The progression to Logistics City and its implication of economies of agglomeration

Purpose of this paper - This paper identifies the essential activities at logistics facilities and describes the progression of these facilities to logistics city. The impact of the progression on economies of agglomeration is analysed, the practical implication is presented, and the need for government initiatives, intervention and coordination as a catalyst is explained. Design/methodology/approach - Based on the sophistication of logistics facilities progression, the essential activities at various logistics facilities are collected and the impact on economies of agglomeration is analysed. Findings - This paper finds that while agglomeration economies explain past development, agglomeration forces alone are insufficient and government intervention is required as a catalyst. This may be in the form of the development of a common user freight terminal with intermodal and customs capability, e.g. inland port to aggregate consolidation/deconsolidation activities. Research implications and limitations - The identification of essential activities of logistics facilities can minimise or prevent inappropriate uses of these facilities to ensure effective and efficient logistics services planning and high utilisation of transport infrastructure. The impact analyse of economies of agglomeration points out the role a government should play in logistics facilities development. Value of paper - The paper identifies essential activities for logistics facilities and therefore makes it possible for governing agencies to plan and protect the development of logistics facilities and ensure high utilisation and effective usage of such facilities. The gap identification of economies of agglomeration ensures tangible economic benefits can be achieved through appropriate government supported logistics facility developments.