topic 1 – iglobalization : emergence and convergence
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GS 120 – iGlobalization: Moving The Things We Buy
Professor: Dr. Jean-Paul Rodrigue
Hofstra University, Department of Global Studies & Geography
Topic 1 – iGlobalization: Moving the Things We Buy
A – What is iGlobalization?B – The Age of InterdependencyC – Transportation and Logistics
Sometimes Image is Important
Global Transport and Logistics
iGlobalization
What is iGlobalization?
How can iGlobalization be defined? What are its driving forces?
iGlobalization: Generating added value through globalization
Research and Development• Finding better products and processes.
Input Costs• Using the labor and resources advantages of locations.
Transportation• Effectively transporting and distributing resources, parts and
finished goods.
Sustainability• Improving environmental and energy efficiency.
What is iGlobalization?
The World in a Box: Containers on the Move
Watch this video
Reuse of a Container as a Swimming Pool
Pallets waiting to be loaded in a container, Shenzhen, China
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Container and Tanker Ships Crossing the Miraflores Locks at the Panama Canal (The Panamax Standard)
53 Footer Domestic Containers, Corwith Rail Yard, Chicago
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FedEx Freight Truck at Distribution Center, Kansas City
In the case below, FedEx is a third party logistics provider, what does this means?
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Dedicated Air Cargo Plane
Economies of Scale: Ultra Large Crude Carrier (ULCC), Persian Gulf
What are economies of scale and how this ship represents them?
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Grocery Distribution Center, Regina, Canada
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A Delivery Bin Full of Mixed Orders (E-Commerce)
How ecommerce has changed retailing?
iPads: Qualitative and Quantitative Product Improvements
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Ikea Rolled Foam Mattress: Product Design and Distribution Efficiency
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Major Forms of Globalization: A Multidimensional and Dynamic Concept
Form Cultural / Social Political EconomicNature How globalization
changed human behavior?
What forms of regulation or control are linked with globalization?
How globalization influences wealth creation and distribution?
Outcomes HomogenizationHybridizationRejection
Transnational agreements (global or regional)
Trade, new markets, new products
Issues Is a global culture emerging?
Are forms of global governance suitable?
Is globalization promoting inequalities?
The Drivers of Economic Globalization: Connecting Different Chains
IntegrationRegulatory
chains.Harmonization of
regulatory regimes.
Trade agreements.
ProductionSupply chains.
Offshoring.Global
production networks.
TransportationTransport chains.Containerization.
Transborder transportation.
TransactionsInformation chains (ICT).Capital for
investments.Credit for
transactions.
Explains the different chains supporting economic globalization.
Short Assignment: Complexity and the Cheeseburger…
This simple product would have been impossible to create more than 100 years ago. Why?
Read this background information
The Age of Interdependency
What are the main relations holding the global economy?
Changes in the Global Balance of Power, World GDP, 1AD - 2014
1 1000 1500 1600 1700 1820 1870 1900 1913 1940 1970 2008 20140%
10%
20%
30%
40%
50%
60%
70%
80%
China India Japan United StatesFrance Germany Italy United Kingdom
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Better and Faster: Powered Transatlantic Passenger Modes
Steamship• 1830s to 1960s (About 6 days; 4 days by the 1930s)
Dirigible• 1931-1937 (About 80 hours)
Sea Plane• 1934-1946 (About 15 hours)
Propeller Plane• 1934-1960 (11 hours)
Jet Plane• 1958- (7-8 hours); Supersonic jet (1976-2003: 3.5 hours)
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Global Space / Time Convergence: Days Required to Circumnavigate the Globe
1850 1875 1900 1925 1950 1975 20000
50
100
150
200
250
300
350
400
360
150
100
60
3 2 1
Days
(1500-1840) Average speed of wagon and sail ships: 16 km/hr
1850-1930 Average speed of trains: 100 km/hr.Average speed of steamships: 25 km/hr
1950 Average speed of airplanes: 480-640 km/hr
1970 Average speed of jet planes: 800-1120 km/hr
1990 Numeric transmission: instantaneous
Industrial Revolution
Modern Era
Space / TimeConvergence
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The Flows behind Globalization
Trade Migration TelecommunicationNature Flows of physical goods Flows of people Flows of information
Types Raw materials, energy, food, parts and consumption goods
Permanent, temporary (migrant workers), tourism
Communication, power exchanges, symbolic exchanges
Medium Transport modes and terminals (freight)
Transport modes and terminals (passengers)
Transport modes and terminals (postal), telecommunication systems
Gateways Ports Airports Global cities
Speed Low to average Slow to fast Instantaneous
Capacity Very large Large Almost unlimited
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World Merchandise Trade, 1960-2016
0
2,000,000,000,000
4,000,000,000,000
6,000,000,000,000
8,000,000,000,000
10,000,000,000,000
12,000,000,000,000
14,000,000,000,000
16,000,000,000,000
18,000,000,000,000
20,000,000,000,000
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
Value of Exports Merchandise trade (% of GDP)
Valu
e (T
rillio
ns o
f Cur
rent
$U
S)
Shar
e of
Wor
ld G
DP
(%)
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World Air Travel and World Air Freight Carried, 1950-2016
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
50
100
150
200Passengers
Freight
Billio
ns o
f pas
seng
ers-
km
Billio
ns o
f ton
s-kmRead this content
Watch this video
Some Can Travel, Some Can’t: Visa Restrictions Index, 2011, 2015
GermanyUnited Kingdom
United StatesDenmark
FranceJapan
South KoreaCanada
SwitzerlandSingaporeAustraliaMalaysia
Hong KongBrazilIsraelUAE
RussiaSouth Africa
ThailandIndia
EgyptVietnam
ChinaIran
PakistanAfghanistan
0 20 40 60 80 100 120 140 160 180
Read this content
What are similarities between this chart and the migration map on the previous page?
