What is Logistics Hub
A logistics hub is a center or specific area designated to deal with activities related to
transportation, organization, separation, coordination and distribution of goods for national
and international transit, on a commercial basis by various operators.
These operators may own, lease or rent the buildings and/or the facilities of the hub. These
include warehouses, storage areas, distribution center, offices, trucking and shipping services.
Logistics hub has be defined: as the integrated centers for transshipment, storage,
collection,and distribution of goods(Jorgensen, 2007)
Logistics hubs provide not only traditional activities such as storage, but also value-added
logistics services such as labeling, assembly, semi-manufacturing, and customizing. These
centers combine logistics and industrial activities effectively in major port areas to create
country-specific and/or customer-specific variations or generic products.
KEY POINTS: *Generic Product is a good that is sold using the name for the type of good that
it is, rather than a brand name. They are are distinguished by the absence of a brand name*
A PERFECT LOGISTICS HUB
The Logistics Hub is intended to serve as a catalyst for the development of a logistics-
centered economy, which encompasses the broader initiatives supporting the business reform,
as well as policies aimed at unlocking investments in the Micro, Small and Medium-sized
Enterprises (MSME) sector. Thus a logistics hub promotes growth, job opportunities and
prosperity in a country.
2 thoughts on “What is Logistics Hub”
3 Logistics hubs are best used for the logistics companies that need to provide a high level
of service to customers.
A logistics hub is a very simple concept, which can be executed in many different ways.
The most common way to implement a logistics hub is to place an operational base in the
center of your delivery area. Using this model, you can utilize your fleet of trucks and drivers to
deliver products within a certain distance from the hub.
For example, if you want to improve your logistics process, you can use a logistics hub located
in central Seattle. This will allow you to reduce the number of deliveries that must be made
beyond your serviceable area around the city and reduce fuel consumption and manpower
costs.
In addition, it will allow you to increase the number of deliveries that can be made within your
serviceable area, thus increasing customer service levels.
DUBAI LOGISTIC HUB Transforming Dubai Logistics Corridor into a
Global Logistics Hub(2017)- Sundarakani B.
Dubai, a part of United Arab Emirate (UAE), has been a member of World Trade Organization
(WTO) and has always supported open trade and stable trade relations with countries
throughout the world. Taking advantage of its open economy, attractive business environment
and continued economic growth, the UAE has emerged as a key international trade hub
between the Indian subcontinent countries and Western economies. The most important
natural resources of the country are oil and natural gas. Most of the logistics activity in the
country takes place through the utilization of ports and free zone areas.
Dubai is also regarded as the gateway to the world’s most progressive markets which include
Greater Africa, Indian subcontinent and the East European countries. Strategically and safely
positioned as one of the major logistical hubs in the Middle East region, Dubai is often
compared to Hong Kong and Singapore.
Strategic geographical location-It is located midway between Asia and
Europe, linking the Pacific, Atlantic and Indian Oceans. The goods manufactured in the Asian
countries are distributed through Dubai to various parts of the world including Africa, the
Middle East, Russian Commonwealth and to the eastern Europe within two weeks of transit
time.
Multi-Modal Connectivity-is considered to excel in connectivity having the best
infrastructure across sea freight ports. It provides more than 90 weekly services to 115
ports globally.
The city infrastructure (Physical, IT and financial infrastructure)- Technology with
its myriad features equips companies to enhance their speed of operation,
communication, document processing and transparency in logistics operation. The
stability of the logistics eco-system of Dubai is ensured by the sound financial
infrastructure due to the presence of global, regional and local financial institutions and
insurance companies.
Regulatory and Institutional Structure
Political Environment-Stability or instability in the political environment has an important role
to play in attracting the foreign investors, since foreign investors are always cautious and
concerned about the political environment of the country where they intend investing their
capital. The country has also been instrumental in bringing peace among the Arab Spring
regions.
Attractive Free Economy-The free zone business model was set up with the intention of
streamlining trade and logistics activities across the countries. Some of the strategic advantages
for logistics companies operating in Dubai Free Zones are:-100% ownership,Tax exemption for
corporate,Purpose-built office or warehouse facilities Liberal VISA policies,No Import or Export
custom duties and Abundant availability of space and energy.
Synergy among the various free zone pockets-The Government of Dubai has diversified its
investment among various sectors to shift the economy away from dependence on oil.
Availability of labour - the bottom line-availability of blue collar labour at a competitive cost is
considered to be one of the most important factors for logistics in attracting foreign investors.
OPERATIONAL MECHANISM
-Response Time-the time taken to unload shipment at DP World, clear the containers and transport
them to the Airport takes few hours, say approximately four hours.
Cost of Handling-in order to enhance the logistics responsiveness, huge expenditure is incurred,
Dubai‟s Potential As An Integrated Logistics Hub(
Fernandes c, 2009)
