Logistics Clusters Drive Value and Growth

If you were to look at any location which featured a logistics hub (like an ocean port or a airport), you're likely to also find a logistics cluster. As Professor Yossi Sheffi, Director of the MIT Center for Transportation and Logistics explains, these logistics clusters provide a great opportunity for all types of workers to find stable employment. Furthermore, they drive the economy in the areas they can be found as well as help promote overall growth. First, however, Professor Sheffi helps explain why logistics clusters are so beneficial: As with large industrial clusters, such as the high-tech cluster in Silicon Valley or the entertainment cluster in Hollywood, logistics clusters exhibit a positive feedback loop, meaning that the bigger they become, the more they grow, Sheffi says. “With logistics clusters, the more freight that flows into them, the more efficient the transportation moving in and out becomes, because it is possible to use larger conveyances with higher utilization. This drives costs down, and, at the same time, service improves since there is a higher frequency of moves and it is easier to ship direct to more locations.” These advantages attract more and “the cycle just continues,” he says. Why should you care about logistics clusters? With their growth comes also the growth of logistics as being a valuable opportunity for upcoming workers ““ something that supply chains and logistics have struggled with in the past few years. Working towards creating vibrant logistics clusters not only allows for innovation, but will also allow for an influx of intelligent and fresh-faced workers to take the reins of an aging workforce ““ and this can spell out the future success of any logistics organization.

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