CILTNA 11th Annual Transportation Situation & Outlook Conference,
April 30 2012, Ottawa, Canada
North American Gateways
and Corridors: Emerging
Trends in Inland Freight
Distribution
Jean-Paul Rodrigue
Professor, Dept. of Global Studies & Geography,
Hofstra University, New York, USA
Why Hinterland Transportation Matters?
Distance
Cost
10%
Port
80%
HINTERLAND
90%
FORELAND
20%
Global Trends: The
Proverbial Elephant in the
Living (Board) Room
The Three Elephants…
Energy and
Resources
Debt and
sovereign
defaults
Aging &
HealthCare
Multiplying Effects of Derived Demand on
Container Transport Peaking?
Global Trade and Container Throughput (1970=100)
10,000
Container Throughput
(520.4 Millions TEU)
Exports in current USD
($15.2 Trillion)
GDP in current USD
($63.4 Trillion)
1,000
World Population
(6.84 Billions)
100
1970 1975 1980 1985 1990 1995 2000 2005 2010
China: The Largest Bubble in History?
Share of the World Commodity Consumption, China and United States, c2009/10
Cattle
Oil
GDP (PPP)
Wheat
Population
Soybeans
Chickens
Rice
Nickel
Aluminum
Zinc
Copper
Lead
Steel
Coal
Pork
Eggs
Cement
Iron Ore
6.1%
6.8%
10.4%
21.7%
13.6%
19.7%
16.6%
4.9%
19.7%
Rebalancing in demand
4.5%
24.9%
19.9%
25.2%
11.3%
30.2%
China
United States
0.9%
31.9%
10.1%
34.6%
8.7%
38.2%
1.8%
39.5%
9.1%
42.1%
13.7%
45.8%
4.8%
46.9%
15.2%
49.6%
8.4%
53.6%
7.8%
53.6%
2.1%
54.4%
0%
10%
20%
30%
1.9%
40%
50%
60%
70%
Commodities and the Canadian Economy: A
Double-Edged Sword
800
700
600
500
400
Price of Selected Commodities on Global Markets, 1991-2012
(Jan 2000=100)
Rapeseed Oil
Wheat
Sawn Softwood
Potash
300
200
100
Aug-91
May-92
Feb-93
Nov-93
Aug-94
May-95
Feb-96
Nov-96
Aug-97
May-98
Feb-99
Nov-99
Aug-00
May-01
Feb-02
Nov-02
Aug-03
May-04
Feb-05
Nov-05
Aug-06
May-07
Feb-08
Nov-08
Aug-09
May-10
Feb-11
Nov-11
0
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
Jan-08
Oct-07
Jul-07
350
Apr-07
Jan-07
Millions of board feet
Monthly Softwood Lumber Shipments to China,
2007-2011
400
United States
Canada
300
250
200
150
100
50
0
140
120
20
0
Jan-70
Jan-71
Jan-72
Jan-73
Jan-74
Jan-75
Jan-76
Jan-77
Jan-78
Jan-79
Jan-80
Jan-81
Jan-82
Jan-83
Jan-84
Jan-85
Jan-86
Jan-87
Jan-88
Jan-89
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
The Third Oil Shock Unfolding
West Texas Intermediate, Monthly Nominal Spot Oil Price (19702011)
100
Rebalancing in input costs
80
60
Second Oil Shock
40
Third Oil Shock
First Oil Shock
The North American East and West Coasts
Dominate…
Millions
… but Growth has Shifted to South America / The
Caribbean
Million TEUs
An Expected Shift in Containerization Growth
Factors
Derived
Substitution
Incidental
Induced
Economic and
income growth
Globalization
(outsourcing)
Fragmentation of
production and
consumption
Functional and
geographical
diffusion
New niches
(commodities
and cold chain)
Capture of bulk
and break-bulk
markets
Trade
imbalances
Repositioning of
empty containers
Transshipment
(hub, relay and
interlining)
Inland Ports in a
Paradigm
Inland Ports: Pick Your Challenge
Site and situation
Massification
Reconciling flows
Trade and transactional facilitation
The Massification of Transportation in Inland
Systems
Inland Load Center Network Formation
Port
Logistics Support
Port
Port
IT
IT
IT
Inland
Terminal
Corridor
Port-Centric
IT
IT
Intermodal
Industrial Park
Direct truck
End haul
Rail / Barge
Inland
Port
The Inland Logistics Funnel: The “Last Mile” in
Freight Distribution
Capacity
Funnel
Frequency
Funnel
Inland Terminal
HINTERLAND
Capacity
Gap
Frequency
Gap
GATEWAY
FORELAND
Economies of scale
Main Shipping Lane
INTERMEDIATE HUB
Transshipment in the Caribbean: From A Triangle
to a Funnel
15.6%
16.4%
63.1%
Economies of scale involve less
tolerance for deviation
4.9%
Asymmetries between Import and Export-Based
Containerized Logistics
Gateway
Distribution Customer
Center
Inland
Terminal
Import-Based
Many Customers
•Function of population density.
•Geographical spread.
•Incites transloading.
•High priority (value, timeliness).
Repositioning
Supplier
Export-Based
Few Suppliers
•Function of resource density.
•Geographical concentration.
•Lower priority.
•Depends on repositioning
opportunities.
Container Traffic, Port of Vancouver and Prince
Rupert, 2008-2011 (import / export ratio)
Vancouver
2,750,000
2,500,000
0.74
2,250,000
2,750,000
0.76
0.81
Prince Rupert
2,500,000
2,250,000
Empty (Exports)
2,000,000
2,000,000
Empty (Imports)
1,750,000
1,750,000
Loaded (Exports)
1,500,000
1,500,000
1,250,000
1,250,000
1,000,000
1,000,000
750,000
750,000
500,000
500,000
250,000
250,000
0
0
0.92
2008
2009
2010
2011
Loaded (Imports)
0.25
2008
0.25
2009
0.33
2010
0.43
2011
Trade and Transactional Facilitation: Functional
Pairing of Inland Ports
Functional Pairing
Hinterland
Corridor
Gateway
Foreland
Inland Port
Conclusion: Inland Ports as Maturing Logistical
Platforms
The last mile remains salient
(Gateway gap + inland massification)
Inland ports are hinterland dependent
(Significant regional variations in logistics)
Longitudinal fixation, latitudinal future?