What is a Hub and Spoke Distribution Model? – Redwood Logistics

hub and spoke

What is the Hub and Spoke Distribution Model?

appropriately named, the hub and speak is basically a distribution model that resembles the ball-shaped form of a bicycle wheel. In the middle of a wire-spoked rack is what is known as the hub. It is this hub that allows each of the spokes, sprawled out in all directions around the wheel, to meet at a centralized location at the center of the rack .
We see this concept used in multiple industries, such as grocery – where food and consumer products are much loaded into a unmarried truck at a distribution hub, then sent to individual satellite stores. It ’ second besides common at larger airports, where an airline will use it as a distribution center to fly people across the ball. basically, this hub and spoke model of doing commercial enterprise and moving people and goods around is something that is about ingrained in our economy .

Reading: What is a Hub and Spoke Distribution Model? – Redwood Logistics

How LTL Carriers Use the Hub and Spoke Model

The aim of a less than truckload cargo is to transport smaller shipments in a larger truck to a address .
however, it ’ s not always possible to ship a one pallet from California to Florida via one-way department of transportation. To make transport effective, an LTL carrier wave will set up or utilize a serial of shipping distribution centers or hubs – where smaller shipments can be bundled together in a single truck heading to a specific address .
This method acting not only saves the LTL aircraft carrier and the shipper a long ton of money but expedites the transit of commodities while improving rescue efficiency .

Why the Hub and Spoke Distribution Model Works for LTL Carriers

In a perfect universe, a shipper would manage their logistics programs with a one truckload heading to a single address – then fill that truck with supplies and bring it back to them. however, the provision chain is anything but a perfect world and it is rarely ever quite so simple .
The hub system was designed to simplify the process of shipping commodities that don ’ thyroxine fit this perfect earth scenario. Since most LTL shippers simply can ’ deoxythymidine monophosphate use full-freight shippers for their logistics needs – the hub and spoke model gives them the tractability they need.

Here is why it’s so beneficial for LTL carriers…

A central hub is designed to receive, path, warhead, and launch multiple shipments to individual destinations. A carrier will typically pick a hub distribution location that is centrally located within their network. Most primary hubs are built in major metropolitan locations, including Denver, Chicago, Houston, and other larger cities. Beyond central hubs are regional-based hubs, such as Los Angeles for the western US, Kansas for central states, Atlanta for the South Eastern US, and Indianapolis .

This system offers multiple benefits for the LTL carrier as well as the customer.

For starters, a hub-based system is designed for maximal efficiency across the board. But the number one save is financially-based. A hub can receive multiple LTL shipments each day ( with most hubs having more than 100 individual loading docks ). The freight can be stored until a route head to the finish is full moon and ready to go. This saves the LTL mailman a draw of money on waste fuel, payroll, and more. The rundle and hub method acting besides permits better customer service .
The modern supply chain is all about efficiency. But the hub and spoke distribution model has been utilized for more than 100 years and is still highly relevant in today ’ sulfur landscape. As engineering improves, this method acting of embark will merely continue to evolve, offering shippers and carriers extra flexibility, improved shipping delivery times, and more sew customer service .