55thth Annual Supply Chain Connections Conference, Annual Supply Chain Connections Conference, Winnipeg, February 11, 2009Winnipeg, February 11, 2009
Inland Terminals, Logistic Clusters Inland Terminals, Logistic Clusters and Global Commodity Chains: and Global Commodity Chains: Looking Into the Eye of the StormLooking Into the Eye of the Storm
Jean-Paul Rodrigue
Associate Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA
Van Horne Researcher in Transportation and Logistics, University of Calgary, Alberta, Canada
Inland Terminals: The Eye of the StormInland Terminals: The Eye of the Storm
Containerized Containerized TradeTrade
Questioning growth prospects.Questioning growth prospects.Paradigm shift (forecasting…).Paradigm shift (forecasting…).
Trade Trade ImbalancesImbalances
Imbalanced flows and shipping rates.Imbalanced flows and shipping rates.Load centers for empties on backhauls Load centers for empties on backhauls to ports.to ports.
TerminalizationTerminalization Integrating inland terminals, corridors Integrating inland terminals, corridors and commodity chains.and commodity chains.
GovernanceGovernanceIncluding inland terminals within public Including inland terminals within public policy and regional planning.policy and regional planning.Value capture.Value capture.
Global Containerized Trade: Prepare to be Global Containerized Trade: Prepare to be DisappointedDisappointed
Potential Divergence: The First Crisis ofPotential Divergence: The First Crisis ofGlobalizationGlobalization
Container yard, Port of Yantian, ChinaContainer yard, Port of Yantian, China
Impact of Recessions on Consumption and Freight Impact of Recessions on Consumption and Freight RatesRates
Value of GoodsLow HighNone
Significant
Decline
A – Basic GoodsB – Discretionary GoodsC – Durable GoodsD – Capital EquipmentE – Luxury Goods
ConsumptionConsumption
None
Significant
Decline
1 – Futures Indexes2 – Income and Spending3 – Container Volumes4 – Value of Trade
Trade and Freight RatesTrade and Freight Rates
SeveritySeverity
Sequence
Futures Indexes: The Current Trend is Strongly Futures Indexes: The Current Trend is Strongly Deflationary…Deflationary…
Annual Light Vehicle Sales, United States, January Annual Light Vehicle Sales, United States, January 2008 – January 2009 (millions)2008 – January 2009 (millions)
-36.8%-36.8%
-42.3%-42.3%
-22.9%-22.9%
Port of Los Angeles (Monthly TEUs), 1995-2008: Port of Los Angeles (Monthly TEUs), 1995-2008: Peaking … and About to Fall Off a Cliff?Peaking … and About to Fall Off a Cliff?
World Container Traffic, 1980-2008. Reaching Peak World Container Traffic, 1980-2008. Reaching Peak Growth?Growth?
0
100
200
300
400
500
600
700
800
900
1000
1980 1985 1990 1995 2000 2005 2010 2015 2020
Mill
ion
TE
U
Divergence
Adoption Acceleration Peak Growth Maturity
1966-1992
1992-2002
2002-2010(?)2010(?) -
Global Bulk and Container Fleet Partially Global Bulk and Container Fleet Partially Immobilized (Singapore, January 2009)Immobilized (Singapore, January 2009)
Cars Accumulating at the Long Beach Port Terminal, Cars Accumulating at the Long Beach Port Terminal, December 2008December 2008
Trade Imbalances: Coping with DistortionsTrade Imbalances: Coping with Distortions
Transport FlowsTransport FlowsTransport RatesTransport Rates
Inland Terminals and RepositioningInland Terminals and Repositioning
NS Rutherford Inland Terminal, PennsylvaniaNS Rutherford Inland Terminal, Pennsylvania
Containerized Cargo Flows along Major Trade Containerized Cargo Flows along Major Trade Routes, 1995-2007 (in millions of TEUs)Routes, 1995-2007 (in millions of TEUs)
4.0
5.2
5.6
7.2
8.8
10.2
12.4
12.4
15.0
15.4
3.5
3.3
3.3
3.9
3.9
4.1
4.2
4.4
4.7
4.9
2.8
3.5
4.5
5.9
6.1
7.3
8.9
10.8
15.3
17.7
2.3
2.7
3.6
4.0
4.2
4.9
5.2
5.5
9.1
10.0
1.2
1.3
2.2
2.7
1.5
1.7
1.7
2.1
2.5
2.7
1.4
1.7
2.9
3.6
2.6
2.9
3.2
3.8
4.4
4.5
0 10 20 30 40 50 60
1995
1998
2000
2001
2002
2003
2004
2005
2006
2007
Asia-USA
USA-Asia
Asia-Europe
Europe-Asia
USA-Europe
Europe-USA
Containerized Cargo Flows along Major Trade Containerized Cargo Flows along Major Trade Routes, 2007Routes, 2007
USAUSA
7.6
AsiaAsia
33.1
14.5
