ARTICLE IN PRESS K O'Connor/Joumal of Transport Geography xxx (2009)xxx-xxx this context,transport planners might draw insight from thought party provider"in logistics analysis)to "fourth party provider" that has already been given to the management and development where the logistics service company becomes fully integrated of these big urban regions (Simmons and Hack,2000).Some evi- into the production process of the client firm,running ware- dence of thinking at this larger scale has been detected by Rodri- houses,in some cases dictating production outputs (from a gue and Hesse (2007).Efforts to refine and expand these ideas knowledge of stock levels)and in other circumstances handling could usefully follow approaches to spatial strategies that have returns and servicing problems.The global city logistics regions been developed by urban planners dealing with the spread of used in this research may be very attractive places for these their metropolitan areas.The assessment of corridor development complex service companies.That is because access to competing versus intensification of existing nodes versus new centres in gateways could provide lower freight and loading cost due to more distant locations that exercise the minds of logistics plan- competition,provide greater flexibility in operations and possibly ners is a sectoral example of the broader urban management ap- ensure a wider set of destinations served.Access to both sea and proaches being applied in these large urban regions.In addition airports would be an additional advantage for those logistics there may be a need for the "creativity in financing new infra- firms with clients needing both sea and air transport at different structure and implementing new technologies and policies"cited times and for different products.Finally,the complex logistics by Leinbach and Capineri (2007,p.270).Both will call for new tasks might begin to draw upon other services just as the finance institutional structures that are now seen as the critical element sector has done as it has become more specialized.Again global in managing modern urban development(Keating 2001;Healey. logistics regions could be attractive as their core business city 2006:Kreukels et al.,2003). will have the array of producer services that might be needed Third,the research was designed to assess whether measures to underpin the operation of logistics.It is these places that of physical logistics activity reflect the level of development of might evolve into what Wang and Cheng(2009)has labeled global city functions.In the absence of data on the actual location "global supply chain management centres".A key question here of firms and details of their functions in each city,the analysis re- is whether these new logistics service providers shape the direc- lied upon the statistical relationship between the rank (and hence tion of physical flows,favouring some ports and airports because the commercial,financial and administrative importance of a glo- of the depth of supporting services,even if their clients may not bal city)and logistics role of each global city region.The research necessarily be in that region.This is a potentially interesting area found that less than 50%of the variance in logistics activity in a of research. global city logistics region was associated with an index measur- The research has provided some additional insight into the ing the rank of the rank of its global city.Exploring those results function and vitality of global city regions,showing not only that for categories of city exposed the infrastructure issue outlined logistics is an important activity,but that levels of that activity above,while at the same time showed that many middle and might be a useful means of differentiating the development of lower ranked global cities with basic infrastructure were impor- these regions.In effect,the acknowledgement of the role of both tant in logistics activity.Hence,infrastructure may be a necessary sea and air freight in a region has confirmed that it makes sense but not sufficient explanatory factor of the performance and con- to think of global cities as logistics cities,as Easterling(2004)sug- centration of freight activity in the main global logistics regions. gested.A further aspect step in this research could involve the Rodrigue and Hesse (2007,p.106)have observed "It is not only analysis of the internal spatial development of these regions.Logis- simple infrastructure provision that makes firms go to a certain tical activities could be creating or re-vitalising some of the nodes area but the ability of regions and cities to cope with the extraor- that Hall(2001)has found contributes to the poly-centric character dinary demand for flexible,timely and cost efficient physical dis- of these regions.Alternatively the transport activities might be dis- tribution".It is may be that the newly-minted and special role persed among fringe green-field sites,so accelerating the spread of that out-sourced logistics companies now play in the handling the region.Local case studies of this aspect are planned as a follow of freight might be a critical part of the link between global city up to this paper. functions and logistics. Finally,this paper set out to utilize sea and air freight data These new roles reflect the way many other services have simultaneously in an innovative effort to capture the breadth evolved and developed over recent years,moving from a position