The Global Supply Chain by Wolfgang Lehmacher

Author:Wolfgang Lehmacher
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

3.1.6 Urbanization

Eighty-three percent of the online shoppers in the USA live in cities (thepaypers.com 2016). Migration from rural to urban areas in many parts of the world will impact consumption patterns and, thus, the supply chain. The percentage of population that resides in an urban setting surpassed the 50% mark sometime between the year 2000 and 2004. By 2025, China’s urbanization rate is projected to be around 60%, India is likely to reach 36%, and the USA will be slightly shy of 90%, compared to 82% in 2014, according to the United Nations’ 2014 World Urbanization Prospect.

China in particular has experienced a major shift towards urbanization; in 1990, the urbanization rate was 26%. The economic development in the eastern part of the country resulted in an urban and industrial corridor stretching from Harbin in the northeast through the Beijing area and south to China’s metropolitan complex of Shanghai, China’s largest city. Well-paying jobs provided people with a better standard of living, drawing even more people into the area. In 2013, the workforce is larger than those of the USA and Europe combined. China’s middle class is growing, and rising incomes are creating a new class of consumers.

The increasing number of urban dwellers will affect traffic, passenger, and goods mobility. In the past, infrastructure plans were rarely able to keep up with the urban growth pace. As a result, mobility and hence productivity within urban areas have been compromised. Ambulances and fire trucks regularly get stuck in traffic, and parcel carriers are often not able to deliver on time.

According to the annual Traffic Index by TomTom, the most congested cities in the world are Istanbul in Turkey, Mexico City in the United States of Mexico, Rio de Janeiro in Brazil, Moscow in Russia, and Salvador in Brazil (Kirkpatrick 2015). In the USA, an annual Traffic Scorecard, compiled by Texas A&M Transportation Institute (TTI), places Washington, DC, the larger Los Angeles area, and San Francisco/Oakland as the top three most congested cities in the country, with an average of 82, 80, and 78 h, respectively, spent in traffic per capita annually. Another more vivid example is a 20 mile stretch of the Cross Bronx Expressway in New York which is determined to be the most congested traffic corridor in the USA, taking 54 min to traverse at an average speed of just 13 mph.

Along with delays, citizens and governments have to deal with increasing costs and environmental pollution. By 2020, TTI projects that the total nationwide delay time will grow to 8.3 billion hours and congestion will cost $192 billion. Fuel wasted increased by 520% in 2015, from just shy of 0.5 billion gallons in 1982 to 3.1 billion gallons (Inrix 2015).

Growing agglomerations lead to rising demand on living space, schools, clinics, water, energy, and recreational programs; emissions increase too. The “United Nations Environment Programme” estimates that cities are already responsible for 75% of global CO2 emissions, with transport and buildings being among the largest contributors (UNEP 2016). In 2011, cities contributed 70% of global GHG emissions while covering only 2% of global land mass.

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