Source: adapted from Wakeman, T. (2008) Marine Transportation of International Freight for the Northeast Corridor, in Anticipating 2025 in Northeast Corridor Transportation: Aerial, Highway, Marine, and Rail Technologies & Linkages, Institute of Public Administration, Public Policy Forum, University of Delaware, Newark, DE. pp. 38-59.
An inland terminal has various integration levels with its hinterland that are contingent upon the concerned economic activities. These functional relations involve a specific array of flows within the facility and between the inland terminal and the activities it services. Succinctly, functional relations can be divided into three tiers:
- Tier I (Inland terminal). Concern all the activities and flows taking place within the terminal, particularly intermodal movements (rail car to a storage area and vice versa) and those related to warehousing and stacking in the yard. These flows are very closely integrated since they are linked with terminal efficiency and productivity. However, intermodal terminals require a large amount of space to reconcile the operational differences between rail (high volume and low frequency of flows) and trucking (low volume and high frequency of flows).
- Tier II (Logistics node). Inbound and outbound freight is linked with distribution centers and other freight activities directly related to the terminal, such as empty container depots and chassis storage. Logistics activities also involve the management part since these flows must be reconciled with existing demand and transport capabilities in terms of capacity and timely availability. Thus, the second tier is a managerial apparatus of the physical and information flows related to the inland terminal and functions as a buffer between the terminal and its hinterland (regional economy). It acts as the fundamental hinterland of the terminal. Over this issue, two dynamics are prevalent; one export-oriented and the other import-oriented. Export-oriented logistics are mainly based on consolidation, reconciling commercial flows with load units according to customer’s demand and level of service constraints. Import-oriented logistics are mainly based on deconsolidation, reconciling inbound load units with commercial flows. This implies several logistics activities such as assembly, transloading, palletizing, and even postponing deliveries to answer changes in demand better.
- Tier III (Freight region). This tier is not linked directly to the terminal but to its buffer (second tier) and concerns two distinct flow categories. The retailing sector is dominated by inbound flows that are imbalanced and must be managed by the second tier. The manufacturing sector tends to have more balanced flows, particularly for intermediate activities and generates substantial outbound flows managed by the second tier, which acts as an extended hinterland. On the opposite side of the spectrum, commodities, particularly if they are containerized, generate imbalanced outbound flows. The ideal would be to reconcile the imbalances of inbound container flows with outbound flows.
A logistics pole can be defined as the interactions between tier 1 and tier 2 activities, essentially creating a freight buffer for a hinterland. All the three tiers taken together essentially define a freight region; the dominant market area of an inland terminal.