19.9
20.4
14.9
EuropeEurope
15.4 (+175%)
4.9 (+48%)
Million TEUs Growth (2000-2007)
Imports (M TEUs)
Exports (M TEUs)2.7 (+23%)
4.5 (+55%)
10.0 (+178%)
17.7 (+293%)
Maritime Freight Rates (Nominal USD per TEU), 1993-Maritime Freight Rates (Nominal USD per TEU), 1993-20082008
$0
$500
$1,000
$1,500
$2,000
$2,500
1993-4
1994-2
1994-4
1995-2
1995-4
1996-2
1996-4
1997-2
1997-4
1998-2
1998-4
1999-2
1999-4
2000-2
2000-4
2001-2
2001-4
2002-2
2002-4
2003-2
2003-4
2004-2
2004-4
2005-2
2005-4
2006-2
2006-4
2007-2
2007-4
2008-2
Asia - US
US - Asia
Asia - Europe
Europe - Asia
Geographical Levels of Empty Container Geographical Levels of Empty Container Repositioning Repositioning
HinterlandHinterland
ForelandForeland
Inter-Regional Repositioning
(inland)
Global Repositioning
Inter-RegionalRepositioning
(coastal / fluvial)
Port Depot / Inland terminal Freight Distribution Cluster
RegionalRepositioning
Cargo Rotation
Main North American Trade Corridors and Main North American Trade Corridors and Metropolitan Freight CentersMetropolitan Freight Centers
1) Efficient repositioning2) Cargo rotation3) Export market
Bulk and Containerized Commodity ChainsBulk and Containerized Commodity Chains
Bulk Commodity ChainBulk Commodity Chain
Containerized Commodity ChainContainerized Commodity Chain
Consolidationcenter
PortSupplier Customer
Inland Terminal
Containerport
PendulumServices
Point-to-Point
ComplementarityComplementarity
Several Established Containerized Commodity Several Established Containerized Commodity Chains in Western CanadaChains in Western Canada
Terminalization and Inland TerminalsTerminalization and Inland Terminals
Trimodal Container Terminal, Willebroek, BelgiumTrimodal Container Terminal, Willebroek, Belgium
Economies of Scale: A Hard Pill to SwallowEconomies of Scale: A Hard Pill to SwallowTerminalization and Supply ChainsTerminalization and Supply Chains
Extended Distribution CentersExtended Distribution Centers
Type and Function of Inland TerminalsType and Function of Inland Terminals
Satelliteterminal
Load center
Transmodalterminal
Type Function
Satellite terminal Close to a port facility. Accommodate additional traffic and serve functions that have become too expensive at the port. Container transloading.
Freight distribution cluster / load center
Access regional markets (production and consumption). Intermodal, warehousing, and logistics functions. Linked with logistics parks and free trade zones.
Intermodal / Transmodal facility
Link large systems of freight circulation either through the same mode (e.g. rail-to-rail) or through intermodalism (e.g. rail-to-truck).
Corridor
The Largest Available Containership, 1970-2007 (in The Largest Available Containership, 1970-2007 (in TEUs)TEUs)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Hinterland Logistics: The Realm of the “Last Mile” Hinterland Logistics: The Realm of the “Last Mile” (or the “First Mile”)(or the “First Mile”)
GatewayGatewayInland Inland
TerminalTerminalDistributionDistribution
CenterCenter
Capacity
Frequency
CorridorCustomerCustomer
“Last Mile”
Segment
GLOBALGLOBAL HINTERLANDHINTERLAND REGIONALREGIONAL LOCALLOCAL
Shipping Network
MassificationMassificationMassificationMassification AtomizationAtomizationAtomizationAtomization
Massification of Inland Terminals: Automated Massification of Inland Terminals: Automated Transfer Management SystemsTransfer Management Systems
Supply Chain Terminalization: Import Flows to the Supply Chain Terminalization: Import Flows to the HinterlandHinterland
GatewayGateway
Offshore HubOffshore Hub
BottleneckBufferDistribution center (outbound / inbound)Inland containerized goods flowInland non-containerized goods flowMaritime container flow
Foreland (First Mile)Foreland (First Mile)
Hinterland (Last Mile)Hinterland (Last Mile)
GatewayGateway
SuppliersSuppliers
CustomersCustomersExtended Distribution Center (Terminal asA warehousing unit)
Extended Gate (Inland terminals)
Port regionalization and the creation of a Regional Load Center Network
Inland Inland TerminalTerminal
Container Transloading: Could it Move Inland?Container Transloading: Could it Move Inland?
