Post on 26-Feb-2016
description
The Asia Pacific Gateway and Corridor Initiative: Toronto Workshop, June 17-18 2010
Extending the Gateways: Logistic Zones in North American Freight Distribution
Jean-Paul Rodrigue
Associate Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA
What Drives Supply Chain Management?
Added Value Efficiency Control
World’s Major Gateway Systems and Hinterland Structure, 2006
39 Gateway Regions90% of the World’s Freight TransportPearl River Delta: 16.7%
Coastal concentrationLandbridge connections
Inland concentrationCoastal gateways
Coastal concentrationLow hinterland access
Logistics Zone
Extending the Gateways: Two Dimensions
Gateway
Logistics Zone
On-dock and near dock
Satellite terminal
A
A
BC
Logistics Zone
Corridor
B-C
Logistics Zone
Gateway / Port Regionalization (A)• Satellite terminals and logistics zones.• Maritime / land interface.Inland Port (B-C)• Corridor development.• Regional load centers.
The Complexities of Inland Logistics: The “Last Mile” in Freight Distribution
Gateway Inland Terminal
DistributionCenter
Capacity
Frequency
Corridor Customer
“Last Mile”
Segment
GLOBAL HINTERLAND REGIONAL LOCAL
Shipping Network
Massification Atomization
Logistics Zone
Logistics Zone
On-dock and near dock
Satellite terminalA
Logistics Zone
Corridor
B-C
Logistics Zone
Extending the Gateway Through Governance Changes
Landlord
Regulator
Operator
• Planning and management of port area.
• Provision of infrastructures.
• Planning framework.
• Enforcement of rules and regulations.
• Cargo handling.• Nautical services
(pilotage, towage, dredging).
Landlord
Regulator
Operator
Terminal Operator(s)
Cluster Governance
• Service Efficiency• Logistical Integration
• Infrastructure and Growth
Management• Terminal-City
Integration
Conventional Port Authority Expanded Port Authority
The North-American Container Port System and its Multi-Port Gateway Regions
1
2
6
5
4
3
7
Multi-port gateway regions1. San Pedro Bay2. Northeastern Seaboard3. Southwestern Seaboard4. Puget Sound5. Southern Florida 6. Gulf Coast7. Pacific Mexican Coast
Something Strange Happened on the Way to the Terminal…
Networks
TerminalsWarehousingOutdoor
StoragePort terminalsRail terminalsAirports
Energy
Roads / linesRights of way
Distribution centersCross-docking
Freight VillageTransportation Storage
1
2
2 Inventory in transit1 Inventory at terminal
Containerization Growth Factors: Which Opportunities are Left?
Derived / Organic (A)
Economic and income growth.Globalization (outsourcing and global sourcing).Fragmentation of production and consumption.
Substitution (B) Functional and geographical diffusion.New niches (commodities and cold chain)Capture of bulk and break-bulk markets.
Incidental (C) Trade imbalances.Repositioning of empty containers.
Induced (D) Transshipment (hub, relay and interlining).
A B C D
American Foreign Trade by Maritime Containers, 2008 (in TEUs): The Trade Fundamentals
Wal-MartTarget
Home DepotSears Holding
Dole FoodCostco Wholsale
Lowe'sLG Group
PhilipsChiquita
HeinekenIkea
Ashley FurnitureGeneral Electric
JardenSamsungRed Bull
NikeJC Penney
Whirlpool
0 200,000 400,000 600,000 800,000
Importers
America Chung NamWeyerhaeuser
CargillKoch Industries
International PaperDow Chemical
DupontPotential Industries
Procter & GambleMeadwestvaco
Cedarwood-YoungArcher Daniels Midland
BASFDelong
ExxonMobilJC Horizon
DenisonCGB Enterprises
Sims Metal ManagementNewport Chinternational
0 200,000 400,000 600,000 800,000
Exporters
Asymmetries between Import and Export Containerized Logistics
Many Customers (Importers)• Function of population density.• Geographical spread.• Incites transloading.• High priority.
Few Suppliers (Exporters)• Function of resource density.• Geographical concentration.• Lower priority.• Depends on repositioning
opportunities.
