Maritime Infrastructure Engineering and Management

Program, Rutgers University, October 2006

Port Hinterlands and

Maritime Logistics
Jean-Paul Rodrigue

Associate Professor, Dept. of Economics &

Geography, Hofstra University, New York,
USA
Theres no business like flow business
Email: ecojpr@hofstra.edu
Paper available at:
http://people.hofstra.edu/faculty/Jean-paul_Rodrigue

Port Foreland and Hinterland: The

Way the Maritime / Land Interface
Used to Be

Foreland

Hinterland

Main hinterland

Competition margin

Continuous and Discontinuous

Hinterlands: An Emerging Paradigm

Port A

Continuous hinterland Port A

Discontinuous
hinterland Port A

'Island' formation
Discontinuous
hinterland Port B

Port B

Continuous hinterland
Port B

Main hinterland
Competition margin
Maritime load centre
Inland terminal

Platform Corporation: An
Emerging Global Production
Framework
Distribution
R&D

Marketing / Retail

Platform

Manufacturers

Factors Supporting Platform

Corporations
Free trade
Mobile factors of production (land, labor and capital).
Limited political impediments.

Telecommunications
Decentralization of processes.
Level of control over supply chain.

Competition
Selection of value added activities to be subcontracted.
(over) bidding keeping costs low.

Transportation
Move goods within the supply chain controlled by the platform
corporation.

The Emergence of Global Logistics

Flows

Network

Bulk shipping

Stage

The Logistical Node

Parts and raw

materials

Transport Chain

Supply Chain

High volumes
Low frequency

Unit shipping
Manufacturing
and assembly

Average volumes
High frequency

LTL shipping

Distribution

Low volumes
High frequency

GPN
Market

Market

Fast growth of international trade

with the full realization of
comparative advantages.
Geographical and functional
integration of production,
distribution and consumption.
Commodity / Supply Chains.
Transportation integrated in the
production / retailing process.
Global Production Networks
(GPN).
Nodes as logistical poles
where value added activities
are performed.
Entirely new nodal locations.

Stages in Port Development

Stage 1

Stage 2

Stage 3

Stage 4

Period

Up to the mid 19th

century

Mid 19th century to

mid 20th century

Late 20th century

Late 20th century,

early 21st century

Development
rationale

Rise in trade

Industrialization

Globalization

Logistics

Main port function

Cargo handling
Storage
Trade

Cargo handling
Storage
Trade
Industrial
manufacturing

Cargo handling
Storage
Trade
Industrial
manufacturing
Container distribution

Cargo handling
Storage
Trade
Industrial
manufacturing
Container distribution
Logistics control

Dominant cargo

General cargo

Bulk cargo

Containers

Containers and
information flows
(supply chain)

Spatial scale

Port city

Port area

Port region

Port network

Role of port
authority

Nautical services

Nautical services
Land and
infrastructure

Nautical services
Land and
infrastructure
Port marketing

Nautical services
Land and
infrastructure
Port marketing
Network management

The Spatial Development of a Port

System
Phase 2: Penetration and hinterland capture

Phase 1: Scattered ports

LAND

SEA
Phase 3: Interconnection & concentration

Phase 4: Centralization

Phase 5: Decentralization and insertion of offshore hub

Phase 6: Regionalization

Load center

Interior centre

Freight corridor
Deepsea liner services
Shortsea/feeder services

Regional load centre network

A New Geography of Port

Hinterlands: The Three Hinterlands
of Port Regionalization
Macro-economic

Physical

Logistical

Concept

Transport demand

Transport supply

Flows

Elements

Logistical sites
Transport links and
(production and
terminals
consumption) as part
of GPNs

Mode, Timing,
punctuality and
frequency of services

Attributes

Interest rates,
exchange rates,
prices, savings,
production, debt

Capacity, corridors,
terminals, Physical
assets (fixed and
mobile)

Added value, tonskm, TEU, Value of

time, ICT

Challenge

International division
of production and
consumption

Additional capacity
(modal and
intermodal)

Supply chain
management

Gateways and the New Port

Hinterlands: The Regionalized
Port
Interest rates, exchange rates, prices, savings,
production, debt

Consumption
Production

Terminal / DC
Link (mode)

