1. The Railway Association of Canada (RAC), Annual Rail-Government Interface (RGI) Meeting, Ottawa, May 15, 2007 Ten Global Trends Impacting North American Rail Freight Distribution Jean-Paul Rodrigue Associate Professor, Dept. of Economics & Geography, Hofstra University, New York, USA Email: ecojpr@hofstra.edu Paper available at: http://people.hofstra.edu/faculty/Jean-paul_Rodrigue

2. A Shift from Derived to Integrated Transport Demand The nature of distribution has changed From push to pull logistics Transportation and distribution jointly planned  Container yard, Port of Yantian, China

3. Commodity Chains and Added Value Commodity chain Added value Low High Manufacturing R&D Globalization Distribution Design Branding Marketing Sales / Service Concept Logistics

4. From Push to Pull Logistics Supplier Manufacturer Customer Distributor Supplier Manufacturer Distributor Customer 3PL Returns / Recycling Point-of-sale data Freight flow Push Pull

5. The “China Effect” has Profoundly Changed Global Freight Distribution The location of production has changed Global production networks Shift in the world’s commercial balance  APL Distribution Center, Shenzhen, China

6. Traffic at the 50 Largest Container Ports, 2004

8. Sectors of American Imports of Asian Goods Through Maritime Container Shipping, 2004 (in TEUs)

9. Significant Imbalances in Trade and Freight Distribution Imbalanced freight flows The empty container problem  Empty trucks waiting to enter China, Hong Kong

10. World’s 10 Largest Exporters and Importers, 2005

11. Balance of Containerized Cargo Flows along Major Trade Routes, 1995-2006 (in millions of TEUs)

12. Containers Handled by the Port of Vancouver, 1997- 2006 (in TEU)

13. Private Global Freight Operators The value capture of global supply chains Global port holdings & 3PL Positioning of intermodal assets Gaining a foothold in major gateways  “Maersk Sealand” Locomotive, Landers Yard (NS), Chicago

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

17. Redefinition of the Maritime / Land Interface Port regionalization Inland terminals Rail integrated with port operations  “Emma Maersk”, 12,500 TEU, Rotterdam, Netherlands

18. Port Inland Distribution Network and Freight Clusters

19. Intermodal Integration is Still in its Early Stages Expansion and diffusion to new markets Advanced containers  Container waiting to be loaded, Shenzhen, China

20. World Container Traffic, 1980-2005, and Guesses for up to 2020

21. Higher Costs for Inland Freight Distribution Peak oil Congestion Modal shift  Chassis waiting to be picked, Corwith Rail Yard, Chicago

22. World Annual Oil Production (1900-2005) and Peak Oil (2010 scenario)

23. The World’s Largest Oil Fields, 2005 Oil FieldOutput (MBD)% of national output Status Ghawar (Saudi Arabia)4.540%Possibly declining Cantarell (Mexico)2.060%Declining Burgan (Kuwait)1.768%Declining DaQing (China)1.040%Possibly declining

24. Level of Congestion of the Interstate Highway System

25. Transmodal Operations: The Next Frontier in North American Rail Distribution Advanced rail terminals Higher throughput  Translisft crane, NS Rutherford yard, PA

27. Simulation of a Direct Transmodal Rail Operation

28. Thruport: Full and Hybrid Configurations Full Hybrid (2-1)

30. Time Factors more Embedded Within Rail Operations Improving the velocity of freight Rail distribution as an element of supply chains  UPS Willow Springs Distribution Center, Chicago

31. Logistics and the Acceleration of Freight Push Logistics Shipment Transshipment Pull Logistics Containerization Speed barrier Logistical threshold

32. Logistical Improvements, Manufacturing Sector, 1960s to 2000s

33. The American Economy is Essentially Bankrupt “Flipper Central”, Phoenix, Arizona (or any neighborhood near you) Debt and asset inflation Misallocation of capital Currency leverage Future growth expectations compromised 

34. 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