Source: adapted from Rodrigue, J-P and T. Notteboom (2009) “The Terminalization of Supply Chains: Reassessing the Role of Terminals in Port / Hinterland Logistical Relationships”, Maritime Policy and Management, Vol. 36, No. 2, pp. 165-183.
Two types of terminalization can be identified:
- Bottleneck-derived terminalization. It encompasses a conventional perspective on the role of terminals, in which terminals are the primary source of delay and capacity constraints for the supply chain. It does not necessarily mean that the terminal is running close to capacity, but rather that operational issues (storage space, port call frequency, gate access) are imposing a more rational use of the facilities, thereby maintaining the terminal’s performance and reliability. This is particularly important, as terminal operators must maintain a level of service to their users, especially maritime shipping lines. In this case, the supply chain adapts to changes in volume, frequency, and scheduling and may seek alternatives if performance and reliability are unsatisfactory.
- Warehousing-derived (buffer) terminalization. It refers to the warehousing function, in whole or in part, being shifted to the terminal. The terminal becomes a buffer, like a distribution center, which makes it an active component of the supply chain, not a factor of delay, but a storage unit. It can provide the supply chain with greater flexibility by reducing warehousing costs and adapting to unforeseen events such as demand surges or delays. An inventory-in-transit strategy, coupled with an inventory-at-terminal strategy, can significantly reduce warehousing requirements at distribution centers and offer greater flexibility in selecting the final destination of an unbound shipment. Given the wide variety of supply chains, each with its own requirements for origins, destinations, frequency, reliability, and overall elasticity, buffer-derived terminalization can take many forms.