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Evolution of academic concerns with transportation and logistics.

THE AGE OF THE ECONOMIST

The academic study of transportation and logistics is not new; indeed, in America it goes back to the 1850s (almost 150 years) when Henry Adams, an economist who was president of Yale University, offered a course in the Economics of Transportation. As L. Leslie Waters, University Professor of Transportation and Business History at Indiana University, wrote in 1966:

In 1850, an important book was published in London (and New York): Dionysius Lardner: Railway Economy: A Treatise on the New Art of Transportation. It was a comprehensive treatment of transport both from an economic and a business point of view. During the following seventy-five years, many leading economists devoted their descriptive and analytical powers to transport economics. Taussig, Fetter, and Hadley were typical of those who were impressed with the significance of the area. About the time that transport began to get complex with the emergence of new modes of conveyance, however, the interest of economists waned. Other problems seemed more beguiling. Not until recent years has there been a renewal of interest in transportation on the part of business administrators, economists and government officials.(1)

It is well to recall that the study of economics is a very old discipline. Some call it the "mother science" of business. Both Plato and Aristotle wrote about economics in the period of 380 to 350 B.C. These scholars were followed by centuries of writings about the economy. It is also well to remember that, as Alexander Gray notes:

...Political Economy throughout [the ages] has been in large measure an attempt to explain, within the existing framework and assumptions of society, how and on what theory contemporary society is operating.(2)

Given the importance of transportation in the development and growth of any economy, it is not surprising that economists were interested in transportation. The much quoted Adam Smith wrote in 1776(3) that economic growth depended on "the division of labor" (p.3) and man's "propensity to truck, barter and exchange one thing for another" (p. 13). But this division of labor is "limited by the extent of the market" (p. 17), and Smith cites as an example transportation:

As by means of water-carriage a more extensive market is opened to every sort of industry than what land-carriage alone can afford it....a broad-wheeled wagon, attended by two men, and drawn by eight horses, in about six weeks time carries and brings back between the ports of London and Edinburgh near four ton weight of goods. In about the same time, a ship navigated by six to eight men and sailing between the ports of London and Leith frequently carries and brings back two hundred weight of goods. (p. 18)

What an excellent example of "Transportation Conquers Distance," the motto of Delta Nu Alpha International Transportation Fraternity! Smith also made a strong case for "public works" as part of the proper role of the "Sovereign or Commonwealth" with a strong recommendation for tolls based on weight.

When the carriage which passes over the highway or a bridge, and lighters which sail upon a navigable canal, pay tolls in proportion to their weight or tonnage, they pay for the maintenance of the public works exactly in proportion to the wear and tear which they occasion of them. It seems scarce possible to invent a more equitable way of maintaining such works. This tax or toll, though it is advanced by the carrier, is finally paid by the consumer, to whom it must always be charged in the price of the goods (p.683).(4)

One could say with some degree of truth that Adam Smith was one of the first transportation economists!

It is not surprising, then, that American economists were very interested in transportation in the 18th century. At the very first meeting of the American Economic Association (AEA) in 1885, the group was organized and the by-laws of this oldest economic association in America established nine "standing committees" to study and report at annual meetings - transportation was, of course, one of the nine.(5)

The association also established American Economic Association Publications, and Vol. II (1887) contained an essay entitled "The Railway Questions" by Edmond J. James (University of Chicago). Subsequent essays were also on "Road Legislation for the American State" (J.W. Jacks, Cornell, 1889); "Two Papers on the Canal Question" (E. James & L. Haupt, 1890); "State Railroad Commissions and How They May be Made Effective" (F. Clark, Ohio State, 1891) and "Theory of Transportation" (C. Cooley, Michigan, 1894).(6) Another indication of academic interest in transportation appears in the yearly list of titles of doctoral dissertations granted beginning in 1904.(7) Assumedly, their authors, newly-earned Ph.D. degrees in hand, went on to teach transportation economics. (Ph.D. degrees awarded by U.S. institutions was quite rare during this period. Many economists got their graduate degrees in England, France, or Germany in the 19th century and up to World War I.)

