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The Future of Containerization: Box Logistics in Light of Global Supply Chains Jean-Paul RODRIGUE Department of Economics & Geography Hofstra University,

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Presentation on theme: "The Future of Containerization: Box Logistics in Light of Global Supply Chains Jean-Paul RODRIGUE Department of Economics & Geography Hofstra University,"— Presentation transcript:


2 The Future of Containerization: Box Logistics in Light of Global Supply Chains Jean-Paul RODRIGUE Department of Economics & Geography Hofstra University, Hempstead, New York 11549, USA Theo NOTTEBOOM ITMMA – University of Antwerp Keizerstraat 64, 2000 Antwerp, BELGIUM

3 Containerization, Production and Distribution Introduction: Looking Back at 50 Years of Containerization Containers in Global Supply Chains Challenges to Liner Shipping Networks Ports and Terminals: Convergence and Divergence Pressures on Inland Distribution

4 Looking Back at 50 Years of Containerization Intermodal Integration 50 years of stepwise technical improvements. Growth and Diffusion Forces shaping containerization and its adoption. Peak Growth? A look at the inflection of the logistic curve.

5 Major Steps in Intermodal Integration Pallets (1930s) TOFC (1950s) Containerization (1956) Standardization (size and latching) (1965) Transatlantic (1966); Containerships (1968) Deregulation (1980s) Doublestacking; IBCs (1985) COFC (1967) Time Intermodal Integration Advanced Terminals Regionalization Advanced Containers Intermodal rail crane (1985)

6 Two Processes behind Containerization: Growth and Diffusion Diffusion (Functional and Geographical) Growth Globalization Global containerized commodity chains (Optimal: 75% ?) Experimental niche markets Regionalization Port / inland terminals systems

7 Diffusion: Degree of Containerization, Selected European Ports, 1980-2005

8 The Largest Available Containership, 1970- 2006 (in TEUs)

9 World Container Traffic, 1980-2005. Reaching Peak Growth? Divergence AdoptionAcceleration Peak Growth Maturity 1966-1992 1992-2002 2002-2010(?) 2010(?) -

10 Containers in Global Supply Chains Logistics and the Velocity of Freight Intermodalism and pull logistics Containerized Global Production Networks The container as a production, transport and distribution unit

11 The Velocity of Freight: From Push to Pull Logistics Push Logistics Shipment Speed Transshipment Speed Pull Logistics Containerization Speed barrier Logistical threshold Future improvements

12 Containerized Global Production Networks Container Production Distribution Transport Modes, terminals, intermodal and transmodal operations Flow management (time-based), warehousing unit Synchronization of inputs and outputs (batches)

13 Challenges to Liner Shipping Networks Liner Service Networks in Transition Reconciling frequency, direct accessibility and transit times. Schedule Integrity Issues Port congestion as the main factor. New Intercontinental Shipping Routes Circum-hemispheric maritime / land interface.

14 Liner Shipping Networks: Variety of Scales and Services Conventional liner / break bulk services Mainline services Feeder services First order network Second order network Third order network Regional Port System

15 Schedule Integrity of Liner Services on Specific Trade Routes

16 Circum Hemispheric Rings of Circulation North American Landbridge Eurasian Landbridge Circum-Equatorial Maritime Highway Arctic Routes Atlantic Connector Pacific Connector

17 Ports and Terminals: Convergence and Divergence Convergence: Terminalization and Value Capture Terminals and commodity chains. Divergence: Planning Process Scarcity in terminal capacity.

18 Commodity Chain The Value Capture Process along Commodity Chains Port Holding Port Authority Maritime Services Inland Services Port Services Horizontal Integration / VerticalVertical Integration Maritime Shipping Port Terminal Operations Inland Modes and Terminals Distribution Centers

19 Delays in the Planning Process: Some Cases in Northwest Europe Development of initial plans Proposed date for start operations (first phase) Earliest date for start terminal operations Le Havre ‘Port 2000’ – France199420032006 Antwerp – Deurganck Dock - Belgium199520012005 Rotterdam – Euromax Terminal – the Netherlands 200020042008 Rotterdam – Maasvlakte II – the Netherlands 199120022013/2014 Deepening Westerscheldt -the Netherlands/Belgium 199820032008? Wilhelmshaven/JadeWeserPort - GermanyNA20062010 Cuxhaven - GermanyNA2006Never Dibden Bay – UKNA2000Never London Gateway – UKNA20062009 Felixstowe South – UKNA20062007 Hull Quay 2000/2005NA20002007

20 Some Terminal Development Options Congestion level High Low (A) Initial situation (C) New terminals along the wider coastline (D) New terminals/ports near existing ports SEA LAND (B) New terminal development in existing ports Multi-port gateway region Corridor

21 Pressures on Inland Distribution Imbalances and Repositioning Coping with macro-economics and the global structure of production. Port Regionalization Improving the maritime / land interface. Maritime Gateways Corridors and the logistical hinterland.

22 Imbalances and Container Repositioning Strategies Repositioning Distance (TEU – KM) Unit Repositioning Costs Local Regional International Container manufacturing costs (Empty interchange) (Intermodal repositioning) High imbalance Low imbalance Repositioning not economically feasible (Overseas repositioning) Imbalances not considered a problem High limit of feasible actions Low limit of feasible actions

23 Port Regionalization and the Development of Logistics Poles Company-specific logistics network LAND SEA Primary and secondary logistics zone Multimodal transshipment center Logistics site Logistics Pole Transport corridor

24 Container port / terminal Logistics zone / site Strongly developed corridor Poorly developed corridor Multi-port gateway region Pacific-Asia (e.g. Pearl River Delta) North American West Coast (e.g. LA/Long Beach) North Europe (e.g. Rhine Scheldt Delta) Landbridge Gateways and the Logistical Hinterland

25 Conclusion: Containerization Reaching Maturity Risks in supply chains Growing efforts spent at dealing with disruptions. Coexistence of shipping networks Flexibility in routing options in light of global production networks (costs / time options). Development of multi-port gateway regions New port hierarchies and a multiplication of the number of ports engaged in containerization. Three scales of inland containerization Continental: high capacity long distance corridors. Regional: integration between maritime and inland transport systems. Local: advanced terminals.

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