Port Hinterlands and Maritime Logistics

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Port Hinterlands and Maritime Logistics

• Jean-Paul RodrigueAssociate Professor, Dept. of
  Economics Geography, Hofstra University, New
  York, USA
• Theres no business like flow business
• Email ecojpr_at_hofstra.edu
• Paper available at
• http//people.hofstra.edu/faculty/Jean-paul_Rodrig
  ue

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Port Foreland and Hinterland The Way the
Maritime / Land Interface Used to Be
Hinterland
Foreland
B
D
A
Main hinterland
Competition margin
C
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Continuous and Discontinuous Hinterlands An
Emerging Paradigm
Discontinuous hinterland Port A
Port A
Continuous hinterland Port A
'Island' formation
Discontinuous hinterland Port B
Port B
Continuous hinterland
Main hinterland Competition margin
Port B
Maritime load centre
Inland terminal
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Platform Corporation An Emerging Global
Production Framework
Distribution
Marketing / Retail
RD
Platform
Manufacturers
5
Factors Supporting Platform Corporations

• Free trade
• Mobile factors of production (land, labor and
  capital).
• Limited political impediments.
• Telecommunications
• Decentralization of processes.
• Level of control over supply chain.
• Competition
• Selection of value added activities to be
  subcontracted.
• (over) bidding keeping costs low.
• Transportation
• Move goods within the supply chain controlled by
  the platform corporation.

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The Emergence of Global Logistics

• The Logistical Node
• Fast growth of international trade with the full
  realization of comparative advantages.
• Geographical and functional integration of
  production, distribution and consumption.
• Commodity / Supply Chains.
• Transportation integrated in the production /
  retailing process.
• Global Production Networks (GPN).
• Nodes as logistical poles where value added
  activities are performed.
• Entirely new nodal locations.

Flows
Stage
Network
Parts and raw materials
Bulk shipping
High volumes Low frequency
Unit shipping
Manufacturing and assembly
Supply Chain
Average volumes High frequency
Transport Chain
Distribution
LTL shipping
Low volumes High frequency
Market
Market
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Stages in Port Development
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The Spatial Development of a Port System
Phase 2 Penetration and hinterland capture
Phase 1 Scattered ports
LAND
SEA
Phase 4 Centralization
Phase 3 Interconnection concentration
Phase 6 Regionalization
Phase 5 Decentralization and insertion of
offshore hub
Freight corridor
Load center
Interior centre
Deepsea liner services
Regional load centre network
Shortsea/feeder services
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A New Geography of Port Hinterlands The Three
Hinterlands of Port Regionalization
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Gateways and the New Port Hinterlands The
Regionalized Port
Consumption Production
Balanced flows Imbalanced flows
Terminal / DC Link (mode)
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Gateways and Hinterland Effect
Efficient Inland Freight Distribution
Inefficient Inland Freight Distribution
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Traffic at Major North American Container Ports,
2003
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Major US Modal Gateways, 2004
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The Three Main Gateways of North America
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Major Road Traffic Bottlenecks
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Un-choking a Gateway The Alameda Rail Corridor

• Alameda
• 20 mile long rail cargo expressway
• Linking the ports of Long Beach and Los Angeles
  to the transcontinental rail lines near Downtown
  Los Angeles (about 45 minutes).
• Jointly used by BNSF (Burlington Northern Santa
  Fe 40) and Union Pacific (60).
• Half of it underground (10 miles).
• About 30 of the port transshipment traffic
  handled through Alameda.
• Unique example of an intermodal rail corridor
  financially sound to replicate?

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Alameda Corridor
CBD
UP BNSF Railyards
UP BNSF Railyards
Thruport
Mid-CorridorTrench (10 miles)
Port of Los Angeles
Port of Long Beach
Port of Long Beach
Port of Los Angeles
Port Cluster
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Un-choking a Gateway The Alameda Rail Corridor

• Challenges for the Alameda corridor
• Did not perform as expected significant
  competition from trucking.
• Significant lag between planning (1980s) and
  implementation (2002).
• Local bound freight transport 50 to 65.
• Relative transport costs
• Improvements in road transport costs.
• Relocation of the bottleneck down the chain.
• High intermodal costs
• Short distance economics of rail transshipment
  unproven.
• Trucking dependant local FDCs.

