Logistics center is a modern phenomenon and the importance of logistics centers in the development of the transport system has increased in the last decades.
Logistics center is also a relatively new and rather broad concept and it may mean different things to different users. However, the unambiguous definition has proven to be difficult. It can be both a general concept the more accurate term, but then we must be able to classify a variety of different styled logistics centers and among other things by their size and characteristics.
In the actual sense, logistics center is an area that includes product transportation, storage and distribution functions. Mainly, it is an area where companies locate, maintain and practice such activities and when it is West European logistics area, the so-called Freight Village, German logistics centers union’s definition characteristics specify further this idea.
These key features are:
- An area formed by transport companies, logistics service providers and logistics intensive commercial and manufacturing companies,
- Connection to at least two different modes of transport – intermodality in particular between rail and road transport and
- Local logistics center area managed by developer, which maintains cooperation between enterprises to achieve synergy benefits.
In the logistics center can be used several modes of transport (rail, road, sea and air transport), and they can function as links between long-distance line haul and local collection and distribution transport. Logistics center often also provides value-added services in addition to transportation and storage operations e.g. re- packaging of goods, pricing, marking and setting for sales. Logistics center can form a co-operation network that has a great regional importance. Behind the development background of logistics centers can be a number of different regional operators such as, for example, business community and educational institutions. The management model and organization that maintains and develops logistics center, together can strengthen entire region’s various operators’ co-operation and marketing and as well as attract new investment to the region.
Logistics centers are different. While one focuses on optimization of goods and information flows concentrated value-added goods, another sees the role of logistics centers as a transport infrastructure hub. Logistics can be viewed at different levels, which have been named in the picture as 1) Infrastructure, 2) traffic/transport, 3) transport, 4) goods, 5) data and information as well as 6) money flows. Between each level operate different markets. For example, vehicles operating as means of transport operate in the transport market utilizing transport infrastructure. They usually do not pay directly to the infrastructure owner and administrator for using capacity.
Vehicles can operate in the process as a transport flows in the transport market fulfilling customers’ accessibility needs by delivering necessary products in the right place.
Each mode of transport and company form their own network and transition from network to another can take place only in the hub that is, the logistics center. Similarly, information flows ensure implementation of operations and services and money flows complete ownership rights and functioning of the market.
Logistics centers can be seen combining these different levels, and therefore the role of logistics centers in development work at different levels is justified. Nodes act as operational transferors from one means and mode of transport to another and between companies, but they also act as unifiers of review levels and balancers of their differences, e.g. storing products.
Warehousing supports the benefits of availability and choice, but the development of a stopping point also provides an opportunity for other production delays in supply chains and thus the development of a supply chain strategy.
Developments at different levels of logistics may not progress at the same pace, and infrastructure is often more rigid, slow and responsive, although its implementation could also be proactive and create new opportunities. At the same time, it can also be seen that the channels at different levels and the flows in them are becoming more specialized and detached: not all work steps are done at all stages of the chain, but can take place centrally and delayed in a logistics center.