Transcript Last Mile Logistics and Port Regionalization in Global Freight

MEDLOG 2011, Tangier, Morocco, March 31April 2, 2011
Last Mile Logistics and Port
Regionalization in Global
Freight Distribution
Jean-Paul Rodrigue
Associate Professor, Dept. of Global Studies &
Geography, Hofstra University, New York, USA
Last Mile Logistics and Port Regionalization in
Global Freight Distribution
1
• What are the differences between
first mile and last mile logistics?
2
• How port regionalization supports
last mile logistics?
3
• Does last mile logistics matters
for transshipment hubs?
“All-Miles” Logistics: Global Maritime Freight
Transport System
Container Terminal Portfolio of the four Main Global
Terminal Operators, 2010
Top ten terminal operators: 65% of the world’s total
container handlings
Supply Chains: Alternating First and Last Miles
Logistics Chain 1
Extraction
LC 2
Processing
Transport Chain 1
LC 3
Fabrication
TC 2
Logistics Chain 4
Assembly
TC 3
Distribution
TC 4
Retailing
TC 5
Containerization Growth Factors
Derived
Substitution
Incidental
Induced
Economic and
income growth
Globalization
(outsourcing)
Fragmentation of
production and
consumption
Functional and
geographical
diffusion
New niches
(commodities
and cold chain)
Capture of bulk
and break-bulk
markets
Trade
imbalances
Repositioning of
empty containers
Transshipment
(hub, relay and
interlining)
The “Terminalization” of Logistics
Terminalization
BottleneckDerived
•
•
•
•
Terminal as a constraint
Rational use of facilities to maintain operational conditions
Storage space, port call frequency, gate access
Volume, frequency and scheduling changes
WarehousingDerived
•
•
•
•
Terminal as a buffer
Incorporating the terminal as a storage unit
“Inventory in transit” with “inventory at terminal”
Reduce warehousing requirements at distribution centers
The Complexities of Inland Logistics: The “Last
Mile” in Freight Distribution
Massification
Atomization
Frequency
Capacity
Shipping Network
1
Gateway
1
REGIONAL LOCAL
HINTERLAND
GLOBAL
Inventory in transit
Corridor
2
Segment
Inland
Terminal
2
Distribution
Center
Customer
“Last Mile”
Inventory at terminal
Pushing Atomization in the Hinterland and
Massification in the Foreland
Inland Terminal
Hinterland-Based
Regionalization
HINTERLAND
GATEWAY
Economies of scale
Functional
Integration
FORELAND
Main Shipping Lane
INTERMEDIATE HUB
Foreland-Based
Regionalization
The Governance Setting of Gateways and Corridors:
Many Actors Supporting Functional Integration
Maritime Freight Distribution
Transport Actors
Maritime shipping companies
(Private).
Waterways and navigation
channels (Public).
Gateways
Corridors and Hubs
Inland Freight Distribution
Terminal operators (Private).
Port operations (Port Authority).
Land ownership (Public and
Private).
On-dock rail (Port Authority and
terminal operators).
Near-dock rail (Rail companies).
Trucking and barging (Private).
Roads and highways (Public).
Rail lines (Rail companies;
ownership or right-of-way).
Asymmetries between Import and Export-Based
Containerized Logistics
Gateway
Inland
Terminal
Distribution Customer
Center
Import-Based
Many Customers
•Function of population density.
•Geographical spread.
•Incites transloading.
•High priority (value, timeliness).
Repositioning
Supplier
Export-Based
Few Suppliers
•Function of resource density.
•Geographical concentration.
•Lower priority.
•Depends on repositioning
opportunities.
American Foreign Trade by Maritime Containers,
2009 (in TEUs)
Importers
Whirlpool
Nike
Red Bull
General Electric
Jarden
JC Penney
Samsung
Ikea Intl.
Ashley Furniture
Chiquita
Heineken
Philips
LG Group
Costco Wholsale
Lowe's
Sears Holding
Dole Food
Home Depot
Target
Wal-Mart
Exporters
60,900
72,300
74,000
76,700
77,100
79,000
81,100
90,800
90,900
116,700
118,100
127,200
149,300
166,100
195,000
216,300
225,500
278,900
441,800
684,000
0
200,000
400,000
600,000
800,000
Cellmark Group
Genesis Resource…
Meadwestvaco
Sims Metal Management
Delong
Shintech
Cedarwood-Young
ExxonMobil
JC Horizon
Dupont
Procter & Gamble
Denison Intl.
Potential Industries
Cargill
Dow Chemical
Newport Ch Intl
Weyerhaeuser
International Paper
Koch Industries
America Chung Nam
0
51,300
54,800
58,100
60,700
65,100
66,900
68,800
70,700
72,400
74,300
78,000
86,900
90,000
90,300
103,000
110,900
112,500
120,100
120,600
259,000
200,000 400,000 600,000 800,000
Distribution based on RDCs
Distribution based on tiered system
Distribution based on two gateways
Distribution based on local DCs
World’s Main Intermediate Hubs and Markets, 2008
Factors behind Transshipment
Substitution
Small ships instead of large ships (better asset utilization).
Water instead of land (modal shift).
Network
expansion
More links and wider coverage (more traffic and throughput).
Intersection and relay (transit between long distance services).
Imposed
Lack of port infrastructure (capacity unavailable for large ships).
Congestion (potential delays for large ships).
High port costs (port call charges versus volume).
Cost trade off
Savings in ship cost vs. additional port handling (advantages of
‘offshore’ locations).
Level of service
Transit Time (varied; depend on the port pairs).
Frequency (higher; more port calls).
Reliability (less; more potential for delays).
Possible Options in the Development of a
Transshipment Hub
Pure Transshipment Hub
• Location and costs advantages
• Dependent on shipping companies and global
terminal operators
Hinterland Gateway
• Logistic zones and inland load centers
Foreland Gateway
• Port-centric logistics zones
• Gateway to a regional freight system
Governance Changes in Port Authorities: Competing
over the Hinterland
Conventional Port Authority
• Planning and
management of port
area.
• Provision of
infrastructures.
• Planning framework.
• Enforcement of rules
and regulations.
• Cargo handling.
• Nautical services
(pilotage, towage,
dredging).
Expanded Port Authority
Port Elizabeth Intermodal Complex, New York
Main Advantages of Co-location: Multiplying Factors
for the Last Mile
Factor
Advantages
Real estate
Lower land acquisition costs. Higher acquisition capital. Joint
land use planning.
Specialization
Transport company; terminal development and operations.
Real estate promoter; logistic zone development and
management.
Cargo interdependency
Respective customers. Joint marketing.
Drayage
Priority gate access. Shorter distances. More delivery trips.
Higher reliability.
Asset utilization
Better usage level of containers and chassis. Chassis pools.
Empty container depots.
Information
technologies
Integration of terminal management systems with inventory
management systems.
Conclusion: Transshipment Hubs at the Forefront of
Last Mile Logistics
1
2
3
• Last mile logistics functionally and geographically complex
• Terminalization increasingly part of last mile-logistics
• Development of hinterland and foreland-based regionalization
• Reconciling massification and atomization in freight
distribution
• Last mile logistics influence the development options of a
transshipment hub.