In 1911, the American Economic Association began publishing quarterly the American Economic Review. Vol. I, No. 1, carried M.B. Hammond's (Ohio State and later president of the AEA) "Freight Rates: Recent Efforts to Advance"(8) as well as a list of "Articles and Abstracts in Other Economic Journals." In that first list in Vol. I (1911-12), there were 109 articles on railroads, 40 articles on water transportation, and 23 articles on public utilities.(9) Clearly, academic interest in transportation was very high as measured by writings in academic periodicals in 1911.

Another measure of academic interest in transportation can be found by noting books published prior to 1931 (see Table 1). Textbook authors are particularly apt at bringing together material from academic periodicals, government cases, and reports. If one examines the content of these books, several things are noteworthy. First, almost all concern railroads, with little discussion of alternative modes of transportation except for inland and maritime water transportation. This is completely understandable because railroads were almost the only means of intercity inland transport until 1920. Second, the vast majority of the material is on regulation and its effects or shortcomings. Again, that is not a surprise since federal regulation began with the Act to Regulate Commerce in 1887 (which created the Interstate Commerce Commission) followed by the Compulsory Testimony Act of 1893, the Expediting Act of 1903, the Elkins Act of 1903, the Hepburn Act of 1906 (which included the regulation of oil pipelines), and the Mann-Elkins Act of 1910. Liability provisions were strengthened by the Carmack Act of 1906 and the First and Second Cummins Amendments of 1915. All of these legislative initiatives were aimed at strengthening regulation. Indeed, prior to World War I "transportation regulation of monopoly seemed to be almost complete."(10)

Third, most of these earlier textbooks devoted considerable attention to transportation costs and rates. Once more, this is understandable since economists were always interested in the various theories of costs and prices.(11) Fourth, there was very little discussion of the operation and organization of the shipper side of transportation. Except for discussions of liability and claims, bills of lading, and procedures to change rates or classifications, there was practically no discussion of the role of the traffic manager in these books. Indeed, many shippers hired former railroad personnel with rail connections as "traffic managers"(12) and it wasn't until years later that the "shipper side" of transportation education began to appear.

After the difficult year prior to World War I, and federal seizure and operation of the nation's railroads between December 28, 1917, and March 1, 1920, Congress amended the regulatory environment via the Transportation Act of 1920. The Act installed the Rule of Ratemaking, which directed the Interstate Commerce Commission to temper minimization of the general levels of freight rates and passenger fares with consideration of carriers' revenue requirements for attracting capital sufficient to render adequate service. The Act also established the Railway Labor Board and gave the ICC power over extensions and abandonments of railway lines, intrastate rates that discriminated against interstate rates, division of rates on interline movements, and control over railroad security issuances. Most of the Act's provisions were aimed at helping the railroads to better serve the public. Also in the post World War I era, with enactment of a series of [TABULAR DATA FOR TABLE 1 OMITTED] Federal Highway Acts and the emergence of state gasoline (user) taxes, motor transportation began to grow and provide a means of transportation competitive with the railroads. This broadened academic interest to include more than railroad and water transportation. In the 1930s, the regulatory structure was modified further by federal regulation of highway transportation (1935), air transportation (1938), and inland water transportation (part of the Transportation Act of 1940), based primarily on the older railroad model of transportation regulation. Hence, scholars' interest in transportation began to be concerned with the competitive structure between the modes (with all regulated).(13)

All during this time, there were regular articles in the periodical literature about transportation and regulation as well as textbooks often titled Economics of Transportation.(14) The American Economic Association continued to have papers on transportation at its regular annual meetings and much research and writing dealt with the competition among the various modes. In 1938, a group of economists petitioned to establish an informal, separate organization of transportation and public utility economists inside the American Economic Association. This group, meeting annually at the AEA's national meeting, later evolved into what today is called The Transportation and Public Utilities Group of the AEA.

