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Integrating Hub Location Optimization and Spatial Equilibrium to Analyze Supplier Logistics in Fresh Produce Markets

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  • Ge, Houtian
  • Gomez, Miguel
  • Peters, Christian

Abstract

Fresh produce supply chains depend on supplier logistics services that connect spatially dispersed production regions, import entry points, aggregation facilities, domestic consumption markets, and export destinations. Yet the intermediary logistics segment remains less integrated into economic models of fresh produce market structure and spatial allocation. This study develops a two-stage framework that combines hub location optimization with a CESbased spatial equilibrium model to analyze supplier logistics in U.S. fresh produce markets. In the first stage, a mixed-integer optimization model selects aggregation hubs from Major Land Resource Area centroid candidates and determines hub-level domestic and import assembly volumes and FOB hub prices for nine fresh produce categories. In the second stage, these optimized hub outputs are used to calibrate 108 commodity-month gravity allocation models that distribute product flows from hubs to Grocery Marketing Areas and export port markets. The model characterizes hub-to-market shipments, composite delivered prices, route-specific supplier attractiveness, and transportation-related food-loss exposure. Results show that large-volume hubs tend to rely less on residual route-attractiveness adjustments, while smaller hubs often require stronger non-price or unobserved logistical advantages to explain their market roles. Destination-level price differences are driven primarily by outbound shipment costs rather than hub FOB price variation, and regions farther from major hub corridors face both higher delivered prices and greater distance-related food-loss exposure. The framework advances spatial foodmarket analysis by linking logistics infrastructure, supplier differentiation, delivered-price formation, and perishability-related losses within a unified economic system. It provides a basis for evaluating how aggregation network design can support more efficient, resilient, and sustainable fresh produce distribution.

Suggested Citation

  • Ge, Houtian & Gomez, Miguel & Peters, Christian, 2026. "Integrating Hub Location Optimization and Spatial Equilibrium to Analyze Supplier Logistics in Fresh Produce Markets," 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri 404626, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea26:404626
    DOI: 10.22004/ag.econ.404626
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