Globalization, e‐economy and trade

This article was downloaded by: [Umeå University Library]On: 18 November 2014, At: 05:05Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Transport Reviews: A TransnationalTransdisciplinary JournalPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/ttrv20

Globalization, e‐economy and tradeCRISTINA CAPINERI a & THOMAS R. LEINBACH ba Di. Gips, Facoltà di Scienze politiche , University of Siena ,Siena, Italyb Department of Geography , University of Kentucky , Lexington,KY, USAc University of Siena E-mail:Published online: 20 Oct 2009.

To cite this article: CRISTINA CAPINERI & THOMAS R. LEINBACH (2004) Globalization, e‐economyand trade, Transport Reviews: A Transnational Transdisciplinary Journal, 24:6, 645-663, DOI:10.1080/0144164042000292443

To link to this article: http://dx.doi.org/10.1080/0144164042000292443

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoeveror howsoever caused arising directly or indirectly in connection with, in relation to orarising out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

http://www.tandfonline.com/loi/ttrv20

http://www.tandfonline.com/action/showCitFormats?doi=10.1080/0144164042000292443

http://dx.doi.org/10.1080/0144164042000292443

http://www.tandfonline.com/page/terms-and-conditions

http://www.tandfonline.com/page/terms-and-conditions

Transport Reviews, Vol. 24, No. 6, 645–663, November 2004

0144-1647 print/1464-5327 online/04/060645-19 © 2004 Taylor & Francis Ltd.DOI: 10.1080/0144164042000292443

Globalization, E-economy and Trade

CRISTINA CAPINERI* and THOMAS R. LEINBACH**

*Di. Gips, Facoltà di Scienze politiche, University of Siena, Siena, Italy; **Department of Geography, University of Kentucky, Lexington, KY, USATaylor and Francis LtdTTRV371.sgm

(Accepted 16 August 2004)10.1080/0144164042000292443Transport Reviews0144-1647 (print)/1464-5327 (online)Original Article2004Taylor & Francis Ltd246000000December 2004CristinaCapineriUniversity of [email protected]

ABSTRACT The first position paper of Stella Focus Group 1 on Globalization, E-Economyand Trade aims to highlight the main concepts around which the activities will develop. Itaddresses the transport and trade implications of the shift from an economy dominated byphysical movements to one where electronic communications aid and, indeed, under certaincircumstances, eliminate or reduce physical flows. In particular, it points out that therevolution taking place is mainly due to deep changes in distribution processes caused bythe spread of e-commerce and by a production system based on networks of different types(production, financial, information, etc.). Major topics for exploration are the specific rolesof networks, new interpretations of access and distance in virtual and physical spaces, theadoption, spread and impact of e-commerce, the multifaceted process of integration andInternetworking, territorial competitiveness in the digital economy, intermodality, and thegrowth of logistical systems and their impact upon supply chains. Factors surrounding theshippers’ choice of freight transport services, communications and transport patternsbetween consumers and businesses, and general sustainability in these increasinglycomplex systems are also important. All these topics are ripe for research from boththeoretical and methodological perspectives.

Introduction: Globalization, E-economy and Trade

To analyse the relationship between transportation and globalization, e-economyand trade, it is necessary to highlight the main features of these three macro-concepts.

Globalization

Globalization refers to the increasing interconnectedness and geographical scale ofeconomic social and political interaction. Transport acts to promote reductions inbarriers to international trade, promotes new technologies and allows marketingthe technologies globally. It also involves both national and international policymeasures to support expanded transport investments. The global economy takesplace in various spaces and dimensions. First, there is a ‘tangible dimension’ orplace/space dimension where flows and interaction takes place physically. This

Correspondence Address: Thomas R. Leinbach, Department of Geography, University of Kentucky,Lexington, KY 40506–0027. Email: [email protected]

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014

646 C. Capineri and T. R. Leinbach

dimension pertains to material support for flows of people and goods. Then thereis the virtual, which includes the electronic communications that transcend places.This refers to digital transactions and, for example, corresponds to the strategies ofnetworks of trans-national firms or to the flows of managerial elites (Castells, 2000).

The emerging socio-economic consequences of globalization may be explainedthrough greater understanding of transportation and related space-adjustingtechnologies. The transport industry is a major beneficiary of recent technologicaldevelopments and a central contributor to this more globalized economy, whichis characterized by a network type organization of production and distribution(Capineri and Leinbach, 2003; Janelle and Beuthe, 1997).

E-economy

The growth of the e-economy is having important implications on transportationdemand and supply both for goods and people (Figure 1). Particular relevance isattached to e-commerce, which means the production, distribution, marketing,sale or delivery of goods and services by electronic means (Leinbach, 2001).E-commerce implies transactions for a service, which is completed using theInternet from selection to purchase and delivery or it involves ‘distributionservices’ in which a product, whether a good or a service, is selected andpurchased on-line but delivered conventionally. Still another definition suggeststhat e-commerce is the use of information and communication technologies tonetwork economic activities and processes in order to reduce information-relatedtransaction costs to gain a strategic, information advantage (Garcia, 1997, p. 18).Figure 1. Globalization, e-economy, transport, tele-communications and trade. Source: authors.Thus, electronic forms of communication play a complementary role in the trans-port/infrastructure system and show positive and negative externalities. Withinthe positive externalities, one certainly can witness a high speed of accessibility,information, etc., especially in the peripheral areas. Among the negative external-ities, a ‘probable’ effect will be a strong competition among the networks of variousmodalities in the light of congestion, saturation, pollution phenomena, etc. Inparticular, many have assumed that the Internet will alter ways of doing business,rendering all the old rules about companies and competition obsolete. It is time toconsider the Internet as an enabling technology, a powerful tool to be used by anyeconomic activity as part of any strategy. The development of electronic commerceand the realization of its potential benefits have been discussed in the economicliterature from two perspectives: the necessary conditions for the provision anddevelopment of electronic commerce and Internet services and the effects of e-commerce and the Internet on sectors that apply these new means of change. In factInternet technology, as the latest stage of an ongoing evolution of information tech-nology, provides better opportunities for companies to establish distinctive strate-gic positioning than did previous information technology (Porter, 2001).

