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Ports Regionalisation Report

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Updated: Nov 3rd, 2020


In a few past decades, the importance of logistics in the modern global trade has drastically increased. Due to globalisation, the present-day logistics and transportation environment has transformed and became highly sophisticated and complex. Therefore, both maritime and inland transport industry are currently undergoing the process of restructuring. As a result, new trends leading to further consolidation of the market, greater integration and collaboration among diverse members of the logistics chain have appeared.

Ports play a significant role in this change process because, nowadays, not only they function as maritime-inland interfaces but also perform many other value-added logistics services. The extent to which ports develop, integrate, and implement intermodal transport infrastructures in various operations may largely define their competitiveness. Regionalisation is one of such integration strategies aimed to increase the ability of ports to control and capture hinterlands.

As observed by Monios and Wilmsmeier (2013), the word “region” in the concept of port regionalisation can be regarded as nothing but hinterland (p. 161). The port regionalisation concept also refers to “multi-port gateway region” − the term defining a “number of ports competing to serve an overlapping hinterland, and intermodal connections as well as suitable logistics structures…paramount to capture and control these areas” (Monios & Wilmsmeier, 2013, p. 161).

In a broader sense, it is possible to say that each transport terminal has a hinterland represented as an aggregate of customers (manufacturing enterprises, trade networks, etc.) with which it interacts. The given operational interactions include the shipping of freight, which goes through the terminal transhipment after reaching a particular distribution point. All these transfer operations will always be limited by a certain territory that can be divided into the main hinterland and the competition margin.

The main hinterland can be defined as a zone in which the terminal serves the predominant share of freight flows, while the term “competition margin” refers to a zone where the terminal competes with other terminals for cargo flows (Rodrigue & Notteboom, n.d.). Within the competition margin, the level of rivals’ competitiveness will be largely determined by spatial accessibility, quality, costs, and reliability of services.

Port regionalisation is essential for capturing of the mentioned competitive advantages. In the given report, the focus will be made on such characteristics of regionalisation as inland terminal development, inland logistics, and collective action. The literature review findings will be applied to the analysis of ports of Sines and Cork.

Literature Review

Inland Terminal Development

The increasing demand for inland freight distribution emphasises the need to improve the physical capacity of the transport systems from the intermodal perspective. As stated by Rodrigue and Notteboom (n.d.), to achieve this, ports should expand their physical capacity and find the sources of funding for this. Monios and Wilmsmeier (2013) note that terminal developments supported by the public sector “due to motivations of regional development” prevail in Europe, while “state involvement is becoming more common as a risk mitigation strategy in large intermodal schemes in the United States” (p. 164).

Although any facility expansion project sponsored either by the private or the public sector subject to similar planning approvals, the private enterprises often cannot deal with various planning conflicts, which arise when both ports and landside actors pursue similar developmental goals to increase their competitiveness within a limited area (Monios & Wilmsmeier, 2013). Such conflicts of interests may result in oversupply of terminals and fragmentation of flows. Thus, when port regionalisation strategy is coordinated with and supported by the state authorities, the chances for success increase.

There are many competitive advantages that ports may generate when using inland terminals incorporated within logistics zones. As stated by Rodrigue and Notteboom (2012), inland facilities or dry ports provide a chance to improve the quality and timeliness of shipping, increase the throughput capacity of seaports and access corridors as a result of accelerated cargo handling in ports, decrease total transport and storage costs, achieve greater ecological sustainability, and so on.

The realisation of the listed advantages becomes possible if the moment of an inland terminal exploitation matches the moment when the port encounters intense transport bottlenecks due to a limited throughput capacity. Additionally, for better results, the port management must choose the most optimal location for inland terminals, as well as select an appropriate size of the facility and sufficiently equip it with the necessary technology.

Thus, during the strategic planning stage, the management should assess new facilities based on expected intensity and inconsistency of input cargo flows and vehicle flows; location of the inland terminals and transport communication routs between them and the seaport; size and processing capacity of both the port and inland facilities; the costs of constructing the dry port and the overall exploitation of the seaport-terminal system (Rodrigue & Notteboom, 2012).

Inland Logistics

The development of multimodal transport networks can provide new opportunities which, in their turn, can have a significant impact on the associated logistics operations. The development of transport corridors enhances the polarisation and zoning of logistics facilities in proximate transport hubs and along communication axes between them (Rodrigue & Notteboom, n.d.). At the same time, logistic companies often appear close to each other as they are attracted by the same territorial factors: proximity to markets, availability of intermodal transport and the availability of support services.

The geographical concentration of logistics companies, in turn, causes the appearance of a synergistic effect, which makes a particular hinterland even more attractive for cargo owners. Such logistic poles, appearing in places of accumulation of logistics facilities, connect the strong orientation to intermodal transport with cluster advantages. Through regionalisation, ports can integrate their logistics operations into one of the logistics pole and receive an opportunity to capture the production, distribution, and consumption flows within the complex web of global trade activities.

