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Inland Ports: Perspectives for Western Canada

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Title: Inland Ports: Perspectives for Western Canada Author: Dr. Jean-Paul Rodrigue Keywords: Intermodal Transportation, Containerization, Freight, Inland Ports, Rail ... – PowerPoint PPT presentation

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Title: Inland Ports: Perspectives for Western Canada


1
Inland Ports Perspectives for Western Canada
  • Jean-Paul Rodrigue
  • Associate Professor, Dept. of Economics
    Geography, Hofstra University, New York, USA
  • Van Horne Researcher in Transportation and
    Logistics, University of Calgary, Alberta, Canada

2
Global Supply Chains, Global Connections
?
Global Freight Distribution Commodity Chains as
Agents of Added Value Terminals and the
Continuity of Supply Chains
Container yard, Port of Yantian, China
3
Traffic at the 50 Largest Container Ports, 2005
4
Commodity Chains Where Value Comes From?
High
RD
Globalization
Sales / Service
Marketing
Branding
Added value
Distribution
Design
Concept
Manufacturing
Logistics
Low
Commodity chain
5
Terminals and Supply Chains Insuring a Continuity
Inland Terminal
Offshore Hub
Gateway
Gateway
Suppliers
DC
DC
Customers
Last mile
First mile
Bottleneck
Buffer
Distribution center
DC
Inland containerized goods flow
Inland non-containerized goods flow
Maritime container flow
6
Composition Pallets waiting to be loaded in a
container (APL DC - Shenzhen, China)
7
Interchange Post-Panamax Containership (Le Havre)
8
Interchange UPS Willow Springs Distribution
Center (Chicago)
9
Decomposition Unloading Floor Loaded
Containers and Palletizing Shipments (Antwerp)
10
Transport Terminals and Inland Ports
?
Freight Terminals The Setting of Inland
Ports Free Trade Zones
Translisft crane, NS Rutherford yard, PA
11
Freight Transport Terminals Operations and Added
Value
Core (Operations) Infrastructure Modal access (dock, siding, road), unloading areas
Core (Operations) Equipment Intermodal lifting equipment, storing equipment
Core (Operations) Storage Yard for empty and loaded containers
Core (Operations) Management Administration, maintenance, access (gates), information systems
Ancillary (Added Value) Trade Facilitation Free trade zone, logistical services
Ancillary (Added Value) Distribution centers Cross-docking, warehousing, light manufacturing, temperature controlled facilities (cold chain)
Ancillary (Added Value) Storage depot Container depot, bulk storage
Ancillary (Added Value) Container services Washing, preparation, repair
12
Inland Terminals, Different Settings, Different
Functions
Intermodal / Transmodal Facility
Satellite Terminal
Port
Freight Distribution Cluster
13
Profitability of Inland Terminals Balancing
Volume and Service Area
Gateway Port
TEU Potential
High Profitability
High volume potential and low haul costs (Ideal
Case)
High haul costs compensated by high volume
Inland Terminal
20,000 TEU
10 km
Bad situation with high haul costs. Limited
costumers
Low volume compensated by low haul costs
Inland corridor
Volume
15 km
Service Area
Low Profitability
High
60 km
Low
Service Area
14
Inland Terminal Life Cycle
Traffic
Subsidies / Investments
Planning
Maturity
Decline
Growth
Setting
Profit
Concept
Operationsbegin
Stage 1
Stage 2
Stage 3
Stage 4
Stage 5
15
Inland Ports Different Stages, Different Concerns
Phase Characteristics
Planning Relevance and viability studies. Local support. Attraction of users and investment commitments. High risk and subsidy level.
Setting Construction of terminal and distribution facilities. First users (some can be transitional).
Growth Realization of market potential. Growth of traffic. Capture of additional users. Clustering effect and generation of added value.
Maturity Traffic stabilization. Available space filled and/or few new users. Non-commercial activities (housing). Revenue generation optimal.
Decline Change in market conditions. Departure of users. Reemergence of subsidies.
16
Free Trade Zones Setting The Rules
Infrastructures High level of infrastructure, such as land, transport, office space, utilities, logistics services, business services and other facilities.
Regulations Streamlined to improve efficiency, including custom services, labor regulation and permits.
Location High accessibility location, often close to major terminal facilities such as a port, inland terminal or an airport. Location often away from conventional industry.
Trade-oriented Activities operating within the zone produce mainly or exclusively for foreign markets. Alternatively, activities distributing imported goods.
Incentives Low cost land, infrastructures, tax and duty exemptions or various subsidies.
17
Free Trade Zones Bending the Rules
Custom Clearance Done inland instead of at the gateway port. Likely faster. Receiver gets further advance notice.
Duties Not paid until the consignment is released and moved out of the FTZ. If transformation is performed in the FTZ, the duty class may change. Select the taxation regime.
Settlement If combined with Warehousing. Vendors often not paid until the freight leaves the terminal for delivery.
18
North American Freight Transportation Gateways
and Corridors
?
Fitting in the Global Freight Picture Transpacific
Connections The Hinterland Problem
Trimodal Container Terminal, Willebroek, Belgium
19
Transportation in North America Then and Now
Then Now
Fast growth and diffusion of containerization Maturity and ubiquity
Excess capacity Running at capacity. Search for alternatives.
New standards and technology (Containerization, unit trains, double stacking, 53 footers) Established practices. Diminishing returns.
Segmented transportation ownership and integration Consolidation (Maritime, trucking and rail industries). Emergence of large operators.
Deregulation Governance
20
Two Major Transpacific Pendulum Routes Serviced
by OOCL, 2006 (The Wal-Mart Express)
21
Balance of Containerized Cargo Flows along Major
Trade Routes, 1995-2006 (in millions of TEUs)
22
Container Traffic at Major Transpacific Container
Ports Mirror Images?
23
The Prince Rupert Equation
Prince Rupert
  • Increase in fuel prices
  • Could advantage Prince Rupert.
  • Fuel (bunker oil) account for 40 of operating
    costs for maritime shipping.
  • Forces ships to slow down (10 speed drop linked
    with 25 reduction in fuel use).
  • Transpacific crossing times become longer (1 or 2
    days).
  • Closer gateways thus become more attractive for
    shipping companies.