The evolution of the e-economy must be placed in the context of the relatedsubsystems, like transport and infrastructure (in terms of speed of information,innovation diffusion, computer connections, transport interoperability, etc.). Thedeployment of telecom systems reduces the importance of location at least for theinitial phases of transactions (or in the initial stage of the transport cycle whentravel information is needed); it widens the geographic market from local toregional or national. Information technologies can expand the size of the marketfor leisure travel, act as substitute for physical movements (especially for routine,short–distance movements such as shopping bookings, etc.), provide a direct

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014

Globalization, E-economy and Trade 647

channel between suppliers and end users reducing the leverage of interveningcompanies, facilitates the coordination of suppliers (virtual enterprise) and allowoutsourcing that can reduce near-term costs and improve flexibility. In fact,virtual enterprises do not eliminate the need for physical activities but they canamplify their reach.

The value of integrating traditional transport and the use of the Internet createspotential advantages as the Internet can be used to reconfigure traditional transportpatterns of movements or to find new combinations of e-networks and traditionalnetworks (road, rail, etc.). This takes place in supply chains that simultaneouslyraise the possibility of the ‘e-materialization’ of some goods and services.

Trade

Trade patterns reflect a world map that has been recently redrawn by politicalchanges and technological improvements with the success of the market economy.

Figure 1. Globalization, e-economy, transport, tele-communications and trade. Source: authors.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


The globalization process is enhanced by the strong expansion of trans-nationalcorporations aided by decreases in transport costs and emerging communicationtechnologies (Dicken, 2003). Still nations survive within their borders. Althoughmore permeable, historically anchored regions continue to look for their organiza-tion in the framework of regional patterns defined by geographical and historicalproximity.

Trade is the oldest form of internationalization: a producer country A exportsits production to a consumer country B and satisfies its demand. Generally, thereare two trade typologies. One is based on complementarity between nationaleconomies where countries achieve a comparative advantage by their diversities.The other is based on similarities where flows are expressed by intra-sectoralexchanges generally in the manufacturing system. This takes place in a monopo-listic competitive environment as a result of product differentiation and growingrevenues. The other form of internationalization is foreign investment in produc-tion activities driven by accessibility to resources (including labour), to privilegedmarkets and more recently by macroeconomic comparative advantages. Theresult of this process is the growth of multinational corporations that reflectcomplex networked enterprises which are often based on partnershipsagreements (joint ventures, franchising, subcontracting, etc.). This systemrequires flexible relationships at a global scale.

Trade patterns are quite dynamic and are being influenced by the changes inthe international spatial division of labour and trans-national corporations thatlink markets with suppliers and production points. In particular trans-Pacificflows between North America and the Asia-Pacific region have come to dominantglobal commerce whereas previously North American–Europe transactions wereprimary. Financial incentives and the liberalization of markets have also played amajor role. Trans-national corporations behave as powerful independent actors asthey establish economic relationships by the internationalization of their activitiesand the consequent transfer of knowledge and technology. In all of these patterns,transport modal distinctions may be isolated. These vary according to the weightand value of the goods exchanged: low value, standardized manufactured goodsare increasingly moved in containers which are shipped via sea transport. Highervalue, perishable and especially time sensitive goods are shipped long distancesvia air freight and over shorter distances by truck which is more flexible.(Leinbach and Bowen, 2004) (Figure 2).Figure 2. World merchandise exports: areas and trends. Source: World Bank.

An Unsustainable Scenario

While many interactions are carried out in virtual space, others are very much phys-ical, placing old-fashioned demands on transportation systems to meet old-fashioned accessibility needs (Couclelis, 2000). The growth of de-materialized waysof interaction is paralleled by growth of people and goods flows. Telecommunica-tion has not replaced face-to-face contacts; there is still a need for physical proximitythat has not been explored. And most important place still matters (Florida, 2002).Trans-national firms use e-communication links, but also, of course, interpersonalcontacts. On occasion electronic communication complements and reinforces face-to-face contacts (Salomon, 1985). Business travel shows little decline and there isstill a need for handshakes and tacit knowledge exchanges.

Increasing flows produce undesirable results (negative externalities) on energyefficiency, environmental quality, safety and health. The growing urbanization

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


and suburbanization, vertical disintegration and division of labour as well as thefree market have produced a considerable increase in mobility and have requireda breathtaking expansion of infrastructures. Between 1970 and 1993, daily mobilityin Europe nearly doubled: from 16.5 to 31.5 km per day per capita. Such distancesare mostly covered by car (from 670 million cars there will be 813 million in 2010),whose use has increased, in the same period by 120% (compared with over 24% ofrail transport). Goods flows have strongly increased since the 1970s: internationalroad goods transport increased by nearly 40% at EU-15 level, international railgoods transport by 17% and international inland waterways transport by 12%.

Greater freedom of movement has brought strong environmental impacts: atmo-spheric pollution is produced by 90% of transport; noise pollution has increased20–30 times in the last the 20 years; car use has increased 20% in the EuropeanUnion between 1991 and 1999 with the highest rates in southern Europeancountries (Portugal, Greece) and Ireland. The motorization index has passed from

Figure 2. World merchandise exports: areas and trends. Source: World Bank.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


21 inhabitants for motor vehicle in 1960 to 1.8 in 1990. And in some countriesvehicles are quite old and still lack recent technological innovations (catalyticconverters, etc.). For example, in Italy, 17% of automobiles are more than 15 yearsold, while in the UK, France and Germany, this is merely 4%.

