PAN-ASIAN CORRIDORS &

GATEWAYS

Peter J. Rimmer AMCollege of Asia and the PacificThe Australian National University, Canberra

http://globallogistics.ning.com/groups

1. INTRODUCTION1994

Rimmer, 1997

•If India is to become manufacturing powerhouse it needs investment in transport & communications infrastructure for just-in-time delivery (JIT) & opportunities in vertically integrated supply chains (Choorikkadam, 2010)

• Status of China’s Pan-Asian platforms transformed since mid-1990s

•Due to China’s involvement in vertically integrated supply chains & large share of international trade in intermediate & unfinished goods & openness to FDI

As international economy vulnerable to shocks counter argument is need to reduce export dependence & increase reliance on regional markets (seafood, fruit & veg. textiles, motor vehicle parts & apparel)

CONTEXT • Argument US & European

markets prioritized resulting in low Pan-Asian connectivity

• Connect India & East Asia thru investment in hard & soft regional infrastructure in countries abutting Bay of Bengal as step towards economic community (i.e. integration & harmonization)

• Higher weight to regionalism than consistent with purely economic goals

• Debate leading to politically sensitive issues cutting across infrastructure, logistics chains & policy Source: ADBI, 2009: 56

INTRA-REGIONAL TRADE FLOWS IN ASIA, 2007 (as percentage of Asia’s total trade)

1B ISSUES

•How

can the emerging spatial economy be defined & efficient transnational transport networks be identified to reduce cost & time in transit & increase reliability & flexibility?

•Where

should investments in logistics infrastructure (including Special Economic Zones) be located to enhance regional cooperation and integration? Source: ADB

1C METHODOLOGY

3. Once the full systems approach (Gateways + Corridors) is adopted we can proceed to consider POLICY aimed at rebalancing development patterns to meet politically-informed priorities

2. As this approach is too narrow & unidimensional there is an explicit need to examine GATEWAYS

1. Initial attention on

CORRIDORS (i.e. linear orientation of goods, people & information)

CORRIDOR

GATEWAY

Border

CORRIDOR

CORRIDOR

GATEWAY

CORRIDOR

2. CORRIDORS• Importance stems from funding agencies• Offer less political approach to regional integration• 4 types of Corridors (Banomyong, 2007)1

Transport2

Multimodal (2+ modes combinations)3

Logistics (institutional framework)4

Economic (investment in less developed areas)

TRANSPORT CORRIDORS

Corridor that physically links an area or region

Following Taylor (20093 corridors explored1 Southern Maritime Corridor2 Central Air Corridor3 Northern Land Corridor

BIMSTEC’s (Bay of Bengal Initiativefor Multi Sectoral and Technical and Economic Cooperation) India-Mekong Trilateral Highway Thailand, Myanmar & India; BTILS, Transport Infrastructure Logistics Study (ADB, 2008)

Plus Tele-Space

SOUTHERN MARITIME CORRIDOR

•Dominant mode offering good connectivity•Hub & spoke system; mainline supported by regional hubs & feeders •Improving cargo handling facilities (e.g. Mumbai) & developing inland transport corridors to ports

MAJORHong KongSingaporeShanghaiShenzhenKaohsiungREGIONALQingdaoL. ChabangT. PelapasPt KlangColomboNATIONALKarachiQasimN ShevaChennaiKolkataChittagongT. PriokHCM

S Asia-Europe15-22days

S Asia-S Asia-EuropeEurope15-2215-22daysdays

S Asia-Europe15-22days

E Asia- Europe22-32days

E Asia- Europe22-32days

E Asia- Europe22-32days

KolkataChittagong+7 days

KolkataChittagong+7 days

KolkataChittagong+7 days

ASIAN PORTS

• Within two weeks sail of each other

• Should decrease to 10 days with increased volume

• Inter-port competition in India (cf. China): esp India’s Gujarat ports & Mumbai; & Chennai & Vishakhapatnam for central hinterland

• Extra port capacity (terminal US$150-200mn cf US$ 250-400mn greenfield site)