24
Gateways and the Hinterland Effect
Pacific Asia
North American West Coast
Efficient Inland Freight Distribution
Inefficient Inland Freight Distribution
25
Main North American Trade Corridors and
Metropolitan Freight Centers
26
(No Transcript)
27
Perspectives for Western Canada
?
Inland Ports Hype or Potential? Containerization
of Commodities
Chassis waiting to be picked, Corwith Rail Yard,
Chicago
28
A Favorable Environment for Inland Ports
Transpacific Trade Strong growth (China effect) Containerization of supply chains. Long distance hinterland transportation.
Gateway Congestion Limited possibility for terminal expansion. Higher port charges and lower dwell times. Problematic local and terminal gate access.
Trade Imbalances Imbalanced shipping rates. Load centers for empties on backhauls to ports.
Regulatory Framework Environmental constraints (Nimbyism). Labor issues. Political support (APGCI).
29
The Pacific Northwest Two Main Corridors, but
How Many Inland Ports?
30
Containers Handled by the Port of Vancouver,
1997-2006 (in TEU)
31
The Potential of Containerization of Commodities
?
Bulk Transport
Container Transport
  • Economies of scale.
  • Low utilization levels (at most 50 due to empty
    backhauls).
  • Delays for the assembly of loads.
  • Flow concept lower transshipment costs.
  • Its own warehouse unit.
  • Faster distribution (extending the realm of
    perishables).
  • Leveling the playing field.
  • Handle variety requirements.

Economics
  • Imbalanced container shipping rates.
  • Rise in commodity prices.
  • Rise in bulk freight rates.

32
Maritime Freight Rates (Nominal USD per TEU),
1993-2007
33
Each System has its own Advantages
Bulk Containerized
Driving force Cost / Volume Time / Flexibility (3 times faster)
Mode of shipment Large output Small shipments
Flows Specialized Mixed
Terminals Dedicated General Container
Markets Mass Niche (spot)
34
and Will Likely See the Emergence of a
Complementarity
Bulk Commodity Chain
Supplier
Customer
Port
Point-to-Point
Consolidationcenter
Complementarity
Container port
Intermodal terminal
Pendulum Services
Containerized Commodity Chain
35
Commodities are more Containerized than Expected
36
Several Established Containerized Commodity
Chains in Western Canada
37
Challenges for the Containerization of Commodities
Challenge
Container preparation Pre-use cleaning (avoid contamination). Post-use cleaning. Dedicated containers?
Container loading, unloading and transloading Bulks difficult to load horizontally. Vertical loading / unloading (equipment). Transloading issues. Source loading (integrity).
Weight Limitations to about 30 tons (40 footer). 20 footer the preferable load unit (26-28 tons).
Weight distribution Containership load (10-14 tons per TEU). Trade imbalances create mitigation strategies.
Land consumption at port terminals Space consumption (4 times) mitigated by velocity.
Existing distribution channels Considerable accumulated investments (modes terminals). Established distribution practices. Inertia.
38
The Challenge of the Box Can Local Communities
Capture Value?
Load center potential (commodities) Intermediacy
(limited) The role of public actors Will the
boxes remain empty?
Container waiting to be loaded, Shenzhen, China
39
Taking Advantage of Local Opportunities,
Subtropolis, Kansas City
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