The Korea Transport Institute (KOTI), Seoul,The Korea Transport Institute (KOTI), Seoul,October 7, 2008October 7, 2008
Terminals and Logistics:Terminals and Logistics:The Terminalization ThesisThe Terminalization Thesis
Jean-Paul Rodrigue
Associate ProfessorDept. of Global Studies & GeographyHofstra UniversityNew York, USA
Contemporary Transport TerminalsContemporary Transport Terminals
Role and Function of Transport TerminalsRole and Function of Transport TerminalsTechnical ChangesTechnical Changes
Modal and Temporal Separation at TerminalsModal and Temporal Separation at Terminals
Container yard, Port of Yantian, ChinaContainer yard, Port of Yantian, China
Changing Role and Function of Transport TerminalsChanging Role and Function of Transport Terminals
Conventional ContainerSmall terminal surface Large terminal surface
Direct transshipment possible Indirect transshipment (modal separation in time and space)
Limited mechanization and automation Advanced mechanization and automation
Improvisation in terminal operations Organization and planning
Types of Intermodal TerminalsTypes of Intermodal Terminals
Po
rt Term
inals
Rail T
ermin
alsD
istribu
tion
Cen
ters
Container sea terminal Offshore hub Barge terminal
On-dock and near dock Satelliteterminal
Load centerTransmodalterminal
Transloading Cross-docking Warehousing
Technical Changes in Container Port TerminalsTechnical Changes in Container Port Terminals
Standard Container Port Emerging Paradigm
Stacking density 1,000 to 1,200 TEUs per hectare
2,000 to 4,000 TEUs per hectare
Ship-to-shore gantry crane productivity
About 30 movements per hour
About 50 movements per hour
Dwell time at container yard
About 6 days About 3 days
Truck turnaround time About 60 minutes About 30 minutes
Rail access In port area On dock
Berthing depth 12 to 15 meters (40 to 50 feet)
More than 15 meters (50 feet)
Modal and Temporal Separation at Freight Transport Modal and Temporal Separation at Freight Transport TerminalsTerminals
Modal and Temporal Separation1
1 1
2 3
4
1- Intermodal2- Transfer quay to truck gates3- On dock rail4- Transloading
Modal Separation in Space: Europa Terminal in Modal Separation in Space: Europa Terminal in AntwerpAntwerp
TrucksTrucks
Deepsea servicesDeepsea services
Rail
Barges
World Container Traffic, 1980-2008. Reaching Peak World Container Traffic, 1980-2008. Reaching Peak Growth?Growth?
0
100
200
300
400
500
600
700
800
900
1000
1980 1985 1990 1995 2000 2005 2010 2015 2020
Mill
ion
TE
U
Divergence
Adoption Acceleration Peak Growth Maturity
1966-1992
1992-2002
2002-2010(?)2010(?) -
Terminals and Added ValueTerminals and Added Value
9Trimodal Container Terminal, Willebroek, BelgiumTrimodal Container Terminal, Willebroek, Belgium
Terminal Operations and Added ValueTerminal Operations and Added ValueSupply Chains and Added ValueSupply Chains and Added Value
Freight Transport Terminals: Operations and Added Freight Transport Terminals: Operations and Added ValueValue
CoreCore(Operations)(Operations)
Infrastructure Modal access (dock, siding, road), unloading areas
Equipment Intermodal lifting equipment, storing equipment
Storage Yard for empty and loaded containers
Management Administration, maintenance, access (gates), information systems
AncillaryAncillary(Added (Added Value)Value)
Trade facilitation Free trade zone, logistical services
Distribution centers Transloading, cross-docking, warehousing, light manufacturing, temperature controlled facilities (cold chain)
Storage depot Container depot, bulk storage
Container services Washing, preparation, repair, worthiness certification
Freight Terminal Hierarchy and Added ValueFreight Terminal Hierarchy and Added Value
GatewayGateway
(low
er …
) Add
ed V
alue
(… h
ighe
r)
(low
er …
) Add
ed V
alue
(… h
ighe
r)
FreightFreightDistribution ClusterDistribution Cluster
Inland PortInland Port(load center)(load center)
Satellite TerminalSatellite Terminal
Container TransloadingContainer Transloading
Cause Outcome
Consolidation Transferring the contents of smaller containers into larger containers (e.g. three maritime 40 foot containers into two 53 foot domestic containers). Cost savings (number of lifts). Time delays.
