Canada’s Asia-Pacific Gateway and Corridor Research Consortium, Gateway and Corridor Workshop,...

Canada’s Asia-Pacific Gateway and Corridor Research Canada’s Asia-Pacific Gateway and Corridor Research Consortium, Gateway and Corridor Workshop, Consortium, Gateway and Corridor Workshop, Regina, Saskatchewan, February 21 2007Regina, Saskatchewan, February 21 2007

Gateways, Corridors and Gateways, Corridors and Global Freight Global Freight Distribution: Transpacific Distribution: Transpacific IssuesIssuesJean-Paul RodrigueAssociate Professor, Dept. of Economics & Geography, Hofstra University, New York, USA

Email: [email protected] available at:http://people.hofstra.edu/faculty/Jean-paul_Rodrigue

Globalization and the Transpacific

■ Globalization; a clustered and spatially diffused process• In terms of production and

consumption.• Distribution is reconciling

spatially diverse demands for raw materials, parts and finished goods.

■ The backbone of globalization• Networks are established to

support distribution.• Gateways are regulating the

flows within networks.• As international trade increases,

gateways have become strategic locations.

Gateways and Hubs as Central and Intermediate Locations

■ Gateways & hubs• Nodes offering an accessibility to a

large system of circulation.• Obligatory (semi) points of

passage.• Convergence of transport

corridors.• Centrality and intermediacy.

■ Gateways• Favorable physical location.• Intermodal and stable in time.

■ Hubs• Transmodal and subject to change.• Commercial decisions.• Delays vs. frequency of services.

Gateway

Intermodal

Hub

Transmodal

Corridors and Regional Development

Specialization andinterdependency

Gateway

Flows

OrderHigh LowHigh Low

A B C

Main North American Trade Corridors and Metropolitan Freight Centers

Miami

Boston

Dallas

Denver

Norfolk

Atlanta

Memphis

Halifax

Detroit

Toronto

Chicago

Houston

Phoenix

Seattle

Calgary

Edmonton

Winnipeg

Montreal

New York

Portland

Baltimore

Charlotte

Cleve land

St. Louis

San Diego

Vancouver

Charleston

Pittsburgh

Cincinnati

New Orleans

Kansas City

Minneapolis

Los Angeles

Philadelphia

Oklahoma Ci ty

San Francisco

Salt Lake City

Hub

Gateway

Interdependencies and Imbalances

■ Macro-economic and physical imbalances• Globalization has made the economies of the Pacific Rim more

integrated.• These interdependencies however come with acute imbalances.• The core of these imbalances is at start macro-economic:

• Comparative advantages.• Foreign direct investments.• Debt and asset inflation.

• Macro-economic imbalances have an outcome in the physical world of freight flows:

• International trade.• Container flows.• Transportation rates.• Structure of long distance transport services.

The “Perpetual Motion Machine”: The Dynamics of the World’s Most Significant Trade Relationship

Goods

Bonds (IOUs)

Asset InflationDebt

Reserves

Interest RatesUnemployment

$ for goods

$ for bonds

United StatesChina USD

USD

BorrowingInvestment

Share of Global Manufacturing Output, 1993-2003

0 1 2 3 4 5 6 7

China

South Korea

ASEAN

Taiwan

India

2003

1993

World’s 10 Largest Exporters and Importers, 2005

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800

Germany

United States

China

Japan

France

Netherlands

United Kingdom

Italy

Canada

Belgium

Billions of $US

Imports

Exports

Containerized Cargo Flows along Major Trade Routes, 1995-2005 (in millions of TEUs)

