Dryport Conference:
Intermodal Strategies for Integrating Ports &
Hinterlands, Edinburgh, Oct 21-22 2010
Inland Ports and Freight
Regionalization in North
America
Jean-Paul Rodrigue
Associate Professor, Dept. of Global Studies &
Geography, Hofstra University, New York, USA
What Drives Supply Chain Management? Control
Freaks…
Offshoring
Costs / time /
reliability
Internalize
efficiency
North American Intermodal Transportation:
Emerging Paradoxes
Geographical and functional diffusion
of containerization.
Massive investments.
Rationalisation (corridors and sites).
New standards, practices and
technologies.
Increasing returns.
Incremental changes.
Decreasing returns.
Consolidation (maritime, rail and
trucking). Emergence of large
operators.
PPP. Supply chain control. Addedvalue-capture.
The Insertion of Inland Ports in North America: Basic
Requirements
Rail Corridor to the Gateway
Intermodal Rail Terminal
Logistics Activities
Northwest Ohio Intermodal Terminal, CSX 2011; An
Inland “Port”
The Complexities of Inland Logistics: The “Last
Mile” in Freight Distribution
Massification
Atomization
Frequency
Capacity
Shipping Network
1
Gateway
1
REGIONAL LOCAL
HINTERLAND
GLOBAL
Inventory in transit
Corridor
2
Segment
Inland
Terminal
2
Distribution
Center
Customer
“Last Mile”
Inventory at terminal
Functional Relations between Inland Terminals and
their Hinterland
Freight Region
Logistics Pole
FLOWS & INTEGRATION
Inland
Terminal
I
II
Logistics activities
Retailing and manufacturing
activities
III
American Foreign Trade by Maritime Containers,
2009 (in TEUs)
Importers
Whirlpool
Nike
Red Bull
General Electric
Jarden
JC Penney
Samsung
Ikea Intl.
Ashley Furniture
Chiquita
Heineken
Philips
LG Group
Costco Wholsale
Lowe's
Sears Holding
Dole Food
Home Depot
Target
Wal-Mart
Exporters
Cellmark Group
Genesis Resource…
Meadwestvaco
Sims Metal Management
Delong
Shintech
Cedarwood-Young
ExxonMobil
JC Horizon
Dupont
Procter & Gamble
Denison Intl.
Potential Industries
Cargill
Dow Chemical
Newport Ch Intl
Weyerhaeuser
International Paper
Koch Industries
America Chung Nam
0
200,000 400,000 600,000 800,000
0
200,000400,000600,000800,000
Asymmetries between Import and Export
Containerized Logistics
Gateway
Inland
Terminal
Distribution Customer
Center
Import-Based
Many Customers
•Function of population density.
•Geographical spread.
•Incites transloading.
•High priority (revenue).
Repositioning
Supplier
Export-Based
Few Suppliers
•Function of resource density.
•Geographical concentration.
•Lower priority.
•Depends on repositioning
opportunities.
Distribution Network Configurations for
Containerized Import Cargo
Type
Supply Chain
Gateway-based
Few mass market goods (economies of scale in distribution).
Few very specialized goods (economies of scale in
warehousing).
Little if any transformations.
Transloading.
Tiered-based
Mix of retail goods coming through a few gateways.
Some customization.
Large suppliers and large retailers (Big Box).
Transloading, Postponement and Cross-docking.
Regional distribution
centers
Complex set of goods coming from numerous suppliers (e.g.
automotive parts).
Regional variation of the nature and extent of demand.
Local distribution centers Time sensitive bulky cargo (e.g. perishables).
Low lead times.
City logistics.
Distribution based on RDCs
Distribution based on tiered system
Distribution based on two gateways
Distribution based on local DCs
Optimal Location and Throughput by Number of
Freight Distribution Centers
Intermodal Terminals and Recent Co-Located
Logistic Zones Projects
Every rail operator involved.
Partnership with a major real estate
developer.
Main Advantages of Co-location
Factor
Advantages
Real estate
Lower land acquisition costs. Higher acquisition capital. Joint
land use planning.
Specialization
Rail company; terminal development and operations.
Real estate promoter; logistic zone development and
management.
Cargo interdependency
Respective customers. Joint marketing.
Drayage
Priority gate access. Shorter distances. More delivery trips.
Higher reliability.
Asset utilization
Better usage level of containers and chassis. Chassis pools.
Empty container depots.
Information
technologies
Integration of terminal management systems with inventory
management systems.
The North-American Container Port System and its
Multi-Port Gateway Regions
4
BNSF Logistics Park
2
1
Rickenbacker Global
Logistics Park
CenterPoint-KCS
Intermodal Center
3
6
5
7
Multi-port gateway regions
1. San Pedro Bay
2. Northeastern Seaboard
3. Southwestern Seaboard
4. Puget Sound
5. Southern Florida
6. Gulf Coast
7. Pacific Mexican Coast
BNSF Logistics Park, Chicago (Extended Gateway of
LA / LB)
Distribution Centers
BNSF Intermodal Yard
Maersk
Wal-Mart
California
Cartage
CenterPoint-KCS Intermodal Center, Kansas City
(Extended Gateway of Lazaro Cardenas)
Phase 1
Phase 2
Phase 4
Phase 3
Columbus (15km)►
Rickenbacker Global Logistics Park, Columbus Ohio
(Extended Gateway of Hampton Roads)
Gateway Campus
North Campus
Rail Campus
Air Cargo Campus
Intermodal Campus
NS Intermodal Terminal
Share of the Northeast Asia – U.S. East Coast Route
by Option
100%
90%
3.0%
2.1%
11.3% 15.1%
2.0%
20.8%
80%
4.6%
1.5%
0.9%
1.8%
2.0%
2.0%
23.6% 33.8%
38.2% 40.1%
42.0% 43.0%
70%
60%
Suez Canal
Panama Canal
Intermodal
50%
40%
30%
85.7% 82.8%
77.2%
71.8%
64.6% 60.9%
58.1% 56.0% 55.0%
20%
10%
0%
1999 2000 2001 2002 2003 2004 2005 2006 2007
Transit Times from Shanghai and North American
Routing Options (in Days)
Prince Rupert
12
Vancouver
4
13
8
5
Seattle / Tacoma
Toronto
Oakland
13
5
Chicago
3
26 New York
Los Angeles
25 Norfolk
Atlanta
5
14
Dallas
5
Savannah/Charleston
25
28 Houston
8
19
Lazaro Cardenas
22 Panama
Lower aggregate demand.
The “curse” of economies of scale.
Response from West Coast ports.
Response from railways (East vs.
West).
New gateways (Canada: CN, Mexico:
KCS).
Response from terminal operators.
Response from Caribbean
transshipment hubs.
Costs (fuel prices and Panama Canal
toll rates).
Competition from Suez and the
Mediterranean.
Regionalization of production.
Extending the Gateways and Inland Ports
1- Functional Integration of Supply Chains
(Gateway + Corridor + Inland Port)
2- Regional Division of Distribution
(Asymmetries + Co-location as a filter)
3- Challenges
(Competing gateways + Corridors)