Intermodal Transportation and Integrated Transport Systems: Spaces, Networks and Flows

1. Intermodal Transportation and Integrated Transport Systems: Spaces, Networks and Flows Jean-Paul RodrigueAssociate Professor, Dept. of Economics & Geography, Hofstra University, New York, USA “There’s no business like flow business” Email: ecojpr@hofstra.edu Paper available at: http://people.hofstra.edu/faculty/Jean-paul_Rodrigue

2. Spaces, Networks and Flows in a Global Economy • 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. • Nodes are regulating the flows within networks. • As international trade increases, nodes have become strategic locations.

3. The Emergence of a Nodal Space: First Phase • The Transshipment Node • Conventional international trade environment. • Some mobility of raw materials, parts and finished goods. • Many impediments (tariffs and regulations). • Trade as an attempt to cope with scarcity. • Nodes as constrained locations for transshipment. • Load break functions. • Industrial clusters next to rail yards. • Port industrial complexes. Industrialcluster Load Break Warehousing lag

4. Harbor Types of the World's Large and Medium Sized Ports

5. The Emergence of a Nodal Space: Second Phase • The Intermodal Node • Higher mobility of the factors of production (particularly capital). • Better realization of comparative advantages (mainly labor). • Strengthening of the transactional and legal setting. • Emergence of intermodal transportation, mainly containerization. • Nodes as locations promoting the efficiency of different transport networks. • New terminals and new locations. • Increased velocity of the flows. ‘First mile’ Composition Transfer Transport Chain Interchange Decomposition ‘Last mile’

6. The North American Landbridge

7. GPN The Emergence of a Nodal Space: Third Phase • The Logistical Node • Fast growth of international trade with the full realization of comparative advantages. • Geographical and functional integration of production, distribution and consumption. • Commodity / Supply Chains. • Transportation integrated in the production / retailing process. • Global Production Networks (GPN). • Nodes as logistical poles where value added activities are performed. • Entirely new nodal locations. Flows Network Stage Parts and raw materials Bulk shipping High volumes Low frequency Unit shipping Manufacturing and assembly Supply Chain Average volumes High frequency Transport Chain Distribution LTL shipping Low volumes High frequency Market Market

8. Traffic at the 50 Largest Container Ports, 2003

9. Nodes 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. Intermodal Corridor Gateway Global Local Regional Centrality Intermediacy Transmodal Hub

10. Modal Gateways: Spaces of Flows • Context • The logistical node is being regionalized. • Land • Linked with borders. • Often a simple transit function. • Respective specialization. • Air • Linked with metropolitan areas. • Centrality and intermediacy. • Maritime • Linked with locations (sites) and hinterlands. • Integration with inland freight distribution centers. Land Logistics Border Manufacturing Air Maritime

11. Major US Modal Gateways, 2004

12. The Three Main Gateways of North America

13. Integrated Transport Systems: From Fragmentation to Coordination

14. Integrated Transport Systems: Intermodal and Transmodal Operations Intermodal operations Transmodal operations Intermodal Terminal DCs / CD ROAD Transloading Thruport RAIL Port container yard On-dock rail Ship-to-ship MARITIME Integrated Freight Transport System

15. Added value Time and cost savings Three Emerging Nodal Spaces Supporting Transmodal Flows • Transmodal Road • Assumed by distribution centers. • High potential for added value. • From inventory management to flow management. • Transmodal Rail • Least investigated segment. • Containerization forced integration between rail systems. • Transmodal Maritime • Offshore hubs. • Transshipment-only terminals at intermediate locations. • How transmodal nodes are inserted within freight distribution systems? Modal segment Modal segment

16. Cross-Docking Distribution Center Before Cross-Docking Distribution Center Suppliers Suppliers LTL Customers Receiving Sorting After Cross-Docking Shipping TL Cross-Docking DC TL Customers

17. UPS Willow Springs Distribution Center, Chicago

18. Rail Transmodal Operations: The Thruport • Market fragmentation • Mainly retail / consumption related. • Reconcile the high volume requirements of markets with the time sensitive requirements of distribution. • Ownership fragmentation • Rail companies have their facilities and customers. • They have their own markets along the segments they control. • Interchange is the major problem. • The distribution potential of each operator is expanded. • Network alliances. Thruport Gateway D C A B

19. Minneapolis / St. Paul Chicago Kansas City St. Louis Memphis Dallas / Fort Worth 13.98 M TEU

20. Mi-Jack Stack-Packer (Thruport Terminal)

21. Offshore Hubs: A New Nodality • Offshore hubs • Dilemma between market coverage and operational efficiency. • An adaptation of shipping routes. • Improvement in the frequency and the timeliness of services. • Emergence of new nodes at strategic locations. • Major factors • Location. • Depth. • Land availability. • Labor costs. • Hinterland access. • Ownership. Pendulum Route B Short SeaShipping Offshore Hub Pendulum Route A

22. Ports with the Highest Transshipment Function, 2004

23. Las Palmas: At the Crossroad of Transatlantic Shipping • Emergence of an offshore hub • Above 600,000 TEU (2005). • An intermediacy node along major maritime routes and major markets; relay transshipment. • Deviation effect: • Minimal for: circum-Africa / Western Europe, Mediterranean / Central America, Europe-Med. / South America. • Algeciras: • Biggest competitor. • Net advantage (low deviation) for the Mediterranean / North America route). Las Palmas

24. Global Port Operators: Using Nodes to Control Global Flows • A change in emphasis • Conventional perspective based on geostrategy: • “Whosoever commands the sea commands trade; whosoever commands the trade of the world commands the riches of the world, and consequently the world itself”. Sir Walter Raleigh (c1610). • An emerging perspective based on accessibility, flows and commercial interests. • Controlling terminals and the major gateways of the global economy: • Through alliances and investments. • Deriving wealth through added value extracted from global flows. • A “nodal strategy” where stake holding is based on locations along major commodity chains.

25. Global Port Operators: Using Nodes to Control Global Flows • Horizontal integration using fixed assets • Gain a foothold in a wide variety of markets. • Financial assets. • Managerial expertise. • Gateway access. • Leverage. • Traffic capture. • Global perspective.

26. Major Port Holdings, 2006

27. Conclusion: Emergence of a Global Nodal Space • The logistical node • Central and intermediate locations; gateways or hubs. • Geographical and functional integration brought by the emergence of global production networks: • Extension and complexity. • Control and synchronization of flows. • Effectively captures and adds value within global supply chains. • Competition (between and within nodes). • Challenges and opportunities • Congestion (offshore hubs and port regionalization). • Integration (intermodal and transmodal). • Energy prices (logistical friction). • Macro-economic changes (trade imbalances).