North American gateways in the age of globalization
Gateways play a strategic role in connecting, organizing and managing freight flows between regional markets and therefore impacting upon the global economy. Rail and highway systems have long been the main support for the North American freight distribution market. This conventional system has now been expanded by the North American Free Trade Agreement (NAFTA), as well as by the globalization of production. This has created an environment where the transport sector is coping to adapt to higher volumes, particularly at major gateways, as well as adhering to more stringent requirements in terms of frequency and reliability of these expanded supply chains. Parallel to this growth; the need to reconcile spatially diverse demands for raw materials, parts and finished goods has placed additional pressures on the function of North American freight distribution and logistics. In the current context, North American maritime gateways are facing several challenges. They are coping with acute trade imbalances resulting in very different freight flows between imports and exports, which are impacting terminal operations and inland logistics. This is associated with a prevalence of transloading where the contents of maritime containers (typically 40 foot) are transloaded into 53 foot domestic containers; a characteristic unique to North American gateway logistics. North American gateways are confronted with largely deregulated freight markets (eg. the Staggers Rail Act of 1980), although pockets of restrictions remain, such as the Jones Act, which imposes strict conditions on coastal shipping between US ports.
Trade synchronisms: China in the balance
The emergence of trans-Pacific trade and China in the global manufacturing market had profound impacts in terms of the volume and pricing of a wide variety of goods. During that period, China mostly focused on the lower range of the added-value manufacturing process in addition to having low labor costs. The usage of China as a privileged location in the global manufacturing system has thus been linked with low input costs (mainly labor) as well as low long distance transport costs brought by containerization. The longer distances of shipping freight from China were positively compensated by lower input costs, as well as the setting of massive economies of scale in maritime shipping through larger container ships. This explains why integration processes in North America, namely the use of Mexico as a low cost manufacturing base, were mainly bypassed in the last decade. Also bypassed was the setting of regional North American supply chains in light of the dominance and efficiency of global supply chains. However, the comparative advantages of China are starting to become eroded eroding in part because of inflationary pressures in input costs, such as labor, as well as higher energy prices and environmental pressures. North American supply chains may be positively impacted by such a trend which will put a greater emphasis on NAFTA as a comparative advantage structure. Changes in the structure and direction of freight flows in North America are to be expected with a higher level of regional orientation.
American containerized trade is characterized by an asymmetry between the nature of its imports and exports. North American retailers account for a substantial share of containerized imports, mostly involving finished consumption goods bound to major inland freight distribution centers. The largest importers, such asWal-Mart, Home Depot, Target, Sears, Costco, Ikea and Lowe's, are all mass (Big Box) retailers relying on high volume and low margin goods, which are dominantly produced in China.
Exporters show a completely different profile. A major category of containerized exports concerns recycles with exporters such as America Chung Nam, Potential Industries or Cedarwood- Young. Other major exporters include diversified resource-based (Koch Industries) forest and paper products (e.g. Weyerhaeuser, International Paper), agribusiness (e.g. Cargill, Archer Daniels Midland) or chemicals (e.g. Dow, DuPont). Yet, a significant containerized trade imbalance remains. For the major trans- Pacific and trans-Atlantic trade routes, while in 2010 17.1 million TEUs were imported in the United States, only 11.4 million TEUs of laden containers were exported. Thus, about 5.7 million TEUs needed to be repositioned empty.
Trade asymmetry has significant impacts on North American inland logistics. The import-driven segment involves a series of stages to reach a multitude of outlets with a freight density correlated with population density. Since the retail trade is essentially unidirectional, a great deal of retail goods are transloaded at gateways into domestic containers while the maritime International organization for Standardisation (ISO) containers are re-exported empty. The export-driven segment relies on the massification of shipments at major gateways and inland ports. Since many resources (chemicals, forest products, food) are extracted inland at locations that rarely correspond to significant population centers, the reconciliation of containerized import and export logistics is a challenging task. While millions of TEUs will leave American ports empty, many inland locations are facing container shortages.
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