Jean-Paul Rodrigue (2013), New York:
Routledge, 416 pages.
Authors: Dr. Jean-Paul Rodrigue and Dr. Theo Notteboom
1. A New Role for Inland Terminals
In many places around the world bimodal and trimodal inland terminals
have become an intrinsic part of the transport system, particularly
in gateway regions having a high reliance on trade. Transport development is
gradually shifting inland after a phase that focused on the development
of port terminals and maritime shipping networks. The complexity of modern freight distribution,
the increased focus on intermodal and co-modal transport solutions and
capacity issues appear to be the main drivers behind a renewed focus
on hinterland logistics. While trucking tends
to be sufficient in the initial phase of the development of inland freight
distribution systems, at some level of activity, diminishing returns
such as congestion, energy consumption and empty movements become strong
incentives to consider the setting of inland terminals as the next step
in regional freight planning. Also the massification of flows in networks,
through a concentration of cargo on a limited set of ports of call and
associated trunk lines to the hinterland, have created the
for nodes to appear along and at the end of these trunk lines.
The evolution of inland freight distribution can be seen as a cycle
in the ongoing developments of containerization and intermodal transportation.
The geographical characteristics linked with modal availability, capacity
and reliability of regional inland access have an important role to
play in shaping this development. As maritime shipping networks and
port terminal activities become better integrated, particularly through
the symbiotic relationship between maritime shipping and port operations,
the focus shifted on inland transportation and the inland terminal as
a fundamental component of this strategy. Thus, after a phase that relied
on the development of port terminals and maritime shipping networks,
the integration of maritime and inland freight distribution systems
has favored the setting of inland ports.
Inland port. A rail or a barge terminal that is linked to
a maritime terminal with regular inland transport services. An inland
port has a level of integration with the maritime terminal and supports
a more efficient access to the inland market both for inbound and
outbound traffic. This implies an array of related logistical activities
linked with the terminal, such as distribution centers, depots for
containers and chassis, warehouses and logistical service providers.
Since the inland terminal is essentially an extension of some port
activities inland, the term "dry port" has gained acceptance.
However, using this term to define an inland terminal is subject to
debate since many inland terminals are in fact ‘wet’ given their direct
access to inland waterway systems. Moreover, the inland location can
effectively be a port if a barge service is concerned, but fundamentally
cannot be considered a port if it involves a rail terminal or more
simply truck depots. Thus, there
seems to be no consensus on the
in a wide range of terms including dry ports, inland terminals, inland
ports, inland hubs, inland logistics centers, inland freight villages,
etc. The reason for this lies in the multiple shapes, functions and
network positions these nodes can have. A similar issue applies with
the inclusion of airport terminals, mainly the freight component, as
an element of an inland port. A whole array of transport terminal infrastructures
is therefore often presented as a dry port. Regardless of the terminology
used, three fundamental characteristics are related to an inland node:
The functional specialization of inland terminals has been linked
with cluster formation of logistical activities. Inland terminals
in many cases have witnessed a clustering of logistics sites in the
vicinity, leading to a process of logistics polarization and the creation
of logistic zones. They
have become excellent locations for consolidating a range of ancillary
activities and logistics companies. In recent years, the dynamics in
logistics networks have created the right conditions for a large-scale
development of such logistics zones.
Each inland port remains the outcome of the considerations of a transport
geography pertaining to modal availability and efficiency, market function
and intensity as well as the regulatory framework and governance. Their
emergence underlines some deficiency in conventional inland freight
distribution that needed to be mitigated. This mitigation includes:
- An intermodal terminal, either rail or barge that has
been built or expanded.
- A connection with a port terminal through rail, barge
or truck services, often through a high capacity corridor.
- An array of logistical activities that support and organize
the freight transited, often co-located
with the intermodal terminal.
The geographical characteristics linked with modal availability and
the capacity of regional inland access have an important role to play in
shaping the emergence and development of inland ports. Each inland market
has its own potential requiring different transport services. Thus,
there is no single strategy for an inland port in terms of modal
preferences as the regional effect remains fundamental. In developed
countries, namely North America and Europe, which tended to be at the
receiving end of many containerized supply chains, a number of inland
ports have been developed with a focus on inbound logistics.
