store or
hold their raw materials, semi-finished goods or finished goods for varying period of
time, but also many value-added activities (including manufacturing, warehousing,
consolidation, packing, labelling processing and distribution). Lu et al. [26]
highlighted the function of international distribution centre, which defined as a
place which integrates the operations of manufacturing with land, sea, air
transportation, storage, port and customs operations in order to achieve the
efficient distribution of commodities, as part of foreign investment.
3.3.2. Singapore: Asian distribution centres. Singapore has the same position in
Asian logistics as the the Netherlands does in Europe. There has been a growing
trend for multinational firms to establish Central Distribution Centres (CDCs) in
Asia. Using CDCs, they can meet their own standards of service quality and timely
service to their own customers. They have better control and could respond more
readily to the needs of the marketplace, with focused distribution from one hub
to the surrounding region [53]. Because of the fierce competition in manufacturing
and marketing, logistics plays a vital role in gaining a competitive advantage. In
Singapore, multinational firms partner with third party logistics service specialists.
Logistics firms have shifted from providing transportation and warehousing to

offering total integrated logistics solutions. They are able to provide high quality
custom tailored third party logistics services to Multinational Corporations (MNCs
hereafter) via their CDCs, most of which are located in a Distripark. As a leading
regional and international logistics hub, the logistics industry accounts for about 7%
of Singapore’s Gross Domestic Product (GDP).
Singapore has all necessary infrastructures support, which offers a strategic
location at the crossroads of major shipping routes linking Indian and Pacific
Oceans. It has world-class seaports and airports, excellent infrastructure, an efficient
telecommunication network, a pro-business environment, intensive use of informa-
tion technology, wide ranging business capabilities, as well as a skilled and
disciplined workforce. All of these advantages have attracted a large pool of
multinational and local companies to Singapore. Singapore has taken advantage of
rapid growing neighbouring economies. Since the Southeast Asian countries have
recorded average annual growth of 7% before the foreign exchange crisis of the late
1990s, the strong neighbouring economies have helped Singapore to build a regional
distribution hub successfully. By mid 2000s, over 500 multinational firms have
chosen as their Southeast Asian logistics/distribution hub. The logistics companies,
which were over 6000 in Singapore, provide comprehensive services such as
transport, forwarding, warehousing and distribution to the multinational firms.
4. Implication for container ports

