Functions of Selected Inland Ports

Functions of Selected Inland Ports

Rodrigue, J-P, J. Debrie, A. Fremont and E. Gouvernal (2010) “Functions and Actors of Inland Ports: European and North American Dynamics”, Journal of Transport Geography, Vol. 18, No. 4, pp. 519-529.

Located only a couple of kilometers from the German border, Venlo, Netherlands was initially linked to Rotterdam by the Betuweline rail link in the 19th century. This link was shut down in 1991, but a new high capacity rail line labeled Betuweroute was completed in 2007 by the Dutch Government. The double-track high capacity rail corridor goes up to Venlo and it is expected that improvements will be made on the German side to extend the corridor up to Duisburg; Europe’s largest inland port. European Container Terminals (ECT), the main terminal operator in the port of Rotterdam and an element of Hutchinson Port Holdings (HPH), has been actively involved in the setting up of three inland ports to mitigate truck volumes at the port of Rotterdam, which was creating serious congestion issues. They are Venlo in the Netherlands, Duisburg in Germany, and Willebroek in Belgium, all of which entered operation in 1999.

The main function of Venlo is the consolidation and deconsolidation of rail traffic bound to or coming from the port of Rotterdam’s on-dock or near-dock rail facilities. ECT acts both as a handling company to transload containers from rail to trucks and as a rail operator. Shuttle trains, managed by Keyrail and with DB Schenker as the main carrier, offer shuttle services several times per day for containers between Venlo and the terminals on the River Maas, including Delta (APM) and Home (HPH) terminals in Rotterdam. As a handling operator, ECT has the opportunity to consolidate flows for many shipping lines, a task performed by similar companies at other locations. Gradually, other services have been added like the storage of empty containers, a function to which Venlo is particularly well suited for due to its inland location and proximity to major importers and exporters along the Ruhr.

The inland Port of Lyon illustrates a variety of functions and actors involved in these functions. The term “port avancé” is used officially in the partnership initiated in early 1990 between the port of Marseille and the river port Edouard Herriot in Lyon, 310 km inland. This partnership is based on relations between private and public stakeholders, respectively, in port, river, and rail operations. These players came together in 1993 to form a society called “Lyon Terminal”, to help coordinate various activities related to intermodal transportation servicing the inland port. Lyon Terminal society is composed of different shareholders, with Compagnie Nationale du Rhône being the majority shareholder of a corporation that also includes the port of Marseille, a barge operator, and the combined transport rail Naviland Cargo. The company operates two container terminals to promote the development of river and rail shuttles. The various functions of handling, storage, packing, and inland transportation are provided in partnership with the shipowners and companies in charge of leasing and repairing containers. Lyon Terminal society, using the concept of “port avancé” in its discourse, offers a typical example of an inland port involving different stakeholders (public and private, institutional and operational) and carrying different port functions (promotion, management, development, operations).

Two important functions characterize this type of inland port. First (and typically), the society promotes intermodal integration through rail and fluvial transport corridors. Additional services (container leasing, packing, storage, etc.) correspond to the traditional functions of inland ports. But secondly, the inland port of Lyon is also developing city logistics services. The inland port is in close proximity to downtown, which is a rather unique situation compared with other inland ports that tend to occupy more peripheral locations within large metropolitan areas. Therefore, to justify its position and its consumption of contested centrally located land the port of Lyon must provide a service to the urban agglomeration. Also, the main shareholder of the port (Compagnie Nationale du Rhone; CNR) has an obligation to develop services of general interest, by providing investments each year. To meet this obligation, the development of a more sustainable freight mobility strategy is being pursued.

The mix of actors places the inland port in a unique role of fulfilling a conventional intermodal function, but the hinterland of this function focuses on the nearby agglomeration. It does not really function as a standard inland port to capture market shares in a competition between other inland ports, even if it provides for the consolidation of traffic in the agglomeration of Lyon for the port of Marseille. The port of Lyon is an inland port of agglomeration (serving a local market) servicing the port of Marseille by offering additional intermodal options for the hinterland.