Trade

Balanced flows
Imbalanced flows

Gateways and Hinterland Effect

Efficient Inland Freight Distribution

Inefficient Inland Freight Distribution

Traffic at Major North American Container

Ports, 2003
St. John's
Vancouver
Fraser
Tacoma
Everett
Seattle

Montreal

Portland

Portland(ME)

Minneapolis

Toronto

Boston
Albany
New York/New Jersey

Chicago

Salt Lake City

Oakland

Halifax
Saint John

Baltimore
Philadelphia
Wilmington

San Francisco

Kansas CIty

Richmond(VA)

TEU (2003)
Less than 100,000
100,000 to 300,000

Hueneme

Long Beach

Hampton Roads
Wilmington(NC)
Charleston
Savannah

San Diego
Los Angeles Ensenada

300,000 to 1 million
1 million to 2 million

El Paso

Gulfport Mobile
New Orleans
Freeport Lake Charles
Houston

Fernandina
Jacksonville

More than 2 million

Canaveral
Tampa
Miami
Manatee
Palm Beach

Port Everglades
San Juan

Mazatlan
Tampico
Altamira
Manzanillo

Veracruz

Lazaro Cardenas
Salina Cruz

Progreso Puerto Morelos

Ponce

Major US Modal Gateways, 2004

Air Gateways

Exports

Land Gateways

Imports

Port of Blaine

$68 Billion

$64 Billion

Seattle-Tacoma International
Port of Seattle

Exports Port Gateways

Exports

Imports

Imports
$81 Billion

Port of Sweetgrass
Port of Pembina

Port of Tacoma
Port of Champlain-Rouses Pt.

Port of Portland

Port of Alexandria Bay

Port of Huron
Chicago

Port of Buffalo-Niagara Falls Boston Logan Airport

JFK International Airport

Cleveland

Port of Detroit

Port of New York

San Francisco International Airpor

Port of Philadelphia

Port of Oakland

Port of Baltimore

Port of Norfolk Harbor

Los Angeles International Airport

Atlanta

Port of Los AngelesPort of Calexico-East

Port of Otay Mesa Station
Port of Nogales

Port of El Paso

Dallas-Fort Worth
Port of Charleston

Port of Long Beach

New Orleans

Port of Laredo

Port of Savannah
Port of Morgan City

Port of Jacksonville

Port of Beaumont Port of New Orleans

Port of Houston
Miami International Airport,

Port of Corpus Christi

Port of Brownsville-Cameron
Port of Hidalgo

Port of Port EvergladesPort of Miami

The Three Main Gateways of North

America

Gateway
System

Gateways

Southern
California

Port of Los Angeles, Port of

18.3%
Long Beach, Los Angeles
International Airport, Otay Mesa
(Port of Entry)

$255.9

$77.8

New York / JFK International Airport, Port of 13.1%

New Jersey New York / New Jersey

$163.0

$75.8

Detroit

$97.9

$81.8

Detroit (Port of Entry), Huron

(Port of Entry)

Total
Imports / Exports
share (%) ($ billions) 2004

9.8%

Major Road Traffic Bottlenecks

Un-choking a Gateway: The Alameda

Rail Corridor
Alameda
20 mile long rail cargo expressway:
Linking the ports of Long Beach and Los Angeles to the transcontinental
rail lines near Downtown Los Angeles (about 45 minutes).
Jointly used by BNSF (Burlington Northern Santa Fe; 40%) and Union
Pacific (60%).
Half of it underground (10 miles).

About 30% of the port transshipment traffic handled through

Alameda.
Unique example of an intermodal rail corridor; financially sound
to replicate?

Alameda Corridor

10

CBD

10

10

101

10

710

10

U
V

72

710

UP & BNSF
Railyards

Alameda Corridor

UP & BNSF Railyards

Ground Level

Thruport

Trench (30 feet)

U
V
42

105 105

Mid-Corridor
Trench (10 miles)

605

U
V
19

710

110

U
V
91

405

Port of
Los Angeles

Port of
Long Beach

U
V
1

U
V
1

710

U
V

U
VU
V
22

22

47

Port of Long Beach

Port of Los Angeles

Port Cluster
0

Miles
8

Un-choking a Gateway: The Alameda

Rail Corridor
Challenges for the Alameda corridor
Did not perform as expected; significant competition from
trucking.
Significant lag between planning (1980s) and implementation
(2002).
Local bound freight transport; 50 to 65%.
Relative transport costs:
Improvements in road transport costs.

Relocation of the bottleneck down the chain.

