INTERMODAL LOGISTICS CENTRES AND FREIGHT CORRIDORS

Dr. Norbert Wagener, Managing Director of Wagener&Herbst Management Consultants GmbH[1], presented a paper in LogForum (available since June 2017) about how international freight corridors facilitate the development of intermodal logistics centres in the form of Freight Villages. The paper is based on his presentation at the VIIth International Scientific Conference on May 12, 2017 at the WSL University of Applied Sciences in Poznan.

The development of international freight corridors requires efficient intermodal logistics centres which play a decisive role as nodes in transport systems and supply chains. They not only enable temporary storage and buffering of cargo but also provide a variety of different logistics service functions and serve as centres for consolidation and distribution and as interfaces between long-distance and regional transport.

The emergence of intermodal logistics centres is closely connected with the introduction of overseas container shipping in the late 70’s and 80’s of the last century. With the conception and implementation of long distance rail freight corridors a similar change in international transport networks can be observed today, but primarily land-based this time. There are heavy investments into a TEN-T network of the European Union but also in new rail corridors between Europe and China (e.g. New Silk Road) and within the developing countries and in newly developed economies. Long distance rail freight corridors have numerous benefits; primarily, they considerably decrease transit times and costs thus extend markets and open new opportunities for regional industries. However, corridors need doors for entrance and exit. Intermodal logistics centres can fulfil this function as interfaces between modes and as cargo generators for the main haul.

THE DEFINITION OF LOGISTICS CENTRES/FREIGHT VILLAGES

A common or even standardized terminology does not exist regarding the phenomena of logistics centres. There is a wide variety of terms and definitions differed between countries and implied different functionalities, e.g. Freight Village, Dry Port, Inland terminal, Logistics Node, Urban Distribution Centre, Intermodal Terminal, Transport-Logistics Centre, Public Logistics Centre, Intermodal Logistics Park, Multimodal Platform, etc. In this paper the hierarchical definition will be used, which covers three levels of logistics centres depending on scope of the value added services and functionality, was developed by Notteboom and Rodrigue and proved to reflect best the interdependence of different types of logistics centres and can serve as an umbrella definition.

FREIGHT VILLAGES AND THEIR BENEFITS

A Freight Village (FV) is a specialized industrial estate consisted of all kind of logistics companies, public services and various auxiliary services. FVs also include an intermodal terminal which facilitates the integration between different modes of transport thus offering the choice and selection of the best possible cost and time effective transport chain for shippers. Usually located at the outskirts of big cities FVs offer the possibility to combine long distance intermodal transport, warehousing and regional distribution, resulting in a more efficient, multimodal transport and less congestion. Moreover, FVs can also be regarded as important hinterland nodes for main sea ports. This kind of formation of FVs is a win-win situation for the public and the private sector. The former benefits from the increase of employment, concentration of investments and less traffic in the cities; while the availability of ready to settle land plots, best infrastructure and auxiliary services and the synergetic effects with the neighbourhood are advantageous factors for the latter.

FVs have not only a high impact on regional development but also serve as access points and cargo generators for freight corridors, which play an important role to remove infrastructure bottlenecks, to improve technical and organizational interoperability between national systems and to facilitate international trade and transport through shorter transit time at lower costs. All in all, Freight Corridors and Freight Villages could facilitate each other in their developments and open new chances to each other. Taking this into consideration, the European Commission follows a policy to strengthen the co-operation between rail infrastructure managers concerning infrastructure development and interoperable systems. Recognizing the importance of these functions the EU promotes interoperability and provides co-financing for necessary infrastructure investments through the TEN-T programme and the Connecting Europe Facility.

GENERAL PRINCIPLES FOR THE DEVELOPMENT OF FREIGHT VILLAGES

In the followings, we provide a list of consideration of general principles how to establish Freight Villages could improve the effectiveness of these logistics centres along freight corridors.

1. Active role of the state. As the establishment of Freight Villages is a complex task, the state should play an active role in initiating and supporting the development of FVs. Best results have been achieved when the different interest groups work together in a kind of public private partnership.
2. Master planning. Because of a lack in spatial planning in many countries a structured development of areas for warehousing and distribution does not exist. On the other hand, intermodal inland terminals are usually owned and operated by railways which may have a master plan for their terminal development; however, this is not connected to FVs. To stimulate the use of multimodal transport, to promote a more coordinated development of logistics areas and to create a win-win situation, a concerted action of the stakeholders (state, municipalities, railways, ports and private property developers, logistics companies) in a master planning process is required.
3. Objective location finding and land availability. For the sake of the FV’s success in the future, multiple criteria from the viewpoints of different stakeholders need to be considered during the designation of the right location. The availability of large real estates of 100 hectares or more at locations suitable for logistics is a key issue and very often a bottleneck, because public developers face the challenge to decide between available, but sub-optimum places and optimum but not available locations.
4. Participation and co-operation of different stakeholders in the business model. For the development of a FV three principal business models can be recommended. First option is that the private or the public entity develops the FV with own capacities and on own account. Second option is that with other stakeholders a development company as a special purpose vehicle is founded to develop the FV. If own capacities or financing abilities are not sufficient a third planning or development company can be contracted, for instance in the form of a trusteeship. In order to make best use of intermodal and other infrastructure facilities and to create synergy effects between the companies a careful selection and location process of investors is also important.
5. Stepwise scheme for financing. High public investments and financing costs can be limited and risks can be reduced through a stepwise approach. In a first phase the first land section can be developed and land plots can be sold. Then the revenues gained from these sales are invested into the development of the next section of the estate.

FUTURE TRENDS AND NEW TECHNOLOGIES

The concentration of logistics companies in Freight Villages promotes the application of new technologies. Major trends for the future development of logistics centres are the following:

1. application of emission free city logistics and electro mobility,
2. formation of freight exchange platforms,
3. development of new security solutions and innovative telematics systems,
4. application of innovative horizontal loading technologies for non craneable trailers,
5. digitalization of supply chains and information platforms.

The implementation of new intermodal train concepts and new technologies would benefit largely from a collaboration of terminals and Freight Villages along freight corridors and within transportation networks. In Europe, this process is still in the beginning, but European Associations and the EU corridor coordinators could play a promoting role in this.

 

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[1] Moreover, in 2014, Dr. Wagener was appointed as an extraordinary professor at the Chair for the Design of Logistics Systems at the WSL.