Transport Effects and Responses

Changing Perspectives on Networks

First the greater interconnectedness and the larger contact sets require a networkmodel of organization in order to harmonize and make possible communicationand exchange among the potentially infinite number of activity locations.Networks acquire a fundamental role in this phase of technocapitalism, theevolution of market capitalism rooted in rapid technological innovation and itssupporting entities. Networks are responsible for the spread of the e-economy andthe transformation of firms. Four main features of networks may be identified. Firstthere are situations where economies of scale are obtained, i.e. where value resultsfrom scale not from scarcity; second, the dilution of hierarchies may occur asparticipants interact more freely; third, networks generate changes and fluidity(adaption to deregulation); and fourth, networks support decentralization anddevolution (which is conspicuous in e-commerce networks) (Suarez-Villa, 2003).

In fact, firms are linked to other firms through networks of different types. Thesemay be networks of financial alliances, outsourcing arrangements, logistics orshipping. Moreover, the network model is based on heavy information andknowledge flows at different levels. This is so because in the knowledge-basedeconomy, actors need to cooperate more actively and more purposefully with eachother to cope with market pressure and competition (globalization liberalization ofmarkets, changing patterns of demand) (Fischer, 2002). The new economy hasgiven rise to a new set of industries centred on the collection, processing anddistribution of information all of which are supported by the Internet.

Finally, note that a new thrust in the literature focuses on a network approachto global linkages and manufacturing (Dicken et al., 2001). The view is thatnetworks, rather than individuals, firms or states, should be used as foundationalunits of analysis for an understanding of the global economy. Viewing networksas relational processes includes identifying actors in networks and their ongoingrelations and structural outcomes. Through a network approach, efforts have alsobeen made to assist understanding of macro-regional economies which lead todivergence/convergence in patterns of economic activity (Smith et al., 2002).Increasingly important is the fact that production networks cross nation stateboundaries, thus regions may be controlled from elsewhere. The global produc-tion networks approach combines the concentrated dispersion of value chainsacross firm and national boundaries with a parallel process of integration ofhierarchical layers of network participants (Henderson et al., 2000; Yeung, 2000).Transport services clearly play a critical role in this perspective.

Spread of E-commerce

One aspect of the relationship between e-economy and transportation is that infor-mation and communication technologies can be used to reduce transaction costsassociated with trading goods and services. The development of e-commerce is

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


critically related to the development of producer services. Increasingly, the marketfor time-definite delivery provided by the integrators (UPS, FedEx, DHL, etc.) hasbecome increasingly more important. Cost savings are also clearly related to theprocess of disintermediation (regional distributors are eliminated) and reinterme-diation (such as content aggregators like Yahoo.com). Geographical implicationsobviously continue to derive from network accessibility.

E-commerce may act as a substitute for physical movements of goods. A majorissue revolves around the differences between urban and rural uses ofe-commerce. Clearly, the digital divide as well as basic social and economicdistinctions between these two arenas will play a role in such participation. Theshift from personal purchases versus Internet purchases clearly may have impli-cations for infrastructure.

In the discussion of the influence of e-commerce on the demand for transport,three aspects play a role. First, e-commerce changes the demands for goods interms of volume and in terms of the type of goods. Second, e-commerce suppliersmake use of different distribution concepts than traditional retailing. This meansthat e-commerce generates a different need for the transportation of goods.Finally, e-commerce affects the number, size and location of physical points ofsale, such as shops. In the competition with e-commerce, traditional retail outletscan be reduced or even increased in number or size and location can beinfluenced. Such changes could affect the traditional distribution of goods toretail businesses in shopping areas (Vleugel, 2002).

E-commerce and Market Structure

Some empirical results indicate that a deeper understanding of the interactionbetween information and communication technology (ICT) and travel needs tocome from an assessment of the aims and motives behind different types of contact(Beyers, 2003). Travel and communications are derived demands: the goal is toparticipate in activities at other places. These activities may be of a completelydifferent character, as in the case of meeting and conferencing. The function,content and form of the meetings are of importance for the analysis and under-standing of the interaction between ICT and travel and whether they can substitutefor or complement each other. Different forms of meetings may satisfy differentkinds of need. It would seem necessary to develop this kind of analysis further tounderstand fully whether or not telework (or various types of teleservices or e-commerce, e.g. teleshopping) are going replace the needs and demand for travel-based activities. As regards teleworking, arrangements must be flexible in bothareas time and space in order for such forms to be a substitute for the on-site work.It has been reported that important differences exist between full-time and self-employed workers in terms of their commuting patterns and residential and worklocations (Giuliano, 1998). In addition, the expanding use of telework away fromthe usual place of work and home must be noted (Mokhtarian and Bagley, 2000).

In other words, on- and off-line activities have to be compared and analysedvis-à-vis their potential for substitution or complementarity before any conclu-sions can be drawn regarding their future success. Through telecommunications,a greater number of interactions are possible because of the empowermentprovided through timely (in some cases ‘real time’) information transfer. Butwhat types of interactions are most efficiently replaced by telecommunications inthis process is by no means certain.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


E-commerce can be used as a strategic tool in a variety of ways. It may be usedto upgrade traditional mail-order businesses. These organizations have a longhistory of sales by telephone or by mail. They can use the Internet as an alternativeor an addition to their traditional sales methods (Wyckoff and Colecchia, 1999).

In addition, virtual retailing or e-tailing by new e-businesses has becomeimportant. New companies that have started their businesses on the Internet,such as Amazon.com, are trying to compete with traditional retailers by usinge-commerce. In a strict sense, they are still retailers. However, their displaywindows are virtual, and their sales occur without physical contact with theclient. While traditional retailers, in particular retail chains, are also usinge-commerce as an extra marketing channel, for producers, e-commerce is anexcellent marketing channel for directly reaching the consumer. Therefore, theretailer may lose some of the market in favour of the producer (Eras, 2000).E-commerce makes it possible to bypass certain leading actors in the marketingchannel, such as import companies, wholesalers and retail organizations. Somemarketing channels will therefore lose market share.

