THE GEOGRAPHY OF TRANSPORT SYSTEMS


Value-added Activities Performed at Freight Distribution Clusters

The concept of added value is often based on the capitalization of inefficiencies within transportation and distribution. For instance, a port draws its income from the necessity to transfer cargo from one mode to the other while a distribution center mainly exist because A freight distribution cluster offers an opportunity to mitigate these inefficiencies through various economies of agglomeration. They can act as functional intermediaries between terminals (or regional suppliers) from which parts and goods are received and customers (for manufacturing or final consumption). For exports, a freight distribution cluster is also an intermediary linking regional production with transport terminals. The main value-added logistics activities are:

  • Simple storage, distribution, and order picking part of the inventory management systems of manufacturers, distributors and retailers.
  • Quality control (inspection) and testing of products before being sent to customers.
  • Transloading international load units into domestic load units. This applies notably to container transportation.
  • Receiving goods, breaking shipments and packing (preparing for shipment). Can also involve packaging were goods are broken down into retail units.
  • In part related with packaging, labeling provides information on the product for consumers such as brand and price. More advanced activities involve the tagging of units using RFID (Radio Frequency Identification) for distribution or retail purposes.
  • Light manufacturing tasks such as assembly and customizing to country-specific (or culture-specific) demands, adding parts and manuals.
  • A variety of reverse logistics activities such returning empty packaging, the recycling of used goods back into the commodity chain.
  • Providing specialized storage facilities, mainly to support cold chain logistics.

The transport activities of pickup and delivery are also part of the added value process since they support logistical activities and provide employment.