Supply-chain-focused measures of centrality and spread in metropolitan areas

Abstract

Efficient freight transportation is a necessary condition for the economic development of markets in metropolitan areas. Without it, the cost of goods increases, and larger negative externalities are produced, negatively impacting the quality of life. In this context, the efficiency of supply chains is strongly influenced by the spatial patterns of economic activities, given the role that freight transportation plays in connecting the multiple stages of supply chains. The research reported in this paper develops and tests data-driven metrics of centrality and spread of freight activity in metropolitan areas. The approach used in the paper identifies the economic pole(s) in metropolitan areas and computes a new set of metrics to assess the physical separation between consecutive stages of supply chains. Three different metrics were used to identify the economic pole(s): (1) total employment, (2) employment density, and (3) an interaction index based on a gravity model that considers the interchanges among related economic sectors. To estimate the spread of freight activity the authors developed an approximation technique based on a simplified freight distribution model to estimate the average weighted shipment distance for various consecutive stages of supply chains. The proposed methodologies were tested on six metropolitan areas of various sizes. In the concluding section the results obtained by the research effort are discussed, together with the corresponding policy implications.