2008 International Logistics Forum, Incheon 2008 International Logistics Forum, Incheon (Korea), October 8, 2008(Korea), October 8, 2008

Port Regionalization:Port Regionalization:Towards a New Phase in Pacific Towards a New Phase in Pacific Asian Port DevelopmentAsian Port Development

Jean-Paul Rodrigue

Associate ProfessorDept. of Global Studies & GeographyHofstra UniversityNew York, USA

The Challenge of the HinterlandThe Challenge of the Hinterland

The Maritime / Land InterfaceThe Maritime / Land InterfaceThe Velocity of FreightThe Velocity of Freight

Gateways and the Logistical HinterlandGateways and the Logistical Hinterland

Container yard, Port of Yantian, ChinaContainer yard, Port of Yantian, China

Elements of the Maritime / Land InterfaceElements of the Maritime / Land Interface

Port SystemPort SystemPort SystemPort System

Foreland (Shipping Network)

RoadRoad RailRail Coastal / FluvialCoastal / Fluvial

Hinterland (FDC)Hinterland (FDC)Hinterland (FDC)Hinterland (FDC)

Corridors and HubsCorridors and Hubs

GatewaysGateways

Mar

itim

e Fr

eigh

t D

istr

ibut

ion

Inla

nd F

reig

htD

istr

ibut

ion

Functional and Geographical Diffusion of Functional and Geographical Diffusion of Containerization: Globalization and RegionalizationContainerization: Globalization and Regionalization

Diffusion (Functional and Geographical)

Volu

me

Global containerized commoditychains (Optimal: 75% ?)

Regional Load CenterNetwork

Nichemarkets

Port

Foreland Traffic

Hinterland Traffic

GlobalizationGlobalization

RegionalizationRegionalization

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

Logistics and the Velocity of FreightLogistics and the Velocity of Freight

Push LogisticsPush Logistics

Shipment Speed

Transshipment Speed

Pull LogisticsPull Logistics

ContainerizationContainerization

Speed barrier

Logistical threshold

Future improvements

Port RegionalizationPort Regionalization

Trimodal Container Terminal, Willebroek, BelgiumTrimodal Container Terminal, Willebroek, Belgium

Regionalization and Hinterland SettingRegionalization and Hinterland SettingHinterland LogisticsHinterland Logistics

The Spatial Development of a Port SystemThe Spatial Development of a Port System

Phase 1: Scattered ports Phase 2: Penetration and hinterland capture

Phase 3: Interconnection & concentration Phase 4: Centralization

Phase 5: Decentralization and insertion of ‘offshore’ hub Phase 6: Regionalization

Load center Interior centreHinterland-based (Regional load centre network)

Freight corridor

LAND

SEA

Deepsea liner services

Shortsea/feeder services Foreland-based

Regionalization and Hinterland SettingRegionalization and Hinterland Setting

North America Western Europe East and Southeast Asia

Coastal concentrationLandbridge connections

Inland concentrationCoastal gateways

Coastal concentrationLow hinterland access

Container port / terminal

Logistics zone / site

Strongly developed corridor

Poorly developed corridor

Multi-port gateway region

Pacific-Asia(e.g. Pearl River Delta)

North American West Coast(e.g. LA/Long Beach)

North Europe(e.g. Rhine Scheldt Delta)

Landbridge

Gateways and the Logistical Hinterland Gateways and the Logistical Hinterland

Continuous and Discontinuous HinterlandsContinuous and Discontinuous Hinterlands

Main hinterland

Competition margin

Maritime load centre

Inland terminal

Continuous hinterland Port A

Continuous hinterland Port B

Discontinuous hinterland Port A

Discontinuous hinterland Port B

'Island' formation

Port A

Port B

Types of HinterlandTypes of Hinterland

Macro-economic Physical Logistical

Concept Transport demand Transport supply Flows

Elements Logistical sites (production and consumption) as part of commodity chains

