Chapter 5: The network of networks
Container shipping, airfreight, air passenger and telecommunications patterns display marked variations from each other. This is not entirely unexpected because their driving forces differ. Container shipping responds to the scarcity of resources; airfreight activity to the inclusion of speed in servicing dispersed production activities; air passengers to gross domestic product (GDP), income growth and, increasingly, to environmental concerns; and telecommunications to marked cultural differences. Nevertheless all manifestations are underpinned by the global hub-and-spoke system. As global hub-and-spoke networks allow for economies of scale by consolidating flows from a set of geographically dispersed services onto trunk connections within the hub, the system is the most economically viable arrangement for private interests and preferred to a mesh network topology in which each of the network’s nodes is interconnected with every other. Any disruptions in container shipping, air cargo, air passenger or telecommunications services due to a massive node failure have the potential to be economically and socially catastrophic for the supply chains of multinational manufacturers and retailers, and may have a significant spillover effect on second-tier cities (Grubesic and Murray, 2006; Grubesic and Matisziw, 2008). For example, an unexpected three-year shutdown of the ports of Los Angeles and Long Beach in the United States ‘would reduce real (inflation-adjusted) GDP by between 0.35 per cent and 0.55 per cent, or $45 billion to $75 billion, per year.
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