The Korea Transport Institute (KOTI), Seoul,
October 7, 2008
Terminals and Logistics:
The Terminalization Thesis
Jean-Paul Rodrigue
Associate Professor
Dept. of Global Studies & Geography
Hofstra University
New York, USA
Contemporary Transport Terminals

Role and Function of Transport Terminals
Technical Changes
Modal and Temporal Separation at Terminals
Container yard, Port of Yantian, China
Changing Role and Function of Transport Terminals
Conventional
Small terminal surface
Container
Large terminal surface
Direct transshipment possible
Indirect transshipment (modal
separation in time and space)
Advanced mechanization and
automation
Organization and planning
Limited mechanization and automation
Improvisation in terminal operations
Types of Intermodal Terminals
Port Terminals
Container sea terminal
Rail Terminals
On-dock and near dock
Distribution
Centers
Transloading
Offshore hub
Transmodal
terminal
Load center
Cross-docking
Barge terminal
Satellite
terminal
Warehousing
Technical Changes in Container Port Terminals
Standard Container Port Emerging Paradigm
Stacking density
1,000 to 1,200 TEUs per
hectare
2,000 to 4,000 TEUs per hectare
Ship-to-shore gantry
crane productivity
About 30 movements per
hour
About 50 movements per hour
Dwell time at
container yard
About 6 days
About 3 days
Truck turnaround time About 60 minutes
About 30 minutes
Rail access
In port area
On dock
Berthing depth
12 to 15 meters (40 to 50
feet)
More than 15 meters (50 feet)
Modal and Temporal Separation at Freight Transport
Terminals
Modal and Temporal
Separation
1
2
1
3
4
1
1- Intermodal
2- Transfer quay to truck gates
3- On dock rail
4- Transloading
Modal Separation in Space: Europa Terminal in
Antwerp
Barges
Trucks
Deepsea services
Rail
World Container Traffic, 1980-2008. Reaching Peak
Growth?
Adoption
Acceleration
Peak Growth
Maturity
1000
900
800
2010(?) -
Million TEU
700
2002-2010(?)
600
500
Divergence
1992-2002
1966-1992
400
300
200
100
0
1980
1985
1990
1995
2000
2005
2010
2015
2020
Terminals and Added Value

Terminal Operations and Added Value
Supply Chains and Added Value
9
Trimodal Container Terminal, Willebroek, Belgium
Freight Transport Terminals: Operations and Added
Value
Infrastructure
Equipment
Core
(Operations) Storage
Ancillary
(Added
Value)
Modal access (dock, siding, road), unloading
areas
Intermodal lifting equipment, storing equipment
Yard for empty and loaded containers
Management
Administration, maintenance, access (gates),
information systems
Trade facilitation
Free trade zone, logistical services
Distribution centers
Transloading, cross-docking, warehousing, light
manufacturing, temperature controlled facilities
(cold chain)
Storage depot
Container depot, bulk storage
Container services
Washing, preparation, repair, worthiness
certification
Freight Terminal Hierarchy and Added Value
Gateway
Freight
Distribution Cluster
Inland Port
(load center)
Satellite Terminal
Container Transloading
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).
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.)
Commodity Chains; Where Value Comes From?
High
Globalization
Added value
R&D
Sales / Service
Marketing
Branding
Distribution
Design
Concept
Manufacturing
Low
Commodity chain
Logistics
Supply Chains, Transport Chains and Added Value
Transport
Chain
Added Value
Supply Chain
Customer
Customers
High
Upward
Value Capture / Creation
Market Potential
Value Expansion
How
Where
Distribution Efficiency
Value Retention
Production Costs
Low
Downward
Supplier
Suppliers
Majort Port Holdings, 2007
Dedicated Maritime Container Terminals
APM Terminals
Dubai Ports World
Hutchison Port Holdings
Port of Singapore Authority
Eurogate
Stevedoring Services of America
Pacific Asia
Europe
Dr. Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University
The Value Capture Process along Commodity Chains
Port Authority
Horizontal Integration
Maritime Services
Port Services
Inland Services
Vertical Integration
Maritime
Shipping
Offshore
hub
Port
Inland
Port
Port Holding
Port Terminal
Operations
Inland Modes
and Terminals
Commodity Chain
Distribution
Centers
Inland Terminal Life Cycle
Traffic
Subsidies / Investments
Planning
Setting
Growth
Maturity
Decline
Profit
Concept
Stage 1
Operations
begin
Stage 2
Stage 3
Stage 4
Stage 5
Inland Ports: Different Stages, Different Concerns
Phase
Characteristics
Planning
Relevance and viability studies. Local support. Attraction of
users and investment commitments. High risk and subsidy
level.
Setting
Construction of terminal and distribution facilities. First users
(some can be transitional).