4.0

5.2

5.6

7.2

8.8

10.2

12.4

13.9

3.5

3.3

3.3

3.9

3.9

4.1

4.2

4.3

2.8

3.5

4.5

5.9

6.1

7.3

8.9

9.9

2.3

2.7

3.6

4.0

4.2

4.9

5.2

5.6

1.2

1.3

2.2

2.7

1.5

1.7

1.7

1.8

1.4

1.7

2.9

3.6

2.6

2.9

3.2

3.3

0 5 10 15 20 25 30 35 40

1995

1998

2000

2001

2002

2003

2004

2005

Asia-USA

USA-Asia

Asia-Europe

Europe-Asia

USA-Europe

Europe-USA

Maritime Freight Rates (USD per TEU), 1993-2006

$0

$500

$1,000

$1,500

$2,000

$2,500

1993-4

1994-2

1994-4

1995-2

1995-4

1996-2

1996-4

1997-2

1997-4

1998-2

1998-4

1999-2

1999-4

2000-2

2000-4

2001-2

2001-4

2002-2

2002-4

2003-2

2003-4

2004-2

2004-4

2005-2

2005-4

Asia - US

US - Asia

Asia - EuropeEurope - Asia

Two Major Transpacific Pendulum Routes Serviced by OOCL, 2006 (The Wal-Mart Express)

Seattle

Oakland

Vancouver

Los Angeles

Kobe Tokyo

Pusan

Nagoya

Shekou

Qingdao

Shanghai

KaohsiungHong Kong

Singapore

Laem Chabang

Ningbo

Source: OOCL Web Site

49 Days

40 Days

Note: Paths are approximate and transit time includes port time

Northwest Express (NWX)

South China Express (SCX)

Largest American Importers of Asian Goods Through Maritime Container Transport, 2004 (in TEUs)

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000

Wal-Mart

Home Depot

Target

Sears (K-Mart)

Ikea

Lowe's

Costco

Ashley Furniture

Payless ShoeSource

Samsung

Matsushita

Toyota

Hamilton Beach

Honda

CVS (Eckerds)

Kobe

Tokyo

OsakaBusan

Ningbo

Nagoya

Manila

Dalian

Yantian

Tianjin

Keelung

Yokohama

Shenzhen

Shanghai

Quingdao

Singapore

Kaohsiung

Hong KongGuangzhou

Port Kalang

Laem Chabang

Tanjung Priok

Tanjung Pelepas

Tacoma

FraserSeattle

Oakland

Portland

Vancouver

Anchorage

Long BeachLos Angeles

Pacific Asia

North American West Coast

2004 Traffic

Less than 2 million TEU

2 million to 4 million TEU



More than 10 million TEU

Container Traffic at Major Transpacific Container Ports: Mirror Images?

TokaidoYellow SeaRim

Sunan Delta

Pearl River DeltaTaiwan / Fujian

Singapore San Pedro Bay

San Francisco Bay

Puget Sound

Prince Rupert

Ensenada

Gateways and Hinterland Effect

Efficient Inland Freight DistributionInefficient Inland Freight Distribution

Pacific Asia North American West Coast

SEZ

Corridor

Containers Handled by the Port of Hong Kong, 1995-2005 (in TEU)

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

0

5

10

15

20

25

Mill

ions

Loaded (inbound) Empty (inbound)

Loaded (outbound) Empty (outbound)

Loaded Ratio (Outbound / Inbound) Empties Ratio (Outbound / Inbound)

Containers Handled by the Port of Los Angeles, 1995-2005 (in TEU)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

0

1

2

3

4

5

6

7

8

Mill

ions




Containers Handled by the Port of Vancouver, 1997-2005 (in TEU)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

1997 1998 1999 2000 2001 2002 2003 2004 2005

Rat

io

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Mill

ions




Types and Functions of Rail Freight Corridors

Type Function Examples

Short distance (within a gateway / hub)

Modal shift, improved capacity and throughput.

