The Next Fifty Years of Containerization: Inland Freight Distribution

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The Next Fifty Years of Containerization Inland
Freight Distribution

• Jean-Paul Rodrigue Theo Notteboom
• Dept. of Economics Geography, Hofstra
  University, New York, USA
• Email ecojpr_at_hofstra.edu
• Paper available at
• http//people.hofstra.edu/faculty/Jean-paul_Rodrig
  ue

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Maritime and Inland Freight Distribution A
Growing Continuity
Hinterland
Foreland
Corridor
Offshore hub
Gateway
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Early Attempts at Intermodal Operations (Late
1920s)
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(Second) Guessing Future Containerized Freight
Trends

• Prediction and forecasting often a futile
  exercise
• Those who have knowledge, dont predict. Those
  who predict, dont have knowledge. Lao Tzu
• Economic systems are not physical systems.
• Projections are often done through the rear
  mirror.
• Paradigm shifts are not considered.
• Overestimate, underestimate or completely miss
  the point.
• Linearly thinking versus non-linear processes
• Extrapolation of past trends to assume future
  conditions.
• Rarely works and leads to misallocation of
  resources.
• Bubbles are classic examples
• Stock market and tech (1995-2000).
• Real estate (2001-2005).

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The Difficulties of Forecasting Freight
Transportation
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A Brief Look Back at 50 Years of Containerization
Advanced Containers
Advanced Terminals
Regionalization
Intermodal rail crane (1985)
Doublestacking IBCs (1985)
Intermodal Integration
Deregulation (1980s)
COFC (1967)
Transatlantic (1966) Containerships (1968)
Standardization (size and latching) (1965)
Containerization (1956)
TOFC (1950s)
Pallets (1930s)
Time
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Inland Containerization Paradigm Shifts and
Maturity

• Three major paradigm shifts
• 1) The introduction of the container itself.
• 2.A) The introduction of double-stacking rail
  trains (North America).
• 2.B) River barge services (Europe).
• 3) Efficiency of intermodal and transmodal
  operations
• Reduce the number of times a container is
  handled.
• Reduce the distance over which it is handled.
• Reducing labor, equipment and time needed for an
  interchange.

Introduction
Containerization
Port transshipment
Diffusion
Double-stacking Barges
Expansion of the hinterland Long distance
corridors
Peak growth
Advanced terminals
Intermodal transmodal Velocity of freight
Maturity
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World Container Traffic, 1980-2005, and Guesses
for up to 2020
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Advanced Terminals Major Operational Issues for
Inland Containerized Freight Distribution
Capacity
Throughput
Velocity
Coverage
Timeliness
Advanced Terminal
Intermodal
Coastal
Improve the maritime / land interface
Inland
Transmodal
Geographical and market fragmentation of
distribution
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The Agile Port System
On-dock rail terminal
Local regional distribution
Dedicated Rail Corridor
National raildistribution
Block swap or No sort
Transloading
Local regionaldistribution
Inland Rail Terminal
Port Terminal
Maritime / Land Interface
Foreland
Hinterland
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Thruport Terminal Full and Hybrid Configurations
Full
Transmodal
Hybrid (2-1)
Intermodal
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Double Grappler Prototype
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Simulation of a Direct Transmodal Rail Operation
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Ownership Models

• Shared facility model
• Thruport authority.
• Public or private consortium.
• Mostly transmodal.
• Fits better the full Thruport configuration.
• Freight Village model
• Each railroad owns/operates a yard.
• Location is shared.
• Intermodal and transmodal.
• Fits better the hybrid Thruport configuration
  (two lifts).
• Agglomeration of distribution centers.

A
Shared Facility(Thruport Consortium)
D
B
E
C
A
DC
B
DC
DC
Freight Village
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Advanced Terminals

• Container terminal buffer systems
• New generation of inland rail terminals.
• Docking/lifting system designed to expedite the
  pick up and deliveries of containers.
• Installed trackside under the overhead crane (15
  to 90 degree angle).
• Suitable for intermodal facilities and large
  distribution centers.
• More capital intensive but result in improved
  throughput.
• Expectations of less than 20 minutes for pickups.
• Increase the velocity of freight.

Gate
Intermodal Buffer
Crane
Rail Tracks
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Simulation of an Automatic Truck Intermodal
Loading / Unloading System (Accelerator)
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Is 53 the Magic Number?

• New container specifications?
• Economies of scale push towards a larger
  container
• Particularly for inland carriers.
• Strong legacy costs (inertia)
• Accumulated investments in modal and intermodal
  infrastructure.
• The North American vs. the European standard
• ISO 40 footer 12.027 m x 2.33 m.
• NA domestic 53 footer 16.15 m x 2.4 m.
• European Intermodal Load Unit 13.2 m x 2.4 m.
• China will play a significant role in the
  decision.
• The bottom line is likely to be the size that can
  be fitted on road transport systems, so 53 could
  be the magic number.

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Carrying Capacity of Containers (in cubic feet)
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Beefed Up Containers

• A greater market share for bulks
• The efficiency of containerization is percolating
  several bulk markets.
• Pressures to provide specialized containers
• Opportunities and challenges.
• Bulk flows are uni-directional.
• Coping with trade imbalances?
• Advanced Containers
• RFID for quick scan.
• GPS system for tracking shipments.
• Monitoring of interior temperature (for cold and
  warm chains).
• Tracking of unusual events (opening, tilt and
  shocks).
• Closer integration to the IT requirements of
  logistics (the load unit becomes the production
  unit).

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Energy Uncertainty
High energy costs
Standard energy costs

• Energy and inland freight distribution
• Entropic forces at play.
• Trigger modal shifts possibly to slower modes
  (rail and barges).
• Change the nature and structure of inland freight
  distribution.
• Shorter truck and rail distances (truck loses
  distance share).
• Inland terminal efficiency could do a great deal
  to maintain the velocity of freight.

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Conclusion Malacca-max dreams and the inland
reality

• The inland question
• Regionalization (maritime / land interface).
• Advanced terminals with a higher velocity for
  intermodal and transmodal operations.
• Which gateways and which corridors?
• Competition between gateways and corridors to
  provide access to inland markets.
• Variations according to the geographical setting.
• Technologies and operational methods must have
  demonstrable economic returns.
• Economies of scale have limited options for
  inland distribution
• The container as the maximal inland logistical
  load.
• Rail is thus the main option (barging
  opportunities).
• Higher volume (economies of scale) through higher
  throughput.

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The End of Containerization