GatewayInland
Terminal
DistributionCenter
Customer
SupplierRepositioning
Distribution Network Configurations for Containerized Import Cargo
Type Supply ChainGateway-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 two gateways
Distribution based on tiered system Distribution based on local DCs
Optimal Location and Throughput by Number of Freight Distribution Centers
Functional Relations between Inland Terminals and their Hinterland
InlandTerminal
Logistics activities
Retailing and manufacturingactivities
I II III
Tier I Tier II Tier III
FLOWS & INTEGRATION
Logistics Pole
Freight Region
Added Value Activities Performed at an Extended Gateway
Activity FunctionsConsolidation / Deconsolidation
Inventory management practices.Cargo consolidated (or deconsolidated) into container loads (paletization).Attaining a batch size (group of containers) fitting a barge or a train shipment.Breaking down batches so that they can be picked up by trucks.
Transloading Change in to load unit (Maritime / Domestic).Consolidation, deconsolidation and transloading commonly mixed.
Postponement Opportunity to route freight according to last minute and last mile considerations (dwell time).Buffer within a supply chain.
Light transformations Forms of product and package transformations (packaging, labeling).Customization to national, cultural or linguistic market characteristics.
Inland Terminals as Foreign Trade Zones (FTZ)
Custom Clearance
Done inland instead of at the gateway port.Likely faster (less congestion).Consignment can stay for an unlimited amount of time in the FTZ.Consignee gets further advance notice that shipment is ready.
Duties Not paid until the consignment is released and moved out of the FTZ (storage).Deferred if goods moved to another FTZ.If transformation is performed in the FTZ, the duty class may change (Select the taxation regime).Not paid for damaged, defective or obsolete goods.
Settlement Vendors often not paid until consignments leave the facility for delivery (Delay settlement).Remove damaged or defective products from the settlement.
Savannah Logistics Cluster
NS Near Dock Intermodal Terminal
ContainerTerminals
Port Industrial Park
CrossroadsIndustrial Park
HomeDepot
Wal-Mart
TEC
North Point Real Estate Savannah RiverInternational Trade Park
IkeaTarget
Raritan Center, New Jersey
Port of New York (20km) ►
Raritan Center
Heller Industrial Park Port Raritan
BNSF Logistics Park, Chicago (Extended Gateway of LA / LB)
BNSF
Inte
rmod
al Y
ard
Distribution Centers
Wal-Mart
Mae
rsk
CaliforniaCartage
Chica
go (6
0km) ►
CenterPoint-KCS Intermodal Center, Kansas City
KCS
Inte
rmod
al Y
ard
Reta
il
Phase 1
Phase 2
Phase 3Phase 4
Phas
e 5
Kans
as C
ity (2
5 km
) ►
Rickenbacker Global Logistics Park, Columbus Ohio
NS Intermodal Terminal
Colu
mbu
s (1
5km
)►Rick
enback
er Inter
national A
irport
Intermodal Campus
Rail Campus
Air Cargo Campus
North Campus
Gateway Campus
Container Traffic at North American Ports, 1980-2009: This was supposed to be impossible…
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000MexicoUnited StatesCanada
Then, this must be lunacy…
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Container Traffic Handled by North American Ports, 1990-2008 and Projections up to 2015
Pacific CoastAtlantic CoastGulf of Mexico
Share of the Northeast Asia – U.S. East Coast Route by Option
1999 2000 2001 2002 2003 2004 2005 2006 20070%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
85.7% 82.8% 77.2% 71.8%64.6% 60.9% 58.1% 56.0% 55.0%
11.3% 15.1% 20.8%23.6% 33.8% 38.2% 40.1% 42.0% 43.0%
3.0% 2.1% 2.0% 4.6% 1.5% 0.9% 1.8% 2.0% 2.0%
Suez CanalPanama CanalIntermodal
Transit Times from Shanghai and North American Routing Options (in Days)
28
25
26
25
19
13
14
12
13
22
5
5
5 3
4
8
8
5
Vancouver
Seattle / Tacoma
Prince Rupert
Oakland
Los Angeles
Lazaro Cardenas
Panama
Houston
Savannah/Charleston
Norfolk
New YorkChicago
DallasAtlanta
TorontoLower 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
1- Regional Division of Distribution2- Functional, Managerial and Governance
Changes3- Potential paradigm shifts