This organization (TPUG) became the first of the allied economic associations, elected its own officers, and arranged its own concurrent meetings with the American Economic Association (usually with one or two "joint sessions" with the general economics group). Today, TPUG is one of over 20 separate allied associations meeting currently with the American Economic Association where annual meetings are now called the "Allied Social Science Associations Meetings." In 1964, TPUG started giving an annual award honoring persons "in Recognition of Outstanding Contributions to Scholarship in the Field of Transportation and Public Utilities." Some 39 individuals have been awarded up to 1996, including William Vickrey, co-winner of the Nobel Prize in Economics in 19967 The "Age of the Economist" in transportation education never really came to an end and continues not only in TPUG but also with the "Transportation Research Forum,"(16) made up of academic and industry economists, government transportation economists, consultants, and carrier economists "who conduct transportation research and those who use and benefit from transportation research."

BROADER CONCERNS

Much of the modern concerns of transportation and logistics flows from World War II. During this period, the movement of military personnel and supplies on two distinct but separate theatres of operation (Europe/North Africa and the Western Pacific), plus the domestic transportation of massive materials into and from the warplants, shipyards, and other industries involved in wartime production, brought about two important factors. One was the concern with the efficiency of transportation (costs of movement were less important than how quickly and efficiently goods could be moved and handled). The other was the management of the flow of goods (transportation decisions by shippers/receivers needed to be made by persons knowledgeable in service choices). On the matter of efficiency, the wartime effort led to many innovations such as palletization, use of fork-lifts, and increased mechanization substituting for manual labor, which were later to become widespread in the domestic post-war economy. On the matter of management, the wartime effort highlighted the role of the previous routinized and clerical job of the shipping clerk into the more analytical job of the traffic manager.

Academically, courses and textbooks began to appear entitled "Traffic Management" or "Industrial Traffic Management," which were almost exclusively aimed at what could be called "the shipper side of transportation" in the 1950s and beyond.(17) Another result was that sections on "Traffic Management" (later titled "Physical Distribution" and "Logistics") began to appear in general texts on transportation. Table 2 notes many of these.

From the association side, Delta Nu Alpha Transportation Fraternity was organized in 1940 by Dr. G. Lloyd Wilson and a group of students at the University of Pennsylvania and was dedicated to furthering transportation education. This organization (now having "International" in its title) has many chapters in every state and abroad and provides a meeting place for those interested in transportation as well as publishing the Journal of Transportation Management since 1989.
Table 2. Transportation Books Having Traffic Management, Physical
Distribution, or Logistics Sections

1950 Marvin L. Fair and Ernest W. Williams, Jr.: Economics of
 Transportation (add "Logistics," 1959)

1951 Charles F. Landon: Transportation; Principles, Practices and
 Problems

1952 Russell Westmeyer: Economics of Transportation

1952 Truman C. Bighman and Merrill J. Roberts: Transportation

1955 Stuart Daggett: Principles of Transportation, 5th ed.

1957 Frank H. Mossman and Newton Morton: Principles of
 Transportation

1963 Hugh Norton: Modern Transportation Economics

1963 Dudley F. Pegrum: Transportation: Economics and Public
 Policy, 1968

1966 Roy Sampson and Martin T. Farris: Domestic Transportation,
 Practices, Theory and Policy, 1971, 1975, 1979; (with David
 Shrock) 1985, 1990

1966 John B. Lansing: Transportation and Public Policy

1967 Martin T. Farris and Paul T. McElhiney: Modern
 Transportation; Selected Readings, 1973

1978 Donald V. Harper: Transportation in America, 1982

1978 Robert C. Lieb: Transportation, The Domestic System, 1981,
 1987, 1994

1982 John J. Coyle, Edward J. Bardi, and Joseph L. Cavinato:
 Transportation, 1986, 1990 (Novack replaces Cavinato 1994,
 1996)

1987 Frederick J. Stephenson: Transportation U.S.A.




Another association, the National Defense Transportation Association, was formed in 1944. Obviously, during World War II the largest shipper was the U.S. government. This situation (the largest single customer of the carriers: the government) continued after the war, first, at a somewhat decreased rate but later at an increasing pace with the Marshall Plan for European reconstruction, loans to foreign governments, and later with the defense build-up during the Korean War and the Cold War. In any case, there was a continuing and growing interest in transportation related to defense. In 1945, the NDTA began publishing the Defense Transportation Journal.

