The Integration of Continuous and Discontinuous Port Hinterlands

The Integration of Continuous and Discontinuous Port Hinterlands

Source: adapted from Notteboom and Rodrigue (2005) and adapted from Monios, J. and G. Wilmsmeier (2012) “Giving a direction to port regionalization”, Transportation Research Part A: Policy and Practice, 46(10), 1551-1561.

The direct hinterland of a seaport (or another terminal) tends to be continuous. More distant hinterland features tend to be discontinuous since the hinterland density is lower and because of the accessibility effect of transport corridors and inland terminals. The service areas of a container load center by rail and barge form overlapping service areas of individual inland terminals. The size of each inland service area depends on the service frequency and the rates of intermodal shuttle services by rail and/or barge, the extent to which the inland terminal acts as a gateway, and the efficiency and price of pre-and end-haul by truck. By developing strong functional links with particular inland terminals, a port might intrude into the natural hinterland of competing ports. “Islands” in the distant hinterland are created in which the load center achieves a comparative cost and service advantage in relation to rival seaports. This increases competition among ports of the same port system as the competitive margins of the hinterlands become increasingly blurred.

Comprehensive port-inland integration is uncommon, and existing strategies focus on the transportation function, whereas the logistics and supply chain functions are more in the interest of regional and public development agencies. Port devolution and deregulation of port infrastructure and transport services have opened a wider range of options for cooperation and new scales for development. This new development offers an opportunity for policy implementation beyond the physical development of infrastructures and traditional port operations. Divergence can be identified between two broad conceptual categories of hinterland logistics.

  • Outside-In (import logistics). A port-driven (port authority or terminal operator) form of hinterland logistics development. It seeks to alleviate terminal and gate congestion and service more effectively the port (terminal) customers. This is conducive to the setting of satellite terminal facilities and inland ports.
  • Inside-Out (export logistics). A public or private sector-driven form of hinterland logistic development. These actors are often not directly related to the port sector but are seeking logistics-oriented developments that enable them to improve their accessibility to global trade (exports). This is conducive to the setting of load centers that can be supported by public policy, including incentives and direct investments in infrastructure and operations.

Still, facilities dealing jointly with inside-out and outside-in logistics can be established. The success or failure and source of port/hinterland integration can commonly be attributed to the existence of institutional barriers that prevent the efficient and effective operation of an integrated port-inland system. These can relate to policies or regulations (either over-regulation of transport services or under-regulation of inland terminal planning regimes) or operational aspects such as consolidation of market demand across political boundaries or finding space to marshal trains or transload cargo between two competing private rail networks.