Transport links and terminals

Mode, Timing, punctuality and frequency of services

Attributes Interest rates, exchange rates, prices, savings, production, debt

Capacity, corridors, terminals, Physical assets (fixed and mobile)

Added value, tons-km, TEU, Value of time, ICT

Challenge International division of production and consumption

Additional capacity (modal and intermodal)

Supply chain management

Gateways and the New Port Hinterlands: The Gateways and the New Port Hinterlands: The “Regionalized Port”“Regionalized Port”

ConsumptionProduction

Terminal / DCLink (mode)

Interest rates, exchange rates, prices, savings, production, debt

Trade

Balanced flowsImbalanced flows

Hinterland Challenges in Pacific AsiaHinterland Challenges in Pacific Asia

““Emma Maersk”, 12,500 TEU, Rotterdam, NetherlandsEmma Maersk”, 12,500 TEU, Rotterdam, Netherlands

Long Distance Trade NetworksLong Distance Trade NetworksSupply Chain ReliabilitySupply Chain Reliability

Port Regionalization ClustersPort Regionalization Clusters

Circum Hemispheric Rings of CirculationCircum Hemispheric Rings of Circulation

Equator

North American Landbridge

Eurasian Landbridge

Circum-Equatorial Maritime Highway

Arctic Routes

Atlantic Connector

Pacific Connector

Equa

tor

The Resurgence of All Water Services to the The Resurgence of All Water Services to the American East CoastAmerican East Coast

LandbridgeLandbridge

Westbound Westbound RouteRoute

Eastbound Eastbound RouteRoute

Zone of ContestabilityZone of Contestability

Equilibrium

Equilibrium

(indifference) Point

(indifference) Point

NYNY

SavannahSavannah

PanamaPanamaRouteRoute

PanamaPanama

SuezSuez

Challenges and Opportunities of the New Panama Challenges and Opportunities of the New Panama Canal (New Panamax – 12,000 TEU) Canal (New Panamax – 12,000 TEU)

Equa

tor

Westbound Westbound RouteRoute

Eastbound Eastbound RouteRoute

Algeciras

Gioia Tauro

Jeddah

Colombo

Singapore

Hong Kong

Shanghai

PusanKobe

LA/LB

Kingston

PanamaPanama

SuezSuez

Service Time Reliability: All Water Services vs. Service Time Reliability: All Water Services vs. Transpacific / Landbridge Transpacific / Landbridge

18 days

NY: 22 daysSavannah: 21 days

Port congestionOffshore transshipmentTransloadingUnit train assemblyRail congestionTransmodal operationsRoad congestion

Port congestionOffshore transshipmentPanama / Suez Delays

Transpacific / Landbridge

All Water Services

Port Regionalization Clusters in Pacific AsiaPort Regionalization Clusters in Pacific Asia

Foreland-based regionalization

Hinterland-based regionalization

Two Major Transpacific Pendulum Routes Serviced Two Major Transpacific Pendulum Routes Serviced by OOCL, 2006 (The Wal-Mart Express)by OOCL, 2006 (The Wal-Mart Express)

Seattle

Oakland

Vancouver

Los Angeles

Kobe Tokyo

Pusan

Nagoya

Shekou

Qingdao

Shanghai

KaohsiungHong Kong

Singapore

Laem Chabang

Ningbo

Source: OOCL Web Site

49 Days

40 Days

Note: Paths are approximate and transit time includes port time

Northwest Express (NWX)

South China Express (SCX)

Port Regionalization in Pacific AsiaPort Regionalization in Pacific Asia

Freight Distribution Moving InlandFreight Distribution Moving InlandTwo Major Forms of Regionalization:Two Major Forms of Regionalization:

Foreland and Hinterland-BasedForeland and Hinterland-Based

Container waiting to be loaded, Shenzhen, ChinaContainer waiting to be loaded, Shenzhen, China