The following review of the literature concerning the topic of hub and spoke system structure as applied to oceanic shipping presents the following relevant areas: hub and spoke system in the airline industry; hub and spoke system in free trade; hub and spoke system in warehouse management; hub and spoke system in additional areas; and summary and conclusions.
Hub and Spoke System in the Airline Industry
Hub and Spoke Systems in the Unites States
Barnett, Curtis, Goranson, and Patrická(1992) reported that in the United States, airline deregulation reflects the degree that the government intervenes in private industry, and this deregulation has resulted in the transformation of airline route networks into a hub and spoke system. This system provides frequent one-stop service between cities based on intermediate transfers at hub airports. These new systems decrease nonstop flights between origins and destinations except at hub cities. These systems resulted in a decline in easy travel from one place to another. Consumer reports stated that the hub and spoke system has resulted in pointless and time-consuming connections that are convenient for the airline but not for the customer. The new systems resulted in an increase in number of flights with a smaller percentage of these being nonstop; hours and stress have been added to consumer trips and hub airports are congested. It was estimated by airline consultants that the average trip under 2,000 miles now takes twice as long to make. Researchers also noted that the hub and spoke system may have also reduced safety since there is a greater risk for passengers on a flight that makes more stops.
Bennett and Boyer (1990) reported that following implementation of the hob and spoke system, markets that had the largest positive price dirtortions under regulation now show an increase in flight frequency. There is tendency of the hub and spoke system to serve medium sized ...