Growth
Realization of market potential. Growth of traffic. Capture of
additional users. Clustering effect and generation of added
value.
Maturity
Traffic stabilization. Available space filled and/or few new
users. Non-commercial activities (housing). Revenue
generation optimal.
Decline
Change in market conditions. Departure of users.
Reemergence of subsidies.
Supply Chains and their Terminalization

The Concept of Terminalization
Export Flows to the Gateways
The Maritime Segment
Import Flows to the Hinterland
Translisft crane, NS Rutherford yard, PA
Unraveling the Terminalization Concept
■ Terminalization
• Growing influence of transport terminals in the setting and
operation of supply chains in terms of location, capacity and
reliability.
Type
Nature
Concept
Challenge
Outcome
Bottleneck-derived
Terminal as a constraint
Rational use of facilities to
maintain operational
conditions
Storage space, port call
frequency, gate access
Volume, frequency and
scheduling changes
Warehousing-derived
Terminal as a buffer
Incorporating the terminal as a
storage unit
“Inventory in transit” with
“inventory at terminal”
Reduce warehousing
requirements at distribution
centers
Terminalization in a Supply Chain Context
Suppliers
Gateway
Offshore Hub
Gateway
Inland
Terminal
Foreland (First Mile)
Bottleneck
Buffer
Distribution center (outbound / inbound)
Inland containerized goods flow
Inland non-containerized goods flow
Maritime container flow
Port regionalization and the creation
of a Regional Load Center Network
Extended Gate
Extended Distribution Center
Customers
Hinterland (Last Mile)
Supply Chain Terminalization: Export Flows to the
Gateway
Suppliers
Gateway
Offshore Hub
■ Bottleneck-derived
terminalization
• Containerized cargo:
• Logistics zones near the
gateway or in a hinterland
location connected to the
gateway via a multimodal
transport corridor.
• Distribution:
Gateway
Inland
Terminal
Customers
• Tends to be synchronized with
terminal handling capacity.
Supply Chain Terminalization: The Maritime Segment
Suppliers
Gateway
Offshore Hub
Gateway
Inland
Terminal
Customers
■ Buffer-derived
terminalization
• Intermediate facility (offshore
hubs):
• Transshipment, interlining or
relay.
• Low cost locations before
entering high distribution costs
areas.
Supply Chain Terminalization: Import Flows to the
Hinterland
Suppliers
1. Port regionalization:
Gateway
•
Regional load center
network.
2. Extended gate:
Offshore Hub
•
1
Gateway
2
Inland
Terminal
Customers
■ Bottleneck and bufferderived terminalization
3
Development of inland
terminals.
3. Extended distribution
center:
•
The terminal as a
warehousing unit.
Terminalization and Supply Chain Costs
Intermodal transportation
costs
No noticeable effects.
Related to higher terminal costs.
Cost mitigation through terminal use (e.g. drayage).
In-transit inventory costs
Confers additional flexibility.
Used as a buffer.
Warehousing inventory
costs
Partially transferred to the terminal.
Blended with in-transit inventory costs.
Dwell time costs
Terminal not always used as a facilitator for
synchronization between transport modes.
Places for cheap storage of consignments.
Could be the result of deliberate actions of actors in
supply chains.
Terminalization in Practice

North America: Long Distance Rail
Western Europe: Close Integration
Pacific Asia: Outbound Logistics
Chassis waiting to be picked, Corwith Rail Yard, Chicago
The Extended Gateway of the Ports of Los Angeles /
Long Beach
Intra-terminal
On-dock rail
yards
Near-dock rail
yards
Alameda Corridor
Non-local
destination
16%
Non-local
destination
13%
Marine Terminal
Off-dock rail
yards
Rail
Non-local
destination
13%
Transload
facility
Off-dock rail
yards
Non-local
destination
22%
Warehouse
Transload
facility
Local destination 34%
Warehouse
Truck
Non-local
destination
2%
Alameda Corridor
§
¨¦
§
¨¦
UP & BNSF
