Hub-and-Spoke Model

The hub-and-spoke model is a logistics network design where goods flow through central hubs before being distributed to regional spokes.

Examples: Airlines route most flights through hub airports, while parcel carriers like FedEx route packages through central sorting hubs.

Advantages: Increases efficiency, enables economies of scale, and simplifies route planning.

Challenges: Vulnerable to delays if a hub is disrupted, and can cause bottlenecks.

Real-world example: FedEx Express’s World Hub in Memphis handles millions of packages daily under the hub-and-spoke model.

Explain like I’m five: It’s like a bicycle wheel — the hub is the center, and the spokes send things out.

FAQ: Why do companies use hub-and-spoke instead of direct routes? Because consolidating freight reduces costs and improves efficiency.

Bottom line: The hub-and-spoke model powers global logistics, but overreliance on hubs can create risks.