As stated by Rodrigue and Notteboom (n.d.), “the logistical hinterland is a matter of flows, how they are organized and how they are taking place considering the existing macro-economic and physical settings” (p. 10). For successful control over hinterland, ports must actively manage the regional freight distribution through contracts with other players in the logistics market, e.g., rail and road transport firms, etc.

It means that along with the expansion of terminal operations and greater port access, global ports should aim to both capture maritime distribution networks and develop inland logistics infrastructures. Therefore, the choice of transportation modes, as well as the synchronisation of maritime and inland freight flows, becomes the major challenge. Other issues also may include the need to address congestion and increasing costs associated with higher throughput maritime-land interface due to the increased port access (Rodrigue & Notteboom, n.d.). The shift towards new transportation modes and distribution channels may be one of the best ways to enhance port hinterland efficacy.

Collective Action

As stated by Monios and Wilmsmeier (2013), “the planning and operation of intermodal corridors require multi-scaled governance and informal regional coherence that port actors are not generally in a position to influence” (p. 168). The researchers observe that large logistics operators competing against each other in the market are usually lack the motivation to cooperate. However, the collective action is one of the primary requirements for successful port regionalisation (Monios & Wilmsmeier, 2013). The findings indicate that a supportive public infrastructure should be developed to address the issues of firms’ reluctance to act together.

According to Monios and Wilmsmeier (2013), “a specified institutional structure and governance regime can be important elements of corridor success, whether for attracting funding, resolving operational problems or harmonising regulations at border crossings” (p. 167). Although traditionally port authorities are not involved in the process of instructional structure development, due to fierce competition within hinterlands, many of them aim to drive port regionalisation efforts and attempt to expand their institutional capacity beyond their conventional core competencies such as container handling (Monios & Wilmsmeier, 2013). Despite this, port governance remains substantially dependent on multiple circumstances of institutional and public character, as well as private investments.

Port of Sines: Analysis

Starting from 2003, Port of Sines began to exploit the containerised segment actively. As a result, it has been released of dependency on the petrochemical industry and gained new opportunities for cargo diversification and further growth (Moreira, 2013). In this regard, the port authorities, plan the development of new industrial and logistics hubs along the distribution chain through the involvement of new market actors in the process. Considering the future trends in the development of maritime routes, the reformatting and expansion of Port of Sines can significantly improve its competitive position in the global market.

Inland Logistics

The main factor defining the need for Port of Sines’s further expansion of its distribution networks, i.e., rail and sea, is the trend for the larger sizes of sea vessels, which pass through the Panama Canal, as well as the increase in the trade flow with Mercosur (Moreira, 2013).

Currently, the port controls the inbound and outbound freight traffic and serves as an interface between regional, national and global systems (Moreira, 2013). It actively develops corridors that are becoming of tremendous support for cargo owners that want to access Sines hinterlands through which the port captures the inland distribution system. In the future, the port authorities plan to increase the control of those distribution channels to ensure a sustainable flow of the containerised cargo (Moreira, 2013).

Moreira (2013) forecasts that as the trade via the Panama Canal will increase, and the need for reduced transport cost due to high fuel prices will grow, within the competitive hinterland the demand for the rail transportation will rise compared to road transport over the long haul. Therefore, if Port of Sines will successfully capture the railway distribution channels, it is going to emerge as a new strategically important global maritime network node and a gateway.

Nevertheless, to achieve this, all involved players must cooperate to create transitional networks required to support the redistribution of freight on land. If all the necessary changes are made − rail links are established, overall port performance and infrastructure are improved, and collective action is provided − Port of Sines will be able to obtain a higher status within the global port hierarchy.

Port of Cork: Analysis

In 2007, the Port of Cork Company started to plan the development of a container terminal and multi-purpose Ro-Ro berth at Ringaskiddy deep-water port and ferry terminal (Port of Cork, 2013). The new facilities will largely facilitate the port’s bulk goods handling and transferring of container handling out of its existing facilities at Tivoli and the City Quays in Cork Docklands. As a result, the company will have an opportunity for sustainable integration of non-industrial activities. The primary advantage of the newly expanded facilities will be the ability to handle deep-water shipping and accommodate larger vessels.

Terminal Development

It is possible to say that the major factor contributing to the port’s regionalisation plan is the current local limitations: scarcity of available space for further development, current trends in vessel size growth, increased loads on the system of the port region leading to bottlenecks and ecological problems. For instance, in the Ringaskiddy Port Redevelopment report, it is observed that the existing Tivoli and Cork Docklands cannot handle large vessels due to physical constraints (Port of Cork, 2013).

Additionally, since most of the Port of Cork Company’s container handling facilities are now located at Tivoli, the HGVs traffic passing through the City Centre road network is excessively heavy (Port of Cork, 2013). Thus, not only can the investment project create new opportunities for the port but also support the sustainable development within Cork.

