Source: A. Beyer and J-P Rodrigue (2011).
The Effect of a Border on Freight Distribution
Economic integration processes such as trade agreements and customs unions have greatly contributed to the growing fluidity of freight flows across borders, notably in Europe and North America. Still, border effects have not disappeared and they continue to influence the structure of hinterlands and freight distribution processes. The three most common border effects are:
  • Barrier. Relates to a conventional border effect where a change in jurisdiction is imposing a sudden friction effect. It mostly involves customs procedures and duties, delays at border crossing and also physical differences in transport infrastructures, such as capacity. Rail gauges are an example of capacity change taking place at a border (e.g. between Europe and Russia). Therefore, the border usually marks a change in the efficiency of freight distribution and related to a different transport rate structure.
  • Operational costs differences. As borders mark a change in jurisdiction, those jurisdictions commonly have differences in operational costs such as labor, land value, energy and taxation levels. This can be linked to different levels of economic development, such as borders between developed and developing countries (e.g. United States and Mexico) or also to subsidies and economic development policies (e.g. Europe). In a setting where there are notable operational costs differences, freight distribution activities will tend to locate where operational costs are lower and use the proximity offered by border regions to service jurisdictions having higher operational costs.
  • Gateway. Transport networks are often constrained to use specific gateways to go from one jurisdiction to another. This creates a convergence effect on networks and flows where the border represents an opportunity to consolidate or deconsolidate shipments. It also incites the setting of high capacity corridors, which can reinforce the border convergence effect. While this structure is common in maritime shipping and air transportation, it also takes place at land gateways.