The setting of global supply chains and the strategy of Pacific Asian
countries around the export-oriented paradigm have been powerful forces
shaping contemporary freight distribution. Indirectly, this has forced
players in the freight transport industry (shipping companies, terminal
operators, logistics providers) to examine supply chains as a whole
and to identify legs where capacity and reliability were an issue. Once
maritime shipping networks and port terminal activities have been better
integrated, particularly through the symbiotic relationship between
maritime shipping and port operations, inland transportation became
the obvious focus and the inland terminal a fundamental component of
this strategy. This initially took place in developed countries, namely
North America and Europe, which tended to be at the receiving end of
many containerized supply chains. The focus has also shifted to considering
inland terminals for the early stages of global supply chains (outbound
logistics), namely in countries having a marked export-oriented function.
Inland terminals have evolved from simple intermodal locations to
their incorporation within logistic zones. Inland terminals (particularly
rail) have always been present since they are locations from which specific
market coverage is achieved. Containerization has impacted this coverage
through the selection of terminals that were servicing a wider market
area. This spatial change also came with a functional change as intermodal
terminals began to experience a specialization of roles based on their
geographical location but also based on their ‘location’ within supply
3. Functions within Transport Chains
A functional and added value hierarchy has emerged for inland terminals
as they try to replicate inland several services performed at a port
terminal, namely customs clearance, container storage, cargo
consolidation and deconsolidation.
In many instances, freight transport terminals fit within a hierarchy
with a functionally integrated inland transport system of gateways and
their corridors, where they service
three major functions:
- Land value. Many deep sea terminal facilities
have limited land available for expansion. This favors the intensification
of activities at the main terminal and the search of lower value
locations supporting less intensive freight activities.
- Capacity and congestion. Capacity issues appear to be
the main driver of inland port development since a system of inland
terminals increases the intermodal capacity of inland freight distribution.
While trucking tends to be sufficient in the initial phase of the
development of inland freight distribution systems, at some level
of activity, diminishing returns such as congestion, energy and
empty movements become strong incentives to consider the setting
of inland terminals as the next step in regional freight planning.
- Hinterland access. Inland locations tend to be less serviced
by intermodal transportation than coastal regions. Through long
distance transport corridors, inland ports confer a higher level
of accessibility because of lower distribution costs and improved
capacity. These high-capacity inland transport corridors allow ports
to penetrate the local hinterland of competing ports and thus to
extend their cargo base. In such a setting, the inland port
becomes a commercial and trade development tools that jointly
increase imports, exports and intermodal terminal use.
- Supply chain management. In addition to standard capacity
and accessibility issues in the hinterland, an inland port is a
location actively integrated within supply chain management practices,
particularly in view of
containerization. This takes many forms such as the agglomeration
of freight distribution centers, custom clearance, container depots
and logistical capabilities. The inland terminal can also become
a buffer in supply chains, acting as a temporary warehousing facility
often closely connected to the warehouse planning systems of nearby
distribution centers. Purchasers can even be advantaged by such
a strategy since they are not paying for their orders until the
container leaves the terminal, delaying settlement even if the inventory
is nearby and available.
These functions are not exclusive, implying that inland terminals
can service several functions at once. Therefore, there is no single
model for an inland port. For inbound or outbound freight flows, the
inland terminal is the first tier of a
functional hierarchy that defines
its fundamental (activities it directly services) and extended (activities
it indirectly services) hinterlands. Considering the potential mix of
the functions of inland ports, five major criteria insure that they
fulfill efficiently their role as an interface between global and regional
freight distribution systems:
- Satellite terminals. They tend to be close to a port
facility, but mainly at the periphery of its metropolitan area (often
less than 100 km), since they mainly assume a service function to
the seaport facilities. They accommodate additional traffic and
serves functions that either have become too expensive at the port
such as warehousing and empty container depots or are less bound
to a location near a deep sea quay. A number of satellite terminals
only have a transport function transshipping cargo from rail/barge
to trucks and vice versa, as is the case for the ‘container transferium’
concept of the port of Rotterdam or the Gateway Access Point (GAP)
concept in Belgium. Satellite terminals can also serve as
load centers for
local or regional markets, particularly if economic density is high,
in which case they form a multi-terminal cluster with the main port
they are connected to through regular rail or barge shuttle services.
