1 / 34

Strategic Gateways and Trade Corridors: The Challenge of Shifting International Trade

Strategic Gateways and Trade Corridors: The Challenge of Shifting International Trade. (Prof) David Gillen YVR Professor of Transportation Policy & Management Director, Centre for Transportation Studies Sauder School of Business University of British Columbia, Vancouver, Canada

carr
Download Presentation

Strategic Gateways and Trade Corridors: The Challenge of Shifting International Trade

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Strategic Gateways and Trade Corridors: The Challenge of Shifting International Trade (Prof) David Gillen YVR Professor of Transportation Policy & Management Director, Centre for Transportation Studies Sauder School of Business University of British Columbia, Vancouver, Canada CMA Canada Supply Chain Management Speaker Series School of Business & Economics Wilfrid Laurier University, November 16, 2007

  2. Changes and Challenges • Amount and composition of trade • Bulk versus containers • Hubs versus ODs • Trade imbalance • Impacts on infrastructure efficiency • Full versus empty • Market concentration • Sea land interface • Economics of Gateways • Gateways & productivity and gateways as networks/alliances • Policy/management responses • The lens of Federal policy

  3. Amount and Composition of Trade

  4. World’s 10 Largest Exporters and Importers, 2005 Source; Jean Paul Rodrique Vancouver Gateway Conference 2007

  5. Pressures: Global Commerce is Expanding, Patterns are Shifting • Global marketplace integration is driving the distribution of economic activity, as well as the expansion of world trade • The emergence of new economic powers such as China and India is forcing all trading nations to adjust, or be left behind. • Imports from China to Canada grew almost 550%, from $4.6B to $29.5B between 1995 and 2005. • Partners and competitors are acting aggressively on the intersecting issues of trade, transport and security.

  6. Is It the Correct Target?

  7. Impacts on Infrastructure Efficiency

  8. TEU 12,500 Crew: 13

  9. Containers Handled by the Port of Los Angeles, 1995-2006 (in TEU) Source; Jean Paul Rodrique Vancouver Gateway Conference 2007

  10. Containerized Cargo Flows along Major Trade Routes, 1995-2006 (in millions of TEUs) Source; Jean Paul Rodrique Vancouver Gateway Conference 2007

  11. Maritime Freight Rates (USD per TEU), 1993-2006 Source; Jean Paul Rodrique Vancouver Gateway Conference 2007

  12. Largest American Importers of Asian Goods Through Maritime Container Transport, 2004 (in TEUs) Source; Jean Paul Rodrique Vancouver Gateway Conference 2007

  13. Logistics and the Acceleration of Freight • The velocity of freight • Shipment and transshipment. • No significant speed improvements in recent decades. • Intermodal operations; the most important element. • Logistical threshold: • Time based management of distribution becomes a possibility. • From push (supply based) to pull (demand based) logistics. Source; Jean Paul Rodrique Vancouver Gateway Conference 2007

  14. Mounting Capacity and Time Pressures in Global Freight Distribution • Time is the essence… • Surprising time underperformance: • Only 63% of transpacific container vessels arrived on time at their scheduled port calls. • 53% for transatlantic port calls. • The major factor behind delays is port congestion: • Multidimensional concept. • Physical docking capacity. • Transshipment capacity. • Storage capacity. • Inland capacity. • Reinforce the importance of the maritime / land interface.

  15. Is this the Correct View?

  16. Container Transport Costs from Inland China to US West Coast ($US per TEU) Source; Jean Paul Rodrique Vancouver Gateway Conference 2007

  17. The Economics of Gateways

  18. Economics of Gateways • Gateways are alliances • Alliances are vertical and horizontal • Gateways internalize externalities • Upstream and downstream agents recognize mutual benefit • provide platform for cooperation and competition • Gateways provide agglomeration effects • Gateways integrate infrastructure, service, information and human capital

  19. Economics of Gateways • Demand side forces favouring gateways • Accessibility/wide geographic scope/interconnectivity/intermodal access • Reliability/connecting capacity/Delivery speed • Allocating risk • Network externalities • Supply side forces • Reduce transactions cost –limit horizontal and vertical boundaries • Reduce logistics costs • Economics of scale, scope and density • Internalize externalities-alliances

  20. Gateways and productivity • Productivity drives real income and economic welfare • Profit = revenue – costs • Gateways and revenue • Increases ‘willingness to pay’ with value adding services • Reliability & consistent service (risk reduction) • Gateways and costs • Enabler like technology (not just another factor input) • Service accountability & transparency • Benchmark – measure & monitor • New practice • Invest in network

  21. Gateways are Systems • Gateways are a facilitator in the global supply chain • Gateways increase productivity by expanding markets, moving down the cost function and lowering costs, shifting down the cost function • Gateways increase productivity by internalizing externalities of upstream and downstream agents • Gateways increase productivity by allocating risk optimally

  22. Current Research Undertakings • Question: what institutional/policy design complements export performance? • Domestic market structure and export performance • (1) firm size and cost function, (2) product and process innovation • Examine multi-market contact in a Cournot game • Question: how does gateway vertical integration between infrastructure providers and carriers differ in performance from vertical contracts? – our interest is in efficient gateway (congestion)pricing • Question: How do we measure gateway performance? • TFP= Aggregate Index of Hedonically-Adjusted Gateway Output • Aggregate Index of Nodal Infrastructure Inputs plus Strategic Investments and Initiatives • 4 effects: (1) exogenous DD effect, (2) factor price effect, (3) public K effect, (4) disembodied (i.e. factor neutral) technical change effect

  23. Gateway Performance

  24. Policy and Management Responses

  25. Federal Response: • International Commerce Strategy • align major transportation systems • Logistics is about efficiency, service quality and capacity to deliver • Competition is in supply chains not individual components – therefore partnerships

  26. Federal Response: • Volumes and Values of National Significance • Strategy should have national not regional focus • Strategy should focus on volumes and values which are most important for Canada • Does this focus on picking winners? • Is this a ‘field of dreams’?

  27. Federal Response: • Future patterns in global trade & transportation • Emerging patterns place new demands on transportation infrastructure • performance linkage between : • infrastructure and user capital (ships) • Links and nodes (distribution networks) • Future patterns are not exogenous – they can be managed • Information technology shapes patterns

  28. Federal Response • Potential scope of capacity and policy measures • Systems interconnection versus integration • Across modes • Investment and policy • Public versus private • Jurisdictions and governance • How do we choose – based on what performance metric? • Who receives the rents?

  29. Thank you david.gillen@sauder.ubc.ca

  30. Lens of National Policy

  31. Strategies to improve gateway logistics: The shippers’ responses • The shippers accept higher transport costs to achieve greater reliability of service. • Retail shippers start shipping earlier to reduce the peak. • Shippers open other routes, e.g., accelerate development of East Coast routes for South Asian trade. • Shippers add flexibility to West Coast routings through the location of distribution facilities and availability of alternate port routings. • A better but more competitive gateway environment.

  32. Strategies to improve gateway logistics: The strategies of service providers • Objective – to make the [Vancouver] Gateway the best place for gateway activity [on the West Coast of North America]. Not the biggest, but the best! • To achieve this a multi-pronged program needs to be continued. • Overview of the program: • Pricing should play a greater role in guiding behaviour. • Leadership is essential to achieve change. • Accountability is important to relationships. • Communication is fundamental to planning and execution. • Enterprise must be shown to adjust to the future, which is now! Source: Trevor Heaver (Gateway Conference Vancouver 2007)

More Related