Further, in 1946 the American Society of Traffic and Transportation was organized with the goal of furthering education and the transportation/traffic profession via its well-known certification program of five national examinations given at examining centers every six months. Later, this organization changed its name to the American Society of Transportation and Logistics and since 1961 has published the Transportation Journal.

Many academics and transportation professionals are active in Delta Nu Alpha, The National Defense Transportation Association, and/or the American Society of Transportation and Logistics.

Clearly, the post World War II era led to a broadening of concern with transportation and traffic management.

THE LOGISTICS EVOLUTION(18)

The current interest in logistics evolved out of concern with traffic management and transportation economics on the one hand, and marketing concepts on the other hand. The term "physical distribution management" began to appear in the 1960s. The lead concept was essentially "cost trade-offs": the idea that using more expensive transportation (say air transportation) could lower costs in other areas (say inventory or packaging costs), particularly in the distribution side of marketing. Scholars in marketing had emphasized the so-called "Four P's of Marketing"(19) for years. Now, increased attention turned to "place" (or distribution of the product produced), sometimes called "The Economy's Dark Continent."(20) Courses began to appear in "Channels of Distribution" and "Physical Distribution" in marketing and transportation curricula as textbooks and articles were written on physical distribution.(21)

Another interesting development was the creation of the National Council of Physical Distribution Management in 1963, in which academics were widely involved along with industry practitioners. In 1978, the Journal of Business Logistics appeared, published by the College of Business of The Ohio State University, sponsored by a grant from the National Council of Physical Distribution Management. And in 1985, the NCPDM changed its name to the "Council of Logistics Management."

About the same time (1960s), the term "logistics" began to appear in textbooks, sometimes in connection with "distribution" or "physical distribution management" or "traffic management" and sometimes as a separate term (see Table 3). Just as wartime shipments called for innovations in storage, handling, and shipping, the domestic economy began to be interested in the efficiency of movement and the flow of goods as well as the costs involved.
Table 3. Books Using Logistics in Title - 1953 to 1996

1953 Frank H. Mossman and Newton Morton: Logistics in
 Distribution

1963 Robert M. McCarral: Production and Logistics Management

1964 James L. Heskett, Robert M. Ivie, and Nicholas A.
 Glaskowsky, Jr.: Business Logistics, 1964, 1973 (with D.R.
 Hudson), 1992

1964 E. Grosvenor Plowman: Elements of Business Logistics

1965 Frank H. Mossman and Newton Morton: Logistics of
 Distribution Systems

1966 James A. Constantin: Principles of Logistics Management
 Meredith and James A. Constantin: Principles of Logistics
 Management: A Functional Analysis of Physical Distribution
 Systems (Appelton-Century-Croft)

1967 Martin E. Marks and Robert M. Taylor (ed): Marketing
 Logistics, Perspectives and Viewpoint

1968 Paul T. McElhiney and Charles Hilton: Introduction to
 Logistics and Traffic Management

1969 Norman E. Daniel and J. Richard Jones (ed): Business
 Logistics: Concepts and Viewpoints

1969 Jerry Schorr (ed): Logistics in Marketing

1970 Richard J. Lewis: A Logistical Information System for
 Marketing Analysis

1972 Martin Christopher and Gordon Wills: Marketing Logistics and
 Distribution Planning

1973 James Heskett, Lewis Scheider, Robert Ivie, and Nicholas
 Glaskowsky, Jr.: Case Problems in Business Logistics

1973 Ronald H. Ballou: Business Logistics Management, 1981, 1992

1974 Grant M. Davis and Stephen Brown: Business Logistics

1976 John J. Coyle and Edward J. Bardi: Management of Business
 Logistics, 1984, 1988 (with C. John Langley, Jr., 1992,
 1996)