of logistics activity.Apart from the need to bridge two separate as a final step in a production process to a central and innova- sets of thinking and analysis this approach faced serious techni- tive function,one that can shape production outcomes (Bryson cal questions in measurement.The approach used was the Glo- et al.,2004).This change emerged from the outsourcing of func- bal Logistics Index which made it possible to merge sea and tions from firms,which,in turn,created specialist service pro- air freight data into a readily interpretable form,and provide a viders.One effect of this shift has been a geographic foundation for more refined thinking on the patterns that were concentration of service firms.That has been illustrated within detected.It is however a crude summation of two separate data the broad category of producer services,and,in particular,in sets and will need refinement if it is to be applied in other the finance sector.It may well apply to logistics services.If so, issues.That refinement could involve some way to weight understanding the location of out-sourced logistics service com- sea and air freight prior to any merge of their numbers.Drewe panies might provide some new insight into reasons for the un- and Janssen's (1996)efforts to differentiate between tonnage and even nature of freight activity among cities.Just as the idea of a value-added in ranking transport activity could be a useful starting "buzz"has been used to account for the concentration of innova- point here tive activity in the cores of global cities (Storper and Venables. 2004),so the local expressions of the"global 'buzz'that has be- Acknowledgements come logistics"Wang et al.(2007,p.1)might provide insight on the role played by global logistics regions in world freight move- Research reported here was funded by a Small Grant from the ment.Olivier and Slack(2006)have created one path into this Volvo Education and Research Foundation. new perspective by clarifying the role and significance of mul- The author acknowledges the great assistance provided by the ti-national terminal operators as a new dimension in the services research publications listed on Jean-Paul Rodrigue's website of sea freight. (http://people.hofstra.edu/jean-paul_rodrigue/cv_research.htm). This perspective recognizes the steady evolution of logistics This has been a major source of reading material,made easily services through the standard out-sourced model (labeled "third accessible via Pdf copies of journal and conference papers. Please cite this article in press as:O'Connor,K.Global city regions and the location of logistics activity.J.Transp.Geogr.(2009).doi:10.1016 j.jtrangeo.2009.06.015this context, transport planners might draw insight from thought that has already been given to the management and development of these big urban regions (Simmons and Hack, 2000). Some evi￾dence of thinking at this larger scale has been detected by Rodri￾gue and Hesse (2007). Efforts to refine and expand these ideas could usefully follow approaches to spatial strategies that have been developed by urban planners dealing with the spread of their metropolitan areas. The assessment of corridor development versus intensification of existing nodes versus new centres in more distant locations that exercise the minds of logistics plan￾ners is a sectoral example of the broader urban management ap￾proaches being applied in these large urban regions. In addition there may be a need for the ‘‘creativity in financing new infra￾structure and implementing new technologies and policies” cited by Leinbach and Capineri (2007, p. 270). Both will call for new institutional structures that are now seen as the critical element in managing modern urban development (Keating 2001; Healey, 2006; Kreukels et al., 2003). Third, the research was designed to assess whether measures of physical logistics activity reflect the level of development of global city functions. In the absence of data on the actual location of firms and details of their functions in each city, the analysis re￾lied upon the statistical relationship between the rank (and hence the commercial, financial and administrative importance of a glo￾bal city) and logistics role of each global city region. The research found that less than 50% of the variance in logistics activity in a global city logistics region was associated with an index measur￾ing the rank of the rank of its global city. Exploring those results for categories of city exposed the infrastructure issue outlined above, while at the same time showed that many middle and lower ranked global cities with basic infrastructure were impor￾tant in logistics activity. Hence, infrastructure may be a necessary but not sufficient explanatory factor of the performance and con￾centration of freight activity in the main global logistics regions. Rodrigue and Hesse (2007, p. 106) have observed ‘‘It is not only simple infrastructure provision that makes firms go to a certain area but the ability of regions and cities to cope with the extraor￾dinary demand for flexible, timely and cost efficient physical dis￾tribution”. It is may be that the newly-minted and special role that out-sourced logistics companies now play in the handling of freight might be a critical part of the link between global city functions and logistics. These new roles reflect the way many other services have evolved and developed over recent years, moving from a position as a final step in a