The meaning of “Hub and Spoke System” in marine transport

By | 06/05/2015

The meaning of “Hub and Spoke System” in marine transport

 

1. Hub & Spoke System

When divided into size and operation type, the container terminals could be divided largely into large major terminals (Hub) and mid to small sized terminals (Spoke).

Fedex & Hub&Spoke System

Fedex & Hub&Spoke System

Hub and Spoke System is the logistics system which Federal Express adopted to realize the next-day delivery system. In this system, when goods are sent from the origination point to a certain central location in a territory, they converge with the goods that came from other places at the same timeframe, reclassified depending on the final destination, after which they are once again sent off to the individual destinations. Such a system is used not only in air transport but also in marine and land transports as well.
 

2. Expansion of the hub & spoke system as a result of advent of large vessels

The hub & spoke system is growing as a result of the advent of large vessels as was seen in past postings. Whereas, in the past, most vessels stopped over in all ports at least once, if large vessels are placed in navigations routes as is being done now, they will only be stopping at large hub ports where anchoring would be feasible. This translates into the increase in the so-called trans-shipment(TS) freights. Here, TS means such freight as those that are piled up on the yard without exiting through the terminal gate and then carried through intact on vessels. Put another way, the freights are unloaded in the main hub in the territory, and then the small vessels carry the freights from the hub ports to the neighboring ports.

Hub & Spoke System

Hub & Spoke System

The trans-shipment ports, national or regional main getaways and other hub ports in developed countries and major base ports are mostly terminals exclusively for containers due to large processing of freights. In the case of spoke ports which move again from the hub, many are complex terminals which handle containers and bulk freights at the same time, and most consist of small scale manual terminals. Also, spoke ports are often small trans-shipment ports in regional getaway or new emerging economies, and whereas the hub ports own large scale terminal management companies, the spoke ports belong to regional terminal management companies, governments are port authorities.
 

3. Steady demand for small vessels

large container ships and container terminal operation at long beach terminal

large container ships and container terminal operation at long beach terminal

Despite the vessels becoming larger and larger, there is expected to be steady demand for small vessels as well. As the vessels are becoming larger, the ships placed within the territories are also becoming larger. However, the demand for small vessels is also rising.

As large vessels are placed in the ocean, the Hub & Spoke transport pattern became developed and the demand for small ships, which can collect the freights from neighboring ports to the hub ports, will continue to increase. As for the Asian region where there are many islands, the utility of small vessels will become even greater due to the region’s characteristics. Another reason for the increased demand for small ships is the lack of ports that could accommodate large vessels.

 

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