Institutional Challenges to Intermodal Transport and Logistics

Governance in Port Regionalisation and Hinterland Integration

Jason Monios

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781472423214
• eBook ISBN: 9781317115830
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Local & Regional Planning Public Policy
• Index: Politics & International Relations

While the operational realities of intermodal transport are relatively well known, the institutional challenges are less well understood. This book provides an overview of intermodal transport and logistics including the policy background, emerging industry trends and academic approaches. Establishing the three key features of intermodal transport geography as intermodal terminals, inland logistics and hinterland corridors, Jason Monios takes an institutional approach to understanding the difficulties of successful intermodal transport and logistics. Key areas of investigation include the policy and planning background, the roles of public and private stakeholders and the identification of emerging strategy conflicts. Substantial empirical content situates the theoretical and practical issues in real-world examples via three detailed case study chapters (covering the USA, UK and Europe), making the book useful to students as well as practitioners desiring an understanding of how intermodal transport and logistics work in practice. The identified challenges to intermodal transport and logistics are used to demonstrate how competing port and inland strategies can inhibit the necessary processes of integration required to underpin successful intermodal transport. The book concludes with a look at the future of institutional adaptation that may enhance the capacity of freight actors to engage with intermodal transport developments.

Chapter 1
Introduction

Why Intermodal Transport?

The subject of intermodal transport is raised with increasing frequency in government policy and planning documents, industry promotional brochures and academic journal articles. It is promoted by governments as a way to reduce emissions through modal shift as well as support economic growth through reduced congestion and better access to global trade routes. Terms such as ‘dry ports’ are used in public planning documents as though they were panaceas for uncompetitive regions and the transport strategy of every public authority seems to involve some kind of logistics platform to consolidate business, lower transport costs and boost local employment. Firms promote themselves as integrated logistics providers offering intermodal options, and the buzzwords of intermodal, co-modal and synchromodal strive for dominance on marketing material. Meanwhile, academics try to keep up with these trends, measuring the transport costs, time savings or emissions reductions claimed by new developments.

In Europe, despite large public investments, intermodal transport continues to struggle against road haulage, due to various operational reasons such as short distances, fragmented demand and equipment imbalances. While these issues also challenge short-distance intermodal traffic in the United States, the vast physical geography of the country means that there is a large market for intermodal traffic on long-distance routes. Developing economies are catching up, although the requirements are more for improved logistics than emissions reductions or even lower transport costs.

Intermodal transport strategies can be based on differing motivations, actors, functions and logistics models. Intermodal terminals can be close to the port, mid-range or distant. The goal of the port may be to ease congestion or to capture hinterlands as instruments of port competition. Terminals and corridors can be developed by port authorities, port terminal operators and transport providers such as rail operators or third-party logistics providers (3PLs), or they can be developed by public bodies, whether national, regional or local. Business models can be based on economies of scale on high-capacity, long-distance links or on logistics improvements such as providing containerisation facilities or allowing fast-track customs clearance. Even where the operational challenges of intermodal transport have been examined, sufficient effort has not always been made to disentangle the different elements. It is argued here that if the institutional relationships underpinning each development are not understood then the development may well fail, even if sufficient demand is known to exist.

This lack of clarity regarding the business strategy of an intermodal transport development is partly because, while the operational realities of intermodal transport are relatively well known, the institutional challenges are less well understood. Institutional approaches have been applied in other areas of geography and other disciplines such as economics. It is only in recent years that such a lens has been turned on the geography of freight transport, and this has only taken the form of a small number of journal articles. This work represents the first book-length treatment of the topic.