Switch carrying, Alameda, “Agile Port”, Panama

Hinterland access (between a gateway and its vicinity)

Expand market area, reduce distribution costs & congestion

Rail shuttles, PIDN, Virginia Inland port

Landbridge (between gateways)

Long distance container flows, continuity of global commodity chains

North American landbridge

Circum-hemispheric (between gateways with a maritime segment)

Integrated global transport chains

Northern East-West Corridor

Miami

Boston

Houston

Halifax

Savannah

PortlandMontreal

Gulfport

Vancouver

Baltimore

Palm Beach

Charleston

New Orleans

Philadelphia

Jacksonville

Hampton Roads

Wilmington (NC)

Wilmington (DE)

Port Everglades

New York/New Jersey

Tacoma

Fraser

Seattle

Oakland


Container Port Traffic and Ownership of Major Rail L ines, 2005

Dr. Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University

Port Traffic in TEU (2005)

Less than 300,000

300,000 to 500,000

500,000 to 1,000,000

1,000,000 to 3,000,000

More than 3,000,000

Burlington Northern Sante Fe (BNSF)

Canadian National (CN)

Canadian Pacific (CP)

CSX Transportation (CSXT)

Ferromex (FNM)

Kansas City Southern (KCS)

Norfolk Southern (NS)

Union Pacific (UP)

Other

Regina

Calgary

Memphis

Chicago

Winnipeg

St LouisKansas City

Minneapolis

Dallas / Fort Worth

Houston

Savannah

Montreal

Vancouver

Charleston

Hampton Roads

New York/New Jersey

Tacoma

Seattle

Oakland


Potential Location of Major Transmodal Rail Facilities:Maritime Gateways and Inland Hubs


Maritime Rail Gateway

Transmodal Rail Hub

Western North America: Value of US Rail Imports by Port of Entry, 2002

Regina

Calgary

Chicago

Winnipeg

St LouisKansas City

Minneapolis

Noyes

Sumas

Portal

Blaine

Pembina

Laurier EastportFrontier

Sweetgrass

Sault Ste. Marie

International Falls-Ranier

Western North America: Value of US Rail Imports by Port of Entry, 2002


Less than 50 million

50 to 300 million

300 to 800 million

800 million to 1.6 billion

More than 1.6 billion

Western Canada: Taking Advantage of Intermediacy

■ Prince Rupert: A new gateway?• Congested West Coast Ports; in search of alternatives.• CN Prince Rupert strategy:

• Focus on non-stop intermodal services to Chicago.• Time component as a major comparative advantage (107 hours).

• The decision to use the gateway will be made by maritime shipping lines.

• The quality and efficiency of inland distribution will be a factor behind the number and frequency of port calls.

• Many logistical opportunities in between (transmodal).• What about the “warm chain”?

■ North Pacific Rim Trade Corridor• A potential alternative?

Conclusion: Pacific Asia and 21st Century North American Freight Distribution

■ Transpacific Trade• Emergence of global production networks.• Substantial rebalancing of the global economy.

■ Gateways, corridors and integrated transport systems• Imbalanced freight flows; the gateways’ dilemma:

• Disequilibrium in the division of labor, trade, production and consumption.• Pressures to manage disequilibrium (e.g. empties).

• Intermodal and transmodal operations:• Reconcile the scales (from the “Agile Port” to the Landbridge).

• Logistical friction:• A new modal balance (time, cost and efficiency).• Competitive advantages derived from whole transport chains.

• The matter is mainly in the hands of private firms:• Decide the allocation of assets and capital.

Circum Hemispheric Dreams

Russia

ChinaCanada

Un

ited

Sta

tes

Kazakhstan

Mongolia

New York

Vostochny

Lianyungang

Archangel'sk

Brest

Druzhba

Zabaykalsk

Oulu

Lokot

Perm'

Astana

Harbin

Urumqi

Beijing

IrkutskLanzhou

VologdaVainikkala

Ulaanbaatar

Novosibirsk

Yekaterinburg Presnogorkovka

Halifax

MoscowSt. Petersburg

El Paso

Chicago

Kansas CIty

Minneapolis

Salt Lake CityTacoma

Oakland

Houston

Savannah

Montreal

Vancouver

Long Beach

Haparanda/Tornio

New York

Rotterdam

Maritime Segment

Rail Main Trunk (Broad Gauge)

Rail Main Trunk (Standard Gauge)

Port

Gauge Change

Rail Terminal

Azimuthal Equidistant Polar Projection

Arctic Bridge

Northern Sea Route

Northwest Passage

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