The Atlantic Rim:
Comparative Issues in North American and European Logistics
Annual Conference of the Association of American Geographers, Boston,
Massachusetts, April 15-19 2008
The Terminalization of Supply Chains:
Assessing Terminals within Freight
Distribution Systems
Theo NOTTEBOOM
Institute of Transport and Maritime Management Antwerp (ITMMA),
University of Antwerp, Antwerp, Belgium
Jean-Paul RODRIGUE
Department of Economics & Geography
Hofstra University, Hempstead, New York 11549, USA
The Terminalization of Supply Chains
A. Changing Role and Function of Transport Terminals
B. Unraveling the Terminalization Concept
C. Terminalization in a Supply Chain Context
2
A. Changing Role and Function of Transport
Terminals
 Modal separation
•
•
In space (specialized terminal areas).
In time (intermodal buffer).
Conventional
Small terminal surface
Direct transshipment possible
Limited mechanization and
automation
Improvisation in terminal operations
3
Container
Large terminal surface
Indirect transshipment (modal
separation in time and space)
Advanced mechanization and
automation
Organization and planning
Modal and Temporal Separation at Freight
Transport Terminals
Maritime Transport System
Modal and
Temporal
Separation
1
Maritime / Barge
2
3
Buffer
Road
1
Rail
4
1
Inland Transport System
1- Intermodal
2- Transfer quay to truck gates
3- On dock rail
4- Transloading
4
An example of modal separation in space:
the Europaterminal in Antwerp
Deepsea services
Rail
Trucks
Barges
Temporary storage on the terminal
 High dwell times:
• Terminal not always used as a facilitator for synchronization between
transport modes
• Places for cheap storage of consignments
• So, could be result of deliberate actions of actors in supply chains
 Terminals as cheap buffers in supply chains ?
 Need for terminalization of supply chains
B. 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
7
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
C. Terminalization in a Supply Chain Context
Suppliers
DC
Hinterland
DC
Customers
Foreland
Bottleneck
Extended Gate
Buffer
Extended Distribution Center
DC Distribution center
Port regionalization and the creation
Inland containerized goods flow
of a Regional Load Center Network
Inland non-containerized goods flow
Maritime container flow
8
Terminalization and Supply Chain Costs
 Transportation costs
• No noticeable effects.
• Related to higher terminal costs.
 In-transit inventory costs
• Confers additional flexibility.
• Used as a buffer.
 Warehouse inventory costs
• Partially transferred to the terminal.
• Blended with in-transit inventory costs.
9
Suppliers
DC
DC
 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:
• Tends to be synchronized with terminal handling capacity.
10
Customers
Supply Chain Terminalization: Export Flows to the
Gateway
Suppliers
DC
DC
Customers
Supply Chain Terminalization: The Maritime
Segment
 Buffer-derived terminalization
• Intermediate facility (offshore hubs):
• Transshipment, interlining or relay.
• Low cost locations before entering high distribution costs areas.
11
Supply Chain Terminalization: Import Flows to the
Hinterland
Suppliers
DC
DC
2
3
 Bottleneck and buffer-derived terminalization
1. Port regionalization:
•
Regional load center network.
2. Extended gate:
•
Development of inland terminals.
3. Extended distribution center:
•
12
The terminal as a warehousing unit.
Customers
1
Inland Terminals; Different Settings, Different
Functions
Intermodal / Transmodal
Facility
Satellite Terminal
Port
Freight Distribution Cluster
Inland Terminals and Terminalization of Supply
Chains
Gateway Port
Inland corridor
Inland Terminal
Satellite Terminal
On call delivery
DC
Low dwell time
14
Low
High dwell time
Degree of Gateways Synchronization
High
Extended Distribution Center
Expected Profitability of Inland Terminals:
Volume and Service Area
Gateway Port
TEU Potential
High Profitability
Inland Terminal
High volume
potential and low
haul costs
(Ideal Case)
High haul costs
compensated by
high volume
20,000 TEU
10 km
Low volume
compensated by
low haul costs
Volume
15 km
Service Area
High
Low
15
Bad situation with
high haul costs.
Limited costumers
Service Area
60 km
Low Profitability
Conclusion: Main Dimensions of
Terminalization
Terminals are getting more embedded in supply chains
Scale
Short Distance
Long Distance
Extended Gate
Satellite terminals
Inland terminals with corridors
Extended Distribution
Center
High level of gateway
synchronization
High inland port synchronization
(Corridor dependent)
Mode
Rail / Barge
Road
Extended Gate
Intermodal or transmodal
Limited
Extended Distribution
Center
Multiple functions (direct delivery,
repositioning)
Merge in transit / Cross-docking
Actors
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Extended Gate
Extended Distribution
Center
Transport and terminal operators
Dominant (initiator)
Distribution centers
Limited participation
Facilitator
Dominant (initiator)