The e-economy has not eliminated the importance of distance as locationalchoice of firms and households still depend on accessibility. With reference to thebusiness to consumers services (B2C) segment of retailers, one must not forgetthat transportation is required at the end of the chain. However, although manytransactions can now be conducted via e-mail or through the Internet, manyorders placed in these exchanges still require delivery of some products toconsumers. This produces an increase in the demand for freight and an interest onthe part of the producers to locate their warehouses optimally. Locationalprocesses are to be addressed carefully according to the spatial levelling in theaccess to a variety of goods and services and to the regime of uniform deliveredpricing that e-retailing seem to entail (Anderson et al., 2003).

Multifaceted Process of Integration

The organization of time-definite goods transport by the integrators, the multimo-dal traveller, the real-time information transfer on telecommunication networks,the rise of transport hubs and multimodal platforms may be just a few aspectsof the current transport scenario which is dominated by the process of integration.The transport cycle, which was once organized in separately managed segmentsof the circulation cycle, needs to have unified direction. An example could be thecycle of standardized transport: producer→land transport→consolidation→landtransport→shipment sea port→sea transport→destination sea port→land trans-port→deconsolidation→land transport→final user. Thus, the technologicalimprovement of post-industrial society requires increasingly faster exchanges:just-in-time (JIT) consignments have been replaced by fast in time.

This model matches the post-Fordist one, which requires a more flexibleeconomic organization to replace mass production and mass consumption.Integration is based on complementarity rather than on hierarchical relationshipsand on the improvement of networks’ performance and efficiency; thus, themanagement of the whole transport cycle is a fundamental objective.

The effects of these changes on the analysis and evaluation of transport andcommunication networks lead us to consider systems of networks and synergiesinstead of individual ones. If infrastructure levels are inadequate in light of newdemand requirements, environmental issues, goods transport, congestion and

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


bottlenecks, then the response must be to exploit synergies of cooperation andcomplementarity between networks rather than simple network expansion. Thisimplies considering not only the way the network is designed and developed(structural aspects), but also how it is operated (private and public actors). It canbe generally affirmed that transport and communication systems are entering anew stage of development. This new phase, which began in the 1970s, is charac-terized both by technological innovations and by the changes in organization,logistical and institutional structures of the transport and communicationindustry in general. The change is also felt in the sectoral policy attitude both atEuropean Union and at single country level.

Thus, the new phase envisaged requires improving network cohesion through aprocess of interconnection among different networks. The idea is not new. In anytransport cycle, it has always been accepted that a journey might be broken indifferent parts and each part may correspond to a change of mode. The new aspectis the increasing degree of the interconnection process that amplifies the networkeffect and the fact that a network becomes a system in which performance andbehaviour are crucial. Network infrastructure serves a demand at different levels(regional and interregional) and it is of course dependent on different factors(regional demand, interregional demand, costs, barrier, finance) (Capineri andRietveld, 1997). In other words, synergy is expressed by the rise in performance ofa network by means of interaction among different territorial scales and modes. Inthe context of regional dynamics, the increase of cohesion plays some importantroles: it increases complementarity relationships, adds value to endogenousresources, is adaptable to the context, and contributes to urban effects diffusionand social relationships, and it produces peripheral development.

As discussed above, synergy in network evolution leads to higher degrees ofcohesiveness that is a combination of some cohesion factors taking part in theprocess. The following features are referred to here: interconnectivity, intermo-dality and interoperability. Each reflect one aspect of synergy and they can all bedistinguished in a network-oriented synergy (interconnectivity), which refers tohorizontal cohesion between different networks and accessibility at differentscales; in a vehicle-oriented synergy (intermodality), which means that the trans-port cycle consists of a sequential use of different means of transport; in an institu-tional-oriented synergy (interoperability), which aims at operative and technicaluniformity and which enables the functioning of interconnectivity and intermo-dality at different spatial levels by the users and the actors. The internetworkingprocess requires adjustments at structural, functional/operational and institu-tional levels. To develop synergy, networks must combine cohesiveness(expressed by indices of interconnectivity, intermodality and interoperability)with the network utilization/performance (as networks produce services), whichhas been described as the relation between demand/capacity (Frybourg andNijkamp, 1995; Capineri and Kamann, 1998).

Territorial Competitiveness

Territorial competitiveness means the ability to attract investments, labour, etc.Infrastructure networks sustain public and private sectors, and to be effective theymust operate at different scales (global, national, regional, local) by means ofinteraction with soft networks. Hard and soft networks meet at nodes (hub type),which have a multidimensional character incorporating the traditional physical

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


place where distance still matters, cyberspace and the technology that links them(Castells, 2000; Malecki, 2002) Central cities in particular have a new advantagerarely found elsewhere as they are typically the point of convergence of telecom-munication lines and of the largest agglomerations of infrastructure. As (Mitchell,1995, p. 68) notes, “we will characterize cities of the 21st century as systems ofinterlinked, interacting, silicon and satellite saturated smart, attentive and respon-sive places”. Similarly, the creation of specialized regions in logistics services,such as the ‘golden triangle’ in Europe among Antwerp, Ghent and Brussels or theRotterdam port area with its five dedicated docks and its three distriparks, show atrend toward agglomeration and benefit of economies of scale. Nevertheless the‘logistic competitivity’ of these areas is also due to the dynamic economic environ-ment, based on global firms and distribution centres, and on the management ofthe nodes carried out by special agency (such as the port authorities). Other logis-tic areas in Europe do not reach the same level of competitiveness in attractingadvanced logistic services since they do not have connection to fast networks(motorways, high capacity railways, etc.) nor an open economic environment.

Moreover, places must respond to two objectives. First, they must meet theever-growing threshold conditions demanded by global firms; second, they mustcreate and maintain a distinctive local culture to attract investment. The ‘localculture’ does not only include consumption-oriented features such as restaurantdistricts, but it is much more extensive and provides local economies with uniquefeatures. Transportation policy has generally followed market trends and socialambitions. However, today, information has become a fundamental resource foreconomic activities and the declining cost of access to information has stimulatedgains from trade. Nevertheless transportation is an external cost that has to bemanaged and generally competition is requires cutting costs (Figure 3).Figure 3. Networks, firms and economic development. Source: authors.