Weight compliance Transferring the contents of heavy containers into loads meeting national or regional road weight limits.
Palletizing Placing loose (floor loaded) containerized cargo unto pallets. Adapting to local load units (e.g. europallet).
Demurrage Handing back containers to owner (maritime shipping or leasing company) by transferring its contents into another load unit (e.g. domestic container).
Equipment availability
Making maritime containers available for exports and domestic containers available for imports. Trade facilitation.
Supply chain management
Terminal and transloading facility as a buffer. Delay decision to route freight to better fulfill regional demands. Perform some added value activities (packaging, labeling, final assembly, etc.)
Commodity Chains; Where Value Comes From?Commodity Chains; Where Value Comes From?
Commodity chain
Adde
d va
lue
Low
High
Manufacturing
R&D Globalization
DistributionDesign
Branding Marketing
Sales / Service
Concept Logistics
Supply Chains, Transport Chains and Added ValueSupply Chains, Transport Chains and Added Value
Market Potential
Production Costs
DownwardDownward
UpwardUpward
Supply ChainSupply ChainAdded ValueAdded Value
Value Capture / Creation
Value Expansion
Value Retention
HighHigh
LowLow
TransportTransportChainChain
SuppliersSuppliers
CustomersCustomers
SupplierSupplier
CustomerCustomer
Where Distribution EfficiencyHow
Pacific Asia Europe
APM Terminals
Dubai Ports World
Hutchison Port Holdings
Port of Singapore Authority
Eurogate
Stevedoring Services of America
Dedicated Maritime Container TerminalsMajort Port Holdings, 2007
Dr. Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University
Commodity Chain
The Value Capture Process along Commodity ChainsThe Value Capture Process along Commodity Chains
Port Holding
Port
Aut
horit
y Maritime Services
Inland Services
Port Services
Horizontal Integration
Vertical Integration
Maritime ShippingMaritime Shipping
Port Terminal Operations
Port Terminal Operations
Inland Modes and TerminalsInland Modes and Terminals
Distribution Centers
Distribution Centers
Offshorehub
InlandPortPort
Inland Terminal Life CycleInland Terminal Life Cycle
TrafficTraffic
Stage 1Stage 1 Stage 2Stage 2 Stage 3Stage 3
Planning Maturity DeclineGrowth
Stage 4Stage 4
Setting
Stage 5Stage 5
Subsidies / InvestmentsSubsidies / Investments
Operationsbegin
Concept
ProfitProfit
Inland Ports: Different Stages, Different ConcernsInland 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.
Supply Chains and their TerminalizationSupply Chains and their Terminalization
The Concept of TerminalizationExport Flows to the Gateways
The Maritime SegmentImport Flows to the Hinterland
Translisft crane, NS Rutherford yard, PATranslisft crane, NS Rutherford yard, PA
Unraveling the Terminalization ConceptUnraveling the Terminalization Concept
■ Terminalization• Growing influence of transport terminals in the setting and
operation of supply chains in terms of location, capacity and reliability.
Type Bottleneck-derived Warehousing-derived
Nature Terminal as a constraint Terminal as a bufferConcept Rational use of facilities to
maintain operational conditions
Incorporating the terminal as a storage unit
Challenge Storage space, port call frequency, gate access
“Inventory in transit” with “inventory at terminal”
Outcome Volume, frequency and scheduling changes
Reduce warehousing requirements at distribution centers
Terminalization in a Supply Chain ContextTerminalization in a Supply Chain Context
GatewayGateway
Offshore HubOffshore Hub
BottleneckBufferDistribution center (outbound / inbound)Inland containerized goods flowInland non-containerized goods flowMaritime container flow
Foreland (First Mile)Foreland (First Mile)
Hinterland (Last Mile)Hinterland (Last Mile)
GatewayGateway
SuppliersSuppliers
CustomersCustomersExtended Distribution Center
Extended Gate
Port regionalization and the creation of a Regional Load Center Network
Inland Inland TerminalTerminal
Supply Chain Terminalization: Export Flows to the Supply Chain Terminalization: Export Flows to the GatewayGateway
■ Bottleneck-derived terminalization• Containerized cargo:
• Logistics zones near the gateway or in a hinterland location connected to the gateway via a multimodal transport corridor.
