Inside-Out and Outside-In Port / Hinterland Integration

Inside-Out and Outside-In Port / Hinterland Integration

Source: 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.

Comprehensive port-inland integration is uncommon and existing strategies tend to 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, in general, have opened a wider range of options for cooperation and new scales for development. This new development offers an opportunity for policy implementation that reaches 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 conductive 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 to improve their accessibility to global trade (exports). This is conductive 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 regulation (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.