1977 Frank H. Mossman, Paul Bankit, and Omar Heiferich: Logistics
 System Analysis

1977 James C. Johnson and Donald F. Woods: Contemporary
 Logistics, 1982, 1986, 1990, 1993, 1996

1978 Ronald H. Ballou: Basic Business Logistics, 1987

1979 Warren Rose: Logistics Management: System & Components

1982 Douglas Lambert and James R. Stock: Strategic Logistics
 Management, 1987, 1993

1983 Grant M. Davis and John F. Dillard: Physical Logistics
 Management

1984 Phillip B. Schary: Logistics Decisions, Text and Cases

1985 Roy Shapiro and James Heskett: Logistics Strategy, Cases and
 Concepts

1986 Carl M. Guelzo: Introduction to Logistics Management

1987 Norman E. Hutchinson: An Integrated Approach to Logistics
 Management

1992 Martin Christopher: Logistics and Supply Chain Management

1992 Attwood, Peter, and Nigel: Logistics of Distribution Systems

1992 Martha Cooper, Daniel Innis, and Peter Dickson: Strategic
 Planning for Logistics

1992 Christopher Gopal and Gary Cohill: Logistics in
 Manufacturing




The term "logistics" had been used for many years in the military(22) and some authors trace the term to the French military in Napoleonic times.(23) Still other authors trace the concept to an essay in 1844 by Jules Dupuit, illustrating the trade-off between road and water carriage by the use of warehouses and inventory costs.(24)

First, concern with material, inventory control, and purchasing(25) were added to transportation, traffic management, and physical distribution. Various models of materials requirements were developed (MRP & MRP II) and persons interested in inventory, materials, and purchasing began joining the various organizations (particularly the National Council of Physical Distribution Management). Importantly, analysis of "physical supply" and "supply chain" began to be coupled with "physical distribution."

According to Langley (in 1986), "We have finally succeeded in achieving some consensus as to what we mean by logistics management" and he cites the definition used by the Council of Logistics Management(26) (the new name for NCPDM in 1985). He also notes that the role of logistics within firms has evolved in "stages."(27) Further, present logistics (in 1986) has a high level of visibility and recognition by executive management; logistics is better at integrating and coordinating with other major functions in the firm; logistics is developing partnerships with vendors, customers, and third parties; logistics educational programs have advanced; and professionalization of the logistics function has progressed. Langley also predicted "logistics' future" as more concern with quality management; more concern with "time and space" jointly coupled; tremendous opportunities in international logistics; more concern with logistical "attributes" rather than "specific logistical services"; emergence of "ultimate third-party firms" to manage the entire logistics function; top logistical managers "working themselves out of a job" as their success in developing systems qualify them for high level positions in corporate management; and the tremendous need to educate others regarding logistics concepts. Certainly, in the ten years that have elapsed since Langley outlined the "future of logistics," many of these predictions have become true. It is also true that the concept of logistics has evolved over time.

Finally, academic interest in logistics has also developed and evolved. Today, there are many institutions of higher learning with courses and programs and many excellent texts in logistics and transportation. Associations of professionals in transportation nowadays often include the term "logistics" in their titles or subtitles and more persons in corporate America now recognize "logistics" as an important position in the firm.

CONCLUSION

Academic concerns with transportation and logistics is a study in evolution over the years. This evolution can be traced from the "Age of the Economist" (from 1850) to the "Broadening of Concerns" with traffic management brought on by World War II and progressing through "physical distribution management," "physical supply and materials management," and the development of the broader "logistics concept" of today. Nothing remains the same and, as usual, change is inevitable and hopefully we are all better for it.

ENDNOTES

1 L. Leslie Waters, "Editor's Introduction," Roy J. Sampson and Martin T. Farris, Domestic Transportation: Practice, Theory and Policy, Boston, Houghton Mifflin Co., 1st ed., 1966, p.v.