High intermodal costs:
Short distance economics of rail transshipment unproven.

Trucking dependant local FDCs.

Trains Running Through the

Alameda Corridor and Containers
Handled by the San Pedro Port
Cluster

The Logistical Hinterland

Causes of the empty containers problem
Global trade imbalances:
A worsening of these imbalances in the US.
Imbalances above 8.6 million TEU per year.
150,000 TEU per week.

Repositioning costs:
From surplus to deficit areas.
East Coast to Asia: about $1,200 per TEU (2004).

Manufacturing and leasing costs:

Comparative differences.
Used to be about $1,300 per TEU (2004).
Recent increase to about $2,000 per TEU.

Containerized Cargo Flows along

Major Trade Routes, 2004
10.2

Imports (Million TEUs)

Europe

Exports (Million TEUs)

1.8
(-

Million TEUs
)
7%
(+8
)
8.4
5%
(+5
5.6

18%
3.0
)
(+3
%)

8.6

14.8

USA
6.1

Growth (2000-2004)

9.9
11.8 (+110%)
4.3 (+30%)

Asia
20.2

Container Repositioning Scales

Repositioning Costs
High imbalance

Container manufacturing cost

ca
o
L

Reshuffling

Re

a
n
o
gi

Storage depots

er
t
In

na
o
i
at

Low imbalance

Gateways as reverse
logistics centers

Repositioning Distance (TEU KM)

Containers Handled by the Port of

Los Angeles, 1995-2005 (in TEU)

Stacked Empties, Yantian Container

Port, Shenzhen, China

Integrated Transport Systems:

Intermodal and Transmodal
Operations
Intermodal operations
Transmodal operations

Port container yard

Intermodal Terminal

MARITIME

On-dock rail

RAIL

Transloading

ROAD

DCs / CD

Thruport

Ship-to-ship

Integrated Freight Transport System

Intramodal (Trans-modal)
Transportation
Why trans-modal shipments take place?

Market fragmentation.
Supply chain fragmentation.
Ownership fragmentation.
Requirements for a high throughput trans-modal facility

Thruport concept

Coined by an intermodal equipment manufacturer (Mi-Jack).

Seamless transfer of freight.
Reduce handling and the number of container movements.
Analogy with air transport hubs:
Consolidation and redistribution.
Passengers reposition themselves.

Rail Transmodal Operations: The

Thruport
Market fragmentation
Mainly retail / consumption related.
Reconcile the high volume
requirements of markets with the
time sensitive requirements of
distribution.

Thruport

Gateway

Ownership fragmentation
D
C

Rail companies have their facilities

and customers.
They have their own markets along
the segments they control.
Interchange is the major problem.
The distribution potential of each
operator is expanded.
Network alliances.

Minneapolis / St. Paul

12.4 M TEU
Chicago
Kansas City

St. Louis

Memphis
Dallas / Fort Worth

Inter-Metropolitan Rail Corridors

Challenges and opportunities
Road congestion:
Increase costs and lower reliability.
Improve the distance advantages of rail (passengers and freight).

Circulation bottlenecks:
Road access to many terminals impaired.
Aging infrastructure unable to accommodate modern operations (e.g.
double-stacking).

Intermodal capacity:
COFC capacity at ports and inland.

Modal shift:
Separate freight and passenger traffic; modal complementarity.

Freight diversion:
Transloading at strategic locations.

Boston Washington Corridor:

Volume to Capacity Ratio

Rail Ownership, Intermodal

Facilities and Freight Clusters

Port Inland Distribution Network

and Freight Clusters

Containers Handled by the Port of

Albany PIDN, April 2003, January
2006

Number of Containers Handled,

Northbound and Southbound
Routes, Port of Albany, 2005

Expressrail Lifts, 1991-2005

Conclusion
Gateways and port hinterlands
Global production networks
Functional and geographical integration.
Transportation moving from a derived to an integrated demand.

Imbalanced freight flows (gateways dilemma):

Disequilibrium in the division of labor, trade, production and consumption.
Short/medium term: additional pressures to manage the disequilibrium
(e.g. empties).
Long term: rebalancing the flows and the hinterlands.

Regionalization of hinterlands (gateways response):

Gateways adapting to the freight flows reality.
Attempt at re-balancing by offering a wider hinterland range.
Requires multimodal freight distribution strategies.

The Future of the Maritime / Land

Interface?