The Development of Hub and Spokes Systems in the Mediterranean: A Problem of Sustainable Development

15 Pages Posted: 12 Jun 2003

See all articles by Alga D. Foschi

Alga D. Foschi

University of Pisa - Department of Economics

Dionisia Cazzaniga Francesetti

University of Pisa - Department of Economics

Date Written: July 2002

Abstract

Since the 1995 Barcelona Conference, the Mediterranean has acquired an increasingly important role in the political strategies of the European Union and in countries bordering on the Mediterranean; at the same time, it has assumed a primary function in the expansion of maritime transport. The Mediterranean is seen as the interface between different economies and cultures, and maritime transport is one of the main tools allowing this integration to take shape. The EU and the national governments and parliaments are undertaking commitments for a more precise and more incisive policy designed to promote maritime transport, in a perspective fully integrated with the requirements of the entire transport system. Development of maritime transport would open up fundamental opportunities in terms of cost reductions for the shipping companies and reduction of the severe environmental and social damage resulting from land transportation, especially road transportation and the associated massive earthworks and construction projects. Furthermore, several modes of organization of maritime cargo transport that could further reduce the pollution risk are available.

In container transport, the organization of traffic according to hub & spokes systems rather than point to point services allows a substantial reduction of unit transport costs (per container, expressed in TWU twenty equivalent unit). It is important to underline that the choice of this organizational system for container transport conciliates two requirements: 1) It provides a response to public concern, as it allows reduction of the negative externalities caused by transportation, and 2) It responds to the needs of the private sector, as it encourages an increase in productive efficiency of the system by a reduction in unit transport costs and a consequent increase in the profit margin of the shipping companies.

Keywords: hub and spokes, transshipment, unit costs, externalities, Mediterranean, fuel consumption

JEL Classification: L100, L920, O1

Suggested Citation

Foschi, Alga D. and Cazzaniga Francesetti, Dionisia, The Development of Hub and Spokes Systems in the Mediterranean: A Problem of Sustainable Development (July 2002). Available at SSRN: https://ssrn.com/abstract=385183 or http://dx.doi.org/10.2139/ssrn.385183

Alga D. Foschi (Contact Author)

University of Pisa - Department of Economics ( email )

via Ridolfi 10
I-56100 Pisa, PI 56100
Italy
+39 050 945331 (Phone)
+39 050 598040 (Fax)

Dionisia Cazzaniga Francesetti

University of Pisa - Department of Economics ( email )

via Ridolfi 10
I-56100 Pisa, PI 56100
Italy

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