1. MEDLOG 2011, Tangier, Morocco, March 31- April 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

2. 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?

3. “All-Miles” Logistics: Global Maritime Freight Transport System

4. Container Terminal Portfolio of the four Main Global Terminal Operators, 2010 Top ten terminal operators: 65% of the world’s total container handlings

5. Supply Chains: Alternating First and Last Miles Extraction Processing Fabrication Assembly Distribution Retailing Logistics Chain 1 Transport Chain 1 LC 2 LC 3 Logistics Chain 4 TC 2 TC 3 TC 4 TC 5

6. Containerization Growth Factors Derived Economic and income growth Globalization (outsourcing) Fragmentation of production and consumption Substitution Functional and geographical diffusion New niches (commodities and cold chain) Capture of bulk and break-bulk markets Incidental Trade imbalances Repositioning of empty containers Induced Transshipment (hub, relay and interlining)

7. The “Terminalization” of Logistics Terminal as a constraint Rational use of facilities to maintain operational conditions Storage space, port call frequency, gate access Volume, frequency and scheduling changes Bottleneck- Derived Terminal as a buffer Incorporating the terminal as a storage unit “Inventory in transit” with “inventory at terminal” Reduce warehousing requirements at distribution centers Warehousing- Derived Terminalization

8. The Complexities of Inland Logistics: The “Last Mile” in Freight Distribution Gateway Inland Terminal DistributionCenter Capacity Frequency Corridor Customer “Last Mile” Segment GLOBAL HINTERLAND REGIONALLOCAL Shipping Network MassificationAtomization 2 2 1 1 2 2 Inventory in transit 1 1 Inventory at terminal

9. Pushing Atomization in the Hinterland and Massification in the Foreland FORELAND HINTERLAND Main Shipping Lane Inland Terminal INTERMEDIATE HUB Economies of scale Functional Integration Hinterland-Based Regionalization GATEWAY Foreland-Based Regionalization

10. The Governance Setting of Gateways and Corridors: Many Actors Supporting Functional Integration Corridors and Hubs Gateways Maritime Freight Distribution Inland Freight Distribution Maritime shipping companies (Private). Waterways and navigation channels (Public). 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). Transport Actors

11. Asymmetries between Import and Export-Based Containerized Logistics Many Customers Function of population density. Geographical spread. Incites transloading. High priority (value, timeliness). Few Suppliers Function of resource density. Geographical concentration. Lower priority. Depends on repositioning opportunities. Gateway Inland Terminal DistributionCenter Customer Supplier Repositioning Import-Based Export-Based

12. American Foreign Trade by Maritime Containers, 2009 (in TEUs)

14. Distribution based on RDCs Distribution based on two gateways Distribution based on tiered system Distribution based on local DCs

15. World’s Main Intermediate Hubs and Markets, 2008

16. 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).

17. Possible Options in the Development of a Transshipment Hub Location and costs advantages Dependent on shipping companies and global terminal operators Pure Transshipment Hub Logistic zones and inland load centers Hinterland Gateway Port-centric logistics zones Gateway to a regional freight system Foreland Gateway

18. Governance Changes in Port Authorities: Competing over the Hinterland Planning and management of port area. Provision of infrastructures. Planning framework. Enforcement of rules and regulations. Cargo handling. Nautical services (pilotage, towage, dredging). Conventional Port Authority Expanded Port Authority

19. Port Elizabeth Intermodal Complex, New York

20. Main Advantages of Co-location: Multiplying Factors for the Last Mile FactorAdvantages 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.

21. Conclusion: Transshipment Hubs at the Forefront of Last Mile Logistics 1 Last mile logistics functionally and geographically complex Terminalization increasingly part of last mile-logistics 2 Development of hinterland and foreland-based regionalization Reconciling massification and atomization in freight distribution 3 Last mile logistics influence the development options of a transshipment hub.