Intermodality and Logistics

Intermodal transport can fulfil the demands for flexible freight transportationwith a high quality and a competitive price stated by European industry. With thecurrent structure of the demand and the production system, however, the inter-modal transport market is limited to distances exceeding approximately 500 km.Future intermodal arrangements must also succeed in the middle distances from200 to 500 km. This has proven difficult in the past, but new technology and newlogistics principles can be implemented to meet the shippers’ constantly higherdemands for transport quality in this market. Industrial and societal needs canthen be met by a more sustainable transport system.

Figure 3. Networks, firms and economic development. Source: authors.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


All forms of European intermodal transport have shown considerable growthover the last decade. Between 1990 and 1996, the average annual growth in tonkilometers amounted to 9% for all intermodal transport. As for intermodal railtransport, however, volumes have been declining since 1998. The existing inter-modal flows are concentrated on certain corridors. Supply chain managementtrends influence the future development of intermodal transport. The increasingvolume of flows transported over longer distances brings about the main oppor-tunity. This increases consolidation opportunities and the relative competitive-ness of intermodal solutions. The biggest challenge to intermodal transport is toprovide the level of service that shippers require. These service requirements arealso the biggest threat to intermodal transport.

Supply chain management trends lead to ever-stricter service requirements(frequency, reliability, lead-time, information provision, risk of damage to cargo,security). As a result, intermodal transport needs sophisticated logistical conceptsusing advanced information systems to comply with service demands and tocompete with unimodal road transport. Until now, little progress has been madein establishing efficient systems for the tracking, tracing and monitoring of inter-modal transport flows. While the road transport sector continues to introducereal-time information systems that can report on the status of any consignmentbeing shipped to clients, intermodal transport has virtually nothing comparableto offer. Network use could be enhanced by free and open exchange of opera-tional data between modes and interchanges. Timely and reliable information isneeded by intermodal operators and shippers. Currently, telecommunicationsnetworks in the transport arena are only fragmentary and proprietary. There is noopen information system that allows potential users to make modal choices andcontrol operations, but its development should be a priority.

From a supply-side perspective, the main obstacles to the growth of intermodaltransport are infrastructural (limited penetration, a lack of infrastructure inter-operability, a lack of terminals and missing links) as well as a lack of standardiza-tion of load units, information systems and administrative procedures. Inaddition, growth of intermodal transport is hindered by a lack of competition(monopoly) in the railway sector and by a lack of marketing and door-to-doorservice offers. This is particularly true in industrial district areas where logisticsactivities are carried out very often through local agents. However, such districtsare gradually becoming more interlinked and participate in the internationaliza-tion process. Thus, there is a trend toward group logistics.

From the demand side perspective, the failure of intermodal transport to deliverappropriate service requirements is the main problem. This obstacle is due in partto the above-mentioned obstacles. In addition, intermodal transport is morecomplex to organize than unimodal road transport because different modes andoperators are involved (with their own specificities and organizational character-istics) and because intermodal transport is unaccompanied transport (except forRo-Ro) (Intermodal Transport in Europe, 2004).

Logistics Networks and Supply Chains

E-commerce may cover any commercial transaction between organizations andpeople in society and is expected to change the supply chain of many products. AsNemoto et al. (2001) point out, many transactions between stakeholders take placeby applying ICT in the area of logistics (Figure 4). Four types of stakeholders are

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


identified: shippers, consumers, governments and logistic service providers(including carriers). The transactions between these stakeholders have multipledimensions: commercial, financial/administrative and a logistical or operationaldimension (Vleugel, 2002).Figure 4. Stakeholders in logistics systems. Source: Nemoto et al. (2001).Related to logistics, applications of ICT are provided by Internet and IntelligentTransport Systems (ITS). Both lead to applications of ICT, for instance on the levelof business transactions (e-commerce), e-logistics and transport operations(e-fleet management). Applying ICT in e-commerce will definitely change thedemand for the transport of goods, in particular the distribution of consumergoods. However, e-commerce will also in some ways influence the diffusion ofICT applications in logistics (e-logistics) and transport (e-fleet management).E-commerce is expected to change the supply chain. Suppliers, manufactures,wholesalers, retailers and consumers can choose their trade partners directly. As aresult, logistics operations are affected immensely. For example, even small- andmedium-sized firms in local areas can demonstrate their products to overseascustomers allowing them to investigate their advantages and suitability.

In the conceptualization of supply chain problems, one study has used thelogistical network as part of a multilevel network in a supply chain model(Southworth, 2002). The logistical network represents the commodity productionoutputs and the shipments between the network agents that lie between thefirms and the retailers, and the retailers and the demand markets. The top tier ofthe nodes of the logistical network consists of firms; the middle tiers consist ofnodes of the retailers; and the bottom tier consists of the demand markets. Thelinks joining the tiers of the nodes correspond to transactions between the nodesin the supply chain that take place (Figure 5).Figure 5. Supply chain transportation supernetwork representation. Source: Southworth (2002).Logistics currently accounts for 16% of the worldwide GDP (gross domesticproduct) and 18% of that is European. In the last half decade, the market for logis-tics has grown steadily and the trend toward outsourcing has grown much morerapidly. The outsourced logistics services are mainly electronic transactions, trans-port, product customization and reverse logistics. Firms often rely on logisticsoperators for freight transport services. A freight transport service is characterizedby its attributes, including the cost, travel time, reliability, safety, vehicle or mode

Figure 4. Stakeholders in logistics systems. Source: Nemoto et al. (2001).

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


Figu

re 5

.Su

pply

cha

in tr

ansp

orta

tion

sup

erne

twor

k re

pres

enta

tion

. Sou

rce:

Sou

thw

orth

(200

2).

