Optimal location of logistics centers Freight Modeling in Finland Tapani Särkkä/MATREX

When Infrastructure Counts. | Contents Objectives and scope Freight model Evaluation method Results Remarks 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 2

When Infrastructure Counts. | Objectives and Scope Find out optimal locations for logistics centers and their transport economic significance in Finland -ca. 70 locations studied Unitized freight (e.g. Containers) of Finnish export and import with Russian through freight Europe, Russia and continents, focus on Finland Multimodal, multi commodity freight model 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 3

When Infrastructure Counts. | Finland 5.4 million people sq km -10% lakes Sparsely populated Compares to Oregon 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 4 Wikipedia

When Infrastructure Counts. | Freight model STAN: similar to Emme -Mode dependent networks -System optimum FRISBEE database in STAN, based on previous models, since commodities and 10 modes -Six components in costs (on links and transfers) -Operation -Level of Service -Risk of damage -Reliability -Value of goods -Transport Time -Frequency 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 5

When Infrastructure Counts. | The rail network in Frisbee 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 6

When Infrastructure Counts. | Freight transport chain and logistics center 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 7 A logistics center

When Infrastructure Counts. | Evaluation method Matrix convolutions to find out the best intermediate zones (logistics centers) for freight flow(s), similar to park-and-ride Stepwise development of the network -Logistics centers can be independent, compete or complement each other -All the potential centers are evaluated and ranked, the ”best” one is added to the base network. The procedure is repeated till all centers are in the base network Macros The procedure can be run backwards to be sure of the ranking 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 8

When Infrastructure Counts. | Unitized export in Finland 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 9 All exports by regions, ca. 10 mill tons/a, 0.71 mill units Exports by region without paper products, ca 2.5 mill tons/a 0.17 mill units

When Infrastructure Counts. | Ranking in step 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 10 Benefits by logistics center after one step of the evaluation procedure

When Infrastructure Counts. | Ten best locations in Finland, “final” ranking 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 11 Benefits by center; Export, all products (savings ca. 74 mil EUR/a) Benefits by center; Export, without paper products (savings ca. 35 mil EUR/a)

When Infrastructure Counts. | Locations on the map dd Month Year 12 Optimal locations of logistics centers, Finnish Export and import Optimal locations of logistics centers, Finnish export and import w/o paper products

When Infrastructure Counts. | Results 15 September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 13 The “optimal” locations are consistent with the expectations and among best throughout the various scenarios The best 20% of the potential centers yield 80…90% of the potential benefits The Finnish route (the Finnish ports) for the Russian freight is very competitive against the Baltic ports

When Infrastructure Counts. | Concluding remarks Preconditions for a good logistics center: -Demand in the vicinity -Work force -Working infrastructure -Available land -Geographical location Political will is not enough to establish a good logistics center Contact: Tapani Särkkä September 2011 Model City 2011, 22 nd emme users’ conference, portland oregon 14