The Future of Containerization:
Box Logistics in Light of Global Supply
Chains
Jean-Paul RODRIGUE
Department of Economics & Geography
Hofstra University, Hempstead, New York 11549, USA
Theo NOTTEBOOM
ITMMA – University of Antwerp
Keizerstraat 64, 2000 Antwerp, BELGIUM
Containerization, Production and Distribution
• Introduction: Looking Back at 50 Years of
•
•
•
•
Containerization
Containers in Global Supply Chains
Challenges to Liner Shipping Networks
Ports and Terminals: Convergence and
Divergence
Pressures on Inland Distribution
Looking Back at 50 Years of Containerization
• Intermodal Integration
• 50 years of stepwise technical improvements.
• Growth and Diffusion
• Forces shaping containerization and its adoption.
• Peak Growth?
• A look at the inflection of the logistic curve.
Major Steps in Intermodal Integration
Intermodal Integration
Advanced Containers
Advanced Terminals
Regionalization
Intermodal rail crane (1985)
Doublestacking; IBCs (1985)
Deregulation (1980s)
COFC (1967)
Transatlantic (1966); Containerships (1968)
Standardization (size and latching) (1965)
Containerization (1956)
TOFC (1950s)
Pallets (1930s)
Time
Two Processes behind Containerization:
Growth and Diffusion
Growth
Global containerized commodity
chains (Optimal: 75% ?)
Port / inland
terminals systems
Experimental niche
markets
Diffusion (Functional and Geographical)
Diffusion: Degree of Containerization,
Selected European Ports, 1980-2005
100
1980
1985
1990
1995
2000
2005
90
80
70
60
50
40
30
20
10
eb
ru
gg
e
Ze
es
M
ar
se
ill
oa
en
G
er
p
nt
w
A
ot
te
rd
am
R
s
A
lg
e
ci
ra
av
re
H
Le
H
am
bu
rg
0
The Largest Available Containership, 19702006 (in TEUs)
14,000
12,000
10,000
8,000
6,000
4,000
2,000
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
0
World Container Traffic, 1980-2005.
Reaching Peak Growth?
Adoption
Acceleration
Peak Growth
Maturity
1000
2010(?) -
900
800
2002-2010(?)
Million TEU
700
1992-2002
600
500
1966-1992
Divergence
400
300
200
100
0
1980
1985
1990
1995
2000
2005
2010
2015
2020
Containers in Global Supply Chains
• Logistics and the Velocity of Freight
• Intermodalism and pull logistics
• Containerized Global Production Networks
• The container as a production, transport and
distribution unit
The Velocity of Freight: From Push to Pull
Logistics
Transshipment Speed
Speed barrier
Future improvements
Pull Logistics
Logistical threshold
Containerization
Push Logistics
Shipment Speed
Containerized Global Production Networks
Synchronization of inputs and
outputs (batches)
Flow management (time-based),
warehousing unit
Production
Distribution
Container
Transport
Modes, terminals, intermodal and
transmodal operations
Challenges to Liner Shipping Networks
• Liner Service Networks in Transition
• Reconciling frequency, direct accessibility and
transit times.
• Schedule Integrity Issues
• Port congestion as the main factor.
• New Intercontinental Shipping Routes
• Circum-hemispheric maritime / land interface.
Liner Shipping Networks: Variety of Scales
and Services
Regional
Port System
Conventional liner / break bulk services
Mainline services
Feeder services
Third order network
First order network
Second order network
Regional
Port System
Schedule Integrity of Liner Services on
Specific Trade Routes
Asia / Europe
(Med)
44%
Transpacific
63%
Transatlantic
53%
0%
20%
40%
60%
80%
100%
Eq
ua
to
r
Circum Hemispheric Rings of Circulation
North American Landbridge
Eurasian Landbridge
Arctic Routes
Circum-Equatorial Maritime Highway
Ports and Terminals: Convergence and
Divergence
• Convergence: Terminalization and Value
Capture
• Terminals and commodity chains.
• Divergence: Planning Process
• Scarcity in terminal capacity.
The Value Capture Process along
Commodity Chains
Port Authority
Maritime Services
Port Services
Inland Services
Port Holding
Vertical Integration
Maritime
Shipping
Port Terminal
Operations
Horizontal Integration / Vertical
Inland Modes
and Terminals
Commodity Chain
Distribution
Centers
Delays in the Planning Process: Some Cases
in Northwest Europe
Development of Proposed date Earliest date for
initial plans
for start start terminal
operations (first
operations
phase)
Le Havre ‘Port 2000’ – France
Antwerp – Deurganck Dock - Belgium
Rotterdam – Euromax Terminal – the
Netherlands
Rotterdam – Maasvlakte II – the
Netherlands
Deepening Westerscheldt -the
Netherlands/Belgium
Wilhelmshaven/JadeWeserPort - Germany
Cuxhaven - Germany
Dibden Bay – UK
London Gateway – UK
Felixstowe South – UK
Hull Quay 2000/2005
1994
1995
2000
2003
2001
2004
2006
2005
2008
1991
2002
2013/2014
1998
2003
2008?
NA
NA
NA
NA
NA
NA
2006
2006
2000
2006
2006
2000
2010
Never
Never
2009
2007
2007
Some Terminal Development Options
(A)
Initial situation
SEA
LAND
(B)
New terminal
development
in existing ports
(C)
New terminals along
the wider coastline
(D)
New terminals/ports
near existing ports
Corridor
Congestion
level
High
Low
Multi-port
gateway
region
Pressures on Inland Distribution
• Imbalances and Repositioning
• Coping with macro-economics and the global
structure of production.
• Port Regionalization
• Improving the maritime / land interface.
• Maritime Gateways
• Corridors and the logistical hinterland.
Imbalances and Container
Repositioning Strategies
Unit Repositioning Costs
Container manufacturing costs
High limit of feasible actions
High imbalance
Repositioning not
economically
feasible
International
(Overseas repositioning)
Regional
(Intermodal
repositioning)
Local
(Empty interchange)
Imbalances not
considered a problem
Low imbalance
Repositioning Distance (TEU – KM)
Port Regionalization and the
Development of Logistics Poles
Logistics site
Multimodal transshipment center
Primary and secondary
logistics zone
Logistics Pole
LAND
SEA
Gateways and the Logistical Hinterland
Pacific-Asia
(e.g. Pearl River Delta)
North American West Coast
(e.g. LA/Long Beach)
Landbridge
Container port / terminal
Logistics zone / site
Strongly developed corridor
Poorly developed corridor
Multi-port gateway region
North Europe
(e.g. Rhine Scheldt Delta)
Conclusion: Containerization Reaching
Maturity
• Risks in supply chains
• Growing efforts spent at dealing with disruptions.
• Coexistence of shipping networks
• Flexibility in routing options in light of global
production networks (costs / time options).
• Development of multi-port gateway regions
• New port hierarchies and a multiplication of the
number of ports engaged in containerization.
• Three scales of inland containerization
• Continental: high capacity long distance corridors.
• Regional: integration between maritime and inland
transport systems.
• Local: advanced terminals.