Spoke-hub distribution paradigm

The hub-and-spoke distribution paradigm (or model or network) is a system of connections arranged like a chariot wheel, in which all traffic moves along spokes connected to the hub at the center. The model is commonly used in industry, in particular in transport, telecommunications and freight, as well as in distributed computing.

1 Analysis of the model
- 1.1 Benefits
- 1.2 Drawbacks
2 Commercial aviation
3 Transportation
4 Industrial distribution
5 References
6 See also

Analysis of the model

The hub-and-spoke model is most frequently compared to the point-to-point transit model.

Benefits

For a network of n nodes, only n - 1 routes are necessary to connect all nodes; that is, the upper bound is n - 1, and the complexity is O(n). This compares favorably to the $\frac{n(n-1)}{2}$ routes, or O(n²), that would be required to connect each node to every other node in a point-to-point network. For example, in a system with 10 destinations, the spoke-hub system requires only 9 routes to connect all destinations, while a true point-to-point system would require 45 routes.

The small number of routes generally leads to more efficient use of transportation resources. For example, aircraft are more likely to fly at full capacity, and can often fly routes more than once a day.

Complicated operations, such as package sorting and accounting, can be carried out at the hub, rather than at every node.

Spokes are simple, and new ones can be created easily.

Customers may find the network more intuitive. Scheduling is convenient for them since there are few routes, with frequent service.

Drawbacks

Because the model is centralized, day-to-day operations may be relatively inflexible. Changes at the hub, or even in a single route, could have unexpected consequences throughout the network. It may be difficult or impossible to handle occasional periods of high demand between two spokes.

Route scheduling is complicated for the network operator. Scarce resources must be used carefully to avoid starving the hub. Careful traffic analysis and precise timing are required to keep the hub operating efficiently.
The hub constitutes a bottleneck or single point of failure in the network. Total cargo capacity of the network is limited by the hub's capacity. Delays at the hub (caused, for example, by bad weather conditions) can result in delays throughout the network. Delays at a spoke (from mechanical problems with an airplane, for example) can also affect the network.

Cargo must pass through the hub before reaching its destination, requiring longer journeys than direct point-to-point trips. This trade-off may be desirable for freight, which can benefit from sorting and consolidating operations at the hub, but not for time-critical cargo and passengers.

Two flights are required to reach the most of the destinations. Landing on the hub and spending some time there increases the duration of the journey (safety screening may be necessary again before boarding the second plane). Miss of the connecting flight is possible and may be more troublesome than just a flight delay.

Commercial aviation

Main article: Airline hub

In 1955 Delta Air Lines pioneered the hub and spoke system at its hub in Atlanta, Georgia [1], in an effort to compete with Eastern Air Lines. In the mid-1970s FedEx adopted the hub and spoke model for overnight package delivery, and after the airline industry was deregulated in 1978, Delta's hub and spoke paradigm was adopted by several other airlines.

Airlines have extended the hub-and-spoke model in various ways. One method is to create additional hubs on a regional basis, and to create major routes between the hubs. This reduces the need to travel long distances between nodes that are close together. Another method is to use focus cities to implement point-to-point service for high traffic routes, bypassing the hub entirely.

Transportation

The spoke-hub model is applicable to other forms of transportation:

Sea transport, where feeder ships transport shipping containers from different ports to a central container terminal to be loaded onto larger vessels.
Cargo airlines; for example, most UPS Airlines flights travel through its "Worldport" at Louisville International Airport, and a significant portion of FedEx Express parcels are processed at its "SuperHub" at Memphis International Airport.
Freight rail transport, where cargo is hauled to a central exchange terminal. At the terminal, shipping containers are loaded from one freight car to another, and classification yards (marshalling yards) are used to sort freight cars into trains and divide them according to varying destinations.
Public transit utilizes various transport hubs to allow passengers to transfer between different lines or transportation modes.

For passenger road transport, the spoke-hub model does not apply because drivers generally take the shortest or fastest route between two points.

Industrial distribution

The hub-and-spoke model has also been used in economic geography theory to classify a particular type of industrial district. Ann Markusen, an economic geographer, theorised about industrial districts, where a number of key industrial firms and facilities act as a hub, with associated businesses and suppliers benefiting from their presence and arranged around them like the spokes of a wheel. The chief characteristic of such hub-and-spoke industrial districts is the importance of one or more large companies, usually in one industrial sector, surrounded by smaller, associated businesses. Examples of cities with such districts include Seattle (where Boeing was founded), Silicon Valley (a high tech hub), and Toyota City, with Toyota.

References

Babcock, B. A., 2002, Making Sense of Cities: A Geographical Survey, London: Arnold, pp. 63–94.
Lawrence, H., 2004, "Aviation and the Role of Government", pp. 227–230.
Markusen, A., 1996, "Sticky Places in Slippery Space: A Typology of Industrial Districts", in Economic Geography, 72: 293–313.