It seems that the new terminal development at Ringaskiddy is largely supported by the national authorities. According to the National Ports Policy, Cork is going to be one of three Irish core ports in the Connecting Europe Network (Port of Cork, 2013). Moreover, it is considered that new deep-water facilities are essential for the commercial viability of the port and the region as such. It means that the facility expansion project is aligned with national development objectives. Since Port of Cork plays a strategic deep-water role, the capacity of the port to achieve the extended gate inland integration may be substantially facilitated.

Inland Logistics

New facilities will only provide a platform. Nevertheless, upgrades in infrastructure and inland logistics will be required as well. Since the relocation of terminal facilities to the Ringaskiddy site is justified by their greater proximity to the port’s major customers, the project may result in better operational cost efficiency. However, some problems may arise during the project implementation. For example, it is expected that at full capacity, the Ringaskiddy proposal will generate “a total of 3,550 vehicle movements per day, of which approximately 38% or 1370 will be HGVs” (Port of Cork, 2013, p. 3).

The relocation induces a risk for an adverse impact of the port generated traffic on the National Road network interchanges. To avoid this, the Port of Cork Company suggests upgrading Dunkettle Interchange to free-flow. Such an initiative may help to remove one of the main of possible bottlenecks (Port of Cork, 2013). Moreover, the port plans to implement a mobility management plan meant to enforce policy measures to suppress HGV movement during peak times on the road network points where the traffic is overloaded (Port of Cork, 2013).

Collective Action

Since the Ringaskiddy port redevelopment project is supported by national policies, it is possible to presume that a public infrastructure required for the collective action of logistics operators is present in the region. A few policies that may help bring the facility expansion endeavours to success are the Smarter Travel policy and N28 Corridor Sustainable Travel Strategy, which aim to eliminate the risks for the development of bottlenecks after the port generated traffic will increase (Port of Cork, 2013).

To achieve this, the policies encourage the promotion of the modal shift from private to public transport in the area (Port of Cork, 2013). Since the traffic on the road network is highly car-dependent, such initiatives will provide additional capacity headroom for the port’s strategic economic activity and minimise the regionalisation risks.

Possible Challenges

  • Nowadays, as the traditional division of tasks within the logistics chain have become blurred due to commonly implemented vertical integration strategies (i.e., vendor managed inventory; efficient customer response; and collaborative planning, forecasting and replenishment), ports become involved in the competition at the supply chain level (Rodrigue and Notteboom, n.d.; Monios and Wilmsmeier, 2013). Thus, the port authorities must continuously engage in the enhancement of terminal and landside operations to ensure that savings gained at the seaside are not lost during the expansion at the landside.
  • As stated by Moreira (2013), rail transport is associated with greater cost efficiency compared to road transport, and it is expected that in the future the trend will increase. In the Ringaskiddy redevelopment plan, the focus is made on road distribution networks, which means that the port will probably not be able to provide competitive shipping prices. As a result, cargo owners may prefer other gateways.


  • The port authorities should aim to create core competencies through the development of port-related value-added logistics activities, efficient information systems, and greater inter-modality. To do so, it can be recommended for Port of Cork to form strategic alliances within the port sector itself. Partnerships can help the port authorities to secure the development efforts and investments.
  • The development of the deep-water facilities can help Port of Cargo accommodate larger port clients. However, it should not be expected that cargo owners will be simply attracted because the port is a natural gateway to hinterlands. According to Rodrigue and Notteboom (n.d.), “major port clients concentrate their service packages not on the ports’ sea-to-land interface but on the quality and reliability of the entire transport chain” (p. 26). Therefore, to ensure the profitability of the planned development project, the port management must focus on the enhancement of service reliability and flexibility, product varieties, as well as corporate governance transparency.


The level of ports’ control over hinterlands is the primary factor defining their competitiveness. The findings of the literature review and the analysis of two ports’ cases reveal that such factors as the interconnectedness of the port and hinterland territories through efficient logistics infrastructures, provision of multiple value-added logistics services, as well as the effective public infrastructure and national governance are of great importance for successful port regionalisation. If a port captures the greater number of favourable factors, it will be able to become more attractive for large cargo owners and expand its operations within its main hinterlands and also improve its performance at competition margins.

Reference List

Monios, J & Wilmsmeier, G 2013, ‘The role of intermodal transport in port regionalisation’, Transport Policy, vol. 30, pp. 161-172.

Moreira, PP 2013, . Web.

Port of Cork 2013, . Web.

Rodrigue, JP & Notteboom, T 2012, ‘Dry ports in European and North American intermodal rail systems: two of a kind?’, Research in Transportation Business & Management, vol. 5, pp. 4-15.

Rodrigue, JP & Notteboom, T n.d., Challenges in the maritime-land interface: port hinterlands and regionalization. Web.

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