Tue | Jan 22, 2019

Collaboration & Logistics

Published:Wednesday | November 12, 2014 | 12:00 AM

It is a truism in business that one plus one does not always amount to two: an observation that acknowledges that synergies between firms can often ensure that the whole is more than the sum of the parts.

In some respects, this is one of the reasons why firms "cluster".

Think Silicon Valley for high-tech industries, Wall Street for financial services, Hollywood for entertainment and, domestically, Duke Street for legal services.

The presence of the latter is responsible for photographers, draftsmen, investigators, etc, locating their own businesses in proximate locations.

Many are now discovering that the same principles apply to logistics centres. The presence of certain types of operations attracts the presence of not only competitors but also the providers of complementary products.

A firm that sees vast amounts of goods coming into a logistics centre, naturally looks to see what opportunities there are to use the return or onward cargo space to its advantage - and often at reduced costs.

MIT Professor Yossi Sheffi, writing in Site Selection magazine of January 2013, cites the case of a market leading Spanish firm, in the fish processing and distribution industry, whose large and frequent air shipments from South Africa into its distribution centre near Zaragoza has enabled it to partner with a fashion retailer for the use of its cargo space on the return flights to South Africa.

It may not have been the most obvious of partnerships, but both firms saw a win-win opportunity.

By positioning itself as a competitive location on the international value-chain network, Jamaica may yet find itself creating business opportunities that many not be "planned for", but which may emerge nonetheless once businesses take a close look.