Canada’s Asia-Pacific Gateway and Corridor Research Consortium, Gateway and Corridor Workshop, Regina, Saskatchewan, February Gateways, Corridors and Global Freight Distribution: Transpacific Issues Jean-Paul Rodrigue Associate Professor, Dept. of Economics & Geography, Hofstra University, New York, USA Paper available at:

Globalization and the Transpacific ■Globalization; a clustered and spatially diffused process In terms of production and consumption. Distribution is reconciling spatially diverse demands for raw materials, parts and finished goods. ■The backbone of globalization Networks are established to support distribution. Gateways are regulating the flows within networks. As international trade increases, gateways have become strategic locations.

Gateways and Hubs as Central and Intermediate Locations ■Gateways & hubs Nodes offering an accessibility to a large system of circulation. Obligatory (semi) points of passage. Convergence of transport corridors. Centrality and intermediacy. ■Gateways Favorable physical location. Intermodal and stable in time. ■Hubs Transmodal and subject to change. Commercial decisions. Delays vs. frequency of services. Gateway Intermodal Hub Transmodal

Corridors and Regional Development Specialization and interdependency Gateway Flows Order HighLow HighLow A B C

Main North American Trade Corridors and Metropolitan Freight Centers

Interdependencies and Imbalances ■Macro-economic and physical imbalances Globalization has made the economies of the Pacific Rim more integrated. These interdependencies however come with acute imbalances. The core of these imbalances is at start macro-economic: Comparative advantages. Foreign direct investments. Debt and asset inflation. Macro-economic imbalances have an outcome in the physical world of freight flows: International trade. Container flows. Transportation rates. Structure of long distance transport services.

The “Perpetual Motion Machine”: The Dynamics of the World’s Most Significant Trade Relationship Goods Bonds (IOUs) Asset Inflation Debt Reserves Interest Rates Unemployment $ for goods $ for bonds United States China USD Borrowing Investment

Share of Global Manufacturing Output,

World’s 10 Largest Exporters and Importers, 2005

Containerized Cargo Flows along Major Trade Routes, (in millions of TEUs)

Maritime Freight Rates (USD per TEU),

Two Major Transpacific Pendulum Routes Serviced by OOCL, 2006 (The Wal-Mart Express)

Largest American Importers of Asian Goods Through Maritime Container Transport, 2004 (in TEUs)

Container Traffic at Major Transpacific Container Ports: Mirror Images? Tokaido Yellow Sea Rim Sunan Delta Pearl River Delta Taiwan / Fujian Singapore San Pedro Bay San Francisco Bay Puget Sound Prince Rupert Ensenada

Gateways and Hinterland Effect Efficient Inland Freight Distribution Inefficient Inland Freight Distribution Pacific Asia North American West Coast SEZ Corridor

Containers Handled by the Port of Hong Kong, (in TEU)

Containers Handled by the Port of Los Angeles, (in TEU)

Containers Handled by the Port of Vancouver, (in TEU)

Types and Functions of Rail Freight Corridors TypeFunctionExamples Short distance (within a gateway / hub) Modal shift, improved capacity and throughput. Switch carrying, Alameda, “Agile Port”, Panama Hinterland access (between a gateway and its vicinity) Expand market area, reduce distribution costs & congestion Rail shuttles, PIDN, Virginia Inland port Landbridge (between gateways) Long distance container flows, continuity of global commodity chains North American landbridge Circum-hemispheric (between gateways with a maritime segment) Integrated global transport chains Northern East- West Corridor

Western North America: Value of US Rail Imports by Port of Entry, 2002

Western Canada: Taking Advantage of Intermediacy ■Prince Rupert: A new gateway? Congested West Coast Ports; in search of alternatives. CN Prince Rupert strategy: Focus on non-stop intermodal services to Chicago. Time component as a major comparative advantage (107 hours). The decision to use the gateway will be made by maritime shipping lines. The quality and efficiency of inland distribution will be a factor behind the number and frequency of port calls. Many logistical opportunities in between (transmodal). What about the “warm chain”? ■North Pacific Rim Trade Corridor A potential alternative?

Conclusion: Pacific Asia and 21 st Century North American Freight Distribution ■Transpacific Trade Emergence of global production networks. Substantial rebalancing of the global economy. ■Gateways, corridors and integrated transport systems Imbalanced freight flows; the gateways’ dilemma: Disequilibrium in the division of labor, trade, production and consumption. Pressures to manage disequilibrium (e.g. empties). Intermodal and transmodal operations: Reconcile the scales (from the “Agile Port” to the Landbridge). Logistical friction: A new modal balance (time, cost and efficiency). Competitive advantages derived from whole transport chains. The matter is mainly in the hands of private firms: Decide the allocation of assets and capital.

Circum Hemispheric Dreams