2 Alexander Gray, The Development of Economic Doctrine, New York, Longmans Green & Co., 1931, p. 12.

3 Adam Smith: An Inquiry into the Nature and Causes of the Wealth of Nations, New York, The Modern Library, Random House, 1937.

4 Ibid p. 683.

5 The first two meetings - 1885 and 1887 - were reported in Vol. I of American Economic Association Publications (1887). The nine "standing committees" were "on labor," "on transportation," "on trade," "on population," "on industrial and technology evolution," "on exchange," "on theory," "on teaching of political economy," and "on statistics."

6 Other early essays up to 1907 include: Hopkins, "The Street Railway Problem in Cleveland" (1896); Swain: "Economic Aspects of Railroad Receiverships" (1898); Mechillie: "The State Purchase of Railroads in Switzerland" (1898); Baldwin: "Railroad Relief Beneficiary Associations" (1900); B. Meyers: "Railways Charters" (1910); H. Adams: "Difficulties in Adjusting Rates" (1900); "State Taxation of Interstate Commerce" (1904); "Regulation of Railroad Rates: (1905); "Taxation of Railways" (1905); Meeker: "History and Theory of Shipping Subsidies" (1905); "Government Regulation of Railway Rates" (1906); Smalley: "Railroad Rate Control" (1906); Snider: "The Taxation of Gross Receipts of Railroads in Wisconsin" (1906).

7 For example, the 8th list of doctoral dissertations in 1911 had 13 completed dissertations from five institutions that year: Columbia (2), "Valuation of Railways," "The Basing Point System of Rate Making"; Cornell (5), "State Aid to Railways in North Carolina," "Legislative and Judicial History of the Interstate Commerce Commission," "History of Maritime Unions," "Chicago Transit System," "The Northern Pacific Railroad"; Stanford (1), "The Legislative History of Transportation in California"; Chicago (3), "Transportation as a Factor in the Development of Illinois Before 1860," "American and European Waterways," "A Comparison of Waterway and Railroad Transportation between Chicago and New Orleans"; Wisconsin (2), "The Study of the Long and Short Haul Clause in the Interstate Commerce Commission," "History of the Railway Development in Iowa."

8 Hammond had just completed a three-part analysis in the Quarterly Journal of Economics: "The Railway Rate Theories of the Interstate Commerce Commission," Nov. 1910, Feb. 1911, May 1911.

9 American Economic Review, Vol. I, pp. 179, 428, 660 and 924 (1911).

10 Sampson and Farris op.cit. p. 253 (This statement appeared in all subsequent editions 1971, 1975, 1979, Sampson, Farris & Shrock 1985 and 1990 as well as several other textbooks that appeared over the years).

11 A large portion of economics books used railroad costs as an illustration of variable, fixed, constant, common, joint, and overhead cost theories. Also, the periodical literature in various journals frequently dealt with cost theory. A classic example of this was the Pigou/Taussig controversy over common and joint costs. Taussig (Harvard) "A Contribution to the Theory of Railway Rates," Quarterly Journal of Economics, Vol. 5, pp. 438 ff (1891) was criticized by Pigou (Cambridge) in QJE, Vol. 27, pp. 691 ff (1913) with response by Taussig QJE Vol. 28, pp. 537 ff (1914) which led to defenders of each author in L.H. Haney QJE, Vol 30, pp. 233 ff (1916) and G.P. Watkins QJE, Vol. 30, pp. 682 ff (1916) and finally Pigou, Economics of Welfare, Macmillain, pp. 257 ff (1920).

12 Sampson and Farris op. cit, p. 384 and elsewhere in subsequent editions. Similar statements appeared in many other texts.