The Zaragoza Maritime Terminal (tmZ; terminal maritima Zaragoza) is a strategic initiative of the Port of Barcelona. It is part of the port’s development plan that aims at expanding the port hinterland, namely through the setting up of inland ports. In this line, tmZ was set up in 2001 as a partnership between the Port of Barcelona and the Logistics Activities Area of Mercazaragoza (founded by the Municipality of Zaragoza and the Mercasa National Company). This is not a new terminal, but the implementation of existing infrastructure into a service labeled “port of Barcelona” which includes road shuttle services, freight handling, consolidation and deconsolidation, warehousing, and other value-added logistic services. The port of Barcelona takes on the role of terminal promoter and the logistics activities are assumed by operators in the area of Mercazaragoza. Therefore, it is a strategy aiming at the promotion and organization of inland freight distribution, but without significant investments. The Port of Barcelona participated mainly in the funding of a new rail terminal in partnership with the national rail infrastructure manager (RENFE) and the company Acciona logistica, allowing rail shuttle services between the port and the inland port.

The Zaragoza Maritime Terminal is a nodal point in the center of two strategic corridors: the Ebro Corridor (Barcelona-Zaragoza-North of Spain) and the transversal Iberian corridor (Barcelona-Zaragoza-Madrid-Lisbon). The inland port is roughly at the center of an area delimited by Barcelona, Madrid, and Bilbao that account for 70 % of the Spanish GDP. This inland terminal mainly competes with the port of Valencia for services to the region of Madrid. Through a similar strategy, the port of Barcelona is developing two inland ports in the south of France and west of Spain. The Zaragoza Maritime Terminal illustrates a specific inland port role; the capture or retention of traffic in areas of market competition with a strategy involving a minimal level of investment.

The BNSF Logistics Park Chicago began operations in 2002 and is entirely a private initiative spearheaded by the rail operator BNSF who spent close to one billion USD to build North America’s largest intermodal rail terminal 60 km southwest of Chicago. The Joliet terminal, along with many others around Chicago, is at the end of a transcontinental rail corridor serviced by BNSF and UP that links the Los Angeles / Long Beach ports to the Chicago hub. Chicago is a particularly important location within the North American rail system with seven major rail operators interconnecting. Co-located with this project is a 2,200 acres logistics zone that fulfills a wide array of functions, including an FTZ. A good share of the real estate is the outcome of reconversion of a munitions depot that was owned by the US Army (Arsenal), which was developed by CenterPoint, one of the world’s largest promoters and manager of logistical parks. The promoter ProLogis is also involved in the development of warehousing space in a section of the park. Co-location is an important aspect of such inland port ventures as it minimizes drayage between tier one and tier two activities.

A large share of the warehousing assets is rented, underlining the standard inland port landlord model where a promoter develops facilities with the expectation of revenue generation. The tenants are major “big box” retailers, third-party logistics providers dominantly linked with Pacific Asian supply chains transiting through California. The BNSF Logistics Park Chicago thus leverages the interests of several private actors in transportation and freight distribution. For the rail operator, it provides a modern high capacity intermodal terminal, improving the efficiency of the largest rail corridor in the world and consequently a major source of revenue (long-distance rail flows). The traffic of the corridor and of the Joliet terminal is further anchored by a co-located private logistics park. The users of this park benefit from more reliable rail services as well as better rates linked to economies of scale and short drayage distances; the rail terminal becomes part of the inventory management systems of the co-located customers.

The port of Savannah and its logistics cluster is under the jurisdiction of the Georgia Port Authority and has seen strong growth, the outcome of two major trends. The first concerns demographic and commercial changes that have attracted cargo that conventionally transited through the middle or north Atlantic ranges of the east coast. The second concerns investments in port infrastructures to provide additional capacity, shorter transit times through the all-water Panama route, large assets of greenfield real estate, and lower labor costs, which have contributed to position the region as a North American gateway.

Savannah’s growth has increasingly placed pressures on the setting up of satellite terminal facilities to alleviate the port’s terminals and to facilitate inland distribution. The port authority has particularly been active in the setting up of logistic zones in the port’s periphery. One such zone is the Savannah Port Authority Industrial Park (SPAIP) which is a site specializing in satellite activities removing pressures from the container terminals, such as container and chassis storage and repair. Nearby are two near dock real terminals, one owned by CSX and the other by NS. About 10 km from the port terminals are two large logistics zones; the Crossroads Business Park (CBP) owned by the Savannah Economic Development Agency and the Savannah River International Trade Park (SRITP) owned by the Georgia Port Authority. They both replicate the revenue generation landlord model where facilities are leased to tenants for various time periods, but some have purchased land and built their own facilities. Although such a speculative strategy can help attract customers since their entry costs are lower, it also comes at a risk that the landlord must bear if the expected customer base does not materialize or if some customers decide to move elsewhere.