1. The Atlantic Rim: Comparative Issues in North American and European Logistics Annual Conference of the Association of American Geographers, Boston, Massachusetts, April 15-19 2008 The Terminalization of Supply Chains: Assessing Terminals within Freight Distribution Systems Theo NOTTEBOOM Institute of Transport and Maritime Management Antwerp (ITMMA), University of Antwerp, Antwerp, Belgium Jean-Paul RODRIGUE Department of Economics & Geography Hofstra University, Hempstead, New York 11549, USA

2. The Terminalization of Supply Chains A. Changing Role and Function of Transport Terminals B. Unraveling the Terminalization Concept C. Terminalization in a Supply Chain Context 2

3. A. Changing Role and Function of Transport Terminals  Modal separation In space (specialized terminal areas). In time (intermodal buffer). 3 ConventionalContainer Small terminal surfaceLarge terminal surface Direct transshipment possibleIndirect transshipment (modal separation in time and space) Limited mechanization and automation Advanced mechanization and automation Improvisation in terminal operationsOrganization and planning

4. Modal and Temporal Separation at Freight Transport Terminals RoadRail Modal and Temporal Separation Buffer Maritime / Barge Inland Transport System Maritime Transport System 1 1 1 2 3 4 1- Intermodal 2- Transfer quay to truck gates 3- On dock rail 4- Transloading 4

5. An example of modal separation in space: the Europaterminal in Antwerp Barges Deepsea services Trucks Rail

6. Temporary storage on the terminal  High dwell times: Terminal not always used as a facilitator for synchronization between transport modes Places for cheap storage of consignments So, could be result of deliberate actions of actors in supply chains  Terminals as cheap buffers in supply chains ?  Need for terminalization of supply chains

7. B. Unraveling the Terminalization Concept  Terminalization Growing influence of transport terminals in the setting and operation of supply chains in terms of location, capacity and reliability. 7 TypeBottleneck-derivedWarehousing-derived NatureTerminal as a constraintTerminal as a buffer ConceptRational use of facilities to maintain operational conditions Incorporating the terminal as a storage unit ChallengeStorage space, port call frequency, gate access “Inventory in transit” with “inventory at terminal” OutcomeVolume, frequency and scheduling changes Reduce warehousing requirements at distribution centers

8. C. Terminalization in a Supply Chain Context 8 Suppliers Gateway Offshore Hub Customers Extended Distribution Center Bottleneck Buffer ForelandHinterland DC Distribution center Inland containerized goods flow Inland non-containerized goods flow Maritime container flow Extended Gate Port regionalization and the creation of a Regional Load Center Network Inland Terminal Gateway

9. Terminalization and Supply Chain Costs  Transportation costs No noticeable effects. Related to higher terminal costs.  In-transit inventory costs Confers additional flexibility. Used as a buffer.  Warehouse inventory costs Partially transferred to the terminal. Blended with in-transit inventory costs. 9

10. Suppliers Gateway Customers DC Supply Chain Terminalization: Export Flows to the Gateway  Bottleneck-derived terminalization Containerized cargo: Logistics zones near the gateway or in a hinterland location connected to the gateway via a multimodal transport corridor. Distribution: Tends to be synchronized with terminal handling capacity. 10

11. Suppliers Gateway Customers DC Supply Chain Terminalization: The Maritime Segment  Buffer-derived terminalization Intermediate facility (offshore hubs): Transshipment, interlining or relay. Low cost locations before entering high distribution costs areas. 11 Offshore Hub

12. Suppliers Gateway Customers DC Supply Chain Terminalization: Import Flows to the Hinterland  Bottleneck and buffer-derived terminalization 1. Port regionalization: Regional load center network. 2. Extended gate: Development of inland terminals. 3. Extended distribution center: The terminal as a warehousing unit. 12 Inland Terminal 1 2 3

13. Inland Terminals; Different Settings, Different Functions Port Satellite Terminal Intermodal / Transmodal Facility Freight Distribution Cluster

14. Inland Terminals and Terminalization of Supply Chains Gateway Port Low dwell time High dwell time Inland Terminal DC On call delivery Inland corridor Extended Distribution Center Satellite Terminal High Low Degree of Gateways Synchronization 14

15. Expected Profitability of Inland Terminals: Volume and Service Area Gateway Port Inland Terminal 10 km 60 km Service Area Inland corridor High volume potential and low haul costs (Ideal Case) High haul costs compensated by high volume Low volume compensated by low haul costs Bad situation with high haul costs. Limited costumers 15 km 20,000 TEU Service Area TEU Potential High Profitability Low Profitability Volume High Low 15

16. Conclusion: Main Dimensions of Terminalization 16 Actors Transport and terminal operatorsDistribution centers Extended Gate Dominant (initiator)Limited participation Extended Distribution Center FacilitatorDominant (initiator) Scale Short DistanceLong Distance Extended Gate Satellite terminalsInland terminals with corridors Extended Distribution Center High level of gateway synchronization High inland port synchronization (Corridor dependent) Mode Rail / BargeRoad Extended Gate Intermodal or transmodalLimited Extended Distribution Center Multiple functions (direct delivery, repositioning) Merge in transit / Cross-docking Terminals are getting more embedded in supply chains