For gateways having a strong import component, a satellite terminal
can also serve a significant transloading function where the contents
of maritime containers are transloaded into domestic containers
- Freight distribution clusters (load centers). A major
intermodal facility - load center - granting access to well defined
regional markets that include production and consumption functions.
It commonly corresponds to a metropolitan area where a variety of
terminals serve concomitantly intermodal, warehousing, distribution
and logistics functions. These tend to take place in logistics parks
and free trade zones
(or foreign trade zones). The inland terminal is thus the point
of collection or distribution of a regional market. The more extensive
and diversified the market, the more important is the load center.
If the load center has a good intermediary location, such as being
along a major rail corridor, then freight distribution activities
servicing an extended market will be present.
- Transshipment facilities. Link large systems of freight
circulation either through the same mode (e.g. rail-to-rail) or
through intermodalism (rail-to-truck, or even rail-to-barge). In
the later case, the inland terminal assumes the role of a load center.
The origin or the destination of the freight handled is outside
the terminal's market area, a function similar to that of transshipment
hubs in maritime shipping networks. Such transshipment terminals
are often found near country borders in view of combining administrative
processes linked to cross border traffic to value-added logistics
activities. Although this function remains marginal in most parts
of the world, ongoing developments in inland freight distribution,
where the scale and scope of intermodal services are increasing,
are indicative that transshipment services are bound to become more
4. The Regional Effect and Inland Ports
Regional issues, namely how inland ports interact with their regional
markets, remain fundamental as it defines their modal characteristics,
their regulatory framework and their commercial opportunities. Depending
on the geographical setting
and the structure, governance and ownership of inland transport systems,
inland terminals have different levels of development and integration
with port terminals. They are part of a
regionalization strategy supporting a more extensive hinterland.
It is in Western Europe that the setting of inland
terminals is the most advanced with a close integration of port terminals
with rail shuttles and barge services. Rail-based dry ports are found
throughout Europe, often linked to the development of logistics zones.
Depending on the European country considered, these logistics zones
are known under different names: ‘platformes logistiques’ in France,
the Güterverkehrszentren (GVZ) in Germany, Interporti in Italy, Freight
Villages in the UK, Transport Centres in Denmark, and Zonas de Actividades
Logisticas (ZAL) in Spain. The rail liberalization
process in Europe is supporting the development of real pan-European
rail services on a one-stop shop basis. All over Europe, new entrants
are emerging while some large former national railway companies have
joined forces. Rail terminals in Europe are mostly built and operated
by large railway ventures. The largest rail facilities have bundles
of up to 10 rail tracks with lengths of maximum 800m per track. Rail
hubs are typically equipped to allow simultaneous batch exchanges (direct
transshipment) through the use of rail-mounted gantry cranes that stretch
over the rail bundles.
In northwest Europe, barge transport is taking up a more prominent
role in dealing with gateway traffic. Barge container transport has
its origins in transport between Antwerp, Rotterdam and the Rhine basin,
and in the last decade it has also developed greatly along the north-south
axis between the Benelux and
Antwerp and Rotterdam together handled nearly 5 million TEU of inland
barge traffic in 2010 or about 95% of total European container transport
by barge. Promising barging developments are also found on the Seine
between Le Havre and the Paris region, in the Rhône/Seine basin between
Marseille, Lyon and Dijon, on the Elbe and the Wester in Northern Germany
and on the Danube River out of the port of Constantza. Barge services
have also been initiated on the Po River connecting the Port of Venice
with Mantua and Cremona near Milan.
European integration processes have permitted the setting of more
natural (commercially based) hinterlands that did not exist before.
Since a good share of the European market is inland, a growth in international
trade required the setting of intermediary locations inland to help
accommodate larger flows between ports and their hinterland. A large
concentration of inland terminals can be found around the
Rhine/Scheldt delta, which
is Europe's most important gateway region with a total container
throughput of 22.2 million TEU in 2010, and where the function of satellite
terminals is prominent. Almost every European port has an inland terminal
strategy as a way to secure hinterland traffic.