• Less successful handling congested traffic outside port

Source: Maitree, 2009

Portcompetition

4-7 days

12-25 days

CENTRAL AIR CORRIDOR

• Air freight growing importance as value of commodities traded increases but lags behind ocean transport as market limited by cost

• Few direct passenger flights between South & East Asia except for hubs: Bangkok, Hong Kong & Singapore

• Less 1% trade in volume (5% value): need to improve cargo handling facilities (esp. India)

• Greenfield airport US$4-6bn 60mn pax; pax terminal US$100-300 bn; cargo US$10-20 mn (Taylor 2009).

growing importance

Transit3-5 days

Top 25 airports shown (Mumbai 34, New Delhi 42)

NORTHERN LAND CORRIDOR •Land transport (road & rail) increasing role in bilateral trade • May facilitate trade away from coast between non-adjacent countries but requiresimprovements at remote land border crossings; link AH1-AH3 US$3bn•Unlikely to attract large share of trade flows by 2020 despite promotion of Asian Highway & Asian Railway System (missing links)•Existing trade negligible & limited growth potential, except northern India to western China•Roads within India upgraded—Golden Quadrilateral; “chicken’s neck”- India-Myanmar problemSingle land border crossing for

each country pair

AH 42

AH43

AH 1

AH3

RAIL

MUMBAI

SINGAPORE

SHANGHAI

Maritime Corridor

TELE-SPACE

• Telecommunications transcends economic space & brings business cores in South Asia & East Asia into instant contact•Spatial outcome is that city cores are stacked pancake-like on top of one another•Cores of Mumbai, Singapore, Shanghai and Tokyo are more adjacent than their physical hinterlands•Economic space involving physical movements of goods & people more continuous but differences between modes reflected in air & sea time lapse •The world is not flat and economic space is not smooth

Air Corridor

TOKYO

Source: Adapted from Dick & Rimmer, 2003

Teleport

LandCorridor

MULTIMODAL CORRIDORS • Corridor that has more than

one mode of transport that can physically link the corridor (i.e. road & rail)

•

•

•

•

Northeastern India landlocked except for congested land corridor: link Kolkota & establish Chittagong link for Bhutan & Nepal trade (BIMSTEC’s Bilateral & Regional Transport & Transit Agreements: preferential access). Japan’s inclusion?

Verbiest , 2009

Source: Ramdallah, 2007

Subramanian & Taylor

Time/Cost-Distance Methodology

Transport to border

Wait at border crossing/change transport mode

Transport to sea port

Wait at sea port

500 km 1000 km 2000 km1500 km

Day 4

Tim

e

Day 3

Day 2

Day 1

Cos

t

Distance

Destination

Point of OriginSource: Ha, 2008

• Corridor not only physically links an area or region but harmonizes corridor’s institutional framework •Aims to facilitate efficient flow & storage of freight & movement of people & related information by removing bottlenecks & developing logistics service providers (LSPs) •

•

chain; JVs with overseas firms

Industrial Corridor

Bangalore , Chennai- East Asia Corridor

ECONOMIC CORRIDORS• Economic corridor able to attract

investment & generate economic activity along lesser developed areas of the corridor

• Physical linkages & logistics facilities must be in place in the corridor as prerequisite

•

•b

Source: Asian Development Bank

3. GATEWAYS• Coastal metropolitan area with

seaports, airports & teleports with access to hinterland & hinterworld

•

•

•

Hinterworld(Source; Pain, 2007)

GATEWAY C

GATEWAY A

AIR

TELE-COM

SEA-LAND

MULTILAYERED GATEWAY

Corridor

Corridor

Corridor

Goods

Passengers

Freight

Information

GATEWAY B

1

2

3

4Gateway: multi-modal entry/exit port where goods, people & information move beyond local markets.

Paradox 1 : Inter-gateways inter dependencies intensifying (1) & global functions clustering (2)

Paradox 2: Trade flows are dematerializing with “informationization” & “virtualization” (3) & physical flow structures (gateways & corridors) more important (4)

How do we select gateways?