Intermodal Transport and Logistics in the Context of Port Regionalisation

Traditional spatial analyses of freight transport have been expanded to cover institutional relationships governing the complexity of transport connections. Recent research has shown how spatial development is to a large degree an institutional problem (de Langen and Chouly, 2004; Van der Horst and de Langen, 2008; Van der Horst and Van der Lugt, 2009; Van der Horst and Van der Lugt, 2011). This development recognises that modern transport actors operate in an increasingly complex and sophisticated transport and logistics environment, embedded within multi-scalar planning regimes. The notion of transport solely as a derived demand has been challenged and reformulated as an integrated demand (Hesse and Rodrigue, 2004; Rodrigue, 2006; Panayides, 2006; Hesse, 2008). As such, the relationship between goods flows and spatial development is complicated by networks of nodes and corridors that may not perform their key functions adequately, potentially constrained not just by physical infrastructure deficits but a lack of connectivity or an inability to fit into wider networks. The focus of this research is on the use of rail transport;¹ a firm’s decision to shift to this mode can be driven by many factors, such as external pressures (e.g. fuel price, legislation, customer pressure) or logistics strategy (e.g. central warehouse or distributed network, private fleet or 3PL) (Eng-Larsson and Kohn, 2012). Yet, according to some authors, the role of transport in logistics and the broader field of supply chain management has been under researched (Mason et al., 2007).

This book addresses the institutional challenges to intermodal transport and logistics, through the frame of port regionalisation (Notteboom and Rodrigue, 2005), which is an approach to port development that focuses on the inland aspects of the process, as well as taking port development models from a spatial focus to a focus on institutions. The research identifies and examines the processes implicit within the port regionalisation concept; namely, intermodal terminal development, logistics integration strategies and the institutional processes of resolving collective action problems. While port regionalisation covers more than intermodal transport, these three processes are all inextricably linked with the concept because the relevant infrastructure and the integration of dominant industry players provide means to capture or control key corridors and load centres. The port regionalisation concept relies on effective intermodal transport infrastructure and operations underpinning the levels of integration required for hinterland capture and control. Port regionalisation cannot, therefore, be fully understood (and hence theorised) without greater analysis of the key issues arising from an in-depth analysis of the spatial and institutional characteristics of intermodal transport and logistics.

The fundamental concern of this book is to understand the process of transport and logistics integration between ports and hinterlands in comparison to that previously observed in sea transport. In the past decade, shipping lines and port terminal operators have consolidated and integrated their portfolios through mergers and acquisitions, resulting in a small number of dominant firms. These firms have since benefited from significant economies of scale and scope and enabled them to provide something of a seamless intermodal transport movement from port to port. Many actors are endeavouring to pursue this same trend inland, but for true intermodality to be successful and economically feasible, land transport operations require a similar level of consolidation to that of the sea leg. The different characteristics of land transport, however, challenge this goal (McCalla et al., 2004). As Graham (1998: p.135) wrote: ‘the land-side is characterized by relatively low investment, high operating expenses, little scale incentive to collective operation and a considerable level of unremunerated activity requiring cross payment out of sea freight’. This book investigates the nature of these processes in order to identify the institutional barriers to intermodal transport and logistics.

The Research Approach

The research in this book follows a predominantly inductive approach. Inductive reasoning commonly proceeds from the specific to the general (as opposed to deductive approaches which flow in the opposite direction). It begins with observations then identifies patterns, from which hypotheses and theory may be developed. Like deductive approaches, inductive research may also begin with theory from the literature; however, while deductive research aims to test a theory (or to test hypotheses derived from a theory), in this case the inductive approach looks for aspects that are not explained by the current theory, and attempts to develop new theory that can account for these gaps.

Kelle (1997: unpaginated) suggested that ‘the theoretical knowledge of the qualitative researcher does not represent a fully coherent network of explicit propositions from which precisely formulated and empirically testable statements can be deduced. Rather it forms a loosely connected “heuristic framework” of concepts which helps the researcher focus his or her attention on certain phenomena in the field’. The generalisation remains a working hypothesis or extrapolation rather than a grand theory, based on logic rather than statistics or probability (Cronbach, 1975; Patton, 2002). According to Seale (1999: p.52), the researcher is ‘seeking for evidence within a fallibilistic framework that at no point claims ultimate truth, but regards claims as always subject to possible revision by new evidence’. He took this view forward by focusing on the skills of the individual researcher to construct a valid argument based on observable and presentable data. Seale argued that it is possible to follow a middle ground between positivist truth and socially constructed knowledge by remaining cognisant of the constructed nature of research even as this imperfect edifice is utilised to investigate a subject.