Railyards
CBD
10
10
101
10
10
§
¨¦
§
¨¦
§
¨¦
£
¤
710
§
¨¦
10
V
U
§
¨¦
72
710
Alameda Corridor
UP & BNSF Railyards
Ground Level
Thruport
Trench (30 feet)
§
¨¦
5
V
U
42
§
¨¦ §
¨¦
§
¨¦
105 105
Mid-Corridor
Trench (10 miles)
605
V
U
19
§
¨¦
710
§
¨¦
110
V
U
91
§
¨¦
405
Port of
Los Angeles
Port of
Long Beach
V
U
1
V
U
1
V U
U
V
22
§
¨¦
22
710
V
U
47
Port of Long Beach
Port of Los Angeles
Port Cluster
0
1
2
4
6
Miles
8
May-08
Dec-07
Jul-07
Feb-07
Sep-06
Apr-06
Nov-05
Jun-05
Jan-05
Aug-04
Mar-04
Oct-03
May-03
Dec-02
Jul-02
Feb-02
Sep-01
Apr-01
Nov-00
Jun-00
Jan-00
Aug-99
Mar-99
Oct-98
May-98
Dec-97
Jul-97
Feb-97
350,000
Sep-96
400,000
Apr-96
Nov-95
Jun-95
Jan-95
Monthly Container Traffic Handled by the Port of Los
Angeles, 1995-2008 (TEU)
450,000
Out Empty
Out Loaded
In Loaded
300,000
250,000
200,000
150,000
100,000
50,000
0
North American Rail System
Major Rail Corridors Improved since 2000
Average Speed of Class I Railroads, 1945-2004
40
Kilometers per hour
35
30
25
20
15
1945
1955
1965
1975
1985
1995
2005
Average Freight Train Length, United States
180
160
140
Eastern Railroads (CSX, NS)
Western Railroads (BNSF, UP)
120
100
80
60
40
20
0
Auto
Bulk
General
Merchandise
Intermodal
Container Dwell Times at BNSF Rail Terminals
Departure
Return
Free Dwell Time
(Days)
Additional Charge
(per day)
Loaded
Loaded (same
shipper)
6
$25
Loaded
Loaded (different
shipper)
3
$25
Empty
Loaded
3
$25
Loaded
Empty
1
$25/$50 (after 10
days)
Empty
Empty
0
$25/$50 (after 10
days)
BNSF’s Three Tier Terminal System, 2007
Facility
Group
Facility
Free Dwell Time
(days)
Charge (per
day)
1
$150
1
Kansas City, KS
Los Angeles, CA
Memphis, TN
2
Alliance, TX
Atlanta, GA
(Fairburn)
Chicago (Cicero), IL
Houston, TX
Oakland Intl.
Gateway, CA
San Bernardino, CA
Seattle, WA (SIG)
St. Louis, MO
St. Paul, MN
Stockton, CA
2
$150
3
Albuquerque, NM
Amarillo, TX
Billings, MT
Birmingham, AL
Chicago (Corwith), IL
Chicago (Willow
Springs), IL
Denver, CO
Dilworth, MN
El Paso, TX
Fresno, CA
Harvard, AR
Logistics Park Chicago, IL
New Orleans, LA
Omaha, NE
Phoenix, AZ
Portland, OR
South Seattle, WA
Spokane, WA
2
$100
Automated Transfer Management System for TruckRail Transfers
Average Dwell Times at Major European Container
Terminals (in days)
Characteristics
Bremen
Hamburg Rotterdam Antwerp La Spezia Gioia Tauro
Import dwell vessel –
truck
6.4
6.4
6.4
6.4
7.4
7.4
Export dwell truck –
vessel
4.6
4.6
4.6
4.6
5.6
5.6
Import dwell vessel –
train
6.5
6.5
6.5
6.5
7.5
7.5
Export dwell train –
vessel
4.7
4.7
4.7
4.7
5.7
5.7
Import dwell vessel –
barge
4.1
4.1
4.1
4.1
5.1
5.1
Export dwell barge –
vessel
4.3
4.3
4.3
4.3
5.3
5.3
Transshipment dwell
-
-
-
-
-
5.3
Case Studies Europe – Rhine-Scheldt Delta
Container transferium
Extended gate (satellite)
Initiated by POR
TCT Venlo
Extended gate (rail-based)
for ECT/HPH
Outbound Logistics: Port Regionalization Clusters in
Pacific Asia
Hinterland-based regionalization
Foreland-based regionalization
Two Major Transpacific Pendulum Routes Serviced
by OOCL, 2006 (The Wal-Mart Express)
Vancouver
Seattle
Qingdao
Shanghai
Laem Chabang
Shekou
Ningbo
Hong Kong Kaohsiung
Northwest Express (NWX)
Pusan
Kobe Tokyo
Oakland
Los Angeles
40 Days
Nagoya
Singapore
49 Days
South China Express (SCX)
Note: Paths are approximate and transit time includes port time
Source: OOCL Web Site
Conclusion: Terminalization and the Integration of
Supply Chains
■ Terminalization
• Terminals are getting more embedded in supply chains.
• Constraint or buffer.
• Extended gateways and extended distribution centers.
■ Is there a distinct North American, European or Pacific
Asian terminalization?
• Due to externalities (congestion, environment) Europe shows
a more advanced terminalization.
• Dwell time pressures indicate a more constraining
terminalization in North America.
• Pacific Asia dominantly as export gateways based
terminalization.