Paradox 3: Administrative & jurisdictional boundaries (5) do not coincide with multi-scale flows & functional business linkages (6)

5 6

RANKINGS IN WORLD TOP-50, 2008

Container Air Freight Air Pax Internet

Tokyo 24 & 29 8 & 23 4 & 31 10

Hong Kong 3,4 & 8 2,26,32 12 19

Singapore 1,18 10 19 28

Beijing 14 18 8 38

Shanghai 2 & 7 3 & 46 41 48

Kuala Lumpur 15 27 42 49

— 4 39 32

Bangkok

Mumbai

Osaka

6 gatewaysbases for global logistics operators (DHL. Fed-EX & UPS)• 5 proto-gateways: not Colombo (BTILS, 2008) but Mumbai & Bangkok

RANKINGS

BEIJING

HONG KONG

SHANGHAI

TOKYO

KUALA LUMPUR

SINGAPORE

GATEWAYProto-Gateway

DubaiMumbai

Bangkok

Osaka

Seoul

Source: Maitree, 2009

PortAirport

CORRIDOR

HINTERWORLD GATEWAY HINTERLAND

CORRIDOR

At-borderAt-border

Behind-the-border Behind-the-border

ShippingAir Lines Road

RailWater

1 2

5

43

1. Oligopoly 2. Congestion 3. Multimodal transport & congestion 4. Inter-governmental jurisdiction 5.Ownership structure (public/private)

GATEWAY, CORRIDOR HINTERLAND & HINTERWORLD

Trace forward & reverse flows (e.g. Mumbai); note at-border & behind-the-border; use for discussing issues

Source: Adapted from Zhang, 2008

•

• knowledge economy (+) & unequal spatial relationships (-)

• Corridors

promote both balanced development (+) & uneven development (-)

• Hinterworld?

• Masked appearance of new gateways (Beijing & Seoul serving emerging transnational markets & HK’s high connectivity)

• What other gateways will emerge in Pan-Asia?

Cross-border

Verbiest 2009

Harry Johnson Jrhttp://cepa.newschool.edu/het/ profiles/image/johnson.jpg

•Crucial SEZs are the gateways (new SEZ accommodate industrial & political trends (e.g. outsourcing & global integration through WTO);

Asia-Pacific not inefficient!•Use of SEZs to bolster impact of transport infrastructure in cross-border land transport infrastructure

may impose higher costs for non-agricultural & non-

resource activities •Harry G. Johnson Jr argued forcefully that distortions should be tackled at source•

•

Inefficient Inland Freight Distribution

Efficient Inland Freight Distribution

West Coast Nth AmericaAsia-Pacific

SPECIAL ECONOMIC ZONES (SEZs)Source: Rodrigue, 2007

4. POLICY• Recommend door-to-door logistics

approach:

no distinction between transnational & domestic connections

• Need to emphasize coordination

among key players to achieve efficiency through logistics chain

• Check cost of removing at-border & behind-the-border obstacles

• Not all sides of benefit equally from seamless development (e.g. India bears cost of Bangladesh & Nepal road)–

not academic study

• Highest returns derived from overcoming externalities & bottlenecks in gatewaysSource: ADB & ADBI,

http://ofam.my/wp-content/uploads/2010/03/logistic_pic.jpg

LESSONS FROM CANADA

• Avoid historically competitive hinterland interpretations & focus on gateways & corridors

• Contrast between fractured politico-territorial space & inter-

gateway synergies of globalizing business networks

• Emphasize material, virtual & institutional

infrastructures

• Cross-border flows most intense where proactive trading policies

& absence of regulatory, technological & legal restraints

5. CONCLUSIONS• How to make

gateways more efficient (i.e. finance & governance)

• No ready-made spatial framework: Europe not model because restricts growth in Pentagon & reliant on internal transport infrastructures

• Tasks: mobilizations of resources; improve tax base; investigate impact of higher fossil fuel prices; & more rigorous cost-benefit analysis

Pentagon

http://www.vrom.nl/Pics/internationaal/Pentagon.jpg

Proto GatewayProto Port

Source: Base map from ADB; list of ports from Containerisation International, 2010

SOUTH ASIA-GMS LANDLINKS

Corridor addedTHANK YOU!