According to Yin (2009), a case study approach is appropriate when ‘how’ or ‘why’ questions are being asked, when the investigator does not have control over events (as one might in an experimental methodology) and when the phenomenon being studied cannot be separated from its context. Since all of these criteria are present in the current research, a case study methodology has been adopted, with differing approaches to the case study format in each of the three empirical chapters addressing each of the three research questions (see Chapter 2 for the derivation of the research questions).

Case studies can be based on both quantitative and qualitative data and indeed combined (Mangan et al., 2004; Näslund, 2002; Woo et al., 2011b). Qualitative case studies capture rich data and derive explanations from this ‘thick description’ (Stake, 1995). According to Merriam (1988: p.16), case studies are ‘particularistic, descriptive, and heuristic and rely heavily on inductive reasoning in handling multiple data sources’. Therefore the key aspects of the case study approach are the depth available from the qualitative data, the particularity of each case, the fact that it is situated within its context and the attempt to understand the phenomenon from multiple perspectives (Simons, 2009).

The data collection for this research was based primarily on expert interviews; more than 100 subjects were interviewed for the empirical sections of this book. These data were supplemented by document analysis in order to build robust case studies that could then be analysed through thematic matrix construction. The case study approach has been adopted because it provides the rich data that is required to achieve the inductive aims of this research. The port regionalisation concept requires greater disaggregation, thus it is only after the analysis of detailed case studies that explanations can be offered and theories developed that can improve upon and refine the port regionalisation concept. The book does not have a spatial focus but is guided by theory. Thus the research questions are open-ended because the goal is not to apply findings to a specific spatial context (e.g. port regionalisation in the UK), but to generalise to theory (e.g. how can the theory be improved or expanded). A case study methodology is suitable for these inductive aims.

Chapter 4 follows a multiple-case design, analysing numerous inland terminal developments in Europe. Chapters 5 and 6 each utilise a single case design, taking a single case in depth in order to explore in rich detail how these issues play out in industry. The cases have been selected through purposive sampling (as opposed to random sampling utilised for a survey methodology), chosen to represent certain characteristics. In particular, the cases have been chosen primarily for theoretical purposes, as they are guided by their potential contribution to theory. They can be used to test current categories, explore new categories and refine them. This is particularly the case in Chapter 4, which is based on a multiple-case design, as each case contributes to the emerging classification of inland terminals. Chapters 5 and 6 are based on in-depth analysis of single cases; therefore, while those cases are relevant for theory, they have also been chosen partly because of their representative nature.

In presenting the research findings, it is important to retain the rich data as well as the summarised evidence for answering the research questions. Flyvbjerg (2006) argued that ‘case studies … can neither be briefly recounted nor summarised in a few main results. The case story is itself the result. … the payback is meant to be a sensitivity to the issues at hand that cannot be obtained from theory’ (pp.238–9). Furthermore, ‘the problems in summarising case studies … are due more often to the properties of the reality studied than to the case study as a research method’ (p.241). On the other hand, Miles and Huberman (1994) recommend regular use of tables and matrices both for guiding the analysis and presenting the findings.

The case studies in this book are therefore presented via a combination of narrative form and tabulated summaries of key evidence for the research factors, which are then discussed at the end of each chapter. Sub-factors are used to structure the findings but the overall research questions are to learn about how the process takes place, therefore a narrative style can discuss those issues and allows for more detail on actual practice. This approach enables readers to follow the research process and draw their own conclusions on its internal validity, as well as the external validity, or degree to which the findings are transferable to other cases (Seale, 1999; LeCompte and Goetz, 1982).

It is also important not to lose the link to the interview context, as the value of expert interviews is that they provide an insight into actual practice, which should not be subsumed beneath overly abstract categories. Therefore while the key findings have been summarised in tables presented throughout each chapter, they have been supplemented by the inclusion of examples of practice drawn from the interviews. Due to commercial sensitivity the detail has been kept fairly general where necessary (mostly in Chapter 5).

