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Extending the Gateways: Logistic Zones in North American Freight Distribution

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.

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Extending the Gateways: Logistic Zones in North American Freight Distribution

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  1. 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

  2. What Drives Supply Chain Management? Added Value Efficiency Control

  3. World’s Major Gateway Systems and Hinterland Structure, 2006 39 Gateway Regions 90% of the World’s Freight Transport Pearl River Delta: 16.7% Inland concentration Coastal gateways Coastal concentration Landbridge connections Coastal concentration Low hinterland access

  4. Extending the Gateways: Two Dimensions • Gateway / Port Regionalization (A) • Satellite terminals and logistics zones. • Maritime / land interface. • Inland Port (B-C) • Corridor development. • Regional load centers. Gateway A B C On-dock and near dock Logistics Zone Logistics Zone Corridor Logistics Zone Logistics Zone A Satellite terminal B-C

  5. The Complexities of Inland Logistics: The “Last Mile” in Freight Distribution Massification Atomization Frequency Capacity REGIONAL LOCAL HINTERLAND GLOBAL Shipping Network Segment Corridor Customer “Last Mile” Inland Terminal Distribution Center Gateway On-dock and near dock Logistics Zone Logistics Zone Corridor Logistics Zone Logistics Zone A Satellite terminal B-C

  6. Extending the Gateway Through Governance Changes Conventional Port Authority Expanded Port Authority • Planning and management of port area. • Provision of infrastructures. Landlord Landlord Cluster Governance • Service Efficiency • Logistical Integration • Infrastructure and Growth Management • Terminal-City Integration Regulator Regulator • Planning framework. • Enforcement of rules and regulations. Operator Operator • Cargo handling. • Nautical services (pilotage, towage, dredging). Terminal Operator(s)

  7. The North-American Container Port System and its Multi-Port Gateway Regions 4 2 1 3 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 6 5 7

  8. Something Strange Happened on the Way to the Terminal… Freight Village Transportation Storage Terminals 1 OutdoorStorage Warehousing Networks 2 Distribution centers Cross-docking Port terminals Rail terminals Airports Roads / lines Rights of way Energy Inventory at terminal Inventory in transit 1 2

  9. Containerization Growth Factors: Which Opportunities are Left? A B C D

  10. American Foreign Trade by Maritime Containers, 2008 (in TEUs): The Trade Fundamentals

  11. Asymmetries between Import and Export Containerized Logistics Customer Distribution Center • Many Customers (Importers) • Function of population density. • Geographical spread. • Incites transloading. • High priority. Inland Terminal Gateway Repositioning • Few Suppliers (Exporters) • Function of resource density. • Geographical concentration. • Lower priority. • Depends on repositioning opportunities. Supplier

  12. Distribution Network Configurations for Containerized Import Cargo

  13. Distribution based on two gateways Distribution based on RDCs Distribution based on local DCs Distribution based on tiered system

  14. Optimal Location and Throughput by Number of Freight Distribution Centers

  15. Functional Relations between Inland Terminals and their Hinterland Freight Region Logistics Pole FLOWS & INTEGRATION InlandTerminal I II III Logistics activities Retailing and manufacturingactivities Tier II Tier I Tier III

  16. Added Value Activities Performed at an Extended Gateway

  17. Inland Terminals as Foreign Trade Zones (FTZ)

  18. Savannah Logistics Cluster North Point Real Estate Savannah River International Trade Park Ikea Target TEC Home Depot Wal-Mart Crossroads Industrial Park NS Near Dock Intermodal Terminal Port Industrial Park Container Terminals

  19. Raritan Center, New Jersey Port of New York (20km) ► Raritan Center Heller Industrial Park Port Raritan

  20. BNSF Logistics Park, Chicago (Extended Gateway of LA / LB) Distribution Centers Wal-Mart CaliforniaCartage Chicago (60km) ► BNSF Intermodal Yard Maersk

  21. CenterPoint-KCS Intermodal Center, Kansas City Phase 1 Kansas City (25 km) ► Phase 2 Retail Phase 4 Phase 3 KCS Intermodal Yard Phase 5

  22. Rickenbacker Global Logistics Park, Columbus Ohio Gateway Campus Columbus (15km)► North Campus Rickenbacker International Airport Rail Campus Air Cargo Campus Intermodal Campus NS Intermodal Terminal

  23. Container Traffic at North American Ports, 1980-2009: This was supposed to be impossible…

  24. Then, this must be lunacy…

  25. Share of the Northeast Asia – U.S. East Coast Route by Option

  26. Transit Times from Shanghai and North American Routing Options (in Days) Prince Rupert 12 Vancouver 4 13 8 5 Seattle / Tacoma 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. Toronto Oakland 5 3 26 Chicago New York 13 Los Angeles 25 Norfolk Atlanta 5 14 Dallas Savannah/Charleston 5 25 28 Houston 8 19 Lazaro Cardenas 22 Panama

  27. Extending the Gateways 1- Regional Division of Distribution 2- Functional, Managerial and Governance Changes 3- Potential paradigm shifts

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