the role of dry ports in logistics: towards a...
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The role of dry ports in logistics: towards a terminalization of supply chains.
Theo NotteboomITMMA - University of Antwerp
Conference ‘Site assessment’ - Brugge, 8 mei 2009
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The logistics environment
• Transport costs have increased from 30-40% of total logistics cost up towards 60% in the last two decades
• Delivery within 24h will become the rule: inventory ! - 27% of logistics service providers comply today
- 44% will comply in 3 years time (Prologis-CapGemini, 2006)
• Pressure on (infrastructural) capacity (current crisis = reflection moment), reliability and rate stability
• Environmental and security issues are omnipresent
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source: BCI
From
Shipper ConsumerDC
EDC
To
Shipper ConsumerRDC
Rapidfulfillment center
CrossDock
The logistics environment Chains become networks
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Distribution based on RDCs Distribution based on one EDC
Distribution based on tiered system (EDC+RDCs) Distribution based on local DCs
© ITMMA 2009
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The logistics environment Logistics sites group to become logistics zones
LAND
SEA
Multimodal transshipment center
Logistics site
Primary
logistics zone
Secondary
logistics zone
LAND
SEA
Source: Notteboom & Rodrigue (2004)
FROM TO
Places which combine central location with gateway function are likely to be chosen
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Bron: Notteboom & Rodrigue (2005)
0 50 100 150 20025Kilometers
France
Belgium
Lux
Germany
Netherlands
ROTTERDAM
Zeeland Seaports
ANTWERPZeebrugge
Ghent
Ostend
Brussels
LilleLiège
WielsbekeGenk
DuisburgEmmerich
Nijmegem
Avelgem
Born
Venlo
Valenciennes
Grimbergen
Willebroek
DeurneMeerhout
Duesseldorf
Cologne
Krefeld
Neuss
Bonn
Andernach
Dortmund
Amsterdam
Alkmaar
BeverwijkZaandam
HarlingenLeeuwarden
Veendam
Meppel
GroningenDrachten
Kampen AlmeloHengelo
ZutphenEde
HillegomUtrecht
A. a/d Rijn
TilburgOosterhout
Helmond
Gorinchem
MoerdijkDen Bosch
Oss
Valburg
Stein
Gennep
Mertert
Koblenz
Dormagen
Seaport in Extended Rhine-Scheldt Delta
Logistics corridors
Inland Container Terminal (barge
or multimodal)
Growth region European
Distribution (outside seaport system)
Dunkirk
The logistics environmentLogistics sites group to become logistics zones
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Source: Cushman & Wakefield, Healey & Baker
The logistics environment
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Middle East – Far East
Main shipping route
Americas
Americas
Transhipment/interlining port
(transhipment incidence >75%)
Logistics core region
Multi-port gateway region
Inland corridor
Main shipping route
Gateway port
Gateway port also handling
substantial transhipment flows
Multi-port gateway regions
1. Extended Rhine-Scheldt Delta
2. Helgoland Bay
3. UK SE Coast
4. Spanish Med
5. Ligurian Range
6. Seine Estuary
7. Black Sea West
8. South Finland
9. Portugese Range
10. North Adriatic
11. Gdansk Bay
12. Kattegat/The Sound
1
2
11
6
5
10
4
9
7
3
8
12
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Increased interest in hinterland issues
• Market players:
- Cost balance is shifting to inland costs
- Competition carrier haulage/merchant haulage
- Vertical integration by market players in view ofrevenue-making, cost savings and creation of value-added to customers
- Coordination actions among market players and portauthorities to streamline inland logistics
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The ‘terminalization’ concept
• Terminalization
- Growing influence of transport terminals in the setting and operation of supply chains in terms of location, capacity and reliability.
9
Type Bottleneck-derived Warehousing-derived
Nature Terminal as a constraint Terminal as a buffer
Concept 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
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• Fight ‘atomization’ with inland ports:
vessel vessel
= direct truck = barge/rail shuttle
= endhaul truck
Seaport
terminal
Inland
terminal
Inland
terminal
Inland
terminal
Seaport
terminal
The ‘terminalization’ conceptBottleneck-derived terminalization
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Gateway Port
Low dwell time High dwell time
Inland Terminal
DC
On call delivery
Inland corridor
Extended Distribution Center
Satellite Terminal
High
Low
Deg
ree
of
Ga
tew
ay
s S
yn
chro
niz
ati
on
11
The ‘terminalization’ conceptWarehouse-derived terminalization
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Logistics zones• The concept of logistics zones in the hinterland is now well-advanced
in Europe:
- ‘platformes logistiques’ in France
- Güterverkehrszentren (GVZ) in Germany
- Interporti in Italy
- Freight Villages in the UK
- Zonas de Actividades Logisticas (ZAL) in Spain
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Policy development
• Logistics network development:
- Strong focus on link between gateways and logistics
Antwerp
Brussels
Ghent
Zeebrugge
OstendGenk
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Site selection
source: BCI
• Focus on costs, quality and transit time
• Personal factors and amenities
• Labor costs
• Transportation costs
• Occupancy costs
• Incentives (government)
Cost factors +
• Labor quality/flexib.
• Labor regulations
• Customs
• Transport situation
• Facilities & utilities
• Sites (prime location, high accessibility)
Quality factors
• Inbound transit time
• Outbound transit time
• Buffering at terminals
Time factors+
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Supply chains differ
• Product and firm characteristics influence logistics attractiveness of port and inland sites (Kuipers and Eenhuizen, 2004)
- Value density
- Delivery frequency
- Economies of scale and scope in production
- Country-specific product or packaging requirements
- Service-oriented distribution (versus cost-orientation)
- Share of transport costs in total distribution costs
- Share of distribution costs in total production costs
- Technological dynamism related to product
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Ports as habitats for logistics sites
The following logistics activities typically find a good habitat in ports :
• High dependency on short-sea shipping.
• Considerable reduction in the transported volume;
• Big volumes of bulk cargoes, suitable for inland navigation and rail;
• Companies which have a site in the port area;
• Cargo that needs flexible storage to create a buffer (products subject to season dependent fluctuations or irregular supply);
• Distribution centers in a multiple import structure (tiered) and as a consolidation centre for export cargo.
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Concluding remarks
• Inland terminals and dry ports have become indispensable in accommodating supply chains
• New dynamics in port/hinterland relations:
- Competition but also complementarity
- Creation of large logistics pole
- Terminalization process is unfolding
• A sound approach to location issues:
- Avoid an imperious approach: cargo flows can not be forced to opt for certain routes/locations
- Aim for a ‘flexible’ approach: routing alternatives build upon network qualities