• Distribution:• Tends to be synchronized with
terminal handling capacity.
GatewayGateway
Offshore HubOffshore Hub
GatewayGateway
SuppliersSuppliers
CustomersCustomers
Inland Inland TerminalTerminal
Supply Chain Terminalization: The Maritime SegmentSupply Chain Terminalization: The Maritime Segment
■ Buffer-derived terminalization• Intermediate facility (offshore
hubs):• Transshipment, interlining or
relay.• Low cost locations before
entering high distribution costs areas.
GatewayGateway
Offshore HubOffshore Hub
GatewayGateway
SuppliersSuppliers
CustomersCustomers
Inland Inland TerminalTerminal
Supply Chain Terminalization: Import Flows to the Supply Chain Terminalization: Import Flows to the HinterlandHinterland
■ Bottleneck and buffer-derived terminalization1. Port regionalization:
• Regional load center network.
2. Extended gate:• Development of inland
terminals.3. Extended distribution
center:• The terminal as a
warehousing unit.
GatewayGateway
Offshore HubOffshore Hub
GatewayGateway
SuppliersSuppliers
CustomersCustomers
Inland Inland TerminalTerminal
11
22
33
Terminalization and Supply Chain CostsTerminalization and Supply Chain Costs
Intermodal transportation costs
No noticeable effects.Related to higher terminal costs.Cost mitigation through terminal use (e.g. drayage).
In-transit inventory costs Confers additional flexibility.Used as a buffer.
Warehousing inventory costs
Partially transferred to the terminal.Blended with in-transit inventory costs.
Dwell time costs Terminal not always used as a facilitator for synchronization between transport modes.Places for cheap storage of consignments.Could be the result of deliberate actions of actors in supply chains.
Terminalization in PracticeTerminalization in Practice
North America: Long Distance RailNorth America: Long Distance RailWestern Europe: Close IntegrationWestern Europe: Close IntegrationPacific Asia: Outbound LogisticsPacific Asia: Outbound Logistics
Chassis waiting to be picked, Corwith Rail Yard, ChicagoChassis waiting to be picked, Corwith Rail Yard, Chicago
Alameda Corridor
The Extended Gateway of the Ports of Los Angeles / The Extended Gateway of the Ports of Los Angeles / Long BeachLong Beach
Marine Term
inalM
arine Terminal
On-dock rail yards
On-dock rail yards
Near-dock rail yards
Near-dock rail yards
Off-dock rail yards
Off-dock rail yards
Transload facility
Transload facility
WarehouseWarehouse
Transload facility
Transload facility
WarehouseWarehouse
Non-local destinationNon-local
destination
Non-local destinationNon-local
destination
Non-local destinationNon-local
destination
Off-dock rail yards
Off-dock rail yards
Non-local destinationNon-local
destination
Non-local destinationNon-local
destination
Local destinationLocal destination
16%
13%
22%
13%
34%
2%Truck
Rail
Intra-terminal
§̈¦105
§̈¦110§̈¦710
§̈¦405
§̈¦10
§̈¦5
§̈¦605§̈¦105
§̈¦10
§̈¦710
§̈¦710
§̈¦10
§̈¦10
§̈¦710
§̈¦10
£¤101
UV42
UV1
UV19
UV72
UV91
UV22
UV47
UV1
UV22
Alameda Corridor
Ground Level
Trench (30 feet)
0 2 4 6 81Miles
Port of Los AngelesPort of Long Beach
CBD
UP & BNSF Railyards
Mid-CorridorTrench (10 miles)
Alameda Corridor
UP & BNSF Railyards
Port of Los Angeles
Port of Long Beach
Thruport
Port Cluster
Monthly Container Traffic Handled by the Port of Los Monthly Container Traffic Handled by the Port of Los Angeles, 1995-2008 (TEU)Angeles, 1995-2008 (TEU)
