North American Gateways and Corridors: Emerging Trends in Inland Freight Distribution
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Transcript of North American Gateways and Corridors: Emerging Trends in Inland Freight Distribution
CILTNA 11th Annual Transportation Situation & Outlook Conference, April 30 2012, Ottawa, Canada
North American Gateways and Corridors: Emerging Trends in Inland Freight Distribution
Jean-Paul Rodrigue
Professor, Dept. of Global Studies & Geography, Hofstra University, New York, USA
Why Hinterland Transportation Matters?
FORELAND
90%
10%
Distance
20%
80%
HINTERLAND
Cost
Port
Global Trends: The Proverbial Elephant in the Living (Board) Room
The Three Elephants…
Energy and Resources
Debt and sovereign defaults
Aging & HealthCare
Multiplying Effects of Derived Demand on Container Transport Peaking?
1970 1975 1980 1985 1990 1995 2000 2005 2010100
1,000
10,000
Global Trade and Container Throughput (1970=100)Container Throughput(520.4 Millions TEU)
GDP in current USD($63.4 Trillion)
Exports in current USD($15.2 Trillion)
World Population(6.84 Billions)
China: The Largest Bubble in History?
Iron OreCement
EggsPorkCoalSteelLead
CopperZinc
AluminumNickel
RiceChickens
SoybeansPopulation
WheatGDP (PPP)
OilCattle
0% 10% 20% 30% 40% 50% 60% 70%
54.4%
53.6%
53.6%
49.6%
46.9%
45.8%
42.1%
39.5%
38.2%
34.6%
31.9%
30.2%
25.2%
24.9%
19.7%
16.6%
13.6%
10.4%
6.1%
1.9%
2.1%
7.8%
8.4%
15.2%
4.8%
13.7%
9.1%
1.8%
8.7%
10.1%
0.9%
11.3%
19.9%
4.5%
4.9%
19.7%
21.7%
6.8%Share of the World Commodity Consumption, China and United States, c2009/10
ChinaUnited States
Rebalancing in demand
Commodities and the Canadian Economy: A Double-Edged Sword
Aug-91
May-92
Feb-93
Nov-93
Aug-94
May-95
Feb-96
Nov-96
Aug-97
May-98
Feb-99
Nov-99
Aug-00
May-01
Feb-02
Nov-02
Aug-03
May-04
Feb-05
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May-07
Feb-08
Nov-08
Aug-09
May-10
Feb-11
Nov-11
0
100
200
300
400
500
600
700
800 Price of Selected Commodities on Global Markets, 1991-2012 (Jan 2000=100)
Rapeseed OilWheatSawn SoftwoodPotash
Monthly Softwood Lumber Shipments to China, 2007-2011
Jan-0
7Apr-
07Ju
l-07Oct-
07Ja
n-08Apr-
08Ju
l-08Oct-
08Ja
n-09Apr-
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l-09Oct-
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l-11Oct-
110
50
100
150
200
250
300
350
400United StatesCanada
Millio
ns o
f boa
rd fe
et
The Third Oil Shock UnfoldingJa
n-70
Jan-
71Ja
n-72
Jan-
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n-74
Jan-
75Ja
n-76
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0
20
40
60
80
100
120
140West Texas Intermediate, Monthly Nominal Spot Oil Price (1970-
2011)
First Oil Shock
Second Oil Shock
Third Oil Shock
Rebalancing in input costs
The North American East and West Coasts Dominate…
Millions
… but Growth has Shifted to South America / The Caribbean
Million TEUs
An Expected Shift in Containerization Growth Factors
Derived
Economic and income growthGlobalization (outsourcing)
Fragmentation of production and consumption
Substitution
Functional and geographical
diffusionNew niches
(commodities and cold chain)Capture of bulk and break-bulk
markets
Incidental
Trade imbalances
Repositioning of empty containers
Induced
Transshipment (hub, relay and
interlining)
Inland Ports in a Paradigm
Inland Ports: Pick Your Challenge
Site and situation
Massification
Reconciling flows
Trade and transactional facilitation
The Massification of Transportation in Inland Systems
Port Port
IT
IT
IT
IT
InlandPort
Port-Centric
Inland Load Center Network Formation Logistics Support
Direct truck End haul Rail / Barge
IT
Intermodal Industrial Park
InlandTerminal
Port
Corr
idor
The Inland Logistics Funnel: The “Last Mile” in Freight Distribution
CapacityFunnel
FrequencyFunnel
CapacityGap
Economies of scale
FrequencyGap
FORELAND
HINTERLAND
Main Shipping Lane
Inland Terminal
INTERMEDIATE HUB
GATEWAY
Atomization
Massification
Transshipment in the Caribbean: From A Triangle to a Funnel
63.1%
4.9%
16.4%
15.6%
Economies of scale involve less tolerance for deviation
Asymmetries between Import and Export-Based Containerized Logistics
Many Customers• Function of population density.• Geographical spread.• Incites transloading.• High priority (value, timeliness).
Few Suppliers• Function of resource
density.• Geographical
concentration.• Lower priority.• Depends on repositioning
opportunities.
GatewayInland
Terminal
DistributionCenter
Customer
SupplierRepositioning
Import-Based
Export-Based
Container Traffic, Port of Vancouver and Prince Rupert, 2008-2011 (import / export ratio)
2008 2009 2010 20110
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,000
2,250,000
2,500,000
2,750,000 Vancouver
2008 2009 2010 20110
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,000
2,250,000
2,500,000
2,750,000 Prince Rupert
Empty (Exports)
Empty (Imports)
Loaded (Exports)
Loaded (Imports)
0.74
0.92
0.76 0.81
0.25 0.25 0.33 0.43
Trade and Transactional Facilitation: Functional Pairing of Inland Ports
Hinterland
Foreland
Gateway
Corridor
Functional Pairing
Inland Port
Conclusion: Inland Ports as Maturing Logistical Platforms
The last mile remains salient(Gateway gap + inland massification)
Inland ports are hinterland dependent(Significant regional variations in logistics)
Longitudinal fixation, latitudinal future?