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![Page 1: Foreland-Based Regionalization: Integrating Intermediate Hubs with Port Hinterlands Theo Notteboom ITMMA - University of Antwerp and Antwerp Maritime Academy.](https://reader036.fdocuments.us/reader036/viewer/2022081418/56649ceb5503460f949b6f63/html5/thumbnails/1.jpg)
Foreland-Based Regionalization:Integrating Intermediate Hubs with Port Hinterlands
Theo NotteboomITMMA - University of Antwerp and Antwerp Maritime Academy
Jean-Paul RodrigueDepartment of Global Studies & Geography, Hofstra University
IFSPA Conference 2009 Hong Kong Polytechnic University, Hong Kong – 25-27 May 2009
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Content
1. PORT REGIONALIZATION REVISITED2. THE ROLE AND FUNCTION OF INTERMEDIATE
HUBS3. IN SEARCH OF COMPETITIVE ADVANTAGE4. RECONCILING FORELANDS AND HINTERLANDS5. AN UNFOLDING PARADIGM?
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1. Port Regionalization Re-visited
• Globalization- Fragmented
production and consumption systems.
- Maritime side:• Economies of scale and
frequency of service along major pendulum routes.
- Inland side:• Spatial deconsolidation
(or consolidation).
• Local constraints- Congestion and
limited amount of land.
- Port growth and expansion issues.
- Freight activities:• Used to take place in
proximity of port terminal facilities.
• Setting of a network of inland terminals.
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1. Port Regionalization Re-visited The Spatial Development of a Port System
Phase 1: Scattered ports Phase 2: Penetration and hinterland capture
Phase 3: Interconnection & concentration Phase 4: Centralization
Phase 5: Decentralization and insertion of ‘offshore’ hub Phase 6: Regionalization
Load center Interior centreHinterland-based (Regional load centre network)
Freight corridor
LAND
SEA
Deepsea liner services
Shortsea/feeder services Foreland-based
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1. Port Regionalization Re-visited Regionalization and Hinterland Setting
North America Western Europe East and Southeast Asia
Coastal concentrationLandbridge connections
Inland concentrationCoastal gateways
Coastal concentrationLow hinterland access
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1. Port Regionalization Re-visited
- Path dependency:• Building on previous phases and ‘memory effects’.• Follow a similar evolutionary development path.
- Degree of contingency:• Deviate from existing development paths.
- Consequences:• Port systems do not follow the same sequence of
stages. • Some level of disparity among port system
developments.
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1. Port Regionalization Re-visited
• “Terminalization”- Higher level of integration within freight
distribution systems through terminals.- Terminals and terminalization:
• A buffer to be used for temporary storage.• A constraint inciting various forms of satellite/inland
terminal use and inventory in transit practices. • Extended gateways and extended distribution centers.
- The need to look at intermediate hubs.
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2. The Role and Function of Intermediate Hubs
• Emergence- Since the mid 1990s in many port systems.- Critical factors:
• Excellent nautical accessibility.• Proximity of major shipping routes (deviation).• Land for future expansion.
- Mostly owned by port holdings or carriers.- Not in all port systems:
• Prevalent in the Mediterranean and Pacific Asia / Middle East.
• Limited in the Americas (avoid flag restriction).
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2. The Role and Function of Intermediate Hubs
• Function- Multiply shipping options.- Optimization of vessel movements:
• Hubs, relay or interlining locations.
- Points of convergence of regional shipping- Connect the same hierarchy levels and improve
connectivity within the network (relay and interlining)
- Some intermediary locations strictly perform cargo handling functions and have a non-existent hinterland
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The Insertion of Intermediate Hub Terminals
Hub-and-Spoke
HubFeeder
Relay
Deep
-sea
line
Interlining
85% of Transshipment Traffic 15% of Transshipment Traffic
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World’s Main Intermediate Hubs, 2007
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World’s Main Transshipment Markets, 2007
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Transhipment flows in Europe
0
1
2
3
4
5
6
7
8
9
10
11
Antwerp Zeebrugge Rotterdam Hamburg Bremerhaven Le Havre Valencia Barcelona
Co
nta
iner
th
rou
gh
pu
t 20
07 i
n m
illi
on
TE
U Sea-sea transhipment
Inland gateway traffic(road/rail/barge)
19.9%
19.6%
25.4%
34.0%28.7%
60.8%
45.8%
37.9%
Transhipment hubs in Med (85-95% transhipment incidence)
Gioia Tauro, Algeciras, Taranto, Cagliari, Malta
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2. The Role and Function of Intermediate Hubs
• Regional shipping networks- Ports feel that serving feeder vessels means a
loss of status.- Feeder options:
• Direct feeders between hub and feeder port:- Lowest transit time but requires more feeders and smaller
feeder vessels.
• Indirect feeders via line-bundling loops including more than one feeder port:
- Economies of feeder vessel size, but incur longer distances and longer transit times.
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2. The Role and Function of Intermediate Hubs
• Vulnerability of intermediate hubs to container growth and decline- Direct end-to-end or line-bundling services
versus hub-and-spoke: a hub can become a redundant node in the network
- Footloose behaviour of transhipment/relay volumes
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Transhipment Hubs in the West Mediterranean
Algeciras
Valencia (MSC) Cagliari
Gioia Tauro
Malta
Taranto
Piraeus (?)