4.1. Northeast Asia as a case
This section makes an application of what has been discussed to the regional
container ports with particular reference to the Northeast Asia as a case. The
Northeast Asia, composed of China, Japan and two (North and South) Koreas and
the Russian Federation, does not belong to any regional economic block except the
Asia-Pacific Economic Cooperation (APEC), which is a sort of consultative regional
forum. During the past two decades, however, the countries in the Northeast have
engaged in a greater degree of economic cooperation. The reform and opening up of
the Chinese economy since the 1970s have accelerated an economic cooperation
in the region, mainly among China, Japan and Korea. China’s accession to World
Trade Organization (WTO) in 2001 provided a new momentum for regional
economic integration by promoting intra-regional trade and accelerating economic
cooperation. The Northeast region is an area occupying one-quarter of the world
population, and boasts a total economic size of above US$ 13 trillion [59], and some
of the fastest economic growth rates in the world. It is also predicted that these three
countries will have approximately 32% of the market share in global container
movements, accounting for 1360 million TEUs and reap into the centre of the world
economy by 2010 [60].
There has been competition being a regional maritime hub port nation in the
region. Until the late 1990s when both Japan and Korea suffered their respective
financial and economic crisis, maritime transport has played a key role in promoting
trade between the nations. Based on its competitive labour cost and market size,
China has been enjoying 8–11% of economic growth rates every year since the early
1990s [61]. China’s economic growth has accompanied development of the nation’s
maritime infrastructure and seaports (such as Shanghai and Shenzhen) and China’s
cargo throughputs was approximately 3.5 times more than Busan port, the main
seaport in Korea, in 2006 [62]. Rapid growth of Asia’s container seaports and their
market position in the 2000s can be seen in Table 4. In addition, total container
throughput of major container ports in Northeast Asia (with particular reference to
Japan, Korea, Singapore, Taiwan and China) since 1970s is illustrated in Figure 3.
As noted by UN [37], the region’s economic opportunity is optimised if an
appropriate transport and logistics system is carried out, including adequate port
and shipping services in place to facilitate the efficient and effective flow of sea-based
trade within the region as well as to and form overseas markets. However, there is an
increasing concern that inadequate infrastructure and a lack of harmonised policies
among the Northeast countries may cause serious bottlenecks in the transport and
logistics system, and ultimately hinder the potential of trade and economic
developments of the region. Multilateral maritime cooperation among the three
countries seems essential to the establishment of a common shipping and port
system. It will also help the maritime transport network evolve into other modes of
transport throughout cross-boarder of different countries such as the projected
Trans-Asian Railway. It is well recognised that seaports are the focal point of global
distribution and logistics systems and therefore a priority should be given to the
balanced development of the ports in the Northeast. The demand for container
ports, and competition and cooperation within the Northeast region will further
increase in the future. This trend will heighten competitive pressures on these major
ports in Northeast Asia.
Along with rapid trade expansion, manufacturing-dominant economies in East
Asia have created tremendous demand for maritime transport. Because container
transportation has been the most appropriate method for facilitating the efficient
movement of manufactured goods to export markets, there has been a surge in
demand for inter- and intra-regional shipping capacity and strong container
handling performance. Looking back the past 10 years, the development of
Northeast countries’ port can be summarised as remarkable investment on ports
by China, while Korea and Japan have experienced economic recession since late
1990s. Two main container ports in mainland China (such as Shanghai and
Shenzhen) ranked world third and fourth highest cargo throughputs which
accounted for approximately 40 million TEUs in 2006 (The figure is 3.5 times
more than Busan port in Korea) [63]. Even massive port construction both in China
and Korea have often been unable to keep pace with the dramatic increase in their
maritime traffic. Faced with these problems, countries in the Northeast have
implemented new approaches to port developments and management, which were
typically funded and managed by government. These new ways include deregulation,
improvement of FDI and private sector involvement in ports [64].
The container port industry in China has experienced a rapid expansion during
the past three decades. Throughput and capacity have been hitting record highs as
progress has been made in port infrastructure, cargo handling facilities and
administrative systems. Meanwhile, a significant amount of investment has been
poured into the container port industry to support its double-digit growth. As a
result, six of Chinese ports have ranked within the top 20 container ports in 2008.
The concentration of throughput is a fundamental characteristic of China’s
container port industry [65]. Adopting a geographical perspective, they can be
organised into three regions: Northern China (Qingdao, Tianjin and Dalian),
Central China (Shanghai and Ningbo) and Southern China (Shenzhen and
Guangzhou).
286
Table 4. Throughput of container ports in Japan, Korea and China since 1970.
Region Country Port 1970 1975 1980 1985 1990 1995 2000 2002 2004 2006
Northeast Asia Japan Kobe 90 904 727 1518 2595 1463 2265 1992 2176 2413
Tokyo 54 358 631 1004 1555 2117 2899 2712 3358 3969
Nagoya 44 95 205 422 897 1477 1911 1927 2155 2752
Yokohama 328 722 1327 1647 2756 2317 2364 2717 3200
Korea Busan 632 1148 2348 4502 7540 9436 11430 12039
North China Shanghai 206 456 1527 5613 8620 14557 21710
Qingdao 135 600 2120 3410 5139 7702
Tianjin 320 702 1708 2410 3814 5950
Yantian 2148 4148 2871
Ningbo 902 1860 4005 7068
Dalian 370 1011 2211 3212
South China Hong Kong 12549 18100 19144 21984 23539
Guanzhou 2180 3308 6600

Shenzhen 3993 7613 13615 18469
Xiamen 84 1084 1750 4019
Note: Unit: 1000 TEUs.