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


used, and additional services such as packaging, paperwork, tracking or tracing,logistical services, special financial arrangements, etc.

According to some empirical results, firms ascribe the greatest importance tothe minimization of the risk of goods being lost or damaged; in addition, reliabil-ity of delivery in a particular time frame is also an important requirement inchoosing among transportation services. Its importance is very likely greaterthan travel time (Danielis, 2002). Moreover, it seems that firms’ value of traveltime is higher for distribution than for procurement; reliability is higher forshipments that take place only by road than for shipments that also make use ofother-than-road vehicles; small- and medium-sized firms have higher prefer-ences for safety than larger firms. It has been learned that firms adopting a JITorganization have a higher preference for reliability than other firms, especiallywith regards to the adoption of the JIT system in managing inputs (and thereforeaffecting the production process) (Bolis and Maggi, 2003). Firms that outsourceinventory and transportation have lower quality expectations than firms thatonly outsource transportation. For all these reasons, the international logisticmarket has begun to exhibit a consolidation and a concentration. A rapidincrease in the level of market concentration in the supply-chain managementindustry has created firms that enjoy the economies of scale and scope necessaryto offer multinational client-integrated services on a worldwide basis (Bowenand Leinbach, 2004).

Sustainability

It is generally known that the use of ICT systems may enable a more sustainablemobility through better utilization of motorways, a decrease in the number ofaccidents and a decrease of congestion. In the long run, it may even result in adecrease in mobility needs. Some empirical analysis based on the most success-ful ICT systems showed that the reduction potential in terms of energy andkilometre savings seems to be limited. The explanation of this conclusion has tobe found in the distinction of short- and long-term effects. ICT systems have animpact on the short term because of the gained efficiency. This efficiency gainprovides new space on the motorways. But in the long term, this will attract newdemand and will lead to an increase of mobility (Wiegmans et al., 2003). Fromthe perspective of transport planners and policy-makers, there is hope that thevirtual mobility will directly substitute for physical travel, and thus the numberof trips made will be reduced. However, there are two principal factors thatinfluence users’ choice between real and virtual space activities: the generalizedcost of reaching amenities and services and the quality of attractiveness of thoseamenities and services (Lyons, 2002). Hence, important questions that must beaddressed include the following: to what extent will the attractiveness of servicesaccessed virtually compare with the equivalent services accessed physically?And whether virtual mobility can improve inclusion and reduce or inhibit socialexclusion (Kenyon et al., 2002)?

Among ITC applications, the implications of e-commerce for sustainabletransport seem to be great, but the relationships are complex and require furtherresearch. Some affirm that e-retailing leaves more time to engage in other activitiesthat are also transport intensive; others maintain that e-commerce reduces theattraction of some shopping facilities (in the USA, 12% of the household budget isspent on transportation and 8% of the vehicle miles travelled is for shopping

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


purposes). Individuals will engage in shopping if the expected benefits of additionalinformation exceed the costs involved in the acquisition of that information. At theend of a shopping process, an individual can either make a purchase or exit themarket. However, there is no specific research on the impacts and, in particular, ondefining the commodities suitable for e-commerce in the long run, and whetherB2C e-commerce is limited only to small market segments (Tsamboulas, 2002).

To reduce the negative environmental impacts caused by extensive use of roadvehicles as well as to increase the utilization of other non-road transport modes,the European Union has taken several actions. The most important have been theimplementation of Common Transport Policy (CTP), promotion of ‘sustainabil-ity’, and economic support for the integration of transport networks and servicesin terms of investments and subsidizing some promising operations at theEuropean Union scale. The most recent upgrading of the CTP and subsequentrelated policy documents have particularly promoted ‘sustainable’ developmentof the transport sector in the European Union, which would result in a slowdownin the growth of the transport sector and reduce its negative impacts on theenvironment. The general idea of such a strategy seems to be the desire todecoupage the link between economic growth and transport growth. Ongoingresearch and subsidization of operations have resulted in the development ofsome successful practical cases such as the PACT cases and ‘Rail FreightFreeways’ (Janic and Bontekoning, 2002) and ‘sea waterways’.

Conclusions and Future Research Needs

The current transport revolution pertains not only to modal structures and theirorganization, but also in the distribution processes. Access to real-time informationhas altered the organization of the world of production as well the world of distri-bution, as well as aspects and attitudes of consumption. Transportation andeconomic growth are clearly interrelated today as they were in the past. Policieshave generally followed market trends and social ambitions. However, today,information has become a fundamental resource for economic activities, and thedeclining cost of access to information has stimulated new gains from trade. Never-theless, transportation is an external cost that has to be managed efficiently as it isa critical element of competitiveness. In the end, little is still known about howenhanced access to information and transport relations affect the economies ofnodes and regions. Summarized below are the main needs for research in the future.

Changes in Freight Transportation Demand

Low costs and instant access to information about new products and marketsstimulate an increase of freight flows. Supply chain networks, which integrateand organize the movements of goods among producers, distributors, retailersand consumers need to be more efficient and profitable. But does faster andguaranteed on-time delivery mean more vehicle miles travelled and more pollut-ants emitted? Some specific needs to be addressed:

● Estimate freight movements in light of the advancing sophistication of newmeans of articulating logistical systems and supply chains.

● Examine how the digital economy alters mode choice.● Show the impact of lower transportation costs on freight demands.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


● Measure savings in vehicle utilization by the use of real-time in-vehiclecommunication.

Trading in the Global Market

There is a need to understand how IT is applied to transport chains (e-businesslogistics) that can reduce the cost of acquiring goods, in particular identifyingwhich sectors of the economy are most likely to benefit from new informationtechnologies. At the moment, the adoption of IT by users (both in the private andpublic sectors) is occurring at a much slower pace than the advance of new tech-nologies. Firms and government agencies are not capitalizing on the benefits ofdigital technologies. Some research needs are as follows:

● Evaluation of technological progress to cost-efficiency in the supply ofe-commerce and Internet services.