North American Rail SystemNorth American Rail System
Major Rail Corridors Improved since 2000Major Rail Corridors Improved since 2000
Average Speed of Class I Railroads, 1945-2004Average Speed of Class I Railroads, 1945-2004
15
20
25
30
35
40
1945 1955 1965 1975 1985 1995 2005
Kilo
met
ers
per h
our
Average Freight Train Length, United StatesAverage Freight Train Length, United States
0
20
40
60
80
100
120
140
160
180
Auto Bulk GeneralMerchandise
Intermodal
Eastern Railroads (CSX, NS)
Western Railroads (BNSF, UP)
Container Dwell Times at BNSF Rail TerminalsContainer Dwell Times at BNSF Rail Terminals
Departure Return Free Dwell Time (Days)
Additional Charge (per day)
Loaded Loaded (same shipper)
6 $25
Loaded Loaded (different shipper)
3 $25
Empty Loaded 3 $25
Loaded Empty 1 $25/$50 (after 10 days)
Empty Empty 0 $25/$50 (after 10 days)
BNSF’s Three Tier Terminal System, 2007BNSF’s Three Tier Terminal System, 2007
Facility Group
Facility Free Dwell Time (days)
Charge (per day)
1 Kansas City, KSLos Angeles, CAMemphis, TN
1 $150
2 Alliance, TXAtlanta, GA (Fairburn)Chicago (Cicero), ILHouston, TXOakland Intl. Gateway, CA
San Bernardino, CASeattle, WA (SIG)St. Louis, MOSt. Paul, MNStockton, CA
2 $150
3 Albuquerque, NMAmarillo, TXBillings, MTBirmingham, ALChicago (Corwith), ILChicago (Willow Springs), ILDenver, CODilworth, MNEl Paso, TX
Fresno, CAHarvard, ARLogistics Park Chicago, ILNew Orleans, LAOmaha, NEPhoenix, AZPortland, ORSouth Seattle, WASpokane, WA
2 $100
Automated Transfer Management System for Truck-Automated Transfer Management System for Truck-Rail TransfersRail Transfers
Average Dwell Times at Major European Container Average Dwell Times at Major European Container Terminals (in days)Terminals (in days)
Characteristics Bremen Hamburg Rotterdam Antwerp La Spezia Gioia Tauro
Import dwell vessel – truck
6.4 6.4 6.4 6.4 7.4 7.4
Export dwell truck – vessel
4.6 4.6 4.6 4.6 5.6 5.6
Import dwell vessel – train
6.5 6.5 6.5 6.5 7.5 7.5
Export dwell train – vessel
4.7 4.7 4.7 4.7 5.7 5.7
Import dwell vessel – barge
4.1 4.1 4.1 4.1 5.1 5.1
Export dwell barge – vessel
4.3 4.3 4.3 4.3 5.3 5.3
Transshipment dwell - - - - - 5.3
TCT VenloExtended gate (rail-based)
for ECT/HPH
Container transferiumExtended gate (satellite)
Initiated by POR
Case Studies Europe – Rhine-Scheldt DeltaCase Studies Europe – Rhine-Scheldt Delta
Outbound Logistics: Port Regionalization Clusters in Outbound Logistics: Port Regionalization Clusters in Pacific AsiaPacific Asia
Foreland-based regionalization
Hinterland-based regionalization
Two Major Transpacific Pendulum Routes Serviced Two Major Transpacific Pendulum Routes Serviced by OOCL, 2006 (The Wal-Mart Express)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)
Conclusion: Terminalization and the Integration of Conclusion: Terminalization and the Integration of Supply ChainsSupply Chains
■ Terminalization• Terminals are getting more embedded in supply chains.• Constraint or buffer.• Extended gateways and extended distribution centers.
■ Is there a distinct North American, European or Pacific Asian terminalization?• Due to externalities (congestion, environment) Europe shows
a more advanced terminalization.• Dwell time pressures indicate a more constraining
terminalization in North America.• Pacific Asia dominantly as export gateways based
terminalization.
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