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Trains Running Through the Alameda Corridor and
Containers Handled by the San Pedro Port Cluster
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The Logistical Hinterland

• Causes of the empty containers problem
• Global trade imbalances
• A worsening of these imbalances in the US.
• Imbalances above 8.6 million TEU per year.
• 150,000 TEU per week.
• Repositioning costs
• From surplus to deficit areas.
• East Coast to Asia about 1,200 per TEU (2004).
• Manufacturing and leasing costs
• Comparative differences.
• Used to be about 1,300 per TEU (2004).
• Recent increase to about 2,000 per TEU.

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Containerized Cargo Flows along Major Trade
Routes, 2004
10.2
Imports (Million TEUs)
Europe
Exports (Million TEUs)
8.6
Million TEUs
Growth (2000-2004)
8.4 (87)
1.8 (-18)
5.6 (55)
3.0 (3)
14.8
9.9
11.8 (110)
USA
Asia
4.3 (30)
20.2
6.1
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Container Repositioning Scales
Repositioning Costs
High imbalance
Container manufacturing cost
International
Regional
Low imbalance
Local
Gateways as reverse logistics centers
Storage depots
Reshuffling
Repositioning Distance (TEU KM)
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Containers Handled by the Port of Los Angeles,
1995-2005 (in TEU)
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Containers Handled by the Port of Long Beach,
1994-2005 (in TEU)
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Stacked Empties, Yantian Container Port,
Shenzhen, China
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Integrated Transport Systems Intermodal and
Transmodal Operations
Intermodal operations
Transmodal operations
Intermodal Terminal
DCs / CD
ROAD
Transloading
Thruport
RAIL
Port container yard
On-dock rail
Ship-to-ship
MARITIME
Integrated Freight Transport System
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Intramodal (Trans-modal) Transportation

• Why trans-modal shipments take place?
• Market fragmentation.
• Supply chain fragmentation.
• Ownership fragmentation.
• Requirements for a high throughput trans-modal
  facility
• Thruport concept
• Coined by an intermodal equipment manufacturer
  (Mi-Jack).
• Seamless transfer of freight.
• Reduce handling and the number of container
  movements.
• Analogy with air transport hubs
• Consolidation and redistribution.
• Passengers reposition themselves.

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Rail Transmodal Operations The Thruport

• Market fragmentation
• Mainly retail / consumption related.
• Reconcile the high volume requirements of markets
  with the time sensitive requirements of
  distribution.
• Ownership fragmentation
• Rail companies have their facilities and
  customers.
• They have their own markets along the segments
  they control.
• Interchange is the major problem.
• The distribution potential of each operator is
  expanded.
• Network alliances.

Thruport
Gateway
D
C
A
B
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12.4 M TEU
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Inter-Metropolitan Rail Corridors

• Challenges and opportunities
• Road congestion
• Increase costs and lower reliability.
• Improve the distance advantages of rail
  (passengers and freight).
• Circulation bottlenecks
• Road access to many terminals impaired.
• Aging infrastructure unable to accommodate modern
  operations (e.g. double-stacking).
• Intermodal capacity
• COFC capacity at ports and inland.
• Modal shift
• Separate freight and passenger traffic modal
  complementarity.
• Freight diversion
• Transloading at strategic locations.

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Boston Washington Corridor Volume to Capacity
Ratio
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Rail Ownership, Intermodal Facilities and Freight
Clusters
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Port Inland Distribution Network and Freight
Clusters
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Containers Handled by the Port of Albany PIDN,
April 2003, January 2006
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Number of Containers Handled, Northbound and
Southbound Routes, Port of Albany, 2005
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Expressrail Lifts, 1991-2005
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Conclusion

• Gateways and port hinterlands
• Global production networks
• Functional and geographical integration.
• Transportation moving from a derived to an
  integrated demand.
• Imbalanced freight flows (gateways dilemma)
• Disequilibrium in the division of labor, trade,
  production and consumption.
• Short/medium term additional pressures to manage
  the disequilibrium (e.g. empties).
• Long term rebalancing the flows and the
  hinterlands.
• Regionalization of hinterlands (gateways
  response)
• Gateways adapting to the freight flows reality.
• Attempt at re-balancing by offering a wider
  hinterland range.
• Requires multimodal freight distribution
  strategies.

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The Future of the Maritime / Land Interface?