There have been large inland terminals in North America
since the development of the continental railway system in the late
19th century. Their setting was a natural process where inland terminals
corresponded to large inland market areas, commonly around metropolitan
areas commanding a regional manufacturing base and distribution system.
Although exports were significant, particularly for agricultural goods,
this system of inland terminals was mostly for domestic freight distribution.
With globalization and intermodalism two main categories of inland terminals
have emerged in North America.
The first is related to ocean trade where inland terminals are an
extension of a maritime terminal located in one of the three major ranges
(Atlantic, Gulf and Pacific) either as satellite terminals and more
commonly as inland load centers (e.g. Chicago
The second category concerns inland terminals mainly connected to NAFTA
trade that can act as custom pre-clearance centers.
Kansas City can be considered the most
advanced inland port initiative in North America as it combines intermodal
rail facilities from four different rail operators, foreign trade zones
and logistics parks at various locations through the metropolitan area.
There is even the world’s largest underground warehousing facility,
temperature stable space can be leased. Like Chicago, the city can essentially
be perceived as a terminal.
Several recent logistic zones projects in North America are
capitalizing on the planning and setting of a new intermodal rail
terminal done concomitantly with a logistics zone project. This
partnership fundamentally acts as a filter for the commercial
potential of the project as both actors must make the decision to go
ahead with their respective capital investment in terminal
facilities and commercial real estate. Compared to Europe, North
American dry ports tend to be larger, but covering a much more
substantial market area.
For Asia, inland terminals are almost unknown, so
they can be considered to be in their infancy. Geographical characteristics,
namely coastal population concentrations, and export oriented development
strategies have not been prone to the setting of inland terminals. Several
container depots have appeared inland as a way to improve the availability
of export containers within manufacturing clusters (e.g.
Thailand, India), but containers are mainly carried by truck. It
is in the case of China that resides the largest potential for the emergence
of a network of inland terminals, with three main types emerging:
- Site and situation. Like any transport facility of significance,
an inland port requires an appropriate site with good access to
the rail or the barge terminal as well as available land for development.
Access to an area of significant economic density, such as large population base, is of importance since it will
be linked to the level of import and export activities handled by
the inland port. Transportation remains the most significant
cost, underlining the importance of an accessible location.
Several inland ports also have an airport in proximity which can
help support a variety of freight activities.
- Massification. The hinterland
opportunities offered by inland ports are associated with
lower transport costs and a better accessibility. It takes place
over two interdependent dimensions. The first concern the
massification of flows between the port terminal and the inland
port through a high capacity corridor. Intermodal rail and barge
services represent the dominant means over which this process is
achieved. The second relates to the consolidation and
deconsolidation of cargo flows depending if it concerns inbound
or outbound logistics.
- Reconciling cargo flows. Since most long distance trade (and some
domestic) is supported by containerization, there are numerous instances
where a regional market imports more than it exports (or vice-versa).
Under such circumstances, an inland port must provide the physical
and logistical capabilities to insure that empty containers are
repositioned efficiently to other markets if local cargo cannot
be found. This can take the form of empty container depots and arrangements
with freight forwarders to have slots available for repositioning. Whether there are imbalances in container
flows or not, an inland port must insure that the inbound and outbound
flows are reconciled as quickly as possible. A common way involves
a cargo rotation from imports activities where containers are emptied
to exports activities where containers are filled with goods. For
container owners, let them be maritime shipping or leasing companies,
a rapid turnover of their assets is fundamental and will secure
a continuous usage of the inland port. Effective repositioning and
cargo rotations strategies insure higher revenue for
both the container owners and the inland port operators.
- Trade and transactional facilitation. An
inland port can also be a fundamental structure promoting both
the import and export sectors of a region, particularly for
smaller businesses unable to achieve economies of scale on their
own. Through these, new market
opportunities become possible as both imports and exports are cheaper.
The setting of a
Foreign Trade Zone (FTZ)
is also an option to be considered as a trade facilitation
functional pairing of inland ports is a transactional
strategy where an inland port is activity seeking agreements
with other inland ports so that reciprocal supply chains are
established or reinforced.
The way an inland port is owned and operated is indicative of its
potential to identify new market opportunities and invest accordingly.
