Transcript Topic 1 * The Global Economy: Emergence and

GS 120 – iGlobalization: Moving The Things We Buy
Professor: Dr. Jean-Paul Rodrigue
Topic 1 – iGlobalization: Moving the
Things We Buy
A – What is iGlobalization?
B – The Age of Interdependency
C – Transportation and Logistics
Hofstra University, Department of Global Studies & Geography
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
What is iGlobalization?
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.
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
Read this content
Container and Tanker Ships Crossing the Miraflores Locks
at the Panama Canal (The Panamax Standard
Read this content
53 Footer Domestic Containers, Corwith Rail Yard, Chicago
Read this content
FedEx Freight Truck at Distribution Center, Kansas City
In the case below, FedEx is a third party logistics provider, what does this means?
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?
Read this content
Grocery Distribution Center, Regina, Canada
Read this content
A Delivery Bin Full of Mixed Orders (E-Commerce)
How ecommerce has changed retailing?
iPads: Qualitative and Quantitative Product Improvements
Read this content
Ikea Rolled Foam Mattress: Product Design and Distribution
Efficiency
Read this content
Major Forms of Globalization: A Multidimensional and
Dynamic Concept
Form
Cultural / Social
Political
Economic
Nature
How globalization
changed human
behavior?
What forms of regulation
or control are linked with
globalization?
How globalization
influences wealth
creation and
distribution?
Outcomes
Homogenization
Hybridization
Rejection
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
Explains the different chains supporting economic globalization.
Integration
Production
Transportation
Transactions
Regulatory
chains.
Supply chains.
Transport chains.
Offshoring.
Containerization.
Information
chains (ICT).
Harmonization of
regulatory
regimes.
Global
production
networks.
Transborder
transportation.
Capital for
investments.
Trade
agreements.
Credit for
transactions.
Economic Integration Levels, 2011
Read this content
Short Assignment: Complexity and the Cheeseburger…
This simple product would have been impossible to create more than
100 years ago. Why?
The Age of Interdependency
What are the main relations holding the global economy?
Changes in the Global Balance of Power, World GDP, 1AD 2014
80%
Read this content
70%
60%
50%
40%
30%
20%
10%
0%
1
1000
China
1500
India
1600
Japan
1700
1820
United States
1870
France
1900
1913
Germany
1940
Italy
1970
2008
United Kingdom
2014
Better and Faster: Powered Transatlantic Passenger Modes
Read this content
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)
Global Space / Time Convergence: Days Required to
Circumnavigate the Globe
400
(1500-1840) Average speed of wagon and sail ships: 16 km/hr
360
350
Days
300
Industrial Revolution
250
1850-1930 Average speed of trains: 100 km/hr.
Average speed of steamships: 25 km/hr
200
1950 Average speed of airplanes: 480-640 km/hr
150
150
Modern Era
100
100
1970 Average speed of jet planes: 800-1120 km/hr
60
50
Space / Time
Convergence
Read this content
1990 Numeric transmission: instantaneous
3
2
1
1950
1975
2000
0
1850
1875
1900
1925
The Flows behind Globalization
Read this content
Trade
Migration
Telecommunication
Nature
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
World Merchandise Trade, 1960-2015
25
55%
20
45%
Read this content
40%
15
35%
30%
10
25%
20%
5
15%
0
10%
Value of Exports
Merchandise trade (% of GDP)
Share of World GDP (%)
Value (Trillions of Current $US)
50%
World Air Travel and World Air Freight Carried, 1950-2014
7,000
6,000
200
Passengers
Freight
180
5,000
4,000
Read this content
Watch this video
140
120
100
3,000
2,000
80
60
40
1,000
0
20
0
Billions of tons-km
Billions of passengers-km
160
Global Net Migration (2005-2010)
Read this content
Some Can Travel, Some Can’t: Visa Restrictions Index, 2011,
2015
What are similarities between this chart
and the migration map on the previous
page?
Afghanistan
Pakistan
Iran
China
Vietnam
Egypt
India
Thailand
South Africa
Russia
UAE
Israel
Brazil
Hong Kong
Malaysia
Australia
Singapore
Switzerland
Canada
South Korea
Japan
France
Denmark
United States
United Kingdom
Germany
Read this content
0
20
40
60
80
100
120
140
160
180
Diffusion of Personal Computing Devices, 1977-2014
What are the three stages in the evolution of personal computing devices?
1,000,000,000
Units Shipped per Year
100,000,000
10,000,000
1,000,000
TRS-80 (1977)
Apple II (1977)
100,000
Atari (1979)
Commodore (1982)
PC (1981)
10,000
Macintosh (1984)
Symbian (2001)
Blackberry (2003)
1,000
100
1975
Android (2009)
Read this content
iPhone (2007)
iPad (2010)
1980
1985
1990
1995
2000
2005
2010
2015
Technological Convergence, 1993-2013
The Myth of the Dematerialization of the Economy
Fallacy
Reality
Platform 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 Amazon owns a network of e-fulfillment
single store.
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 Transportation
Read 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
Euclidean Distance
A
B
Transport Distance
A
Delivery
Pickup
Transshipment
B
Logistical Distance
A
Pickup
Order Processing
Packing
Scheduling
Order
Transshipment
Sorting
Warehousing
Read this content
Delivery
B
Inventory Management
Unpacking
Transportability of Some Key Goods
Cargo
Weight
Storage
Fragility
Perishable
Coal
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
Read this content
Simple transportability
Complex transportability
Transportation as a Derived Demand
Read this content
Activity
Working
Vacationing
Manufacturing
Taxi
Truck
Direct
Commuting
Air travel
Containership
Services
Warehousing
Indirect
Services
Energy
Derived Demand
Transportation cannot exists on its own and cannot be stored.
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
In-process inventory
Parts or
raw materials
Inventory
Supplier
Orders
Transportation
Read this content
Parts or
finished goods
Manufacturer /
Distributor
Inventory
Orders
Customer
Transportation
The Relevance of Logistics
Read this content
Explain why logistics matters in a global economy.
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.
World’s Major Container Ports, 2012
Read this content
Freight Traffic at the World’s Largest Airports, 2010
Read this content
Logistical Distance and Online Purchases
Apply the concept of logistical distance to all the stages of an online
purchase.