13 Indication of the interest in other competitive modes of transportation (besides railroads and maritime transportation) can be seen in the books published. A very early book on motor appeared in 1923 (Perceival White, Motor Transportation of Merchandise and Passengers), but the 1930s and early 1940s saw the appearance of Sidney Miller, Inland Water Transportation; Emory Johnson, Grover Huebner, and Arnold Henry, Transportation by Water; G. Lloyd Wilson, Coordinated Motor, Rail and Steamship Transportation; and John Frederick, Commercial Air Transportation, 1942, 1946, 1951 & 1959. Also, there was the inclusion of chapters on Highway, Air & Inland Water Transportation in D. Philip Locklin, Economics of Transportation, 1935 & 1938, plus subsequent editions, 1947, 1954, 1960, 1966 and 1972; T.W. Van Metre, Transportation in the United States, 1939; and Kent Healy, Economics of Transportation, 1940. Other books on the competitive modes include G. Lloyd Wilson, Motor Traffic Management; Paul David, The Economics of Air Mail Transportation; Joseph L. Nicholson, Air Transportation Management, 1951; as well as the classic Charles A. Taff, Commercial Motor Transportation, 1950, 1955, 1961, 1969, 1975, 1980, 1986; William J. Hudson and James H. Constantin, Motor Transportation, 1958; Fritz R. Kahn, Principles of Motor Carrier Regulation, 1958; Ernest W. Williams, Jr., The Regulation of Rail-Motor Competition, 1958; Gayton Germane, Nicholas Glaskowsky, Jr. and James L. Heskett, Highway Transportation Management; 1963; and Garland Chow, The Economics of the Motor Freight Industries, 1978.

14 A few examples being Locklin op. cit., Sidney Miller, Economics of Transportation, 1933; Kent Healy op. cit.; Marvin Fair and Ernest Williams, Jr., Economics of Transportation, 1950 and 1959; Russell Westmeyer, Economics of Transportation, 1952; Emery Troxel, Economics of Transportation, 1955; George W. Wilson, Essays on Unsettled Questions in the Economics of Transportation, 1962; Dudley Pegrum, Transportation: Economics and Public Policy, 1963, 1968; Hugh Norton, Modern Transportation Economics, 1963; Karl Ruppenthal, Issues in Transportation Economics, 1965; John B. Lansing, Transportation and Economic Policy, 1966; James T. Kneafsey, The Economics of the Transportation Firm, 1974; and George W. Wilson, Economic Analysis of Intercity Freight Transportation, 1980.

15 Transportation economists who received awards are D. Philip Locklin, Dudley Pegrum, E. Grosvernor Plowman, Kent Healy, Marvin Fair, John Frederick, James C. Nelson, Robert Harbeson, James R. Nelson, Beatrice Aitchson, L. Leslie Waters, Charles Taff, Ernest Williams, William Vickery, Wilford Owen, William Thompson, Roy Sampson, John Due, Merrill Roberts, Martin Farris, Robert Pashek, George Wilson, John Hazard, Donald Harper, and John Spychalski. Public Utility Economists: James Bonbright, Martin Glaeser, Joseph Rose, Eli Clemens, Emery Troxel, Horace Gray, Alfred Kahn, Harry Trebing, James Suelflow, Paul Schwartz, Edythe Miller, Douglas Jones, and Curtis Cramer.

16 Founded in 1958, with annual meetings in the United States and Canada since 1960, and publishes the national Journal of the Transportation Research Forum.

17 Early texts in the 1950s included G. Lloyd Wilson, Principles of Freight Traffic; Frank Cushman, Transportation for Managers, 1953; Thurman Van Metre, Industrial Traffic Management, 1953; Leslie A. Bryan, Traffic Management for Industry, 1953; Charles A. Taff, Traffic Management, 1955, 1959, 1964 (later entitled Management of Traffic and Physical Distribution, 1968, 1972 and then Management of Physical Distribution and Transportation, 1978, 1984); Newton Morton and Frank Mossman, Industrial Traffic Management, 1954; G. Lloyd Wilson, Traffic Management, 1956; William L. Grossman, Fundamentals of Transportation, 1959; Kenneth Flood, Traffic Management, 1959, 1963, 1965, 1975 (with Callson and Jablowski) as Transportation Management, 1984; Paul T. McElhiney and Charles L. Hilton, Introduction to Logistics and Traffic Management, 1968 and John E. Tyworth, Joseph Cavinato, and C. John Langley, Jr., Traffic Management, 1987, 1991.

