Urban Logistics

Putting food on supermarket shelves or supplying the high street with clothes and other consumer durables is no small feat. The guzzling city presents titanic and complex organizational challenges. Sating the demands of a city like London requires the movement of huge ships filled with oil or piled high with minerals or Lego-like containers, thousands of kilometres of pipeline carrying oil and gas, and just-in-time meetings of different transport modes. The port infrastructures of Hong Kong or Rotterdam are small cities in themselves. But since they are usually cut off behind fencing and customs barriers, we often overlook them. Equally, we see trucks on motorways with names like Maersk Sealand or CN, but few of us have much of a grasp of what they are doing.

Logistics is the art and science of coordinating the myriad movements of goods and information within and between nations. It involves the process of strategically and profitably managing the procurement, movement and storage of materials, parts and finished inventory (and the related information flows). City logistics require an intensely complex coordination of tangible and less visible things - trucks, planes and ships on the one hand, computer systems and software on the other. When it works it has the grace of the well-oiled machine, but its resilience is far lower than we think, its fragility exposed in a computer shutdown or traffic crisis. All this may sound dry, but logistics constitutes the respiratory and digestive systems that make cities work; without them cities fall apart.

Logistics is big business. The logistics sector is worth £55 billion to the UK economy alone. It contributes 15-20 per cent of total product costs. The sector currently spans some 63,000 companies, employing 1.7 million people in the UK and, although often neglected, is one of the largest employment sectors in the economy.54 The size of the US logistics industry is US$900 billion -almost double the size of the high-tech industry, or more than 10 per cent of US gross domestic product.55 The global logistics industry is worth US$3.43 trillion.56 This includes a wide variety of jobs, from vehicle tracking, cargo securing and protection to customs brokerage, warehousing, distribution and the associated IT connected to these activities.

And it is a fast growing business. Food imports and exports have tripled over 20 years in the UK.57 Significantly, recent years have seen the emergence of third party logistics companies (3PLs) who are solely concerned with organizing these movements. Theoretically, and historically, there are a number of different players in the supply chain whose activities have to be coordinated: road haulers, rail operators, shipping companies, airlines, freight forwarders, warehousing companies, postal companies, and packaging and distribution companies. Increasingly, however, sophisticated one-stop companies - 3PLs with unfamiliar names like Christian Salvesen, Wincanton, and Tibbet & Britten - offer solutions over a range of sectors. New software and satellite technology tracks inventory and movement, allowing suppliers and importers to locate their shipment at any one time. The newest trend is radio frequency identification (RFID), which is now being standardized at a global level, allowing companies to tag all their goods to provide uninterrupted tracking of goods in transit.

Sea ports are the main hubs of global freight distribution. There are some 2000 ports worldwide, from single-berth operations handling a few hundred tonnes a year to multipurpose facilities handling up to 300 million tonnes a year. The largest include Shanghai, Singapore, Hong Kong, New York, Houston, Rotterdam, Hamburg and the ports around Tokyo Bay. Fewer and fewer ports handle the lion's share of world traffic: the top ten container ports handle close to 40 per cent of world traffic today. You can recognize the containers in any port: Maersk Line (with 18 per cent of world trade, by far the largest), Mediterranean Shipping Co., Evergreen from Taiwan, Cosco (China Ocean Shipping) from Beijing, Hanjin from Seoul and NYK Line from Tokyo.

Port infrastructures can be massive. For example, Rotterdam's Europort stretches 40km and covers 10,500 hectares (industrial sites plus water), has 60,600 people in directly port-related employment and handles some 1 million tonnes of goods every day. In 2005 the equivalent of 8 million 20-foot containers passed through Rotterdam. The port is now expanding by claiming land from the sea.

World port traffic surpassed 5 billion tonnes in 1998 and it is estimated that by 2010 world seaborne freight will approach 7 billion tonnes. Of this, Chinese ports will handle about 4 billion tonnes of freight throughput, 57 per cent of the total.58 Forty-five per cent of sea freight is liquid. Dry bulk goods - coal, iron ore, grain, phosphate - make up 23 per cent and general cargo accounts for the remaining 32 per cent. The transportation of general cargo has become increasingly containerized. Freight containers are typically 20 feet long, 8 feet wide, and, usually, a little over 8 feet high. Some are 40 feet long. One twenty foot equivalent unit (TEU) equals about 12 register tonnes or 34m3. One TEU can carry 2200 VCRs or 5000 pairs of shoes. There are estimated to be 15.9 million TEU containers in the world. Container traffic breaks down globally thus: the Far East 45 per cent, Europe 23 per cent, North America 16 per cent, the Near and Middle East 6 per cent, Central and South America 4 per cent and Africa 3 per cent. Movements of empty containers are estimated to make up about 20 per cent of the total. In 2003 sea port container traffic was 266.3 million TEUs, treble the container traffic in 1990. Thus more goods are moving around faster.

Ports handle about 26,500 ships of over 500 gross tonnage criss-crossing the seas. They include 5500 crude oil tankers and oil product tankers, which between them can carry 175 million tonnes of oil, 2600 container ships, 4900 bulk carriers carrying loads such as grains, over 2000 chemical tankers and around 11,500 general cargo ships sailing around the world. The largest ports handle the super-sized ships, over 300m long, that can carry up to 9000 20-foot containers, 13 storeys high and 10 containers wide. One of the largest, the OOCL Shenzhen, can carry up to 100,000 tonnes of cargo; it is driven by a single 12-cylinder, 69,439kW (93,120bhp) engine which turns an 85 tonne propeller. By way of comparison, a typical family car engine generates around 90kW (120hp), 776 times less. Fuel consumption is measured in tonnes of fuel consumed per hour, and the rate is around 10 tonnes. On the drawing board is the MalaccaMax ship, 470m long, 60m high, with 16 storeys, an 18,000 container capacity and a 200,000 tonne cargo capacity.59

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