Source: Compiled from [58].
Container throughput in Japanese ports since 1970 Container throughput in Busan portin Korea since
4,500 1970
14,000
4,000
3,500 12,000
3,000 10,000
TEU (1,000)
TEU (1,000)
2,500
8,000
2,000
6,000
1,500
1,000 4,000
500 2,000
0
0
70
75
80
85
90
95
00
02
04
06
19
19
19
19
19
19
20
20
20
20
1970 1975 1980 1985 1990 1995 2000 2002 2004 2006
Year Year
Container throughput in northeast Chinese ports Container throughput in southeast Chinese ports
since 1970 since1970
25,000 25,000
20,000 20,000
TEU (1,000)
TEU (1,000)
15,000 15,000
10,000 10,000
5,000 5,000
0 0
1970 1975 1980 1985 1990 1995 2000 2002 2004 2006
Year Year
Figure 3. Total TEUs by major container ports in Japan, Korea and China since 1970.
Japan is a long, narrow island country and, therefore, the port industry plays an
essential role in Japan’s economic activities. More and more top quality container
terminals are set to provide the response to the increasing demand for container
transportation. In Japan, major container ports were built in Tokyo Bay (the ports
of Tokyo and Yokohama), Ise Bay (the port of Nagoya) and Osaka Bay (the ports of
Kobe and Osaka). Japan has been well-endowed with port infrastructure for the
container trades since the 1970s. At that time, based on the advantage of its
industrialisation, Japan dominated the whole of Asia’s container trades. However,
such an illustrious situation has changed dramatically from the middle of the 1980s.
Japanese ports have been moving down in the world ranking over the last two
decades. The falling competitiveness of Japanese ports has been a serious concern for
both government and industry. In response to the challenge, investment in Japanese
container terminals was emphasised in 1996. In 1998, the Japanese government set
their target to ‘Surpass other major ports in Asia in terms of cost and service in about
3–5 years’.
South Korea is only a part of a small peninsula but with vast potential in
container transportation. Ideally located in the centre of the world’s main shipping
lines, particularly for the Trans-Pacific route, South Korea has set their target to be
one of the major logistics hubs in East Asia. Indeed, the container ports of South
Korea not only carry out about 99.8% of the cargo handling for national foreign
trade, but also handle transhipment cargo originating from China, Russia and
Northwestern Japan. The ports of Busan, Gwangyang and Incheon together
constitute the main force of South Korea’s container transportation. There are 21
container berths totalling 6220 meters at the port of Busan; 12 berths totalling 3700
meters at the port of Gwangyang and five multi-purpose berths at Incheon port.
Apart from the port of Incheon, both Busan and Gwangyang have the ability for
hosting sixth generation container ships. Similar to the other countries in East Asia,
existing container handling capacity falls far behind the trade and transhipment
demand [17, 43].
4.2. Network perspectives

Analysing container hub ports used to evaluate with their throughput, largely in
terms of TEUs. There is, however, a question that greater volume of container
throughput should be regarded as the main or sole condition to become a regional
hub port. As is defined in the previous section, a greater level of connectivity with
neighbouring ports via shipping lines could be another signal factor with which to
judge whether or not a certain port is in a region.
A promising alternative for such an examination is a network theory, which is