18 Much of this section draws heavily on the excellent article by C. John Langley, Jr., "The Evolution of the Logistics Concept," Journal of Business Logistics, Vol. 7, No. 2 (1986), pp. 1-13, plus the author's experiences in creating new courses at his institution.

19 Product, Price, Promotion, and Place.

20 After the seminal article by Peter Drucker, "The Economy's Dark Continent," Fortune, April, 1962: "We know little more about distribution today than Napoleon's contemporaries knew about the interior of Africa. We know it is there, and we know it is big; and that's about all."

21 Donald Bowersox, Bernard LaLonde, and Edward Smykay (eds), Readings in Physical Distribution, 1959; and Essays in Physical Distribution, 1961. Bernard LaLonde, then editor of the Journal of Business Logistics states in "Preface" (Sept., 1987): "The first textbook in [physical distribution] was Edward Smykay, Donald Bowersox and Frank Mossman Physical Distribution Management, 1961." Hale Bartlett, Readings in Physical Distribution, 1966, 1967, 1970; James Constantin, Principles of Logistics Management: A Functional Analysis of Physical Distribution Systems, 1966; John F. McGee, Physical Distribution Systems, 1967 and others.

22 Bernard J. LaLonde and Leslie Dawson, "Early Developments in Physical Distribution" in Bowersox, LaLonde, & Smykay (eds), Readings in Physical Distribution, 1959, states the army used the term "logistics" in 1905.

23 Paul T. McElhiney and Charles L. Hilton, Introduction to Logistics and Traffic Management, 1968, where the French term "Logistique" translated into English as "logistics" (meaning "to transport, quartering and supplying of troopers") and "Logistiko" in Greek (meaning "skill in calculating"), combine to mean modern logistics is "systemic and mathematical... seeking to optimize total costs of supply and distribution."

24 Norman E. Daniel and J. Richard Jones, Business Logistics, Concepts and Viewpoints, 1969.

25 There has been considerable writing on the subject of materials management. A few books are: W. Evert Welch, Tested Scientific Inventory Control, 1956; Thomas Whitin, The Theory of Inventory Management, 1957; C.W. Churchman, Russel Ackoff & E.L. Arnoff, Introduction to Operations Research, 1957; John F. McGee, Production Planning and Inventory Control, 1958; Robert G. Brown, Statistical Forecasting for Inventory Control, 1959; Andrew Briggs, Warehouse Operations Planning & Management, 1960; Robert Fetter and Winston Dallech, Decision Models for Inventory Control, 1961; Dean S. Ammer, Materials Management, 1962; Wm. T. Morris, Analysis for Materials Handling Management, 1962; Martin K. Starr and David W. Miller, Inventory Control Theory and Practice, 1962; Joseph Buchan and Ernest Koenigsberg, Scientific Inventory Control, 1963; and many others. In 1973, the Journal of Purchasing changed its name to Journal of Purchasing and Materials Management (and subsequently added International to its title).

26 See Note 18 above. "Logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption for the purposes of conforming to customer requirements."

27 See Note 18 above. Stage One: physical distribution and logistics viewed only as an area of cost control. Stage Two: recognition that logistics capabilities can have a positive or revenue-enhancing impact on sales and justify a profit-center orientation. Stage Three: logistics can differentiate products or service offerings from competitors; thus, a key to market segmentation. Stage Four: logistics activity becomes the key strategic advantage of the firm.

28 Three examples are: The American Society of Traffic and Transportation is now the American Society of Transportation and Logistics; the I.C.C. Practitioners' Association changed its name to Transportation Practitioners' Association and then to the Association for Transportation Law, Logistics and Policy; and The Council of Physical Distribution Management became The Council of Logistics Management.

Mr. Farris, CE-AST&L, is the late Regents' Professor of Transportation, emeritus, Arizona State University, Tempe, Arizona 85287-4706.
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