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Market shares of ports in the West Mediterranean according to the diversion distance (1975-2008)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
Sh
are
in T
EU
th
rou
gh
pu
t W
est-
Med
West-Mediterranean ports with one-way diversion distance > 250 nm
West-Mediterranean ports with one-way diversion distance 100-250 nm
West-Mediterranean ports with one-way diversion distance < 100 nm
Source: Notteboom (2009)
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Tanger Med IIAPMT/Akwa: + 3 mln TEU (2012)PSA: +2 mln TEU (2012)
Tanger MedAPMT: + 1.5 mln TEUEurogate: +1.5 mln TEU
Port Said (Egypt)Traffic: 3.2 (2008)Capacity: +2.5 (2011)
Ambarli (Turkey)Traffic: 2.26 (2008)
Haifa (Israel)Traffic: 1.39 (2008)
Beirut (Libanon)Traffic: 0.95 (2008)
Damietta (Egypt)Capacity: +4 (2012)
Mersin (Turkey)
Djendjen (Algeria)Capacity: +2 (DP World)
Bejaia (Algeria)Traffic: 0.15 (2008)
Capacity: +2.5 (>2010)
Algiers (Algeria)Traffic: 0.5 (2007)
Capacity: +0.8 (2010)
Container throughput in million TEU, capacity extensions in million TEU
PLAN OF TANGER MED
Rades (Tunisia)Traffic: 0.3 (2007)
Enfidha (Tunisia)Capacity: +1 (2011)+2.5 (period 2011-2015)+2 (period 2015-2030)
Misurata (Libya)Initial plans
Competition from new port developments in Med
Source: Notteboom (2009)
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3. Foreland-Based Regionalization: In Search of Competitive Advantage
• Vulnerability of intermediate hubs:
- Narrow focus on transhipment only
- Competition on basic resources such as location, nautical accessibility, terminal infrastructure and on terminal productivity
- Sources of competition can rather easily be imitated by competitors => hard to create a sustainable competitive advantage
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3. Foreland-Based Regionalization: In Search of Competitive Advantage
• Intermediate hubs likely to play a more important role beyond pure transhipment:- Capitalize on scale increases of vessels:
• Undermining the serviceability of some ports (lack of connectivity)• Hubs offer advantages of consolidation + support a level of traffic not
feasible otherwise
- Extracting more value/economic rent from cargo passing through:
• Using the hub for added-value logistical activities (see e.g. Theys et al, 2008)
• Low-end to high-end value added activities (e.g. mass customization of products)
• Low cost location before entering high distribution cost areas• Free-trade zone status can trigger development of value-added services
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3. Foreland-Based Regionalization: In Search of Competitive Advantage
- Integration of intermediate hubs in regional shipping networks.
- The maritime foreland of the intermediate hub is functionally acting as a hinterland.
- Reconciling operational characteristics of forelands and hinterlands
FORELAND
HINTERLAND
Main Shipping Lane
Inland Terminal
INTERMEDIATE HUB
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4. Foreland-Based Regionalization: Reconciling Forelands and Hinterlands
• Different momentums- Maritime momentum (carriers’ needs):
• Economies of scale.• Optimal network configuration (concentration).
- Inland momentum (shippers’ needs):• Spatial coverage (deconcentration).• Frequency and flexibility.
- A growing disparity:• Massification versus atomization.• At a certain traffic level; inland diseconomies of scale.
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The “Last Mile” in Freight Distribution
GatewayGatewayInland Inland
TerminalTerminalDistributionDistribution
CenterCenter
Capacity
Frequency
CorridorCustomerCustomer
“Last Mile”
Segment
GLOBALGLOBAL HINTERLANDHINTERLAND REGIONALREGIONAL LOCALLOCAL
Shipping Network
MassificationMassification AtomizationAtomization
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Functional and Geographical Diffusion of Containerization: Globalization and Regionalization
Cost
per
TEU
-KM
Volume
Foreland Traffic
Hinterland Traffic
Regionalization
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4. Foreland-Based Regionalization: Reconciling Forelands and Hinterlands
• Reconciliation- Hinterland-based regionalization permitted
inland freight traffic to keep up with volume and network configuration changes.
- Foreland-based regionalization enables small and medium-sized ports an integration to an intermediate hub:
• Long distance volatile transshipment traffic complemented with more stable regional traffic.
• Functional gateway of a regional port system.• Competitiveness of a maritime range.
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Port Regionalization Clusters in Pacific Asia
Foreland-based regionalization
Hinterland-based regionalization
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5. An Unfolding Paradigm?
• Changing role of intermediate hubs in regional shipping networks ?- Competitive strategy to cope with risks:
• Footloose operators and shifts in maritime shipping networks.• Secure traffic from smaller regional ports.• Capture added value.
• Perception of the feeder function- Ports prefer direct calls.- Option: link to more than one hub.
• Transition phase?- Foreland-based regionalization appears to be a
distinct phase on its own.