Diffusion of Personal Computing Devices, 1977-2016
What are the three stages in the evolution of personal computing devices?
1975 1980 1985 1990 1995 2000 2005 2010 2015100
1,000
10,000
100,000
1,000,000
10,000,000
100,000,000
1,000,000,000
10,000,000,000Units Shipped per Year
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TRS-80 (1977)
Apple ][ (1977)
Atari (1979)
PC (1981)
Commodore (1982)
iPhone (2007)
Macintosh (1984)iPad (2010)
Android (2009)
Blackberry (2003)
Symbian (2001)
Technological Convergence, 1993-2013
The Myth of the Dematerialization of the Economy
Fallacy RealityPlatform corporation fallacy. Apple does not manufacture a single device.
Apple focuses on product design and retailing (Apple Store). Relies on a massive network of original equipment manufacturers.
Ecommerce fallacy. Amazon does not own a single store.
Amazon owns a network of e-fulfillment centers (distribution centers) processing large volumes of cargo (orders). It also operates parcel delivery services.
Asset management fallacy. Uber does not own a single car.
Uber links users with individual car owners willing to provide a taxi service.
Airbnb does not own a single accommodation.
Airbnb links users with property owners.
Explain why a dematerialized economy is a fallacy.
Transportation and Logistics
What is the role and purpose of transportation? What are the relations between transportation and logistics?
Core Components of TransportationRead this content
What are the core components of transportation and how they interact?
Modes
Conveyances (vehicles) used to move passengers or freight.Mobile elements of transportation.
Infrastructures
Physical support of transport modes, such as routes and terminals.Fixed elements of transportation.
Networks
System of linked locations (nodes).Functional and spatial organization of transportation.
Flows
Movements of people, freight and information over their network.Flows have origins, intermediary locations and destinations.
Different Representations of Distance
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A B
A B
TransshipmentPickup Delivery
TransshipmentPickup Delivery
Order
Inventory ManagementUnpacking
Order ProcessingPackingScheduling
SortingWarehousing
Euclidean Distance
Transport Distance
A B
Mode 1 Mode 2
Logistical Distance
Mode 1 Mode 2
Transportability of Some Key Goods
Cargo Weight Storage Fragility PerishableCoal Heavy (0.83
g/cc)Simple (piling) None None
Grain Heavy (0.83 g/cc)
Average (silos) Low Low
Petroleum
Heavy (0.88 g/cc)
Simple (tanks) None None
Clothing Average Average (distribution center)
Low None
Fruits Average Complex (temperature controlled)
High High
Container
Average (15-20 tons)
Average (stacking)
Low Cargo dependent
Simple transportability Complex transportability
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Transportation as a Derived Demand
Transportation cannot exists on its own and cannot be stored.
Read this content
Indirect
Derived Demand
Working Vacationing
Manufacturing
Activity
Commuting
TaxiAir
travel
TruckContaine
rship
Direct
Warehousing
Energy
Services Services
Logistics
■ Definition• Activities related to the transformation and circulation of
goods.• All operations required for goods (material or nonmaterial) to
be made available on markets or to specific destinations:• Material supply of production.• Distribution and transport function.• Wholesale and retail.
Watch this video
Based on the video, how would you define logistics?
The Nature of a Supply Chain
Supplier CustomerManufacturer /Distributor
Orders
Transportation
Orders
Transportation
InventoryParts or
raw materials
In-process inventoryParts or
finished goods Inventory
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The Relevance of Logistics
Distribution has a friction• Logistics cost 10-15% of national GDP.• Efficient logistics has commercial benefits (costs, time and reliability).
Growing material demands• Growth of global consumption and income.• Diversity of consumption patterns.
Complexity of value chains• Goods are getting more complex (parts and processes).• Embededness of design, manufacturing, distribution and marketing.
Spatial division of production and consumption• Stages of production are spatially separated.• Final production and markets are spatially separated.
Sustainability• Energy and material efficiency.• Reverse logistics / recycling.
Read this contentExplain why logistics matters in a global economy.
Freight Traffic at the World’s Largest Airports, 2010
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Logistical Distance and Online Purchases
Apply the concept of logistical distance to all the stages of an onlinepurchase.
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