Evaluation of the potential locations for logistics hubs : A case srudy for a logistics company

Abstract: The location of logistics hubs is one of the most crucial success factors for potential economic growth in logistics sector. Since the logistics hub has direct and indirect impacts on different stakeholders including investors, policy makers, infrastructure providers, hub operators, hub users and the community itself, it needs to be considered carefully. Therefore, logistics hubs should be located in such a way that it can provide a better accessibility to three different modes of transportation- road, rail and waterways. The aim of this study is to evaluate the potential locations for logistics hubs and to find out the criteria that affect for the selection of location for logistics hubs. A comprehensive literature study reveals the factors that are affecting the selection of location for logistics hubs and the methods to evaluate those locations considering the criteria. Location selection or evaluation is a typical multi-criteria decision making (MCDM) problem in which performance criteria plays a vital role for the final decision making. Both qualitative and quantitative MCDM methods are applied in this study, where the Analytic Hierarchy Process (AHP) is qualitative and the gravity method is quantitative method. Analytic Hierarchy Process (AHP) is a structured approach to reach the final decision which is one of the best methods of all MCDM problems, used in recent literature to evaluate the location selection problems. A case study is done for the logistics company, Brinova Fastigheter AB in Sweden. This study is followed by AHP method which is considered with selected factors, i.e. highway accessibility, intermodal capacity, port capacity and land availability. Moreover, this study is conducted by evaluating the four major potential locations in Sweden i.e. Stockholm, Göteborg, Helsingborg and Karlshamn for selecting as a logistics hub. Besides, the location for selecting logistics hubs is evaluated by the gravity method, which is a quantitative method to determine the level of accessibility for the selected locations, considering the flow of goods both inbound and outbound and the transport cost between the locations. The result from the AHP method recommend that Göteborg is the best potential location to establish logistic hub whereas the Gravity model represents that Stockholm has the highest level of accessibility for logistics activity. Therefore the study suggested that both Göteborg and Stockholm are considered to be the best potential locations considering in present situation