In many cases, the commitment of a large private investor such as
a terminal operator or a real estate developer can be perceived as a
risk mitigation strategy in addition to provide expertise in the
development of facilities and related activities. Sections of an
inland port can be shared facilities (e.g. distribution centers)
so that smaller players can get involved by renting space and equipment.
This also applies to the appropriate strategies related to each
stage in the life cycle
of an inland terminal from its construction to its maturity
where its potential has essentially been taped off.
Another system of inland terminals is likely to emerge in Southeast
Asia, particularly along the Mekong. In light of the North American
and European experiences, the question remains about how Pacific Asia
can develop its own inland port strategy and regionalism. The unique
geographical characteristics of the region are likely to rely much on
the satellite terminal concept and inland load centers in relative proximity.
For this context, the European example is more suitable. However, the
setting of long distance intermodal rail corridors within China and
through Central Asia is prone to the development of the inland load
center system common in North America.
The setting of dry ports (inland ports) have been a dominant paradigm
in the development of hinterland transportation as the growth of maritime
transportation and its economies of scale have placed pressures on the
inland segment of freight distribution. The prospects for inland ports
remain positive with large continental markets like North America and
Europe relying on a network of satellite terminals and load centers
as a fundamental structure to support hinterland freight movements,
particularly their massification. This entailed the emergence of extended
gates and with them extended forms of supply chain
management in which inland terminals play an active role. As congestion
increases, inland terminals will be even more important in maintaining
efficient commodity chains. It can also be expected that resources will
play a greater role within containerized trade with inland terminals,
again underlining unique regional characteristics. This implies a set
of repositioning strategies where inland terminals play a fundamental
role either to improve the efficiency of this repositioning, by providing
better cargo rotation opportunities, or by acting as an agent that can
help promote containerized exports. Inland ports will take part of the
ongoing intermodal integration between ports and their hinterland through
long distance rail and barge corridors. They are likely to be more important
elements within supply chains, particularly through their role of buffer
where containerized consignments can be cheaply stored, waiting to be
forwarded to their final destinations.
Like several stages in intermodal transport development, such as
in port infrastructure, there is a potential of overinvestment, duplication
and redundancy as many inland locations would like to claim a stake
in global value chains. This appears to be the case in Western Europe
where an abundance of inland terminals, particularly within the
/ Scheldt delta, is indicative of an over competitive environment and
the waste of resources it implies. In North America, because of a different
ownership and governance structure, the setting of an inland port, at
least the intermodal terminal component, is mostly in the hands of rail
operators. Each decision thus takes place with much more consideration
being placed on market potential as well as the overall impact on their
network structure. The decision of a rail company to build a new terminal
or to expand existing facilities commonly marks the moment where regional
stakeholders, from real estate developers to logistics service providers,
readjust their strategies. In some instances, local governments will
come with inland port strategies adjusting to existing commercial decisions
in the hope to create multiplying effects.
The development of dry ports around the world has clearly underlined
an emerging functional relation of port terminals and their hinterland.
Based upon their regional setting, dry ports assume a variety of functions
with co-location with logistical zones a dominant development paradigm.
While the interest in dry ports has increased we have to be aware that
no two dry ports are the same. Each dry port is confronted with a local/regional
economic, geographical and regulatory setting which not only define
the functions taken up by the dry port, but its relations vis-à-vis
seaports. Best practices can only be applied successfully if one takes
into account the relative uniqueness of each dry port setting.
- The first are satellite facilities in the
vicinity of port terminals. They assume the conventional role of
accommodating activities decongesting port operations, such as
container deports, as well as performing customs clearance.
- The second type concerns inland facilities
located at major metropolitan areas to provide better
connectivity to the port terminals along the coast as well as to
support the logistics of a growing internal consumption market.
Significant dry port development is taking
place on the Yangtze river all the way up to the upper stretches near
Chongqing, some 2,400 km upstream from Shanghai. Intermodal rail development
faces the challenge of the strong focus of the existing rail network on passengers and
dry bulk commodities. As the Chinese economy moves towards a more extensive
internal market intermodal rail and barge traffic will increase, and
so the usage of inland ports.
- The third type are border facilities that
play the function of custom clearance, consolidation and
deconsolidation of cargo as well as emerging trans-modal
functions of linking different systems or circulation. The
setting of Asia-Europe rail connections may promote this