● Access to e-networks.

Impacts of the Digital Revolution Upon Personal Travel and Accessibility to Services

The digital economy influences trip length patterns, temporal and spatial distri-bution of origins and destinations, and the modes and purpose of travel (Kenyonet al., 2002). At the moment, digital economy makes it possible to avoid certaintrips (booking, shopping, administrative services, etc.), but access to digitalnetworks still seems highly concentrated and exclusionary. The growth of busi-ness-to-business and business-to-consumer transactions offers the potential ofbringing goods and services to locations and people with limited access to them.Some research needs are as follows:

● To establish information networks and reduce the digital divide with adequatestrategies (see the example of civic network or community networks).

● To measure investments in IT as a proxy of e-commerce development.● To develop indicators for measuring e-commerce activity between nations.● To highlight the adoption processes of e-commerce in different countries.● To explore issues of transport and social exclusion in the e-economy.

Adoption of E-retailing

First, research is needed into the broader effects that the use of e-retailing has onthe spatial behaviour and activity patterns of individuals and households.Conventional shopping is one of the most important non-work activities in anyaffluent society in terms of both expenditure of money and time. If a householdswitches substantially from conventional shopping to e-shopping, a number ofquestions need to be addressed:

● To what activities will the saved time be transferred?● Will decisions regarding car ownership or transportation mode of other activi-

ties be affected?● Will total person-km travelled decline?● Will residential location choice be affected?

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


Network Capacity

There is a need to maximize the efficiency of existing networks, to redesignnetworks (especially in urban areas) and nodes (terminals, connectors), and todetermine how to develop interconnections. Digital technologies will introduceopportunities and challenges for public transit and have the potential toimprove services and ridership. They may allow transit operations to match thefragmentation of places of work and residence. Some research needs are asfollows:

● Identify implications for transportation planning.● Identify and remove bottlenecks and barriers.● Investigate how ICTs can reduce congestion.

New Interchange Nodes

The digital economy is redefining the relationships among production, distribu-tion and warehousing, which will alter the geography of business and willrequire new roads, transit services, pick-up and delivery services. This will affectland-use patterns and especially urban development and the location of shoppingareas, as well as changing patterns around ports or intermodal terminals. Inparticular, warehousing has a new role as a point of consolidation, distributionand sometimes assembly of products (terminals of second generation) (Zhu et al.,2002). Some research needs are as follows:

● Examine the impact of new node development brought about by technologyand optimization efforts.

Intermodal Traffic Improvement

Research should contribute to strengthening further the internal coherency andmarket position of intermodal transport in the European Union and the rest ofEurope in terms of its ability generally to increase the market share on allranges of distances: short, medium and long. Some research needs are asfollows:

● Examine the performance of intermodal infrastructure (i.e. links, terminals andnodes) including implementation of innovative concepts, operations, and newautomated and robotized technologies.

● Analyse the impact of standardization of vehicles and loading units acrosstransport modes and countries.

● Evaluate the impact of up-graded information system(s) for supporting inter-modal transport in the broadest sense.

● Analysis and forecast demand, costing and pricing of intermodal freight trans-port services including the design of the generic model related to intermodaltransport and logistics.

● Design convenient statistical databases that will be useful for planners, opera-tors and policy-makers at different levels such as local-regional, national andinternational.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


Future of Global Logistics Networks

The research challenges concern the analysis of logistical systems and multimodalnetworks on a meta-level (Tavasszy et al., 2003):

● Which types of networks could benefit the real-time planning procedure?● What kind of synergies can be identified in multimodal logistical networks,

both for achieving economies of scale and economies of scope?● What kind of effects might logistical networks have on sustainability indica-

tors?● What possibilities exist for economic restructuring logistic systems and there-

fore also economic systems if the more relaxed logistics operations could berealized?

References

Anderson, W., Chatterjee, L. and Lakshmanan, T. R. (2003) E-commerce, transportation and economicgeography, Growth and Change, 34(4), pp. 415–432.

Beyers, W. B. (2003) Implications of IT advances and e-commerce on transportation in producerservices, Growth and Change, 34(4), pp. 433–455.

Bolis, S. and Maggi, R. (2003) Logistics strategy and transport service choices: an adaptive statedpreference experiment, Growth and Change, 34(4), pp. 490–504.

Bowen, J. T. and Leinbach, T. R. (2004) Market concentration in the airfreight forwarding industry,Tijdschrift voor Economische en Sociale Geografie, 95(2), pp. 174–188.

Capineri, C. and Leinbach, T. R. (2003) Introduction: Globalization, e-economy and transport, Growthand Change, 34(4), pp. 385–390.

Capineri, C. and Rietveld, P. (Eds) (1997) Networks in Transport and Communications. A Policy Approach(Aldershot: Ashgate).

Castells, M. (2000) The Rise of the Network Society, 2nd Edn (Oxford: Blackwell).Couclelis, H. (2000) From sustainable transportation to sustainable accessibility: can we avoid a new

‘tragedy of the commons’?, in: D. Janelle and D. Hodge (Eds) Information, Place, and Cyberspace: Issuesin Accessibility, pp. 341–356 (Berlin: Springer).

Danielis, R. (2002) Shippers’ preferences for freight transport services: a conjoint analysis experimentfor Italy. Paper presented at STELLA Focus Group 1 Meeting, Certosa di Pontignano, Siena, Italy,7–9 June.

Dicken, P. (2003) Global Shift: Reshaping the Economic Map in the 21st Century, 4th Edn (New York: Guilford).Dicken, P., Kelly, P. F., Olds, K. and Yeung, H. W. C. (2001) Chains and networks, territories and scales:

towards a relational framework for analysing the global economy, Global Networks, 1(2), pp. 89–123.Eras, P. (2000) Koeriers zetten elektronische aanval, Transport en Logistiek, 2, pp. 26–27.Fischer, M. (2002) The new economy and networking. Paper presented at the STELLA Focus Group 1

Meeting, Certosa di Pontignano, Siena, Italy, 7–9 June.Florida, R. (2002) The Rise of the Creative Class (New York: Basic).Frybourg, M. and Nijkamp, P. (1995) Integrated strategic infrastructure networks in Europe (ISINE).