Generalising from case studies can be problematic. Bryman (2008: p.55) stated that generalisability or external validity is not the aim: ‘case study researchers … do not think that a case study is a sample of one’. Case studies can be used to generalise to theoretical propositions rather than samples, meaning that the aim is to ‘expand and generalise theories (analytic generalisation) and not to enumerate frequencies (statistical generalisation)’ (Yin, 2009: p.15). Hammersley (1992) named these two kinds of generalisation theoretical and empirical and Lewis and Ritchie (2003) split statistical or empirical generalisability into two kinds, representational and inferential. In this research the goal is analytic generalisability, or generalising to theoretical propositions.

It is recognised that additional case studies will be required to continue this line of theoretical enquiry and strengthen the validity of the explanations offered in this book. On the other hand, one of the strengths of this research is the access to high calibre interviewees, particularly in Chapters 5 and 6. Therefore the case study methodology based primarily on semi-structured interviews offered the opportunity to capture valuable industry knowledge that would not have been possible through a different research design.

Structure of the Book

This book provides an overview of the important issues relating to intermodal transport and logistics, including the policy background, emerging industry trends and academic approaches. The three key features of intermodal transport geography will be established as intermodal terminals, logistics and corridors. An interdisciplinary perspective will be introduced, based on a discussion of the role of institutions, how they relate to transport and how they can enable understanding of some of the intractable challenges facing successful intermodal transport and logistics.

Chapter 2 provides an overview of intermodal transport and logistics, beginning with a brief history and then introducing the key actors and issues, examining the motivations of industry and government in reducing transport costs as well as decreasing emissions. Chapter 3 establishes the institutional approach that underpins the research in this book, charting key governance relationships between public and private sector actors.

Chapters 4–6 provide the empirical content via three detailed case study chapters based on extensive field work in Europe and the United States, exploring the theoretical and practical issues in real-world examples. Chapter 4 compares a sample of 11 European intermodal terminals, divided into one group with port investment and one group without, in order to identify different models of inland terminal development and improve inland terminal classifications that can then contribute to the port regionalisation concept, including classifications such as ‘dry port’, ‘extended gate’ and ‘freight village’. Their key features and functions are discussed, including the roles of the public and private sectors, relations with ports and rail operators and their situation within the logistics sector. Chapter 5 analyses a case study of intermodal logistics in the UK. Large retailers are the primary drivers of intermodal transport in the UK, and they are explored in the context of their relationships with rail operators and 3PLs. Chapter 6 examines the development of an intermodal corridor in the United States, offering the opportunity to study a collective action problem in detail, in which several actors need to come together to solve a joint problem. Collective action is an arena where various actors can be influential due to the role of informal networking in managing freight corridors; however, institutional constraints such as a conflict between legitimacy and agency and the limitations of institutional design restrict their ability to act directly.

Following the case study chapters, Chapter 7 uses the institutional literature from Chapter 3 to expand the empirical findings via a wider discussion of governance in transport and logistics, comparing the operational models identified in this research with other cases from the literature. In Chapter 8, a brief global comparison of intermodal freight transport and logistics covers Europe, North America, Asia, Africa and Latin America, explaining how the key trends and issues derive from the transport and logistics environments of each continent. For instance, differences exist between developed economies with mature transport and logistics industries and developing countries seeking access to more basic facilities such as inland customs clearance and sources of maritime containers.

Discussion of the challenges to intermodal transport and logistics demonstrates how a lack of integration and competing port and inland strategies challenge the necessary process integration that underpins successful intermodal transport...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Dedication
• Contents
• List of Figures and Maps
• List of Tables
• Note on the Author
• Preface
• Acknowledgements
• List of Abbreviations
• 1 Introduction
• 2 The Geography of Intermodal Transport and Logistics
• 3 The Role of Institutions in Intermodal Transport and Logistics
• 4 Case Study (Europe): Intermodal Terminals
• 5 Case Study (UK): Intermodal Logistics
• 6 Case Study (USA): Intermodal Corridor
• 7 Institutional Challenges to Intermodal Transport and Logistics
• 8 Institutional Adaptation and the Future of Intermodal Transport and Logistics
• References
• Index