production process to a central and innova￾tive function, one that can shape production outcomes (Bryson et al., 2004). This change emerged from the outsourcing of func￾tions from firms, which, in turn, created specialist service pro￾viders. One effect of this shift has been a geographic concentration of service firms. That has been illustrated within the broad category of producer services, and, in particular, in the finance sector. It may well apply to logistics services. If so, understanding the location of out-sourced logistics service com￾panies might provide some new insight into reasons for the un￾even nature of freight activity among cities. Just as the idea of a ‘‘buzz” has been used to account for the concentration of innova￾tive activity in the cores of global cities (Storper and Venables, 2004), so the local expressions of the ‘‘global ‘buzz’ that has be￾come logistics” Wang et al. (2007, p. 1) might provide insight on the role played by global logistics regions in world freight move￾ment. Olivier and Slack (2006) have created one path into this new perspective by clarifying the role and significance of mul￾ti-national terminal operators as a new dimension in the services of sea freight. This perspective recognizes the steady evolution of logistics services through the standard out-sourced model (labeled ‘‘third party provider” in logistics analysis) to ‘‘fourth party provider” where the logistics service company becomes fully integrated into the production process of the client firm, running ware￾houses, in some cases dictating production outputs (from a knowledge of stock levels) and in other circumstances handling returns and servicing problems. The global city logistics regions used in this research may be very attractive places for these complex service companies. That is because access to competing gateways could provide lower freight and loading cost due to competition, provide greater flexibility in operations and possibly ensure a wider set of destinations served. Access to both sea and airports would be an additional advantage for those logistics firms with clients needing both sea and air transport at different times and for different products. Finally, the complex logistics tasks might begin to draw upon other services just as the finance sector has done as it has become more specialized. Again global logistics regions could be attractive as their core business city will have the array of producer services that might be needed to underpin the operation of logistics. It is these places that might evolve into what Wang and Cheng (2009) has labeled ‘‘global supply chain management centres”. A key question here is whether these new logistics service providers shape the direc￾tion of physical flows, favouring some ports and airports because of the depth of supporting services, even if their clients may not necessarily be in that region. This is a potentially interesting area of research. The research has provided some additional insight into the function and vitality of global city regions, showing not only that logistics is an important activity, but that levels of that activity might be a useful means of differentiating the development of these regions. In effect, the acknowledgement of the role of both sea and air freight in a region has confirmed that it makes sense to think of global cities as logistics cities, as Easterling (2004) sug￾gested. A further aspect step in this research could involve the analysis of the internal spatial development of these regions. Logis￾tical activities could be creating or re-vitalising some of the nodes that Hall (2001) has found contributes to the poly-centric character of these regions. Alternatively the transport activities might be dis￾persed among fringe green-field sites, so accelerating the spread of the region. Local case studies of this aspect are planned as a follow up to this paper. Finally, this paper set out to utilize sea and air freight data simultaneously in an innovative effort to capture the breadth of logistics activity. Apart from the need to bridge two separate sets of thinking and analysis this approach faced serious techni￾cal questions in measurement. The approach used was the Glo￾bal Logistics Index which made it possible to merge sea and air freight data into a readily interpretable form, and provide a foundation for more refined thinking on the patterns that were detected. It is however a crude summation of two separate data sets and will need refinement if it is to be applied in other issues. That refinement could involve some way to weight sea and air freight prior to any merge of their numbers. Drewe and Janssen’s (1996) efforts to differentiate between tonnage and value-added in ranking transport activity could be a useful starting point here. Acknowledgements Research reported here was funded by a Small Grant from the Volvo Education and Research Foundation. The author acknowledges the great assistance provided by the research publications listed on Jean-Paul Rodrigue’s website (http://people.hofstra.edu/jean-paul_rodrigue/cv_research.htm). This has been a major source of reading material, made easily accessible via Pdf copies of journal and conference papers. K. O’Connor / Journal of Transport Geography xxx (2009) xxx–xxx 7 ARTICLE IN PRESS Please cite this article in press as: O’Connor, K. Global city regions and the location of logistics activity. J. Transp. Geogr. (2009), doi:10.1016/ j.jtrangeo.2009.06.015