part of graph theory in the social network analysis [66] and is an area of computer
and network science being useful for mapping and measuring of relationships and
flows between objectives (i.e. people, groups, organisations and other connected
information/knowledge entities). It can be presented in a form of visual and
mathematical relationships. Network theory concerns itself with the study of graphs
as a representation of either symmetric relations or, more generally, of asymmetric
relations between discrete objects. Each graph represents a set of objects called
vertices (or nodes) connected by links called edges (or arcs). Scott [67] explains that a
graph structure can be extended by assigning a weight to each edge or by making the
edges to the graph directional (e.g. X links to Y, but Y does not necessarily link to X,
as is in webpages), which is technically called a digraph. In graph theory, a digraph
with weighted edges is called a network. A primary aim/usage of graph theory is to
identify an ‘important’ objective (called actor). On the other hand, the centrality and
prestige concepts of graph theory seek to quantify graph theoretic ideas about an
individual actor’s prominence within a network by summarising structural relations
among the nodes [68]. The centrality concept shows how many inter-relationships an
actor is involved with other actors in the network, regardless of sending and receiving
directionality (i.e. volume of activity), whilst the prestige concept indicates how many
directed ties an actor receives from other actors, but the actor does not initiate such
relations (i.e. actor’s popularity is greater than extensivity) [66, 68].
These two concepts have a potential meaningfully applicable to the maritime
transport and logistics which is in nature a network-based industry. Measuring the
centrality is a widely used methodology in the field of transportation: for example,
Ducruet et al. [69], Blonigen and Wilson [70] and Ducruet et al. [71]. Ducruet et al.
[69, 71] examine the Northeast Asia’s hub port status according to centrality
measurement with ‘degree centrality’ and ‘betweenness centrality’. The degree
centrality can be simply measured by the sum of direct networks between nodes: a
sum of direct network connection by shipping lines between two ports. The
betweenness centrality is a measure of a node within a graph, and nodes that occur
on a number of shortest paths between other nodes have higher betweenness than
those that do not: the sum of proportions, for all pairs of ports, in which a main port
is involved in a pair’s geodesics.
These centrality measurements would be a useful tool to diagnose the regional
hub port competition in Northeast Asia or even other parts of the world where a
number of adjacent ports make a significant effort to be a key port in that region.
Currently both Japanese and South Korean container ports have lost their
competitive position to Chinese ports in terms of container throughput. However,
it does not necessary indicate that they have also lost their relative hub port status;
it might have been maintained or even have been strengthened based on network
analysis. An analysis of regional hub port competition based on network theory
would enable to provide a useful insight into how regional ports take an advantage
against competitors and co-operate each other within the region.
5. Concluding remarks
This article has attempted to make a meaningful concept and definition of maritime
logistics hubs in the spirit that an effective literature review facilitates to enhance
academic knowledge depth and horizon. There have been a number of empirical-
based studies on the topic but those researches are conducted under vague
assumption or definition on maritime logistics hub, generally proxied in a form of
container hub ports. While those empirical analyses have their own merits by
offering a fact-based picture of the industry trend over the past years, they are
unfortunately unable to clarify issues of what a maritime logistics hub or container
hub port is, what factors make a hub, how to predict next steps, and what measures,
in terms of policy and strategy making, are to be made to be a hub. It is hoped that
the review made in this article initiates further discussion and scientifically rigours
examination on the topic from a variety of qualitative and quantitative perspectives.
This line of research will surely be beneficial to those engaged in port development
and policy making and in daily port operations and management, and other
strategically related industry sectors.
Nevertheless, this study has such inevitable shortcomings that existing literatures
are not rich enough to be directly applicable to the topic concerned, that the boundary
of disciplines associated with the issue is still high to be pushed down, which makes
things worse in making a consensus towards a precious concept, definition and scope
of the matter and that this line of review might not be comprehensive to digest all the
necessary aspects and perspectives related to the topic. It is sincerely hoped that those
listed shortfalls and others not identified herein are the ones that we maritime
academic community can deal with in an objective and scientific manner so that our
understanding and knowledge are elevated and embellished.
Acknowledgements
An earlier version of this article was presented at the 12th WCTR in Lisbon held on
11–15 July 2010. The authors are grateful to the conference organiser and scientific
committee members for constructive and helpful comments on the previous version,
which are well embraced into the current version with the enhanced quality as it is.
Due appreciation also goes to the guest editors of this special issue during the
preparation and review process.
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Maritime Policy & Management: The

Defining maritime logistics hub and its

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Defining maritime logistics hub and its implication

HYUNG-SIK NAM and DONG-WOOK SONG*

companies to consolidate shipments on the large scale at major terminals (i.e.

*To whom correspondence should be addressed. E-mail: D.Song@hw.ac.uk

2. Logistics hub in concept

2.1. Defining logistics

Human Logistics Management Time and

•Customer services •Plant and warehouse site selection

Figure 1. Components of logistics management.

2.2. Defining logistics hub

logistics facilities are viewed as a mere warehouse that is understood as a physical

3. Maritime logistics hub in perspective

Table 1. Perspectives on logistics centre/hub.

Perspectives Types of hub Key points References

Source: Compiled by the authors.

Maritime logistics is often referred to as a process of planning, implementing and

Shipping lines Manufacturing inventory

Finished goods inventory

Figure 2. Maritime logistics in perspective.

Maritime transportation is an inter-mediate mode which connects other modes of

offering a distribution centre, quality control, testing, assembly, packaging,

Table 2. Increasing scale of vessel size.

1991 1996 2001 2006

45000 TEU 0 1.0 12.7 30.0

Note: Figure indicates percentage of total fleets. Unit: %.

3.2. Defining maritime logistics hub and successful conditions

roles of seaports are recognised as main components in determining the competi-

Table 3. The transhipment volume of main ports in Asia-Pacific area in 2005.

Total Transhipment Estimate

Singapore Southeast Asia 23.19 18.79 81.0%

handles 10.15 millions TEU of transhipment container equivalent to 44.9% of

3.3. Maritime logistics hub in practice

3.3.1. The Netherlands: European distribution centres. Centralisation of pan-

examination, packaging and distribution. Dutch and foreign logistics service

. Flexibility in space and manpower requirements,

Logistics firms have shifted from providing transportation and warehousing to

4. Implication for container ports

Guanzhou 2180 3308 6600

Note: Unit: 1000 TEUs.

4.2. Network perspectives

A promising alternative for such an examination is a network theory, which is

References and notes

International Trade Operations (London: Thomson).

2434. (New York: UNESCAP).

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