Working Paper attached to the Technical Annex: Search of Evaluation Indicators and AssessmentMethods for Complementary and Competing Trans-European Networks (Amsterdam: Free University).

Garcia, D. L. (1997) Networked commerce: public policy issues in a deregulated communicationenvironment, Information Society, 13(1), pp. 17–31.

Giuliano, G. (1998) Information technology work patterns and intra-metropolitan location: a casestudy, Urban Studies, 7, pp. 1077–1095.

Henderson, J., Dicken, P., Hess, M., Coe, N. and Yeung, H. (2000) Global production networks and theanalysis of economic development, Review of International Political Economy, 9(3), pp. 436–464.

Intermodal Transport in Europe (2004) Deliverable of Trilog Europe. Report Inro/log. 2004-26 (TNO).Janelle, D. and Beuthe, M. (1997) Globalization and research issues in transportation, Journal of

Transport Geography, 5(3), pp. 199–206.Janic, M. and Bontekoning, Y. (2002) An overview of the state-of-the-art on intermodal transport

research and possible trends with respect to developments in sustainable transport. Paper presentedat the STELLA Focus Group 1 Meeting, Certosa di Pontignano, Siena, Italy, 7–9 June.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014


Kamann, D. J. and Capineri, C. (1998) Synergy in networks: concepts, in: K. Button, P. Nijkamp andH. Priemus (Eds) Transport Networks in Europe: Concepts, Analysis and Policies, pp. 35–56. (Cheltenham:Edward Elgar).

Kenyon, S., Lyons, G. and Rafferty, J. (2002) Transport and social exclusion: investigating the possi-bility of promoting inclusion through virtual mobility, Journal of Transport Geography, 10(3),pp. 207–219.

Leinbach, T. R. (2001) The emergence of the digital economy and electronic commerce, in: T. R. Leinbachand S. D. Brunn, (Eds) The Worlds of Electronic Commerce: Economic, Geographical and Social Dimensions,pp. 3–26 (Chichester: Wiley).

Leinbach, T. R. and Bowen, J. T. (2004) Air cargo services and the electronics industry in SoutheastAsia, Journal of Economic Geography, 4(3), pp. 1–24.

Lyons, G. (2002) Internet: investigating new technology’s evolving role, nature and effects ontransport, Transport Policy, 9(4), pp. 335–346.

Malecki, E. J. (2002) Hard and soft networks for urban competitiveness, Urban Studies, 39(5–6),pp. 929–945.

Mitchell, W. J. (1995) City of Bits: Space, Place, and the Infobahn (Cambridge, MA: MIT Press).Mokhtarian, P. L. and Bagley, M. N. (2000) Modelling employees’ perceptions and proportional pref-

erence of work locations: the regular workplace and telecommuting alternatives, TransportationResearch A, 34(4), pp. 223–242.

Nemoto, T., Visser, J. and Yoshimoto, R. (2001) Impacts of Information and Communication Technology onUrban Logistics System (Tokyo: Hitotsubashi University).

Porter, M. E. (2001) Strategy and the Internet, Harvard Business Review, 79(3), pp. 63–78.Salomon, I. (1985) Telecommunications and travel: substitution or modified mobility, Journal of

Transport Economics and Policy, 19(3), pp. 219–235.Smith, A., Rainnie, R., Dunford, M., Hardy, J., Hudson, R. and Sadler, D. (2002) Networks of value,

commodities, and regions: reworking divisions of labour in macro-regional economies, Progress inHuman Geography, 26(1), pp. 41–63.

Southworth, F. (2002) Dynamics of supply chains: a multilevel network perspective. Paper presentedat the STELLA Focus Group 1 Meeting, Certosa di Pontignano, Siena, Italy, 7–9 June.

Suarez-Villa, L. (2003) The e-economy and the rise of technocapitalism: networks, firms, and transpor-tation, Growth and Change, 34(4), pp. 390–414.

Tavasszy, L., Ruijgrok, C. J. and Thissen, M. J. P. M. (2003) Emerging global logistics networks:implications for transport systems policies, Growth and Change, 34(4), pp. 456–472.

Tr News (2001) E-commerce and transportation, Tr News, 2(6).Tsamboulas, D. (2002) Impact of e-economy on traffic patterns. Paper presented at the STELLA Focus

Group 1 Meeting, Certosa di Pontignano, Siena, Italy, 7–9 June.Vleugel, J. (2002) E-commerce and the consequences for freight transport. Paper presented at the

STELLA Focus Group 1 Meeting, Certosa di Pontignano, Siena, Italy, 7–9 June.Wiegmans, B., Beekman, N., Boschker, A., Van Dam, W. and Nijhof, N. (2003) ICT and sustainable

mobility: from impacts to policy, Growth and Change, 34(4), pp. 473–489.Wyckoff, A. and Colecchia, A. (1999) The Economic and Social Impact of Electronic Commerce: Preliminary

Findings and Research Agenda (Paris: OECD).Yeung, H. W. C. (2000) Organizing ‘the firm’ in industrial geography. I: Networks, institutions, and

regional development, Progress in Human Geography, 24(2), pp. 301–315.Zhu, J., Han, S. L. and Seah, K. M. (2002) The third party logistics services and globalization of manu-

facturing, International Planning Studies, 7(1), pp. 89–104.

Dow

nloa

ded

by [

Um

eå U

nive

rsity

Lib

rary

] at

05:

05 1

8 N

ovem

ber

2014

Globalization, e‐economy and trade

Documents

Transcript of Globalization, e‐economy and trade