Cause Outcome
Consolidation Transferring the contents of smaller containers into larger containers (e.g. three maritime 40 foot containers into two 53 foot domestic containers). Cost savings (number of lifts). Time delays.
Weight compliance Transferring the contents of heavy containers into loads meeting national or regional road weight limits.
Palletizing Placing loose (floor loaded) containerized cargo unto pallets. Adapting to local load units (e.g. europallet).
Demurrage Handing back containers to owner (maritime shipping or leasing company) by transferring its contents into another load unit (e.g. domestic container) to avoid charges.
Equipment availability
Making maritime containers available for exports and domestic containers available for imports. Trade facilitation.
Supply chain management
Terminal and transloading facility as a buffer. Delay decision to route freight to better fulfill regional demands. Perform some added value activities (packaging, labeling, final assembly, etc.)
Governance and Inland TerminalsGovernance and Inland Terminals
Terminal Operators and Value CaptureTerminal Operators and Value CaptureRegional Integration as Logistics ClustersRegional Integration as Logistics Clusters
Uiwang Inland Container Depot, South KoreaUiwang Inland Container Depot, South Korea
Commodity Chain
The Value Capture Process along Commodity ChainsThe Value Capture Process along Commodity Chains
Port Holding
Port
Aut
horit
y Maritime Services
Inland Services
Port Services
Horizontal Integration
Vertical Integration
Maritime ShippingMaritime Shipping
Port Terminal Operations
Port Terminal Operations
Inland Modes and TerminalsInland Modes and Terminals
Distribution Centers
Distribution Centers
Offshorehub
InlandPortPort
Inland Terminals: Operations and Added ValueInland Terminals: Operations and Added Value
CoreCore(Operations)(Operations)
InfrastructureInfrastructure Modal access (dock, siding, road), unloading areas
EquipmentEquipment Intermodal lifting equipment, storing equipment
StorageStorage Yard for empty and loaded containers
ManagementManagement Administration, maintenance, access (gates), information systems
AncillaryAncillary(Added (Added Value)Value)
Trade facilitationTrade facilitation Free trade zone, logistical services
Distribution Distribution centerscenters
Transloading, cross-docking, warehousing, light manufacturing, temperature controlled facilities (cold chain)
Storage depotStorage depot Container depot, bulk storage
Container servicesContainer services Washing, preparation, repair, worthiness certification
Functional Integration of Freight ClustersFunctional Integration of Freight Clusters
Logistic PoleLogistic Pole
Logistic ZoneLogistic Zone
Scale
Scope
Logistic ClusterLogistic Cluster
FTZ
Terminal / Depot
Distribution center
Port
Free Trade Zones: Setting The RulesFree Trade Zones: Setting The Rules
Infrastructures High level of infrastructure, such as land, transport, office space, utilities, logistics services, business services and other facilities.
Regulations Streamlined to improve efficiency, including custom services, labor regulation and permits.
Location High accessibility location, often close to major terminal facilities such as a port, inland terminal or an airport. Location often away from conventional industry.
Export-oriented Activities operating within the zone produce mainly or exclusively for foreign markets.
Incentives Variety of incentives, including low cost land, infrastructures, tax and duty exemptions or various subsidies.
Free Trade Zones: “Bending the Rules”Free Trade Zones: “Bending the Rules”
Custom Clearance
Done inland instead of at the gateway port.Likely faster.Receiver gets further advance notice.
Duties Not paid until the consignment is released and moved out of the FTZ.If transformation is performed in the FTZ, the duty class may change.Select the taxation regime.
Settlement If combined with Warehousing.Vendors often not paid until the freight leaves the terminal for delivery.
Inland Terminals: The Calm after the Storm (lessons Inland Terminals: The Calm after the Storm (lessons to be learned)to be learned)
Rebalancing of the global economyRebalancing of the global economy
Repositioning strategiesRepositioning strategies
Terminalization (intermodal integration)Terminalization (intermodal integration)
Logistics cluster (regional integration)Logistics cluster (regional integration)